India is considering the possibility of reviving a $500 million anti-tank missile deal with Israelâ€™s Rafael weapons manufacturer, a Delhi news agency reported Wednesday, days before Prime Minister Benjamin Netanyahu is expected to visit the country along with officials from the arms-maker.
On January 2, a spokesperson for Rafael Advanced Defense Systems confirmed that the company had received official notice from the Indian government that the deal for Spike anti-tank missiles had been nixed, expressing disappointment over the move.
However, Delhi is now examining whether to purchase the weapons missiles through a government-to-government deal, the Press Trust India news agency reported, quoting unnamed official sources.
The initial deal for the missiles was signed in 2014. Before the cancellation, Rafael 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.
According to the Indian Express news outlet, the decision to cancel the Spike deal was made in order to protect Delhiâ€™s Defense Research and Development Organization, which is working on creating its own anti-tank guided missile.
Netanyahu will lead a business delegation to India on a five-day trip starting January 14. Israel has become a major defense supplier to India, selling an average of $1 billion of military equipment each year. Rafael will be among the 130 firms in India to sign a series of bilateral agreements during the visit.
Last April, the two countries signed a military deal worth nearly $2 billion which includes the supply over several years of medium-range surface-to-air missiles, launchers and communications technology.
India, which has longstanding 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 been moving away from relying on traditional ally Russia for military hardware, and has deepened its ties to Israel, diplomatically and militarily.
Modi visited Israel this summer, in the first official visit of an Indian premier to Israel.
In November, the Indian Air Force and special forces also took part in the Israeli Blue Flag air exercise, in what was seen as a sign of strengthening ties between New Delhi and Jerusalem. In June, a month before Modiâ€™s visit, India helped sponsor the renowned Israeli Defense Expo in Tel Aviv.
And in May, three Indian Navy ships docked in Haifa for an official visit, marking 25 years of diplomatic relations between the two counties.