India Cancels $500M Arms Deal with Israel's Rafael

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Though some aspects were still being negotiated, Rafael Advanced Defense Systems had started preparations for delivering the missile, opening a production facility in India in August with its local partner, the Indian industrial giant Kalyani Group.

Indian media report the country's defense ministry has canceled a $500 million deal with Rafael Advanced Defense Systems to purchase Spike anti-tank guided missiles (ATGM).

The deal, which was seen a proof of increasing defence cooperation between India and Israel, was expected to be signed soon after price negotiations with Rafael Advanced Defence Systems of Israel were completed a year ago.

The Spike system, manufactured and marketed by Rafael, consists of missiles suited for several platforms, multiple ranges and a variety of targets. They said the decision to retract the RFP was taken after the DRDO expressed confidence of producing the ATGMs.

Indian media networks reported today (Monday) that India's Ministry of Defense has chose to cancel a major arms deal with Israeli company Rafael Advanced Defense Systems- a deal estimated to be worth about half a billion dollars.

The front of Rafael’s SPIKE LR II missile
The front of Rafael’s SPIKE LR II missile

Prior to this, India had also rejected an offer from US-based Raytheon-Lockheed Martin for Javelin ATGM in favour of the Israeli weapon system. "It won't also need any transfer of technology", sources said, according to The Indian Express.

The decision to retract the deal could be a setback to the modernization of the Indian army. The Army said that the Spike missile "gives a major capability impetus to troops deployed on the Line of Control, especially in the current operational scenario". It is a third generation weapons system, the Indian Army is now using 2nd generation ATGMs - Konkurs and Milan 2T - which can not be used in the nighttime.

The Army now faces a massive shortage of around 68,000 missiles. Gen. (res.) Yoav Har Even said the factory "is another expression of the strong cooperation between Israel and India in general and of Rafael as a strategic ally of India in particular".

India chose to acquire an Israeli-made anti-tank rocket, picking it over the US-made Javelin, in October 2014. The matter was eventually resolved earlier this month with Army headquarters agreeing to retract the RFP for ATGM launchers and missiles.

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