Delhi ditches $500m Israeli missile deal for 'Make in India' initiative

04:01 PM | 21 Nov, 2017
Delhi ditches $500m Israeli missile deal for 'Make in India' initiative
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NEW DELHI - The Indian defence ministry has cancelled a $500 million military deal with an Israeli defence technology firm following its ambitious plan to strengthen local defence industries, according to local media.

The deal with Israel’s Rafael Advanced Defence Systems was about to be signed after price negotiations with Rafael Advanced Defence Systems of Israel were completed last year, but after pressure from the Indian arms industries, the defence ministry cancelled it.

Under the agreement, India would have purchased 8,000 Spike anti-tank missiles and 300 missile launchers.

Spike is a man-portable "fire and forget' missile that can hit moving targets such as a tank. It is versatile since the missile independently tracks the target upon being fired. This allows the infantry soldier who has fired the missile to quickly move for cover.

Last year, India concluded negotiations with Israel's Rafael for the Spike missile which was supposed to be built in India in a joint venture with the Kalyani group, which has already constructed a missile-manufacturing facility near Hyderabad. Now, however, in a strong endorsement of the Modi’s ‘Make In India’ initiative, New Delhi has decided to back the state-owned Defence Research and Development Organisation (DRDO) which says it can deliver a world-class missile within four years.

“Under the deal, Israel has pledged to set up a local assembly plant to create work in India,” the MiddleEastMonitor quoted an official as saying.

According to a report in NDTV, the Indian army has criticised the defence ministry’s decision because locally-made rockets would take long time to be developed, leaving the soldiers badly out-gunned by Pakistani forces.

Pakistan has portable anti-tank missiles for its infantry soldiers which can strike Indian tanks and bunkers that are at a distance of 3-4 km; India's equivalent missiles have a range of just 2 km.

Reports also suggest the Indian defence ministry’s decision to cancel the deal could have repercussions for Israeli Prime Minister Benjamin Netanyahu’s scheduled visit in January which will come in response to Indian Prime Minister Narendra Modi’s visit to Israel in July.

India is Israel's top destination for arms exports, buying 41 per cent of export between 2012 and 2016, according to the Stockholm International Peace Research Institute, an independent global conflict and arms-research institute.

Israel is India's third-largest source of arms, with a 7.2 per cent share of imports between 2012 and 2016, next to the US (14 per cent) and Russia (68 per cent).

In September this year, the Indian Navy received first Indian produced Long Range Surface to Air missile by Israel Aerospace Industries.

The LRSAM, or Barak-8 naval air defense system, is jointly developed by India’s Defense Research and Development Organization (DRDO) in close collaboration with Israel's Israel Aircraft Industry (IAI).

Indian Navy gets first surface-to-air missile ... 04:01 PM | 1 Sep, 2017

NEW DELHI - The first Indian produced Long Range Surface to Air missile by Israel Aerospace Industries has been given ...

In June 2016, Modi’s government announced that it was massively increasing foreign direct investment in the defense industry as part of the prime minister’s ambitious “Make in India” project to encourage companies, both foreign and domestic, to produce goods and services in the South Asian country. Modi has said that by 2020, he expects 70 percent of India’s weapons to be made domestically.