Netanyahu says $500m Israel-India arms deal back on the table

MUMBAI, India — A massive missile deal between India and Israeli defense contractor Rafael is back on the table, Prime Minister Benjamin Netanyahu said Wednesday, as he wrapped up his third day of a state visit to the subcontinent that sought to foster closer economic ties.

Netanyahu’s visit came shortly after Rafael Advanced Defense Systems had confirmed that Delhi backed away from a $500 million agreement to purchase Spike anti-tank missiles, casting a cloud over the trip.

“They are reauthorizing the Spike deal,” Netanyahu said as his plane took off for Mumbai from Ahmadebad, where he spent the day with Indian counterpart Narendra Modi.

Netanyahu said the details were being worked out, raising questions as to whether the final agreement would be as large as the canceled weapons deal.

But the prime minister insisted that the outlook on the deal was “very positive.”

Netanyahu announced the news as the centerpiece of a series of achievements during his five-day trip to the Asian giant.

There was no immediate confirmation from Delhi.

The prime minister had brought 130 Israeli business leaders with him to India, including representatives from Rafael, in the hopes of boosting business ties, holding a series of summits meant to ramp up trade.

Prime Minister Benjamin Netanyahu at a welcome ceremony at the president’s house in New Delhi, India, on January 15, 2018. (Avi Ohayon/GPO)

Israel and India trade some $5 billion annually, with the majority of the deals in arms and diamonds.

On January 2, a spokesperson for Rafael Advanced Defense Systems confirmed the company had received official notice from the Indian government that the deal for Spike anti-tank missiles had been nixed.

The initial deal for the missiles was signed in 2014. Before the cancellation, Rafael had started preparations for delivering the missiles, opening a production facility in India in August with its local partner, the Indian industrial giant Kalyani Group.

Last April, Israel and India also signed a military deal worth nearly $2 billion which includes the supply over several years of medium-range surface-to-air missiles, launchers and communications technology.

India, which has longstanding territorial disputes with neighbors China and Pakistan, has signed several big-ticket defense deals since Modi came to power in 2014.

It has been moving away from relying on traditional ally Russia for military hardware, and has deepened its ties to Israel, diplomatically and militarily.

Illustrative. An Israel soldiers prepares to launch a Spike anti-tank guided missile during a training exercise. (Rafael Advanced Defense Systems)

Modi visited Israel this summer, in the first official visit of an Indian premier to the Jewish state.

In November, 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.

Times of Israel staff and AFP contributed to this report.