India Scuttles $500m Anti-tank Missile Deal With Israel

Israeli company Rafael confirms the half-billion dollar sale of anti-tank missiles to India has been terminated, but announces new $72m ship-borne missile deal

Rafael's Spike anti-tank missiles.
Rafael Advanced Defense Systems

India has officially pulled out of a half-billion dollar anti-tank missile deal with the Israeli company Rafael in favor of encouraging its local defense industry, Rafael told Haaretz on Tuesday. Also on Tuesday, India agreed to another deal to buy missiles from the same company in a roughly $70 million deal, according to the Hindustan Times.

In November Rafael Advanced Defense Systems denied to Haaretz that its deal to manufacture Spike anti-tank missiles in Hyderabad, in collaboration with the local company Kalyani Strategic Systems, was off. The company said it had already begun to transfer development informationIndian media reported however that the deal had not been finalized and that the Ministry of Defense decided to develop anti-tank missiles at home, to encourage the local defense industry.

On Tuesday, however, Rafael confirmed to the Kan website and to Haaretz that the deal was off. "Rafael received formal notice from the Indian Ministry of Defense that the deal for Spike missiles is canceled," the company stated, adding that the Spike is used by 26 countries, and that it had been awarded the deal after protracted negotiation and meeting all India's requirements. 

Rafael admitted that no final deal had been signed: "The cancelation was before the contract was signed, despite the company meeting all the requirements," it stated on Tuesday. "Rafael regrets the decision but is committed to continuing to pursue this important goal, as it has been doing with great success for over two decades, with a range of innovative, advanced systems and with commitment to the Indian Ministry of Defense. The company will continue to cooperate, including in the framework of the prime minister's delegation to India [later] this month," the company stated.

Rafael CEO Yoav Har Even will be joining other Israeli defense industry leaders on Prime Minister Benjamin Netanyahu's trip to India, now scheduled for January 14 to 18.

Despite terminating the deal to co-manufacture Spike missiles with Rafael, the Indian government smiled upon a deal to buy Barak missiles from Rafael for the Indian navy, the Hindustan Times reported on Tuesday. The Barak missiles, which will set India back 460 crore or about $76 million, are surface to air missiles designed to be used as a ship-borne anti-missile defense system against anti-ship missiles, the ministry explained. 

India also agreed to procure 240 precision guided bombs for the Indian Air Force from Russia, according to the Hindustan Times.