India has signed a $1.4 billion deal with Israel for the supply of an anti-missile air defence system in what is the biggest defence deal between the two countries.
Under the deal signed on Feb 27, Israel will develop and manufacture seaborne and shore-based systems against missile attacks on India, Israeli business daily Globes said.
Israel Aerospace Industries Ltd. (IAI) officially announced the deal only on Thursday, more than a month after it was signed, because the company felt 'early disclosure was liable to cause material difficulties in execution of the contract, and even result in its cancellation', according to the daily.
According to IAI officials quoted by the daily, they felt that this risk would be substantially reduced once the advance payment was received.
Part of the payment will be made during the development period, and the balance during the 66-month delivery period, which is slated to begin 90 months from the date the advance payment is received, the daily said.
According to the contract, IAI has undertaken to procure military or aviation products and services from India and will invest in defence companies in India up to an amount equal to 30 per cent of the contract.
Israel has emerged as one of the largest suppliers of military hardware to India. Over the years, India has deftly balanced its ties with Israel with its relations with Middle East nations.