Israel and India Forge $150Billion Arms Deals and Joint Weapons Research

Posted: November 19, 2014 in War Is The New Economy



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Modi Revives India’s Ties With Israel as Terrorism Threat Grows

Indian Prime Minister Narendra Modi is openly boosting ties with Israel, strengthening a relationship that has largely grown outside of the public spotlight over the past two decades.

India last month decided to buy Israeli anti-tank guided missiles and launchers, shunning a rival U.S. offer, and is reviving joint development of a long-range missile. The moves came soon after Modi held talks with Prime Minister Benjamin Netanyahu, the first meeting between Indian and Israeli leaders in a decade.

Modi’s public overtures to Israel since his Hindu-dominated Bharatiya Janata Party won a landslide election in May are bolstering a defense relationship as both countries face threats from Islamic terrorists. The previous Congress-led government kept ties with Israel quiet, partly over concerns it’d antagonize Muslim voters the party relied on for support.

“The relationship is coming out of the closet,” said Sadanand Dhume, resident fellow at the American Enterprise Institute in Washington. “This is unquestionably the most pro-Israel government in India’s history. It’s one of the many signals of a more assertive India and one that takes terrorism very seriously.”

India, the world’s largest weapons buyer, has bought 41 billion rupees ($662 million) of Israeli arms since Modi took power six months ago. That’s more than the total value of Israel’s defense exports to India in the prior three years.

$150 Billion

In September, India made an 8.8-billion-rupee purchase of 262 Barak-I air defense missiles for warships, a deal that had been delayed for six years. A month later, it approved a 32-billion-rupee deal to buy 8,356 Spike anti-tank guided missiles and 321 launchers built by Rafael Advanced Defense Systems Ltd. They beat out a U.S. offer to supply Javelin missiles manufactured by Lockheed Martin Corp (LMT) and Raytheon Co.

Modi’s government is also reviving a five-year-old effort to jointly develop a long-range surface-to-air missile called the Barak-II NG. It was successfully tested in Israel, according to an Indian Defense Ministry statement on Nov. 10.

All this may just be the start. India plans to spend $150 billion to modernize its military by 2027, and Israel may be well positioned to gain. For starters, the military needs about 16,000 more anti-tank missiles, according to the Indian army.

While the U.S., Russia and European nations are likely to remain India’s top suppliers of ships or aircraft, Israel’s missile systems, surveillance, and ordnance systems are designed for the kind of threats posed by hostile neighbors and terrorists, according to Jon Grevatt, Asia-Pacific defense industry analyst for IHS Jane’s.

Terrorism Threat

“Israeli capabilities — this is important — fit in with the military requirements of the Indian armed forces,” Grevatt said. “The threats they face are similar.”

Modi called for an international strategy to defeat terrorism while addressing Australia’s parliament this week, several months after accusing neighboring Pakistan of resorting to terrorism because it can’t win a conventional war. The countries have fought two of their three wars since 1947 over the disputed Muslim-majority region of Kashmir, which is divided between them and claimed in full by both.

The planned U.S. exit from Afghanistan makes it more likely that Pakistan-based fighters who had targeted American troops will turn their weapons on India. In September, al-Qaeda leader Ayman al-Zawahiri said the terrorist organization plans to conduct operations in India headed by two Pakistani militants.

Israel Visits

Modi visited Israel in 2006 as chief minister of Gujarat, when he was ostracized by the U.S. and European countries over his response to 2002 riots in his state that killed about 1,000 people, mostly Muslims. Modi has repeatedly denied wrongdoing.

Other members of Modi’s BJP are also close with Israel. Home Minister Rajnath Singh’s first trip abroad was to Tel Aviv this month to discuss defense and security ties. Sushma Swaraj, Modi’s foreign minister, previously headed the equivalent of the Israel caucus in India’s parliament.

Modi is aiming to build up the local manufacturing base with a “Make in India” campaign, which includes modernizing the nation’s armed forces. Netanyahu told Singh this month that Israeli manufacturers, including the defense industry, could produce in India to reduce costs.

The selection of the Israeli Spike anti-tank missile over the U.S. Javelin “will not negatively impact our relationship with India or other possible military sales” to the country, the Pentagon’s top weapons buyer, Frank Kendall, said in an e-mail.


The Spike “had been the original frontrunner” for India’s requirements and the decision “had been put on hold pending their review of our Javelin proposal. The Spike has already met their technical and field trial requirements, Javelin had not,” Kendall said.

The U.S. Javelin proposal “is still on the table” to meet India’s remaining requirements, he said.

