India and Israel have agreed to develop an advanced-range surface-to-air missile in a $2.5 billion deal.

The missiles, with a range of 70km, will be capable of detecting and destroying hostile aircraft, missiles and spy planes.

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The joint venture between the Defence Research and Development Organisation and Israel Aerospace Industries was approved by India’s Cabinet Committee on Security on Thursday.

Last year Israel supplied India with $1.6 billion worth of military equipment, and is the country’s second largest defence supplier after Russia.