India officially cancels $500-million defense deal with Israel

Rumors that the deal with Rafael to buy 8,000 Spike missiles was cancelled first surfaced in November.

January 2, 2018 19:09
3 minute read.
Israel and India marked 25 years of diplomatic ties in 2017.

Israel and India marked 25 years of diplomatic ties in 2017.. (photo credit: ANNA AHRONHEIM)


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Less than two weeks before Prime Minister Benjamin Netanyahu is set to visit India, New Delhi has officially canceled a $500m. defense deal with defense-giant Rafael to purchase Spike anti-tank guided missiles.

“Rafael has received an official statement from the Indian Ministry of Defense on the cancellation of the Spike missile deal,” read a statement from the company, adding that it had been canceled before the signing of the contract and despite the company fulfilling all of the necessary requirements. “Rafael regrets the decision but is committed to continuing to pursue this important goal, as it has done with great success for over two decades, with a variety of innovative and advanced systems and with a commitment to the Indian Ministry of Defense,” it continued.

According to the company, the Spike was selected as a winner for the tender “after a long and lengthy process and according to all Indian procurement rules.” It added that the production facility the company opened in August with its local partner, industrial giant Kalyani Group near Hyderabad, will not be closed.

Rafael, which was slated to provide India with some 8,000 Spike missiles and more than 300 launchers, will still take part in Netanyahu’s three-day trip to New Delhi beginning on January 14.

While Rafael only got the official notice on Tuesday, rumors of the cancellation began to swirl in November.

The Indian Express newspaper quoted Defense Ministry sources as saying the decision to cancel the deal was based on the fact that importing the Spike would “adversely impact the program for indigenous development of the weapon system by DRDO [India’s Defense Research and Development Organization].” RAFAEL's Spike LR2 Missile (YouTube/Rafael Advanced Defense Systems Ltd)

It added that India had also rejected an offer from US-based Raytheon-Lockheed Martin for the sale of Javelin anti-tank guided missiles.

Israel has been supplying India with various weapons systems, missiles and unmanned aerial vehicles for several years. Until recently, most of the transactions have been kept quiet, but ties have shifted, and India has become one of Israel’s largest buyers of military hardware, with annual defense deals worth over $1b.

Rafael has four missiles in the Spike family, Spike NLOS, Spike ER, Spike MR/LR and Spike SR. It has supplied over 27,000 Spike missiles and systems to 26 countries, including the Philippines, Lithuania, Australia and India, where they are used by armies on various naval- and land-system platforms.

While Delhi canceled the Spike deal with Rafael, the Indian Defense Ministry announced on Tuesday that it approved a $70m. deal to buy 131 surface-to-air Barak missiles from Rafael for the country’s first aircraft carrier.

“These missiles are surfaceto- air missiles designed to be used as a ship-borne anti-missile defense system against anti-ship missiles,” read a statement by the ministry.

The Barak-8 naval longrange surface-to-air missile system (LRSAM) is a unique joint development by the Israel Air Force and India’s Defense Research and Development Organization in collaboration with the Air Force’s subsidiary Elta, Rafael and various Indian companies.

Working with different branches of the Indian military and other security bodies, Rafael has worked to integrate its electro-optical systems and advanced ordnance and defense systems, including multi-layered air defense capabilities, to provide “comprehensive protection for armed forces and population centers by delivering full protection on the ground,” the company said in a statement in May.

Over the past few years, the IAF has awarded several contracts for air and missile defense systems to India, including $2.5 billion in deals in recent months. In April, the IAF announced that it had been awarded the largest contract in the Israeli defense industry’s history, after it signed a $1.6b. mega-contract with the Indian Army for the medium-range surface-to-air missile (MRSAM) advanced air and missile defense systems, as well as additional LRSAM systems for Indian aircraft carriers.

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