The deal was cancelled a few weeks ahead of Mr Netanyahu's visit to India and its renewal is considered to be a "major strategic achievement", the Jerusalem Post reported.
"India will buy Israel's anti-tank spike missiles," the paper quoted Prime Minister Netanyahu as saying after spending the day with Prime Minister Narendra Modi.
Mr Netanyahu, who is on a six-day visit to India, said the final details and scope of the deal are still in the process of being worked out, the paper said.
Another leading Israeli daily 'Haaretz' reported that the deal is "back on the table".
Quoting Israel's National Security Adviser Meir Ben-Shabbat, the paper said that current talks are trending in a positive direction, and more details will be disclosed later.
As per the original proposal, India had planned to acquire the ATGMs for the Army at a cost of USD 500 million.
The Indian defence ministry has been strongly pushing for transfer of technology in procuring various weapons and other platforms from foreign defence majors as part of its broad policy initiative to encourage domestic defence industry.
Official sources in New Delhi had earlier indicated that the proposal to acquire the missile system faced hurdles when Israeli side apparently expressed reservations in ensuring full transfer of technology as per the provisions of the 'Make in India' initiative.
The company had recently inaugurated its facilities in Hyderabad where the project was to be executed.
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