Indian media outlets reported on Monday that the country’s defense ministry had scrapped a $500 million deal to buy anti-tank missiles from the Israeli Rafael weapons manufacturer in favor of developing missiles domestically.
In response to the reports, Rafael Advanced Defense Systems said it had yet to be “officially informed of any changes” to the contract.
The initial deal for the Spike anti-tank guided missile was signed in 2014. Though some aspects were still being negotiated, Rafael Advanced Defense Systems had started preparations for delivering the missile, opening a production facility in India in August with its local partner, the Indian industrial giant Kalyani Group.
According to the Indian Express news outlet, the reversal was made this week in order to protect the government’s Defense Research and Development Organization, which is working on creating its own anti-tank guided missile.
Indian military sources told the website that DRDO had already produced a few varieties of anti-tank guided missiles and was “confident” that it could produce one on par with the Israeli Spike.
The Indian military, which currently uses an inferior anti-tank missile that does not work well at night, reportedly expressed concerns that the decision to scrap the Spike deal would negatively affect its preparedness, and that there was “operational urgency” for the Israeli missile.
A spokesperson for Rafael said the company was continuing in its efforts as normal, as long as it wasn’t officially instructed otherwise.
“The Spike missile, which is in use in 26 countries, was chosen by India after a lengthy process, in which the system was inspected and successfully performed in a wide variety of scenarios,” Rafael said in a statement.
The company also noted that it was working with the Kalyani Group in order to ensure that the production of the Spike missile conformed to the government’s requirements that they be “made in India.”
The approximately half-billion-dollar deal was described as a major milestone in Israeli-Indian relations.
In a speech at its inauguration, Rafael CEO Maj. Gen. (res.) Yoav Har Even said the factory “is another expression of the strong cooperation between Israel and India in general and of Rafael as a strategic ally of India in particular.”
The opening of the missile production facility in August came weeks after a visit to Israel by Indian Prime Minister Narendra Modi — the first official visit of its kind.
Earlier this month, the Indian Air Force and special forces also took part in the Israeli Blue Flag air exercise, in what was seen as a sign of strengthening ties between New Delhi and Jerusalem. In June, a month before Modi’s visit, India helped sponsor the renowned Israeli Defense Expo in Tel Aviv.
And in May, three Indian Navy ships docked in Haifa for an official visit, marking 25 years of diplomatic relations between the two counties.