Arms sales form the backbone of the Israeli economy. There are nearly 150 defence firms in
Israel, with combined revenues estimated at US $3.5 billion. The three largest arms
manufacturing groups in Israel are the government-owned Israeli Arms Industry (IAI), Israel
Military Industries (IMI) and the Rafael Arms Development Authority, all of which produce
a wide range of conventional arms and advanced defence electronics. In addition, there are
privately owned weapons manufacturing companies like Elbit Systems and the Tadiran
Group. The Israeli arms industry employs close to 60,000 people. Israel's defence exports are
coordinated and regulated through SIBAT --- the Foreign Defence Assistance and Defence
Export Organization --- which is run by the Ministry of Defence. SIBAT's tasks include
licensing all defence exports, as well as marketing products developed for the Israel Defence
Force (IDF), that is the Israeli military, from electronic components to missile boats and
tanks.
Since the end of the cold war, Israel has been plagued by shrinkage in arms trade/export
forcing it to become extremely proactive in seeking clients to sustain the industry. The
establishment of Indo-Israel diplomatic relations in 1992 came as an undisguised blessing for
the Israeli political- military- industrial complex, as it re-energized the overall performance of
the Israel’s defence industry. India, with a record $1.6 billion procurement of arms, had
boosted Israel’s defence industries to record an all- time sales figure of $ 4.4 billion in 2006.
The Israelis’ defence trade with India has been one of the main reasons for Israel’s
emergence as one of the top five exporters of defence equipment in the world. The Indian
arms purchases include:
Barak Naval anti-missile defence system
Phalcon advanced airborne early warning systems
Green Pine early-warning and fire-control radars
Upgradation of 180 130 mm M-46 field guns by Israeli firm Soltam
Super-Dvora Mk II fast attack craft
Heron Unmanned Aerial Vehicles
Star Night Technologies Night Vision Goggles
Spider quick-reaction surface to air missile (55 km range) $2.5 billion joint collaboration
project
A $480 million, five-year contract was concluded in early 2006 between the Indian Defence
Research Development Organization (DRDO) and Israel Aerospace Industries (IAI)
for missile development. India and Israel are now working to expand their already
considerable missile development cooperation to cover both air and land based missile
systems. It is estimated that this new deal with IAI would be of the order of $2.5 billion. The
deal, apart from missile systems, also includes radar systems made by IAI's subsidiary, Elta
Systems Ltd, unmanned aerial vehicles (UAV), and possibly satellites too.
IAI had last month launched its TechSAR all-weather, high-resolution radar satellite using an
Indian launcher in collaboration with the Indian Space Research Organisation (ISRO). Israel
has made no secret of the fact that the prime function of TechSAR is to spy on Iran, a country
with which India has friendly relations. It is also known that this was the first in a series of 5
such satellites that India has agreed to launch for Israel.
A coalition of US-India Political Action Committee (USINPAC), America-Israel Political
Action Committee (AIPAC) and American Jewish Committee (AJC) has vehemently lobbied
to gain the Bush administration's approval for Israel to sell four Phalcon early warning radar
planes to India worth US $1 billion. After Pokhran II, the US had imposed sanctions on India
and opposed any form of arms trade in the subcontinent. Delegations of the American pro-
Israeli Jewish lobby have been visiting India frequently since 1995. Two years ago, it was
this very lobby that took a group of Indian-American leaders to visit Israel to boost the arms
trade and diplomatic relations. India has become one of Israel's largest business partners.
Israel is currently India's second largest weapons supplier after Russia and is expected to take
over the first place from Russia soon.
Recently the head of SIBAT, Maj.Gen. Yossi Ben-Hanan, in his interview with the
Jerusalem
Post
proclaimed "India was Israel’s biggest customer, with purchases reaching $1.5 billion".
He also pointed out that Israel’s single largest sale to a foreign country involved India, the
Barak Naval anti- missile defence system worth $450 million. Israeli defence exports to India
totalled US $ 2.76 billion from the year 2002 through 2005. The year 2006 registered a record
purchase of defence equipment worth $1.6 billion by India from Israel. In the last five years
India had purchased arms worth nearly $5 billion from Israel and has been its largest client
for military hardware.
