India has cancelled a massive $500 million deal to purchase 8,000 anti-tank missiles from Israeli defense firm Rafael, Indian press reported on Monday.

India originally selected the Rafael Spike missile system in 2014, choosing to contract with the Israeli government-owned defense firm rather than accept a US offer to purchase its Javelin system.

The deal saw Rafael Advanced Defense Systems, which also developed the famous Iron Dome, open a production facility in India with its local partner this past August in order to begin manufacturing the Spike missiles. But according to the Indian Express, the Indian government has decided to turn the project over to the state instead, tasking India’s Defense Research and Development Organization with developing and producing the weapon.

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According to ministry sources, the deal to buy the foreign missile system was cancelled so as not to adversely impact India’s domestic program, said the Indian Express.

However, the cancellation may have a negative effect on international relations between India and Israel, which have been strengthening in recent years through large defense deals, joint military training, and diplomatic visits.

The cancellation notwithstanding, India is one of Israel’s biggest consumers of defense goods and the two countries’ militaries recently cooperated when India sent its air force to join Israel’s Blue Flag aerial exercise for the first time. In July, Indian Prime Minister Narendra Modi visited Israel in an historic trip marking the first-ever time a sitting premiere made an official visit to the Jewish State.

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Source: Israel in the News