India readies $3 billion defence deals with Israel; fresh push for Israeli
missile system
By Rajat Pandit, TNN | 9 Feb, 2016, 11.50AM IST
http://economictimes.indiatimes.com/news/defence/india-readies-3-billion-defence-deals-with-israel-fresh-push-for-israeli-missile-system/articleshow/50912638.cms

NEW DELHI: India is close to concluding a clutch of bilateral military deals
and projects with Israel, collectively worth around $3 billion, ahead of PM
Narendra Modi's first visit to the country later this year.

At least three deals with Tel Aviv are headed to the Cabinet Committee on
Security (CCS) for the final nod, which will consolidate Israel's position
as one of the top three arms suppliers to India, defence ministry sources
said on Monday.

The main pact concerns the Rs 10,000-crore joint development of a
medium-range surface-to-air missile system for Indian Army. The deal is
undergoing financial vetting after conclusion of final contract
negotiations. India is readying a slew of military deals with Israel worth
$3 billion before Prime Minister Narendra Modi visits Tel Aviv this year.

The pacts include the acquisition of 164 laser-designation pods or
'Litening-4' for IAF fighters like Sukhoi30-MKIs and Jaguars as well as 250
advanced 'Spice' precision stand-off bombs capable of taking out fortified
enemy underground command centres."It should be cleared by the CCS within a
month or so," said an MoD source.

Some headway has been made over the stalled negotiations for an initial Rs
3,200 crore contract for 321 'Spike' anti-tank guided missile (ATGM) systems
and 8,356 missiles. "There was a major difference (of opinion) in the ATGM
project cost between the Israeli commercial bid and the much-lower price
benchmarking done by the MoD. Over 20 contract negotiation committee
meetings have been held till now... the effort now is to close the gap,"
said the source.

The Army desperately needs third-generation ATGMs, with a strike range of
over 2.5-km and fire-and-forget capabilities, to equip all its 382 infantry
battalions and 44 mechanised infantry units.

In October 2014, the Modi government had selected the Israeli Spike ATGM
over the US Javelin missile system, but the actual contract has been hanging
fire since then. The project involves an initial off the-shelf induction,
followed by large-scale indigenous manufacture by Bharat Dynamics Ltd (BDL)
to equip the 1.18-million strong Army.

The proposed MR-SAM project between DRDO and Israeli Aerospace Industries
(IAI), too, will be huge. The initial order is for one MRSAM regiment, with
16 firing units along with their multifunction surveillance and threat
tracking radars as well as weapon control systems. But the SAM systems are
also to be subsequently produced in bulk by BDL, in keeping with the similar
ongoing DRDO-IAI projects worth around Rs 13,000 crore for Navy and IAF.