India’s media networks reported that India’s Ministry of Defense has decided to cancel a huge arms deal with Israel- a deal worth 500 million dollars. India had agreed to purchase 8,000 “Spike” anti-tank missiles and hundreds of launchers from Rafael Advanced Defense Systems, but backed out before finalizing the deal in order to strengthen its domestic missile development program.

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

According to the reports, India decided to cancel the deal, which included the purchase of at least 8,000 missiles and 300 missile launchers, because of the country’s desire to strengthen its domestic missile development program and prioritize local industries.

A source in India closely familiar with the details of the deal, said that for Rafael to be allowed to carry out the project, the company would have to commit to opening a local assembly plant and thus provide jobs in India. According to the source, the deal was about to be signed, but was halted due to increased pressure from local defense industries.

Netanyahu and Modi meet in Israel

Netanyahu and Modi meet in Israel Photo Credit: Haim Zach, GPO/ Channel 2 News

Negotiations between the two countries began in 2014 after the anti-tank system manufactured by Rafael outdid the competing system from an American company in the bid for the Indian military. Per the terms of the deal, India was supposed to buy “Spike” anti-tank missiles- with an innovative guided missile system that locks onto a target before the missile is even launched- worth 550 million dollars.

“National security is the paramount concern of the government” a defense ministry source told Reuters when the deal was first initiated in 2014. The source quoted Defense minister Arun Jaitley as saying that “all hurdles and bottlenecks in the procurement process should be addressed expeditiously so that the pace of acquisition is not stymied.”

Indian Prime Minister Narendra Modi, who visited Israel this year as part of a rapprochement between the two countries, had agreed to the deal as part of his policy to bolster the country’s military considering the constant tensions between India and Pakistan and out of fear of reignited tensions over their mutual border with China.