India inks weapons deal worth nearly US$2b with Israel

[NEW DELHI] India will buy nearly US$2 billion worth of weapons technology from Israel in what's being described as the "largest defence contract" ever signed by the military exporting giant.

The deal will see state-owned Israel Aerospace Industries provide India with an advanced defence system of medium-range surface-to-air missiles, launchers and communications technology, the company said in a statement Thursday.

The "mega" missile agreement is "considered to be the largest defence contract in Israel's defence industries' history", the company said.

The Israeli firm will also supply a naval defence system including long-range surface-to-air missiles for India's first aircraft carrier, which is still under construction.

Comment was not immediately available from India's defence ministry.

Israel Aerospace Industries said some components will be assembled in India, in line with Prime Minister Narendra Modi's push to reduce reliance on costly imports.

Mr Modi's government has raised the limit on foreign investment in the defence sector and encouraged tie-ups between foreign and local companies under a 'Make in India' campaign.

India - the world's largest defence importer - has been investing tens of billions in updating its Soviet-era military hardware to counter long-standing tensions with regional rivals China and Pakistan.

India has signed several big-ticket defence deals since Mr Modi's Bharatiya Janata Party stormed to power in 2014.

Israel is a top weapons exporter, with sales last year surging to US$6.5 billion.

India is a top market for its arms, as New Delhi has turned increasingly away from traditional ally Russia for its military hardware.

Last year India signed a contract to buy 36 Rafale twin-engine fighter jets from France for 7.9 billion euros (S$12.34 billion) after major delays and obstacles over the cost and assembly of the planes in India.

AFP