The deal with India's state-owned Bharat Electronics Limited to supply the marine version of the Barak 8 air and missile defence system for seven more warships follows a $630 million (551 million euro) order placed last year.

State-owned IAI, Israel's largest defence firm, said worldwide sales of the Barak 8 system now totalled more than $6 billion.

Israel is among the world's top arms dealers, with nearly 60 percent of its defence exports going to the Asia-Pacific region, according to Israeli defence ministry figures.

Russia is still by far India's largest arms supplier. During a visit last week, President Vladimir Putin won an order for the S-400 surface-to-air missile defence system, worth $5.2 billion according to an Indian source.

But as the United States has imposed sanctions on countries buying Russian military hardware, India has sought to diversify its suppliers.

Washington and New Delhi announced plans last month for joint military exercises in 2019 and the United States is now India's second-biggest supplier.

In April last year, Israel won 1.6 billion euros of orders from India, which it hailed as its largest ever arms export deal.

"It constitutes further proof that security is an investment not an expense," Israeli Defence Minister Avigdor Lieberman said of Wednesday's deal.

"Israel Aerospace Industries is a pillar of the nation that we must conserve and strengthen," he added, recalling his opposition to proposals for partial privatisation of the firm.

Prime Minister Narendra Modi made a "groundbreaking" first ever visit by an Indian premier to Israel in July last year to cement growing defence ties.