Jerusalem, Januray 06, 2005 (PTI)

Israel Military Industries (IMI) has signed a deal with India for joint manufacture of advanced tank shells (125 mm).

The deal, worth approximately USD 11.6 million, is part of an agreement signed between IMI and Indian defence industries and a follow-up order is likely later this year, a company release said.

It was signed during a recent visit of a delegation from the Indian Ordnance Factories to Israel, defence industry sources told PTI.

"The IMI management regards India as a strategic partner and therefore has a permanent representation there", the release said.

The deal follows two others recently concluded by the two sides.

The Israeli company will be setting up five chemical plants to develop explosives in Bihar, to be built over a period of two years, IMI officials said.

According to another major contract, the company will be upgrading rockets for the Indian Army in a deal worth USD 30-40 million, media reports said.

The deal has the potential to expand to the USD 1 billion mark over a five year period, IMI Chairman Arie Mizrachi was quoted as saying.