Article Library / 2016

2016 Annual Assessment

In 1947, India supported the Arab countries in the United Nations and voted against the establishment of a Jewish state. In 1949, India again voted with the Arabs against the admission of Israel to the United Nations. In 1992, it established diplomatic relations with Israel. 2014 heralded a fundamental revision of its Israel policy, in favor of open friendship and cooperation with the Jewish state. From 1992 on, political and diplomatic ties moved ahead, slowly and sporadically, although India continued to vote for every UN anti-Israel resolution, and Indian leaders largely avoided meetings with Israeli leaders. There were a few exceptions: President Ezer Weizmann’s state visit to Delhi in 1996, and more importantly, Prime Minister Sharon’s visit in 2003, but no Indian leader ever visited Israel until President Mukherjee’s state visit to Jerusalem in 2015. He invited both Israel’s President and Prime Minister to India and confirmed that Prime Minister Modi planned a visit to Israel.

Military cooperation, joint research and development, arms sales, cyber-security and counterterrorism are the sectors in which Indo-Israeli ties are older and deeper than in any other sector. Both countries live in dangerous neighborhoods, which has led to a tacit convergence of strategic interests.  These ties had already begun in the 1960s and have never been interrupted, even during the decades when India’s official policy toward Israel was hostile. Today, India is Israel’s largest weapons market (an estimated $1 billion annually has been cited). In the coming years, Israel may have to cope with growing foreign, particularly American, competition and India’s own growing armaments industry. The Indo-Israeli relationship must not depend so strongly on the military sector alone. Furthermore, one cannot speak of a full Indo-Israeli “strategic alliance” as India has naval, military, and many other links with some of Israel’s enemies, particularly Iran.

Indo-Israeli economic links have enormous potential. Bilateral civilian trade moved from $200 million in 1992 to approximately $4.5 billion in 2015. The increase is huge when seen in isolation, but less so when compared to other countries. Bilateral trade with Turkey for example, which has a population 20 times smaller than India and a GDP four times smaller, has reached more than $5 billion. India is one of Israel’s fastest growing export markets. Experts have conjectured that bilateral trade could reach $10-15 billion if a free trade agreement (FTA) were signed. FTA negotiations began in 2006, and bore no fruit. Negotiations resumed in 2016.  A FTA with India would benefit Israel’s consumers, but harm its protected manufacturing sector, which may be one of the reasons for the delays and obstacles.6