In its biggest defence deal with India, Israel will provide its largest arms buyer an air defence system at a whopping sum of $1.4 billion.
Israel Aerospace Industries (IAI) has officially acknowledged that the defence deal between the two countries was signed on February 27 under which Israel will develop and manufacture seaborne and shore-based systems against missile attack on India, business daily Globes reported.
The two sides have agreed that part of the payment for the systems will be made during the development period and the balance will be paid during the 66 month delivery period, which is slated to begin 90 months from the date the advance payment is received.
As per the agreement, IAI has also undertaken to procure military or aviation products and services from India. Besides, it will invest in defence companies in India up to an amount equal to 30 per cent of the contract.
Meanwhile, the state-owned Israeli firm stated that it delayed announcing the contract because the customer informed them that early disclosure was liable to cause material difficulties in its execution and may even result in cancellation, the business daily reported.
IAI also added that it felt that this risk would be substantially reduced once the advance payment was received, the report said.
The Israeli defence industry, however, decided to go open on the contract following reports in media, even though the advance payment has not yet been received, it said.