New Delhi, Nov 29: The growing closeness between India and Israel could face a major roadblock following New Delhi’s decision of scrap the deal for Spike Anti-Tank Guided Missile (ATGM) with Jerusalem in favour of an indigenous weapons platform. According to the Indo-Israeli Chambers of Commerce the junking of the $500 million deal by New Delhi will have negative fallout on the business relationship and not just on those related to defence.

According to Federation of Indo-Israeli Chambers of Commerce vice chairman David Keynan the deal was a significant milestone in the relationship between the two countries. “It is a very noteworthy deal. It will have an impact not only on defense trade, but on all trade. Defence exports often act as a catalyst for further trade,” The Times of Israel quoted Keynan as saying.

Under Prime Minister Narendra Modi, the focus is shifting from importing the latest weapons to developing them in the country under the “Make in India” initiative. The Defence Research and Development organisation (DRDO) has been instructed to develop and produce a Man-Portable Anti-Tank Guided Missile (MPATGM) which would be inducted into the Indian Army. At present the troops are equipped with second generation Konkurs and Milan 2T ATGMs. But the two missile systems are night-blind.

Israel’s Rafael Advanced Defense Systems which makes the Spike anti-tank guided missiles claims Indian officials have not officially informed the company about the deal’s cancellation. Rafael was already in advanced stages of opening up the production line for Spike in India in collaboration with the Kalyani Group. The factory to manufacture the state-of-the-art missile was inaugurated by Kalyani Group head Babasaheb Neelkanth Kalyani, Rafael CEO Yoav Har Even and Israel’s Ambassador to India Daniel Carmon on August 3, 2017.

India decided to go for the Israeli Spike and the $500 million deal was cleared by the Defence Acquisition Council in 2014 when Finance Minister Arun Jaitley was also handling the defence ministry. India was to but almost 8,000 missiles along with over 300 launchers and Rafael had initially agreed to transfer the technology to Bharat Dynamics Limited (BDL). The entire process of delivering the missiles was to be completed in almost five years.

Over the last couple of decades India has cemented its ties with Israel and bought military hardware worth almost $1.5 billion thousand crores. Currently India is Israel’s 10th-largest trade partner.

DRDO has already successfully produced ATGMs like Nag and Anamika and officials claim that it is working on third generation MPATGM which will be ready in the next three to four years.