India Cancels $500 Million Missile Deal With Israel's Rafael

Updated on
  • Defense contract scrapped 2 weeks before Netanyahu India visit
  • Israeli weapons maker’s CEO to join prime minister on trip
Benjamin Netanyahu Photographer: Dario Pignatelli/Bloomberg

Israel’s Rafael Advanced Defense Systems Ltd. has confirmed the Indian government canceled a missile contract worth nearly $500 million just two weeks before Prime Minister Benjamin Netanyahu is scheduled to visit the world’s biggest arms importer.

The Indian Defense Ministry’s plan to buy Rafael’s Spike anti-tank missiles had been agreed upon after a “long and rigorous process,” though no contract was signed, the Haifa-based company said in an emailed statement Wednesday. Signs the deal might be scrapped were first reported by the Indian Express newspaper in November.

India’s government canceled the contract in order to give the state-run Defence Research and Development Organisation an opportunity to design, develop and manufacture its own anti-tank missile, according to two Indian defense officials, who asked not to be identified because they were talking about private discussions.

“Rafael regrets the decision and remains committed to cooperating with the Indian Ministry of Defense,” the company said, adding that Chief Executive Officer Yoav Har Even will accompany Netanyahu on his mid-January visit to India.

Netanyahu’s trip follows Indian Prime Minister Narendra Modi’s landmark visit to Israel in July, when the two leaders hailed their growing defense cooperation and signed seven agreements in areas ranging from water conservation to space research. Trade between the countries has grown from about $200 million in 1992, when they established diplomatic ties, to nearly $4.2 billion in 2016, according to Israel’s Economy Ministry.

— With assistance by Iain Marlow

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