NEW DELHI – India has inked a $2.5 billion missile deal with Israel to jointly develop a medium-range surface-to-air missile system for Indian military stirring anxiety among the south Asian members.

The multi-billion contract between the Defence Research and Development Organisation (DRDO) and Israel Aircraft Industries (IAI) was approved by India’s Cabinet Committee on Security, headed by Prime Minister Narendra Modi, ahead of his visit to Israel, according to Indian media

The MR-SAM missile with a range of 50km-70km is the latest in a series of other variants of surface-to-air missile systems for the Indian Navy and Air Force being jointly manufactured by both countries.

As per the deal, five regiments of the missile, which consists of 40 units and 200 missiles, will be developed.

‘The system will be based on the older Barak system of Israel, which is in use in India. It is being changed as per requirements,’ a defence source was quoted as saying.

The system, which will be manufactured in India with 80 per cent indigenous content, would play a crucial role in developing the target homing system, the source said, adding delivery of the system would begin in 2023.

India and Israel are also in advanced stage of negotiations for the purchase of two more long-range Phalcon Airborne Warning And Control System (AWACS).