After September 11 attack on the World Trade Centre, Israel has been selling defence
supplies to India, especially in the garb and under the rhetoric of counter-terrorist operations.
India is now aiming to purchase Israeli Arrow-II anti-ballistic missile defence system, for
which permission from the US, which has co-developed the system, is awaited. India has
already acquired two Green Pine early-warning and fire-control radars which can detect and
track hostile missiles from 500 km away. During the NDA regime, India entered into a
contract with the Israeli firm Soltam to upgrade 180 M-46 130-mm field guns to 155 mm/39
calibre and 155 mm/45 calibre at a cost of about $250,000 each. Moreover, Soltam also
agreed to provide India's Ordnance Factory Board kits to retrofit another 220-250 M-46 guns
to equip some 25 artillery regiments. The Navy has also purchased three Super-Dvora Mk II
fast attack craft for around $4.30 million. In 2001, during the Kargil war, India acquired
40,000 rounds of 155 mm ammunition from Israel for around $1200 apiece and 30,000
rounds of 160mm mortars for around $400 apiece. Israeli firms have also revamped INS
Viraat's electronic control systems though the cost has not yet been disclosed.
The Indian government entered into a $220 million deal with Israel in 2006 for the supply of
50 Herons drones to the Indian Army. Israel claims that these unmanned aerial vehicles can
fly at an altitude of 30,000 feet and are equipped with surveillance technology and an
automatic landing and take-off system.
In 2004, India signed a $1.1billion agreement for the acquisition of four Phalcon advanced
airborne early warning systems from Israel to India. The Israeli Military Industries also
announced that it had secured a $130 million lucrative defence contract from India in the
same year. Even the procurement of 126 multi-role combat aircraft for IAF in a deal
estimated to be worth over $6.5 billion will have an Israeli imprint.
It is understood from Indian Defense sources that whichever fighter --- F-16, F/A-18, Rafale,
Typhoon or MIG-35 --- is selected, the aircraft will be fitted with Israeli avionics.
At the same time, high- level military visits and Joint Working Groups of both countries are
continuing and operating at great pace. In 2006, two major military delegations headed by
the Chief of Air Staff, Air Chief Marshal S.P. Tyagi, and the vice-chief of the Navy, Vice-
Admiral Venkat Bharathan, and in 2005 Lieutenant-General Shantonu Choudhary, and Vice
Admiral Arun Prakash visited Israel, apart from routine visits of Indian military officers and
commandos for training under Israeli Defence Force (IDF). The Army Chief General
J.J.Singh visited Israel for 10 days, the first by a serving army chief, to review military
projects like the upgradation of 300 T-72 MI tanks, BMP2 infantry combat vehicles and the
induction of UAVs. Apart from this, in 2006, two Indian warships docked in the Israeli port
of Haifa on a so-called goodwill visit to enhance diplomatic relations. Indian Navy chief,
Adm. Suresh Mehta, concluded a five-day visit to Israel in January 2008. All three serving
chiefs have now visited Israel in the last 2 years.
The chief of staff of the Israeli ground forces command, Brig-General A Mizrahi, was in
India in February last year for sharing of military intelligence, equipment, conducting joint
training and exercises and "interoperability". Israeli deputy chief of general staff, Major
General Moshe Kaplinsky, visited J&K, including the 16 Corps headquarters in Nagrota for
presumably helping India with "counter- insurgency" operations. He and his delegation also
held talks with senior military representatives and Defence Ministry officials on each other’s
"security perspectives".
An Indo-Israeli Joint Working Group on Counter-Terrorism has been set up and has held a
number of meetings. The Israeli Defence Ministry Chief, Brig Gen (ret'd) Pinchas Buchris
visited India in January, 2008 and held talks with National Security Advisor M.K.Narayanan,
Defence Secretary Vijay Singh, Army Chief Gen Deepak Kapoor, Naval Chief Admiral
Suresh Mehta and Air Force Chief Fali Homi Major. These talks included setting up a
mechanism for intelligence sharing.
There is already an on-going relationship between Israeli Intelligence agencies and their
Indian counterparts. It is well known that Mossad routinely infiltrates even "friendly"
intelligence agencies and uses them to plant information which helps Israel. Such activities
could damage India's relationship with countries such as Iran and Syria, with whom India has
friendly relations but Israel does not.
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