The Multibillion-dollar Arms Deals Driving India’s Modi’s Visit to Israel

Indian media estimate the deals could total $10 billion and are expected to focus on air defense systems against missiles and drones. ‘The mini-war with Pakistan last year led to a shift. India woke up’

Hagai Amit

In July 2017, when Indian Prime Minister Narendra Modi made his first visit to Israel, he and Prime Minister Benjamin Netanyahu signed agreements worth $13 million in satellite development, agriculture and water, along with the creation of a $40 million joint investment fund.

Modi’s second visit to Israel, taking place this week – more than eight years later – is set to tell a very different economic story. Modi’s arrival is expected to kick off deals worth billions of dollars. This time, however, the focus is not “peace technology,” but the procurement of Israeli defense systems. While the largest companies and the Defense Ministry are maintaining strict secrecy, the Indian media is reporting that the visit will include a memorandum of understanding for deals totaling $10 billion, to be implemented over several years.

The state of Israel

Even if that estimate is inflated, major procurement agreements are expected to be signed on Wednesday and Thursday for air-defense systems – including laser-based systems produced by Rafael and Elbit, the Arrow system made by Israel Aerospace Industries, and David’s Sling and Iron Dome produced by Rafael.

Alongside the large air-defense procurements aimed at countering missiles at different ranges – which naturally center on Israel’s major defense contractors – Indian officials are also interested in counter-drone systems, particularly defenses against drone swarms, a field in which smaller companies are also active.

“Most of the deals that emerge from Modi’s visit will be in missile and drone defense,” said Nir Bar-Natan, business development manager at the Autonomous Guard group, whose subsidiaries, Bizense and Skylok, work on border protection and operate with India.

“The mini-war India had for 48 hours with Pakistan about a year ago led to a shift. They started to wake up and realized they need to keep a close eye on new technologies.”

“At the Defense-Tech exhibition held in Tel Aviv last week, we saw many representatives from India,” Bar-Natan continued. “They like Israeli products, and their performance in our war over the past two years convinced the Indians that they need these kinds of systems for their border challenges – not only along the border with Pakistan, but also with China and Bangladesh.”

He added, “These are sensitive borders, and not every small incident there makes it into the media. The result is that we’re feeling growth in Indian interest and demand, and that processes are speeding up. In the past, maturing a deal took five to seven years – today, things are moving much faster.”

Not solely defensive

Alongside the purchase of Israeli air-defense systems, Indian media are also reporting interest in offensive capabilities, including stand-off systems that launch missiles from aircraft operating beyond the range of enemy air defenses. These are the types of systems the Israeli Air Force used in its June strike on Iran.

Indian outlets have also reported plans to acquire Israeli drones, including Hermes 900 UAVs produced by Elbit Systems in cooperation with a company from the Adani Group.

Visitors to the military parade held in New Delhi at the end of January could also see PULS rocket launchers – another product of cooperation between Elbit and a local company affiliated with the Adani Group.

India may also expand its procurement of Barak missiles, designed to defend naval vessels against missile threats and manufactured by Israel Aerospace Industries; Air LORA ballistic missiles, also produced by Israel Aerospace Industries and intended for long-range strikes on major targets; Spike anti-tank missiles made by Rafael; Rampage air-to-ground missiles produced by Elbit; and glide bombs manufactured by Rafael.

Sold to India, exported onward to Indonesia

Dr. Lauren Dagan-Amos of the Begin-Sadat Center for Strategic Studies, who researches India’s foreign policy, said the visit is aimed at advancing deals that have long been under discussion in fields such as cyber, agriculture, energy and artificial intelligence.

However, she says, “We are in an era in which such deals cannot be conducted solely between governments. Companies must act independently. With India come other countries – the Philippines, Indonesia, Australia, the U.S. and certain European states – that view India as an important player and are influenced by its policies.”

“For example, Israeli strike missiles sold to India in recent years were later exported to the Philippines and Indonesia. Similarly, if Australia defines India as a critical partner in the Indo-Pacific, then the relationship between Israel and India will also affect Australia’s approach to Israel.

“Already now, I see a greater willingness to do business with Israel than I did a year ago. The stars have aligned in favor of this relationship since October 7, 2023, and in the past six months, hardly a week goes by without Israeli companies speaking to me about business in India, and senior officials traveling back and forth between the two countries,” Dagan-Amos said.

Bar-Natan added: “There is enormous potential in India. What’s required is patience and stamina. When you break through there commercially, it’s on a large scale. You don’t sell the Indians 10 or 20 systems – you sell hundreds or thousands.”

Source: HAARETZ

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