Will the defense relations between Israel and India ascend to the next level and the Israeli defense industries benefit from it, big time? Insights and updates from the Aero-India Exhibition held last month in Bangalore
2015 will be a significant year for the defense relations between India and Israel. This was reflected in the first-ever visit by a serving Israeli defense minister to India and the warm welcome extended to the Israeli defense industries at the Aero-India Exhibition in Bangalore (February 18-22).
More than 15 Israeli companies shared the Israeli pavilion – one of the largest at this important Indian exhibition. In fact, it was only smaller than the massive presence of security organizations and industries from India itself. Israeli Defense Minister Moshe Ya’alon attended the opening of the exhibition and held defense and diplomatic meetings in the Capital, New Delhi.
The Chairman of Rafael, Itzhak Gat, said at the opening of the Israeli pavilion, on behalf of the Israeli industries, that the first-ever visit by the Defense Minister in India will propel the connections between Israel and India to new achievements. According to him, “India is a superpower that offers a technological opportunity for the (Israeli) defense industry. We must be attentive to their needs. Unless we adapt, we will not be able to develop over here.”
Gat addressed the Indian trend according to which India’s massive defense contracts are based on international cooperative alliances that include the transfer of technologies and commitment to having the lion’s share of manufacturing, in each project, done on Indian soil. For this reason, the slogan for this year’s exhibition was “Make in India”.
Brig. Gen. (res.) Michel Ben-Baruch, head of SIBAT, the Defense Export & Defense Cooperation Division of IMOD, said that the special relations between Israel and India began during a crisis in India and have since evolved significantly, so today they are based on solid trust and cooperation in many fields.
Defense Minister Ya’alon told Indian reporters in Bangalore that “The cooperation between Israel and India is not aimed against any particular third party, but based on the common democratic values and interests (of the two countries).”
“The Key Point: Modi’s Appointment”
Contrary to the warm defense alliance, the open diplomatic relations between Israel and India are still fairly cold. Formal diplomatic relations were established between the two countries only in 1992, and India still votes almost automatically for all anti-Israeli resolutions at the UN. In the economic field, the two countries have not yet signed a free trade zone agreement.
Indian analysts and senior sources in the local defense establishment told
IsraelDefense that according to their estimates, the results of the recent general elections of June 2014 will be highly significant to the Israeli-Indian alliance and will have a favorable effect on the sales of the Israeli defense industries to India. Narendra Modi, head of the right-wing party BJP, won the elections and became Prime Minister. Modi is a highly charismatic leader who grew up as the member of a lower-caste family in Gujarat province, close to Pakistan. In the past, the Prime Minister waged an all-out war against the terrorist organizations financed by Pakistan and has, therefore, lived under heavy security arrangements, owing to threats aimed directly at him. One of the first telephone calls he made pursuant to his winning the elections was to Israeli Prime Minister Benjamin Netanyahu. During the last general assembly of heads of state at the UN, he had his picture taken with Netanyahu. Now, the first-ever visit of an Israeli Defense Minister is another public expression of the warming-up of the relations between the two countries during Modi’s tenure.
Analyst Mayuri Mukherjee of the influential Indian English language daily newspaper “The Pioneer” states that unlike the visit by the late Israeli Prime Minister Ariel Sharon to India, in September 2003, which met with widespread hostile demonstrations, Modi’s photograph with Netanyahu did not stir any storms in the Indian media. Ya’alon’s visit has passed smoothly, too. Based on unrepresentative conversations with local residents of the Capital New Delhi, it appears that the (educated) Indian public is largely aware of the alliance between Israel and India and definitely supports it. The operatives of Israel’s Mossad are legendary in India.
Mukherjee states that Israel is the second largest supplier of arms to India, after Russia. The last tender won by Rafael for the supply of Spike missiles (designated ‘Gil’ in the IDF) is estimated at US$ 525 million. A recent inquiry found that an actual requisition for the missiles, pursuant to Rafael having won the tender, is yet to be placed.
However, the massive tender for the supply of Spike missiles can indicate the extent to which politics and security are intertwined and how significant Modi’s appointment as Prime Minister is as far as the Israeli defense industries are concerned.
