Indian Military Cancels $500 Million Deal for Advanced Israeli Anti Tank Missiles

India announced the cancellation of a $500 million weapons deal with Israel’s Rafael weapons manufacturer to provide Spike anti tank guided missiles to its military. The initial agreement to provide Spike missiles to India was signed in 2014, and by the end of 2017 Rafael had already begun preparations for delivering the missile and had opened a production facility in India in August alongside India's Kalyani Group - the company's local partner. The deal had been described by David Keynan, vice chairman of the Federation of Indo-Israeli Chambers of Commerce, as “a very noteworthy deal (with) an impact not only on defence trade, but on all trade." While Rafael had met all of India's requirements, including co-production of the weapons system with an Indian firm, the deal was cancelled shortly before the signing of the contract. The cancellation came shortly before a visit to New Delhi by Prime Minister Benjamin Netanyahu.

While cancelling the deal for Spike missiles, India's military at the same time agreed to purchase 131 Barak surface to air missiles from Rafael in a deal worth $70 million. These ship based SAM systems would be used by the Indian Navy on its aircraft carrier INS Vikrant - currently under construction. India remains one of Israel’s prime defence partners, and is the by far the largest customer for Israeli arms. Israel is the second greatest supplier of arms to India after Russia - though with New Delhi increasing defence ties to the United States this may well change in future. SAM systems, drones, AWACS have been among Israel's primary exports to India, while the two have also long maintained close intelligence cooperation. The Spike missiles were hardly the first Israeli weapons order which was unexpectedly cancelled - with India reportedly having considered purchasing Israeli Merkava tanks to augment the T-90 and Arjun units already in service. Following the Israeli platform's poor performance in its war with Hezbollah in 2006, prospects of sales of the Merkava to India floundered. While the Spike missile deal’s cancellation is a blow to Indian-Israeli military cooperation, Prime Minister Netanyahu's visit to Delhi is likely to be accompanied by new arms deals and further improvements to defence ties.