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India, Israel and the Jewish People

Milestones in India-Israel military partnership

Indo-Israeli defense ties had begun developing even before normalization. The defense relationship between the two countries had, at least until 1998 and perhaps much longer, no influence on their formal political relationship. As in the case of China, Israel’s military links with India, including cooperation between air forces, was the beginning, and for a long time the core, of the Indo-Israeli relationship. India sought and received Israeli military aid and provision of small quantities of arms and ammunition during moments of crisis such as the 1962 Sino-Indian War and the 1965, 1971, and 1999 Indo-Pakistani conflicts. Since the 1992 normalization of relations, Indian purchases of Israeli weapons systems and technologies have increased considerably.

Two key events, close together in time, boosted India’s weapons purchases from Israel in the late 1990s and early 2000s. The first was the rise to power of the Hindu BJP party after the 1998 general elections. During the six years the BJP was in power (1998-2004), it made intensive efforts to expand ties with Israel, in the political and diplomatic fields as described earlier, but even more so in the military and security spheres. The BJP-led Indian government regarded Israel as a valuable ally in the fight against Muslim extremism and terrorism, and, perhaps, also against neighboring Pakistan. India’s expansion of military trade and cooperation with Israel was also part of a larger shift in Indian strategic and foreign policy doctrine. Military and economic clout, rather than Nehru’s non-alignment and moral diplomacy, were now viewed as the basis of India’s power in the regional and international arenas. Accordingly, the development of military capabilities became a prime focus of the BJP government. It favored the acquisition of advanced weapons systems and technologies from Israel, especially at a time when India suffered from technological isolation as a result of the sanctions originally imposed in 1974 and stiffened by the United States and other countries in the wake of the 1998 Pokhran-ll nuclear tests.14 The defeat of the BJP and return to power of the Congress party after the 2004 general elections caused no significant damage to Indo-Israeli military trade. Defense links have continued to thrive because policy makers regard them as being in India’s overarching national interest, irrespective of the party in power.

The second key event that favored the expansion of Israeli military sales to India in the early 2000s was the 1999 Kargil War between India and Pakistan. The Israeli role in helping the Indian army in this time of severe crisis facilitated better mutual understanding and appreciation and contributed to strengthening bilateral ties in the defense and security spheres.

A decade or so after normalization, Israel had already emerged as India’s second largest military supplier, with defense deals estimated at approximately $1 billion annually. In early 2009, Israel briefly overtook Russia as India’s primary military supplier. One of the most significant defense deals was the Israel’s sale of three Phalcon Airborne Warning and Control System (AWACS) to India in early 2004, for more than 1 billion U.S. dollars. The Phalcon AWACS is among the world’s most advanced warning and control systems. Just a few years earlier massive American pressure had forced Israel to break a legally binding contract to sell China the Phalcon system, and this provoked the most serious crisis in the history of Sino-Israeli relations. The fact that Israel sold the Phalcon to India so soon after it was forced to rescind the contract with China, was said to compound Beijing’s anger. Perhaps this was a foretaste of the difficult choices that Israel, which seeks friendship and cooperation with both of Asia’s giants, may face in the future. If the United States did not oppose Israel’s sale of the Phalcon to India, it is probably because it was seen by the American administration as congruent with the U.S. response to a perceived China threat. Joint cooperation between American Jewish and Indian lobbies played a role in obtaining the Bush administration’s approval.

Indo-Israeli military cooperation has gone far beyond a buyer-supplier relationship, with major joint research and development ventures initiated by Indian and Israeli defense firms, and extensive bilateral cooperation in intelligence and counter-terrorism. In 2007, the two countries agreed to develop a new generation of Barak air-defense missiles together, with a total investment of nearly $2.5 billion. The so-called Barak 8 project (also called Barak-II or Barak NG) was probably the largest joint Indo-Israeli defense venture prior to 2014. For Kumaraswamy, this joint weapons development project constituted “a quantum leap in the two countries’ relations.” It was not only “the largest single deal involving Israel but [it] also mark[ed] a new phase in defense-related cooperation between the two countries.” It signaled India and Israel’s willingness to move beyond their traditional buyer-supplier relationship in the military sector and advance “greater synergy between the two defense establishments.”15

