India cancelled a deal worth $500 million to buy Spike anti-tank guided missiles from Israel’s state-owned defense contractor Rafael, the company said on Wednesday.
“Rafael regrets the decision and remains committed to cooperating with the Indian Ministry of Defense and to its strategy of continuing to work in India, an important market, as it has for more than two decades, to provide India with the most advanced and innovative systems,” the firm said in a statement.
The termination of the deal came weeks before Israeli Prime Minister Benjamin Netanyahu was due to visit India.
Rafael said the cancellation came before the contract was signed and despite the company having fulfilled all its requirements. It did not give a reason for the cancellation.
An Indian Defense Ministry spokesman declined comment on the cancellation. Local media reported that India’s Defense Research and Development Organization was developing a domestic anti-tank missile the government was keen to support.
However, India’s Defense Ministry said separately it had cleared a plan to buy 131 Barak surface-to-air missiles built by Rafael. The 4.6-billion-rupee ($72 million) order follows up an earlier purchase of Barak missiles, meant to protect navy vessels against sea-skimming missiles and aerial threats.
The two countries have grown closer since Indian Prime Minister Narendra Modi took office in 2014, widening commercial cooperation beyond their longstanding defense ties.
Modi became the first sitting Indian prime minister to visit Israel last summer, and Netanyahu will fly to India on January 14.
Rafael CEO will join Netanyahu on his trip.