The Indian defence ministry has cancelled a military deal with the Israeli defence technology firm, Rafael Advanced Defence Systems, worth $500 million, local media reported yesterday.
Under the deal, India would have purchased 8,000 Spike anti-tank missiles and 300 missile launchers.
Indian sources claimed that New Delhi cancelled the deal because it wants to strengthen local defence industries.
An Indian source, described as familiar with the details of the agreement said: "Under the deal, Israel has pledged to set up a local assembly plant to create work in India."
The deal was about to be signed, but after pressure from the Indian arms industries, the defence ministry cancelled it.
The source said the Indian army has criticised the defence ministry's decision because locally-made rockets would take long time to be developed.
The source also noted that the Indian defence ministry's decision to cancel the deal could have repercussions for Israeli Prime Minister Benjamin Netanyahu's scheduled visit in January which will come in response to Indian Prime Minister Narendra Modi's visit to Israel in July.
In response to the reports, Rafael Advanced Defence Systems said it had yet to be "officially informed of any changes" to the contract.