Israel’s Make with India Strategy

With the strengthening of their bilateral ties, the time is ripe for India to harness the technological expertise from Israel to modernise the indigenous defence industry

Defence Industry

By P R Kumaraswamy

Prime Minister Narendra Modi with his Israeli counterpart Benjamin Netanyahu

By reinventing itself to changing situations, Israel has emerged as a critical player in the Make in India campaign of the government in the defence sector. Since the normalisation of relations in 1992, military-security cooperation has been a pivot to the bilateral ties. One could notice a gradual shift and maturity in defence relations. Initially, it revolved around the upgrading of Soviet inventories such as MiGs in the wake of the sudden disintegration and disappearance of the USSR and the resultant supply-chain disruption.

Then their engagements moved to Indian procurement of small arms, ammunition, fast patrol boats, radars, unmanned aerial vehicles (UAVs), and eventually AWACS. Following the visit of the then Home Minister L K Advani to Israel in the summer of 2000, border management was added to cooperation in intelligence sharing and counter-terrorism cooperation. Over the years, both countries have been cooperating in space and satellite areas along with missile defence.

The growing Indian market and limited Israeli production capabilities compelled both countries to revisit their business model. The wholesale capital acquisition is not only costlier but also limits and slows down defence modernisation. At the same time, indigenous technological innovations have been slower, inadequate, and often frustrating. It was in this context, Make in India became the buzzword in the defence sector.

Saankhya Lab
Defence Minister Rajnath Singh with his Israeli counterpart

Technology transfer is the critical component of the arms trade, but arms-producing states are not keen to share technology. For security as well as commercial considerations, they prefer to transfer either obsolete or earlier generation technologies. This is more pertinent for Israel as its qualitative edge over its adversaries, rests on its technological superiority. Moreover, security concerns also inhibit Israel from sharing the latest innovations as it does not wish to confront its own technologies by imprudent sales. For example, during the visit of Prime Minister Ariel Sharon in September 2003, Israel flagged its concerns that its military supplies to India should not be inadvertently shared with its adversaries like Iran.

At the same time, collaborating with the Make in India campaign is critical for Israel. Without sharing technologies, Israel will not be able to capitalise on the burgeoning Indian market, especially when the Indian government seeks to minimise its defence outlays through joint ventures, local production facilities, and more significant indigenous content in procurement. In short, the outright purchase of defence equipment is either discouraged or is shrinking. Furthermore, Israel lacks the capacity of scale to meet the Indian demands, and this could be circumvented through joint ventures with Indian companies, private and public sector ones. Moreover, this measure also facilitates greater access to the Indian market as the Israeli companies would be competing not as a global player but as partners of the domestic defence industries.

One can cite the Kalyani Rafael Advanced Systems Ltd, the first private sector missile production facility, which was established in Hyderabad in August 2017. Two years later, it secured a $100-million order from Rafael of Israel to supply 1,000 Barak-8 MRSAM missile kits for the Indian Army and Air Force.

A contract signing ceremony between Bharat Forge and Rafael Defence

During the visit of Prime Minister Benjamin Netanyahu to India in January 2018, both countries signed an MoU to promote cybersecurity cooperation. For his part, Prime Minister Modi invited Israeli companies ‘to make more in India with our companies.’

Though public sector undertaking and DRDO are involved in joint ventures, the rapid entry of private players should accelerate the Indo-Israeli defence cooperation. In recent years, both have entered into several joint ventures in the defence sector. These include defence and technology branches of leading Indian conglomerates like Bharat Dynamics, Tata, Mahindra, Punj Lloyd, Kalyani, Adani, etc. From the Israeli side, Rafael, Israel Aerospace Industries, Israel Weapons Industries are the prime partners. In most cases, the Israeli participation is substantial and is closer to 50 percent.

IWI Carmel

The areas of cooperation include advanced weapon sights, small arms, land systems including artillery and mortars, unmanned aerial vehicles, electronic and electro-optical systems, parts of assault rifles, Galil sniper rifles, Negev light machine guns, etc.

Though public sector companies such as HAL have been producing or upgrading Soviet inventories under license, the current phase is part of the larger Indian aspiration to be self-sufficient in the military and to emerge as a possible weapons supplier. The Israeli partners not only enjoy a technological edge over the Indian counterparts, but much of their inventories and technologies are also battle-tested. They can be adapted to Indian demands and battlefield conditions. The products can also be tested in Indian terrains and can be easily modified with relative ease. If handled well, joint defence ventures could enhance the threshold of Indian defence industries and increase their technological competence, which in turn will have a spill over effect in the non-defence sectors.

When he became the first and, so far, the only Defence Minister to visit India in February 2015, Moshe Yaalon observed: “We are willing to share our techniques, our technologies, our know-how with India”, and this is being carried through growing number of joint ventures between Indian and Israel defence companies.

– The author teaches Israeli politics and security in Jawaharlal Nehru University, New Delhi.

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