India officially cancels $500-million defense deal with Israel

Two weeks before Israeli Prime Minister Benjamin Netanyahu is set to visit India, New Delhi has officially cancelled a $500-million defense deal with defense giant Rafael to purchase Spike anti-tank guided missiles.

“Rafael has received an official statement from the Indian Ministry of Defense on the cancellation of the Spike missile deal,” read a statement from the company, adding that it had been cancelled before the signing of the contract and despite the fact that the company had fulfilled all necessary requirements.

“Rafael regrets the decision but is committed to continuing to pursue this important goal, as it has done with great success for over two decades, with a variety of innovative and advanced systems and with a commitment to the Indian Ministry of Defense,” it continued.

According to the company, the Spike was selected as a winner for the tender “after a long and lengthy process and according to all Indian procurement rules,” and the production facility the company opened in August with its local partner, industrial giant Kalyani Group near Hyderabad, will not be closed.

Rafael, which was slated to sell to India some 8,000 Spike missiles and over 300 launchers, will still take part in Netanyahu’s three-day trip to New Delhi on December 14.

The Indian Express quoted ministry sources as saying that the decision to cancel the deal was based on the fact that importing the Spike would “adversely impact the program for indigenous development of the weapon system by DRDO [India's Defense Research and Development Organization],” adding that India had also rejected an offer from the US-based Raytheon-Lockheed Martin for Javelin anti-tank guided missiles.

Israel has been supplying India with various weapons systems, missiles and unmanned aerial vehicles over the last few years. Until recently, most of the transactions have been kept quiet, but ties have shifted, and the east-Asian country has become one of Israel’s largest buyers of military hardware, with annual defense deals worth over $1 billion.

Rafael has three missiles in the Spike family, Spike NLOS, Spike ER, Spike MR/LR and Spike SR and has supplied over 27,000 SPIKE missiles and systems to over 26 countries, including to the Philippines, Lithuania, Australia and India, where they are used by armies on various naval and land system platforms.

While Delhi cancelled the Spike deal with Rafael, the Indian Defense Ministry announced on Tuesday that it approved a $70 million deal to buy 131 surface-to-air Barak missiles from Rafael for the country’s first aircraft carrier.

"These missiles are surface- to-air missiles designed to be used as a ship-borne anti-missile defense system against anti-ship missiles," read a statement by India’s Defense Ministry.

The Barak-8 naval air defense system or LRSAM is a unique joint development by Israel Air Force and India’s Defense Research and Development Organization in collaboration with Israel Air Force subsidiary ELTA, RAFAEL and various Indian companies.

Working with different branches of the Indian military and other security apparatuses, Rafael has worked to integrate their electro-optical systems, advanced ordnance and defense systems including multi-layered air defense capabilities to provide “comprehensive protection for armed forces and population centers by delivering full protection on the ground,” the company said in a statement in May.

Over the past few years, Israel Air Force has awarded several contracts for air and missile defense systems to India, including $2.5 billion in deals in recent months. In April, Israel Air Force announced that it had been awarded the largest defense contract in the Israeli defense industry’s history after signing a $1.6 billion mega-contract with the Indian Army for the medium-range surface-to-air missile (MRSAM) advanced air and missile defense systems as well as additional LRSAM air and missile defense systems for Indian Aircraft Carriers.

 jpost