Israel has signed a USD 2 billion contract with India to supply it with missile defence systems, the state-owned Israel Aerospace Industries said today.

Israel Aerospace Industries (IAI) in an announcement said that it has been awarded its largest defence contract of almost USD 2 billion for supplying advanced medium-range surface-to-air missile systems (MRSAM) to India.

IAI said it would also supply additional long-range air and missile defence systems (LRSAM) for the first locally produced Indian aircraft carrier.

The contract is worth USD 1.6 billion for IAI, with the rest going to another state-owned defence company Rafael, that will be providing components for the systems.

"The current contracts represent an enormous expression of confidence by the government of India in IAI's capabilities and advanced technologies, which are being developed with our local partners as part of the Indian government's 'Make in India' policy," IAI Chief Executive Officer (CEO) Joseph Weiss said in a statement.

President Reuven Rivlin, who is said to have discussed the deal with Indian leaders during his trip to India early this year, called to congratulate Weiss on this "historic" deal terming it truly "exceptional".

"Please pass on my congratulations to all who contributed to this important achievement. You have come such a long way to arrive at this point, it is truly exceptional," Rivlin told IAI's CEO.

"Israel's willingness to share technology and form joint ventures with Indian companies to develop and manufacture military equipment supporting the 'Make in India' initiative is said to have been well received in New Delhi.

In the case of MRSAM, an advanced air and missile defence system that provides protection against a variety of aerial threats, the technology is said to have been jointly developed by IAI and India's Defence Research and Development Organisation in collaboration with Rafael and IAI's Elta division.

Indian companies such as Larsen & Toubro are said to have also participated in the project.

MRSAM's current version is operational with the Indian Air Force, Indian Navy and Israel Defence Forces (IDF).

The system includes an advanced phased-array radar, command and control, mobile launchers and missiles with advanced RF seekers.