The government has decided to retract the process to acquire a batch of Spike anti-tank guided missiles from Israel for the army, and asked premier defence research laboratory Defence Research and Development Organization to develop it with indigenous technology.
The government has decided to retract the request for proposal to procure the Spike missiles from an Israeli firm, official sources said.
The sources indicated that the proposal to acquire the missile system faced hurdles when Israeli side apparently expressed reservations in ensuring full transfer of technology as per the provisions of the 'Make in India' initiative.
They said the decision to retract the RFP was taken after the DRDO expressed confidence of producing the ATGMs.
The DRDO has now been told to work on the project and has been given four years to develop the missile, the sources said.
There was no official comment from the defence ministry on the issue.
India's Kalyani group and Israel's state-run Rafael Advanced Defence Systems had commissioned a Rs 70 crore production facility near Hyderabad in August, anticipating that the Israeli firm would bag the contract.
In Jerusalem, Rafael Advanced Defence Systems said it has not received any communication from India on retraction of the RFP.
"Rafael has not been officially informed of any change in the decision to purchase Spike missiles. Spike is in use with 26 different militaries around the world, and was selected by India after a long and rigorous process, in which it successfully met all the requirements in a wide variety of combat test scenarios," Rafael's deputy spokesman Ishay David told PTI.
The defence ministry has been strongly pushing for transfer of technology in procuring various weapons and other platforms from foreign defence majors as part of its broad policy initiative to encourage domestic defence industry.
As per the original proposal, India had planned to acquire the ATGMs for the army at a cost of USD 500 million.