NEW DELHI, March 27: In a major defence deal, Israel will provide India a $1.4 billion air defence system, an Israeli newspaper was quoted on Friday as saying. The deal, according to the paper, was signed last month.

Press Trust of India quoted business daily Globes as saying that Israel Aerospace Industries (IAI) officially acknowledged that the two countries signed the defence deal on February 27. Under the terms, Israel will develop and manufacture seaborne and shore-based systems against missile attack on India.

The two sides have agreed that part of the payment for the systems will be made during the development period and the balance will be paid during the 66-month delivery period, which is slated to begin 90 months from the date the advance payment is received, PTI said in a dispatch from Jerusalem quoting the daily.

According to the reported agreement, IAI has also agreed to procure military or aviation products and services from India.

Besides, it will invest in defence companies in India up to an amount equal to 30 per cent of the contract.

The state-owned Israeli firm was quoted as saying that it delayed announcing the contract because the customer informed them that early disclosure was liable to cause material difficulties in its execution and might even result in cancellation.

IAI also added that it felt this risk would be substantially reduced once the advance payment was received, the report said.

The Israeli defence industry, however, decided to go open on the contract following reports in media, even though the advance payment has not yet been received, it said.
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