India OKs Israel Arms Deals

The Indian Cabinet Committee on Security has given the go-ahead for two mega-deals with Israeli defense industries in India, claim sources in the know.

Local sources say that the committee approved a $1.5 billion Israel Aerospace Industries project to develop and upgrade the Barak surface-to-air missile.

The council also approved a $270 million purchase of Rafael's SpyDer defense systems. According to Indian news reports, Rafael has already inked the final agreement, and IAI is expected to renew negotiations shortly.

The deal has been held up because the Indian Central Bureau of Investigations accused India's former defense minister and president of the Samata Party George Fernandes of accepting NIS 435,000 in kickbacks from the IAI to fix a tender for anti-ship missiles in IAI's favor. The IAI and Fernandes denied the allegations, which Fernandes says were politically motivated.

The Rafael deal was also suspended, apparently under the shadow of similar allegations. Rafael denies the allegations. According to the Times of India the development project for the new generation of Barak missiles will also move forward, and the missiles will be operational by 2011.