Less than two weeks before Prime Minister Benjamin Netanyahu is set to visit India, New Delhi has officially canceled a $500m. defense deal with defense-giant Rafael to purchase Spike anti-tank guided missiles.

“Rafael has received an official statement from the Indian Ministry of Defense on the cancellation of the Spike missile deal,” read a statement from the company, adding that it had been canceled before the signing of the contract and despite the company fulfilling all of the necessary requirements. “Rafael regrets the decision but is committed to continuing to pursue this important goal, as it has done with great success for over two decades, with a variety of innovative and advanced systems and with a commitment to the Indian Ministry of Defense,” it continued.

Rafael, which was slated to provide India with some 8,000 Spike missiles and more than 300 launchers, will still take part in Netanyahu’s three-day trip to New Delhi beginning on January 14.

It added that India had also rejected an offer from US-based Raytheon-Lockheed Martin for the sale of Javelin anti-tank guided missiles.

Israel has been supplying India with various weapons systems, missiles and unmanned aerial vehicles for several years. Until recently, most of the transactions have been kept quiet, but ties have shifted, and India has become one of Israel’s largest buyers of military hardware, with annual defense deals worth over $1b.

Sources within the Indian Defense Ministry were quoted by the Indian Express newspaper as saying the decision to cancel the deal was based on the fact that importing the Spike Missile System would “adversely impact the program for indigenous development of the weapon system by DRDO [India’s Defense Research and Development Organization].”

The Indian Defense Ministry will continue, however, with the deal with Rafael to purchase 131 surface to air missiles for $70 million for their aircraft carrier.

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