Until 1992, when relations between India and Israel were normalized, citizens couldn’t travel between the countries. India’s pro-Palestine stance started to shift in 1999, when Israel provided crucial weapons at short notice to India that allowed it to defeat Pakistan during a conflict in Kashmir.

Ariel Sharon was the only Israeli prime minister to visit India in 2003, the last time a BJP-led government held power. Since then, Palestinian leader Mahmoud Abbas has visited India four times, including two state visits, according to India’s foreign ministry.

‘Integral Part’

While India’s foreign ministry says its friendship with Palestine is “an integral part of our time-tested foreign policy,” signs of a shift toward Israel were seen shortly after Modi’s BJP became the first party in 30 years to win a majority in India’s parliament. Swaraj, the foreign minister, in July rejected a request by opposition lawmakers for a resolution condemning Israel’s attacks on Gaza.

Israel’s relationship with India “is very important to us, and we are placing a major investment in nurturing and growing that relationship,” said Paul Hirschson, a spokesman for the Israeli foreign ministry in Jerusalem. “We’ve had an incredibly positive engagement” with the Modi administration, he said.

“Modi has a mandate,” said Harsh V. Pant, a scholar of international relations at King’s College London. “He can confidently take this relationship forward rather than be bogged down by the ideological affiliations of the past.”


India cancels Israel Military Industries boycott – report


US “Defense News” reports that the way is now open for IMI to win a battle tank development project.


Without fanfare, India has retracted its 2009 boycott of Israel Military Industries Ltd. (IMI). The measure will pave the way for negotiations between IMI and the Indian Ministry of Defense on potential joint projects, including development of a battle tank for the Indian army, according to a report from New Delhi by US periodical “Defense News.”The information is attributed to a source in the Indian Ministry of Defense. The ministry has not published an official announcement that the boycott was removed, but notified IMI management of its decision in September. Indian Ministry of Defense officials and diplomats in the Israeli embassy in New Delhi did not confirm the report. According to “Defense News,” IMI management sources did not respond to the report.The previous government in India, controlled by the United Progressive Alliance (UPA), imposed the embargo in 2009, following accusations that IMI had bribed officials in Indian government company Ordnance Factory Board (OFB) in order to win a tender for production of 155-mm artillery shells in cooperation with the Indian company’s plant in the Nalanda district. Five other foreign companies, including companies from Russia and Singapore, were accused of corruption in the same year for the purpose of winning military tenders, and a boycott was imposed on all of them. The “Times of India” reported in 2012 that IMI would be barred from operating in India until 2022. In any case, the Indian uncover police never proved that IMI paid bribes, according to the Indian source who reported the removal of the boycott.”Globes” wrote in 2012 that IMI’s involvement in the bribery affair had excluded it from taking part in defense deals in India, while other Israeli defense companies were prospering in the country, where demand for weapons and systems has been constantly rising. “Globes” called 2009-2012 “lost years” for IMI. 2013 and 2014 were also obviously lost for the company in India.

According to “Defense News,” now that the boycott has been removed, the Indian Ministry of Defense plans to consider new possible defense projects with IMI. One possible project is a partnership in the development of a battle tank for the Indian army and the establishment of a factory for joint production of various types of munitions, particularly 155-mm artillery shells. IMI was a leading contender in the competition for developing the tank before the boycott. In addition, due to the boycott, the Indian Ministry of Defense canceled IMI’s win in a tender for the production of a system for loading 155-mm ammunition slated for production at an OFB facility.

What caused the removal of the boycott? According to “Defense News,” the exclusion of the company from the Indian defense industry caused a shortage of 155-mm artillery ammunition. Former Indian army chief of staff Gen. (res.) VK Singh reported to then-Indian Minister of Defense AK Antony a “critical shortage” of various types of ammunition. OFB was incapable of supplying the Indian army’s munitions needs, and India became dependent on Russia for its ammunition requirements.

IMI has always denied any involvement in bribery. Following the decision in 2012 to bar the company from doing business in India until 2022, company management stated that it had “acted legally, and would continue its actions with the authorities in India to settle the matter.” IMI said it intended to appeal the decision to the authorized parties in India, because it had been “based on erroneous reports, and ignored documents and figures that IMI had given to the Indian Ministry of Defense.”

A source involved in the matter told “Globes” reporter Yuval Azulai in 2012, “IMI fell victim to wider affair involving a number of defense companies operating in India. In its case, however, a competing company had motivation to implicate IMI in this dubious affair. It is not as if this is not something that never occurred before in giant tenders in various places around the world.”


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