The Ministry of Defence has decided to cancel a $500-million (approximately Rs 3,300 crore) defence deal with Israel, The Indian Express reported on Monday.

As part of its efforts to make India a defence manufacturing hub, the ministry has asked the Defence Research and Development Organisation to indigenously develop and produce a Man-Portable Anti-Tank Guided Missile for the Army instead of procuring it from Israel.

In anticipation of the deal, which was seen as proof of the rise in co-operation between the two countries, Israel’s Rafael Advanced Defence Systems had entered into a joint venture with an Indian firm, and even set up a missile sub-systems facility in Hyderabad. The deal was expected to be signed as soon as price negotiations were finished in 2016, the report said.

Importing a foreign Anti-Tank Guided Missile would hurt the Defence Research and Development Organisation’s weapons systems programme, ministry sources said.

Since the DRDO has “successfully produced the Nag and Anamika Anti-Tank Guided Missiles”, it is confident about providing the Army with a “Man-Portable Anti-Tank Guided Missile of third generation missile technology, at par with Spike, within three to four years”, an unidentified official of the ministry was quoted as saying. “It won’t also need any transfer of technology.”