(MENAFN- The Peninsula) India has opted to buy Israel's Spike anti-tank guided missile, a defence ministry source said yesterday, rejecting a rival US offer of Javelin missiles that Washington had lobbied hard to win.
The Defence Acquisition Council (DAC) approved defence procurement proposals worth Rs800bn ($13.1bn), many of which were longstanding, at a meeting chaired by Defence Minister Arun Jaitley, the Press Trust of India said.
India, the second most populous nation in the world, is in the midst of a $100bn defence upgrade programme. It cleared proposals worth nearly $3.5 billion in June.
India will buy at least 8,000 Spike missiles and more than 300 launchers in a deal worth Rs32bn ($525m), the source said after the meeting.
Prime Minister Narendra Modi's five-month-old government wants to clear a backlog of defence orders and boost India's firepower, amid recent border tensions with China and heavy exchanges of fire with Pakistan across the Kashmiri frontier.
"National security is the paramount concern of the government," the source quoted Jaitley, who also holds the finance portfolio, as telling the procurement panel. "All hurdles and bottlenecks in the procurement process should be addressed expeditiously so that the pace of acquisition is not stymied."
Spike is a man-portable "fire and forget" anti-tank missile that locks on to targets before shooting. It is produced by Israel's Rafael Advanced Defence Systems, which declined to comment.
It beat out the rival US Javelin weapons system, built by Lockheed Martin Corp and Raytheon Co, that defence secretary Chuck Hagel pitched during Modi's visit to Washington at the end of September.
Senior US officials had said they were still discussing the Javelin order as part of a broader push to deepen defence industry ties with India by increasing the share of production done in the country.
The other proposals cleared by the DAC include manufacturing six conventional submarines worth over Rs500bn. The Request for Proposal (RFP) will, however, be open for "compliant yards", ministry sources said. The government aims at manufacturing all six submarines in the time frame of a year.
These submarines will be Air Independent Propulsion (AIP) capable that will enable them to stay underwater for longer and will have features including stealth and attack cruise missiles.
A committee will be set up by the DAC to decide on the shipyards that will be issued RFPs for these submarines which will study both public and private shipyards over the next 6-8 weeks. All six submarines will be made in one shipyard.
The navy will also get 12 more Dornier aircraft. These will be built by the Bangalore-based defence public sector unit - Hindustan Aeronautics Limited - at a total cost of Rs1,850 crore. Dorniers are used for maritime surveillance and the navy has a fleet of 40 of these aircraft.
The order for production of 363 infantry fighting vehicle BMP-2 for army units from the Ordinance Factory Board has also been approved. Another army proposal worth Rs662 crore for buying radio relay containers has also been approved. It also includes acquiring 1,768 critical rolling stock - open and closed wagons for transport of military equipment at a cost of Rs740 crore.
Analysts estimate that India, the world's largest arms buyer, will invest as much as $250bn in upgrading its Soviet-era military hardware and close the gap on China, which spends three times as much a year on defence.
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