Military trade and cooperation offer a number of key benefits to both countries. The high quality and competitive prices of Israeli weapons, as well as the fact that they are generally tested on the ground, are very important to India. Speed of delivery and innovative flexibility in adapting to specific Indian needs are additional Israeli assets in comparison to most other countries. Last but not least, Russia, the United States, France and the United Kingdom export weaponry and military technologies to all interested Arab countries, and to Turkey from where they sometimes filter eastward to Pakistan. Israel is the only advanced weapons manufacturer that has not exported arms to Arab countries, and since the deterioration of relations after 2008 and until 2016, no longer to Turkey either. Of course, there is no defense or other relationship between Israel and Pakistan. This is very important to India.

Israel’s success in maintaining a substantial, qualitative military edge over the Arab and Muslim world relies on massive American support, but also on Israel’s own ability to develop and fund innovative defense projects that usually require significant financial resources. Israel’s limited domestic market has always been a major impediment to the development of the country’s weapons systems and military technologies. The best way for Israel’s military industries to fund research and development of new products and technologies is to recoup costs through exports to foreign countries. In this regard, India, and its growing defense budget, is an extremely attractive partner. Arms sales and the transfer of advanced technology to India has become a significant part of the total turnover of Israeli defense firms – the Indian Economic Times reported in September 2012 that the “single-biggest buyer of Israel’s defence products now is India.”16 Israeli military industries have also been able to share the high cost of development of cutting-edge military weapons and systems through the formation of joint ventures with Indian defense research institutions and companies, with the latter keen on benefiting from the transfer of Israeli advanced technology and expertise. In addition, the expansion of bilateral ties in the intelligence and counter-terrorism sectors reveals India and Israel’s eagerness to improve their capabilities to respond to similar threats. The common fight against terrorism and radical Islam has promoted increased cooperation in many fields, including joint military training exercises. Shared concerns over nuclear proliferation and long-range missile technology underlie the two countries’ support for the development of anti-ballistic missile defense systems.17 India and Israel’s growing strategic interest in the Indian Ocean is the chief impetus for the development of Indo-Israeli naval cooperation. Another promising initiative is Indian-Israeli cooperation in space technologies, which often have defense applications. On January 28, 2008 Israel’s mini-satellite TechSAR was successfully sent into space from south India by an Indian launch vehicle. The satellite was – and maybe still is – flying over hostile countries such as Iran, which triggered its protest.

The BJP’s election victory in 2014 gave a new, almost immediate boost to the Indo-Israeli defense relationship. Several important Indian defense-related decisions have been taken since Modi’s election. India ended its boycott of IMI (Israel Military Industries Ltd.) that resulted from past bribery allegations, paving the way for the planned joint development of a new battle tank and other projects. This was followed by the clearing of a long-delayed sale of Israeli navy missiles, the closing of a large sale of Israeli anti-tank missiles (in spite of strong American competition), and the successful testing of a jointly developed aerial defense system. Both countries agreed to greatly increase cooperation in cyber-security and the fight against terrorism. In February 2015, Israel’s defense minister, Moshe Ya’alon, paid an official visit to India, the first of its kind, and met with Prime Minister Modi.

At the beginning of 2016, Israeli and Indian defense companies announced a further tightening of cooperation. IAI (Israel Aerospace Industries) and Rafael Advanced Defense Systems were the most prominent Israeli companies mentioned in this context. Thus, cooperation between Indian and Israeli defense manufacturers will likely continue for years to come.

