India has reportedly canceled its $500 million contract for Israeli anti-tank missiles after the country’s defense manufacturing sector conducted successful tests and promised to deliver an indigenous alternative within two years.

Following a series of successful trials of the man-portable anti-tank guided missile (MPATGM) by the Defense Research and Development Organization (DRDO), India has notified Israel that it will “abandon” the agreement to purchase Spike missiles from Rafael Advanced Defense Systems, government sources told the Indian Express.

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“Israel has been informed about the contract being abandoned in favor of DRDO, which claimed that it was developing a similar missile at a lower price in partnership with VEM Technologies Ltd,” the report said.

DRDO has been developing the third-generation MPATGM since 2015. With the second stage of testing recently successfully completed, the military research arm intends to have missiles in serial production by 2021.

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This is the second time that the half-a-billion-dollar contract for some 8,000 Spike missiles, initially signed in 2014, is being revised. India pulled out of the deal in 2017, but reopened the order the following year under new terms in which contracts for 5,000 missiles would go to domestic manufacturers, while the remaining 3,000 units would be awarded to Rafael Advanced Defense Systems. The Israeli government-owned corporation has yet to issue a comment on the latest reported cancellation.

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