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By Sankalp Phartiyal NEW DELHI (Reuters) - India successfully test-fired on Wednesday a new long range surface-to-air missile capable of countering aerial threats at extended ranges, as Prime Minister Narendra Modi pushes to enhance the country's military capabilities. India, which shares borders with nuclear-armed China and Pakistan, is likely to spend $250 billion over the next decade to upgrade its military. It is the world's biggest buyer of defense equipment but Modi is trying to build a defense industrial base in the country to cut overseas purchases. The test-firing of the missile system, jointly developed by India and Israel, was carried out by warship INS Kolkata, the Ministry of Defence said in a statement said. Defense industry told Reuters last year that the value of the Barak 8 project was $1.4 billion. The aerial defense system includes a radar for detection, tracking and missile guidance. Only a small club of countries including the United States, France, Britain and Israel possess such capability, a Defence Research and Development Organization spokesman said. Israel is one of India's top three arms suppliers, delivering items such as missiles and unmanned aerial vehicles, but such transactions were long largely unpublicised because of India's fear of upsetting Arab countries and its own large Muslim population. (Additional reporting by Jatindra Dash; Editing by Robert Birsel)