Originally, India intended to sign the major transaction involving the acquisition of the Spike missiles more than a year ago. Everything had been finalized and the Israeli missile passed a series of trials in India, but at the very last moment, a surprising turn occurred: US Secretary of State John Kerry, along with the entire leadership of the world’s greatest superpower, intervened and started pressuring the Indians to shred the documents they had drawn up with the Israelis and purchase US-made Javelin missiles instead. The Americans gave India an assurance that looked very lucrative on paper: they would allow India to participate in the development of the next-generation antitank missile of the USA – if they only purchased present-generation Javelin missiles instead of the Israeli Spike missiles.
The blatant intervention of the US leadership stemmed from the fact that the US defense budget had been cut severely, and the US government does everything in its power to provide work to the giant industries of the USA, so that they do not dry up for lack of employment or revenue.
The end was a happy one for Israel: the Indians did not budge under the American pressure and selected the Israeli missile. In Israeli eyes, one factor that may have helped was the fact the Indians have deep reservations toward the USA, in view of the American support of India’s enemy Pakistan and the memory of the long-term embargo the USA had imposed on India in the past.
Soon: a Trial for Rafael’s Trophy System in India
Presumably, although this subject is not mentioned, the Israeli-Indian cooperation includes extensive intelligence aspects, but some proportions are in order: the entire population of Israel does not equal even one half of the population of metropolitan Delhi – which is not India’s largest population center. The entire population of Israel equals a medium-size city on the scale of the world’s largest democracy, whose population has crossed the one billion mark.
Nevertheless, Israel has a lot to offer India, from a technological point of view.
Major Israeli industries have registered sales by the billions over the last decade. Leading the pack is IAI, which sold India Heron UAVs, Radar systems, Barak-1 missiles (through a joint project with Rafael) and Barak-8 systems that would be supplied to the Indian Navy and to the Israeli Navy in the future. Rafael sold the Indians, among other things, a large number of Barak-1 missiles.
Elbit Systems also recorded substantial sales in India, some of which were accomplished through a local company that Elbit shares with the Indian conglomerate HAL. This Israeli-Indian partnership is known as HALBIT.
The Israeli defense industries operating in India look to the future primarily. Israeli companies are positioned at an excellent starting point with regard to several massive tenders of the Indian military, which were mostly frozen during the reign of the previous Indian government. One of the tenders involves the supply of thousands of artillery pieces to the Indian Army, and Elbit Systems has reached its final stage.
In a few weeks, the Trophy situational awareness and active protection system for vehicles (by Rafael) will undergo a trial on Indian soil. At the same time, India and Israel are cooperating and exchanging ideas regarding the development of the future tank. Generally, the defense research and development agencies of the two countries maintain close cooperative ties in an extensive range of fields.
Not everything runs smoothly, however. Defense Minister Ya’alon admitted in his meeting with the Indian reporters that the massive project involving the supply of Barak-8 missiles (signed after the terrorist attack in Mumbai a few years ago, and intended to provide protection to India’s endless shoreline) encountered quite a few technological hindrances. In response to reporters’ questions, Ya’alon said that the failures encountered in the trials thus far involve the missile engines.
Either way, the future in India looks rosy to Israeli eyes. Israeli defense sources say that senior Indian officials informed them, in talks conducted during the exhibition in Bangalore, that India intends to ease her requirements regarding cooperation between local and international companies, so that the existing condition according to which in each cooperative project, 74% of the ownership will be Indian and only 26% will remain in foreign hands, will be revised to a ratio of 51-49 in favor of the Indian side.
This revision will also affect cooperative agreements signed between Rafael and Indian companies recently. “When we only have 26% of the ownership, there is no real incentive to maintain a cooperative alliance and transfer technology to India,” said Israeli sources. “The new arrangement can be beneficial to both sides – and Israel has enormous advantages compared to the giant international corporations competing for the massive Indian tenders. Because they are smaller, Israeli companies can respond more promptly to Indian demands and offer the latest technologies, through a reliable cooperative alliance that is lucrative to both sides. Israeli technology enjoys excellent reputation in India, and it seems that the defense cooperation between the two countries is about to ascend to the next level.”