Constraints and Challenges

The U.S. factor
The United States has been Israel’s prime military supplier since the 1970s. It provides Israel with a great amount of military aid, which gives it substantial veto power over Israel’s military exports.18 There has been American opposition to some planned weapons deals between India and Israel, particularly when U.S. technology or financial input are involved. In 2003 for instance, the U.S. intervened politically to thwart Israel’s sale to India of the Arrow anti-ballistic missile defense system, a system developed first and only by Israel but largely financed by the U.S. Still, the overall U.S. view of Israel’s defense and security cooperation with India is generally positive. However, if the deep reason for America’s positive attitude is the hope of some policy makers to see India, supplied by Israel, play a role in new “Asian Pivot” policy meant to counter-balance the rise of China, Israel will have to be on its guard. India remains allergic to any idea of being used by a great power as a pawn against another great power, and the very last thing that Israel would wish is to see its relations with China damaged again by appearing as part of a global China containment strategy. But China’s power rise in Asia is not the only factor affecting U.S. policy vis-à-vis Indo-Israeli defense ties. The United States must also consider the possible and actual reactions of Pakistan, the Arab world, and Muslim terrorist organizations such as al-Qaeda. Pakistani and other Muslim extremists have for decades been obsessed with an imaginary “Hindu-Jewish” or “Hindu-Zionist Axis” allegedly set up to destroy Islam. These terms, which the late Osama bin-Laden and his acolytes liked to use, can be found on extremist Pakistani websites.

Arguably, the most potent but least talked-about reason for some U.S. ambiguity on Indo-Israeli defense ties is industrial-technological competition even when Israel does not incorporate American technology in its weapons systems. Israel’s technological excellence has its drawbacks when it irritates its powerful protector in foreign markets. For example, it was reported in 2009 that a major Israeli defense company had been forced by the U.S. to withdraw a joint bid with a Swedish firm for the sale of 120 fighter aircrafts to the Indian Air Force, ostensibly due to concerns that some American technology would be integrated in these fighters.19 Surprisingly – or rather not surprisingly – two U.S. firms, obviously using American technology, participated in the same bid. It appears that the U.S. may have been more concerned that the joint – perhaps more competitive – Israeli-Swedish bid would force the two American firms to lower their prices. Israel yielded because it could not afford tensions with the U.S. defense establishment. Perhaps there are ways to defuse such tensions, for example by modifying conditions for U.S.-Israeli joint ventures that affect potential sales to India.

In the medium and long terms, much will depend on whether India moves closer to the U.S. if and when its military requirements become more sophisticated. Are the United States and India “natural allies,” as many Americans believe? If India does move closer to the U.S., Israel’s military technology could become partly redundant. To compound this problem for Israel, if India’s increasingly sophisticated requirements generate Indian demands that Israel share more sensitive military technologies, Israel’s relationship with the American defense establishment could run into difficulties, again. Some Indians, including some senior military commanders, have sometimes viewed Israel purely as a stepping-stone to better ties with America, a U.S. “vassal” that cannot move independently of its “master.” Thus, if India’s direct military ties with the U.S. improve, particularly if the U.S. is willing to sell at better terms, Israel’s value as a provider might be eroded. America is entering the lucrative Indian defense market and can offer India generous credits, which Israel cannot do.

However, this is only one possible scenario. Another, not impossible scenario sees India not moving nearer, but further away from the U.S. Some in the Indian leadership continue to be wary of close defense and security links with the U.S., which rarely come without political demands. They are concerned that these could lead to U.S. constraints on India’s foreign policy independence. A third, contrarian scenario envisions upheaval in Pakistan, perhaps with Pakistan’s nuclear arsenal slipping out of control, which might force the U.S. and India into an alliance of intervention. The future of Pakistan is every bit as unpredictable as that of the Middle East. Whether such a scenario would dispel Indian distrust of the U.S. and increase its readiness to become more dependent on U.S. military supplies cannot be predicted.

A stronger Israeli position in India and China, and a growing interest of these countries in Israel’s survival and prosperity, would in the long term also affect the Middle East situation. Israeli defense sales, in the past to China and currently to India, were and are more than mere business transactions. They also serve a long-term geopolitical purpose that is not against American interests, and which the U.S. may wish to encourage. It would help Israel if the American political establishment could better understand this purpose, and the American Jewish community could play a critical role in explaining Asia’s long-term importance for Israel.

