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.

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.