Indian missile trial jeopardizes Rafael's $500m Spike deal

The fate of the $500 million Spike missile deal that Rafael Advanced Defense Systems Ltd. hopes to sign with the Indian government remains clouded in doubt.

India is meanwhile continuing to develop its own anti-tank missile, which will compete with the Israeli missile. India’s Defense Research and Development Organization (DRDO) tested its anti-tank guided missile (ATGM) NAG 190 in desert conditions against two tank targets last week.

Israeli defense experts believe that it will take another five years at least until India's NAG 190 is fully operational. However, in India itself, experts believe that the NAG 190 will be full developed by the end of the year.

Over the past two months there has been a major dispute between DRDO and the Indian army, which wants to buy 8,000 Spike anti-tank missiles from Rafael and hundreds of launchers, which will be made in cooperation with an Indian company. Agreements were already reached on the matter last month and this would be one of Rafael's most important deals over the coming few years.

DRDO is demanding that the NAG 190 should be favored by the Indian army, which insists that unlike the Indian missile, the Spike is already operational.

Since Prime Minister Benjamin Netanyahu visited India in January together with Rafael CEO Yoav Har Even and announced that the deal would go ahead, talks have been renewed between the Indian army and Rafael with the hopes of concluding a final agreement.

A defense ministry source told "Globes" that "The dialogue with the Indians is continuing all the time and lately it seems that institutions in the country are falling in line behind doing the deal with Rafael because it will be a long time before the Indian missile is operational. Clearly the Indians want to develop and manufacture everything they need and the idea that until they will have full capabilities on this subject, they will buy Israeli missiles."

the source added, "We weren't particularly impressed by the latest trial in India because there is a long way to go and the Indians need to work until they will have an operational missile to keep on the shelf."

In order to move ahead with the Spike deal, Rafael has formed a joint venture with Kalyani to manufacture the missiles in India using knowhow brought over from Israel. A new plant for the Spike missiles was inaugurated near Hyderabad last summer.

Rafael has already sold Spike missiles to over 30 countries.

 globes