Bureaucracy and corruption
India’s legendary bureaucracy is characterized by enormous slowness, lack of transparency and coordination, and obstructionism. It can take a great amount of time to negotiate, sign, and implement deals with India, especially in the military and security sectors, which are, more than others, subject to India’s domestic politics. All experts agree that it is almost impossible, particularly for smaller companies, to make effective deals in India without Indian middlemen who speak the local language, know how to navigate the system, and are “rewarded” for their help. This partly explains some of the allegations of corruption that have more than once strained Indo-Israeli military ties. In 2006, India’s Central Bureau of Investigation launched an investigation into a case of suspected corruption relating to the sale of anti-missile systems by Israeli companies. It was alleged that bribes had been paid to influence the decision of the then Indian defense minister. In 2009, allegations of corruption were leveled against another Israeli defense company, Israel Military Industries Ltd., which was subsequently banned from doing any business in India (the prohibition was lifted by the Modi government in 2014).20 It seems that the blacklisting of this company has had no impact on existing military trade and cooperation between India and Israel.

Allegations of corruption against Israeli companies are most frequently voiced by the Indian left and, in particular, the Communist Party (Marxist), as well as Muslim interests. This is because they are ideologically committed to support the Arab and Palestinian struggle against Israel. But foreign firms and countries seeking to conquer the lucrative and quickly expanding Indian defense market and, therefore, have to beat Israeli competition have also raised similar allegations. For example, during the discussions prior to Israel’s accession to the Organization for Economic Cooperation and Development (OECD) in 2010 Israel was criticized for not taking enough action against bribery and corruption in international transactions, particularly in arms deals. Although the countries and companies allegedly involved were not named explicitly, these accusations pointed at the activities of Israeli defense firms in India.21 It is impossible for outsiders to know what the truth is, and therefore very difficult to make specific policy suggestions. But it is clear that Israel will have to cope with such allegations in the future as well.

Other factors affecting long-term prospects of Indo-Israeli military links
During the past decade alone Israeli weapons sales to India were estimated to exceed $10 billion, and they, along with military cooperation, are expected by many to continue expanding significantly in the coming years. Yet, Israel cannot be sure that these links with India will thrive forever.

In early 2012, Indian Defense Minister Anthony turned down a request by his Israeli counterpart, Ehud Barak, to visit India’s well-known DefExpo, where the Israeli pavilion, the largest of the foreign delegations, exhibited Israel’s latest state-of-the-art weapons systems and technologies. Anthony’s refusal was motivated by domestic political sensitivities, as his primary pool of support is found in the State of Kerala, which has a large, partly radical Muslim minority. Modi’s election victory in 2014 turned this incident into a small, temporary stumbling block, but one cannot exclude the possibility that domestic concerns could interfere with the military relationship between the two countries in the future. And there is a more serious obstacle that Israel might have to face. Until recently, U.S. and European defense firms were handicapped by restrictions imposed by their governments on the export of advanced technologies to India in response its 1974 and 1998 nuclear tests. Today U.S. and European defense firms are no longer subject to these limitations. This could make the long-term expansion of Indo-Israeli military ties more difficult, as it is often not easy for Israel’s relatively small firms to compete with large U.S. and European corporations. For the time being, Israeli defense firms continue to benefit from their well-known technological excellence and their close ties with the Indian military establishment.

Apart from U.S. policies, Israel will also have to watch the complex, evolving and sometimes adversarial relationship between the two Asian giants, China and India, and reflect on the possible implications for its defense links. Some Indians are said to be worried by Israel’s growing ties with China. China would like to renew its former links with Israel’s highly respected defense establishment. Israel has made it clear that it will not agree to this as long as the United States is adamantly opposed to such a renewal. Nevertheless, the Indian political and military establishments may have watched with some unease the first-ever visit to Israel by the Chinese chief of staff in August 2011, as well as other exchange visits of Israeli and Chinese senior military leaders.

However, a few experts in both Israel and India have suggested that the military relationship between the two countries is, in the long term, doomed. They argue that Israel will have to develop other links with India. The reasons they cite include some of the afore-mentioned obstacles, particularly U.S. constraint, but they add one more. India wishes, as emphasized by the new Modi government, to develop its own weapons industries and become self-sufficient. Indeed, India has outstanding military scientists and engineers. Still, it would be foolhardy to make predictions on this issue. Many countries want to be independent in weapon’s procurement, but no country can, not even the United States. For the time being, Israel’s excellence and innovativeness in some specific weapons’ developments is unchallenged, and Israel’s arms industries do not seem particularly worried.