India’s Israeli Spike Guided Missile Procurement Plan Deadlocked Over Price

The Indian Government’s defense deal worth INR 3,000 crore ($470 million) to procure ‘Spike’ Israeli Anti-Tank Guided Missiles (ATGM) for its army has hit a roadblock ahead of Prime Minister Narendra Modi’s visit to Jerusalem.

“The cost negotiation committee which was to assess the modalities for the procurement deal has failed to make any headway,” The Hindu newspaper quoted an unnamed source from the MoD as saying.

The government had approved purchase of 8,356 ATGMs from Rafael, an Israeli firm in October. The Spike missile was selected over US Javelin missile system.

Officials from the MoD and from the Army have also raised serious objection about the Original Equipment Manufacturer (OEM) claiming that the price quoted was almost twice that of the benchmark price. They also claim that the Israeli firm has asked for additional amount on each missile that has to be produced in India.

“Besides, the OEM has asked for a yearly escalation of four per cent on all the supplies, including raw material to be sold to the Bharat Dynamic Limited (BDL). In fact, after the transfer of technology to the BDL, the company has refused to take responsibility for any quality issues,” said an officer, who is privy to the developments.

So, perturbed with the Israeli firm’s attitude, the MoD has red-flagged its commercial bids. “We have discontinued the negotiations with the firm and asked it to reconcile and revert. It is an important project for the Army, which is in dire need of anti-tank missiles. At the same time, we cannot compromise on the terms and conditions,” the officer added.