India’s Kalyani Group and Israel’s Rafael are set to create a Joint Venture (JV) to manufacture Spike Anti-Tank Guided Missiles (ATGM). India’s state-run defense manufacturer Bharat Dynamics Limited (BDL) will act as the system integrator. The details of the defense JV were reported today by Indian newspaper The Hindu.

Pune-based $2.5 billion Kalyani Group will hold the majority share of 51 percent, in compliance with India’s Foreign Direct Investment regulations.

In October 2014, Indian Defense Ministry had opted for Israeli-made Spike, despite U.S. State Department’s push to promote Javelin missile. The deal includes manufacturing of over 8,000 missiles and 300 launchers — along with transfer of technology to Indian counterparts.

Traditionally, India’s defense procurement has remained heavily depended on foreign imports. Prime Minister Narendra Modi’s 14-month old government aims to reduce country’s dependence on foreign suppliers and has removed restriction on foreign defense manufacturers willing to set up operations in India. Foreign companies can now hold up to 49 percent in defense joint ventures.

In recent months, Israel Aerospace Industries (IAI) and Or Akiva-based Meprolight have also entered in partnerships with Indian companies to form defense-based Joint Ventures – giving boost to Prime Minister Modi’s “Make in India” initiative aimed to develop India’s manufacturing capabilities.

Israel-India bilateral ties have come a long way since two countries established full diplomatic relations 24 years ago. In a major move, India’s President Pranab Mukherjee is set to visit Israel in October.