Israel Aerospace Industries signs near $2 billion missile deal with India

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The logo of state-owned Israel Aerospace Industries (IAI), the country's biggest defence contractor, is seen at their offices next to Ben Gurion International airport, near Or Yehuda, Israel February 27, 2017. REUTERS/Baz Ratner (Copyright Reuters 2017)

State-owned Israel Aerospace Industries (IAI) has struck a deal worth almost $2 billion to supply India's army and navy with missile defense systems, the company said on Thursday, describing it as Israel's largest ever defense deal.

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IAI [ISRAI.UL] said in a statement it would supply an advanced air defense system, including medium-range surface-to-air missiles, launchers and communications and control technology, to the Indian army for around $1.6 billion.

An additional naval defense system, including long-range surface-to-air missiles, would be deployed on India's first aircraft carrier, which is still being built, the statement said. The value of that deal was not disclosed, but IAI said the total package was worth nearly $2 billion.

Israel is one of the top three arms suppliers to India, which shares borders with nuclear-armed China and Pakistan. Between 2008-2015, India was the world's second largest developing-world arms purchaser, according to the U.S. Congress.

Until recently, India kept its defense ties with Israel under wraps, largely out of fear of upsetting Arab countries and its own large Muslim population.

But Indian Prime Minister Narendra Modi, whose nationalist party sees Israel as an ally against Islamist militancy, has openly cultivated warmer ties, and is due to visit Israel later this year.

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(Reporting by Jeffrey Heller and Maayan Lubell; Editing by Jon Boyle)