NEW DELHI ― Without explaining its decision, the Indian Ministry of Defence last week scrapped a long-pending, $1 billion anti-tank guided missile deal with Rafael Advanced Defense Systems.

The ministry on Nov. 21 officially communicated to the Israeli defense company that the man-portable Spike ATGM tender is being retracted under defense procurement procedure DPP-2011. The cancellation could damage bilateral defense ties between India and Israel and potentially lead to the cancellation of Israeli Prime Minister Benjamin Netanyahu’s visit to India in January.

The MoD also reportedly plans to suspend other crucial defense programs with Israel including a $400 million deal to buy 10 armed Heron TP drones as well as a $1.2 billion deal with Israel Aerospace Industries for two additional Phalcon airborne early warning and control systems for Russian-built IL-76 aircraft.

No MoD official would comment on why the Spike program was terminated, but one source said: “As per ruling National Democratic Alliance government’s directives, all global buy, big-ticket programs will be shelved where transfer of technology is involved and they will be re-initiated under Make in India policy initiative.”

The MoD source noted that man-portable ATGMs are an urgent requirement of Army infantry troops, and so an unspecified number of Spike ATGMs could be purchased off the shelf from Rafael in the future.

An Army official, however, offered an explanation: “The man-portable Spike ATGMs cancellation has been done by MoD under pressure from state-owned Defence Research and Development Organization, which wants to promote its own man-portable ATGM, which is currently only at initial stage of development.”

A DRDO scientist has confirmed that to promote the Make in India initiative, the MoD gave its blessings to DRDO’s man-potable ATGM program. But the scientist would not comment on a development timeline or when the weapon could enter service.

Once fully developed, DRDO would transfer full technology of the ATGM to state-owned Bharat Dynamics Limited for large-scale production.

An Army official claimed it will take at least three to five years to develop a proven man-portable ATGM before it can even be tested by the service. “Moreover, DRDO’s man-potable ATGM would be around at least $80,000 a unit price, which is almost double than Spike. This missile is not fully indigenous, and DRDO will have to depend on Thales of France for missile’s infrared seeker systems.”

Another Army official said that based on the service recommendations, the MoD pursued the Spike program with Rafael on a single-vendor basis. And after successful summer and winter trials, cost negotiations were settled early this year for the procurement of 321 launcher systems, 8,356 Spike ATGMs and 15 training simulator systems.

Under the $1 billion deal, Spike ATGMs were to be delivered to the Indian Army. The program also had an optional clause for the production of 1,500 launcher systems and 30,000 Spike missiles in India.

Domestic defense industry giant Kalyani Group opened a missile subsystems manufacturing facility in partnership with Rafael Advanced Defense Systems in August at Hyderabad, southern India. The joint venture, Kalyani Rafael Advanced Systems, was opened to undertake the production and assembly of Spike ATGMs and related technologies ― such as missile electronics, command, control and guidance, electro-optics, remote weapon systems, precision-guided munitions, and system engineering ― in its newly established 24,000-square-foot facility.

Vivek Raghuvanshi is the India correspondent for Defense News.

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