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India considers revisiting $500 million missile deal with Israel

Indian Prime Minister Narendra Modi (L) shakes hands with Israeli counterpart Benjamin Netanyahu during a press conference in Jerusalem on July 5, 2017
Thomas COEX (AFP)
Israel has become a major defense supplier to India, selling an average of $1 billion each year

India is reportedly reconsidering a decision to cancel a $500 million dollar missile deal with Israel made in May 2016, days ahead of a visit from Israeli Prime Minister Benjamin Netanyahu.

A local Indian news agency, Press Trust India, reported on Thursday that Delhi is mulling whether to revive the deal and purchase the missiles through a government-to-government-deal, according to unnamed official sources.

India had initially sealed the deal to buy Israel's Spike anti-tank guided missiles from Rafael Advanced Defense Systems, with reports at the time saying India was set to purchase 8,000 Spike missiles and 300 launchers in a deal worth some $500 million.

However, in November, India media outlets reported that the government had decided to scrap the half-billion dollar deal in favor of a domestically-produced version.

Its manufacturer Rafael finally confirmed the reports of cancellation at the beginning of January, claiming that the 2016 sale had never officially been signed.

Rafael said that it "regrets the decision" but will continue to cooperate as part of the Prime Minister's delegation to India this month.

The decision, while a blow to bilateral defense ties between Israel and India, is in line with Modi's ‘Make In India" strategy to draw in more foreign investment and encourage manufacturers to do business in the world's fastest growing major economy.

India, which has long standing territorial disputes with neighbors China and Pakistan, has signed several big-ticket defense deals since Prime Minister Narendra Modi came to power in 2014.

It has however been moving away from relying on traditional ally Russia for military hardware.

Israel has become a major defense supplier to India, selling an average of $1 billion of military equipment each year.

India is still set to buy 131 surface-to-air missiles from Israel in a smaller, $70 million deal, the defense ministry announced also earlier this month.

The Barak missiles made by Rafael Advanced Defense Systems are to be used for India's first aircraft carrier which is under construction.

The Israeli premier is set to meet with his Indian counterpart while on a five-day trip January 14 along with a business delegation.



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