Indo-Israeli Relations Set for Further Acceleration
- Wednesday, 25 January 2012
Background
The visit of Indian Foreign Minister SM Krishna to Israel, in early January, represents a key milestone in the development of the two countries’ relations at the governmental level. Although it has grown over the last decade, it is a part of the bilateral relationship that has kept a relatively low profile. This is in sharp contrast to the dynamic growth of commercial, economic and defence links.
The extent of the growth is exceptional. It is reported by the Indian Government that since the commencement of diplomatic relations in 1992, bilateral trade has increased from US$200 million to over US$4.657 billion in 2010. Even more striking, was the fact that, in just one year, from 2009 to 2010, the level of total bilateral trade grew at a rate of 59 per cent. Today, India is Israel’s fourth-largest export destination.
Comment
Such growth is set for yet further acceleration, with negotiations for a free trade agreement now well underway and recent revelations that Israel has expressed interest in exporting gas to India, having made massive gas discoveries in its Tamar and Leviathan offshore fields.
Yet the economic links only represent a part of the story. Trade statistics do not include armaments sales and the significant contribution the Israeli defence industry is now making to the modernisation of India’s armed forces. It was reported by the Times of India that, since 1999, the bilateral defence industry has grown to over US$9 billion dollars. Israel is now India’s second-largest source of defence imports, exceeded only by Russia.
In an recent opinion piece, published on 5 January 2012 in the Asian Age, Bharat Karnad, a Research Professor in National Security Studies at the Centre for Policy Research, New Delhi and a former member of the Indian security council, stated: ‘If the details were to be out about the quality and extent of Indo-Israeli co-operation and collaboration in defence, space and anti-terrorism spheres, it would astonish most people.’ He further went on to note that much of India’s more antiquated Russian-built military assets are only viable due to Indian acquisition of Israeli technological upgrades.
From the Israeli perspective, India is now its largest defence export market, accounting for nearly 50 per cent of all sales. In 2009, Israeli Aerospace Industries (IAI) secured a US$1.4 billion contract to supply India with Barak ground-based and ship defence missiles. India’s importance to Israel’s defence industry cannot be understated. In 2010, the president of IAI, Itzhak Nissan, in an interview with Middle East Newsline, expressed concern over increased competition facing the Israeli defence sector in keeping their important Indian gains, as US and EU military budgets shrink. Yet the signs are still very promising for Israeli defence interests, as the Indian Government continues to show eagerness to access Israeli technology in its race to modernise the armed forces and accelerate technology transfers. Nevertheless, the latter has been hampered to an extent by US pressure, such the 2011 move to block IAI’s US$1.1 billion sale of EL/M-2052 AESA radar systems to India.
Beyond the supplies of defence materials and technology, India has also increased co-operation with Israel in the area of counter-terrorism. This has been given greater impetus since the Mumbai terror attacks of November 2008. The growing level of co-operation was highlighted by the 2010 visit to India of the Israeli minister for internal security, Yitzhak Aharonovitce, to discuss counter-terrorism
co-operation. It was also announced during Minister Krishna’s visit that the two countries had signed an Extradition Treaty and a pact on the Transfer of Sentenced Prisoners.
It is interesting to note that this progress in building relations has largely occurred behind the scenes. Until last week’s visit, the Indian Government had sent no foreign or prime ministerial delegation to Israel in over 11 years. This is an interesting dynamic, which both Israeli and Indian media commentators have referred to as a “mistress relationship”.
This was highlighted in a speech given by the Israeli ambassador at the 2008 annual IDSA-BESA dialogue, in which he stated:
‘On the other hand, we are trying, both of us Israel and India, to strike the fine line between too much and nothing. And I think that we have found this fine line in the sense that everybody knows there is a strong and burgeoning relationship on the one hand and the details of this relationship are really quiet, they are not so relevant, as a matter of fact.’
The current pace of growing economic ties, and mutual interests in defence and counter-terrorism, highlighted by SM Krishna’s visit to Israel, shows signs that the strange dynamic might finally be ready to mature.
Jahnu Russell
Future Directions InternationalAssociate
About the author: Jahnu Russell manages the international research team for Melbourne-based company Export Results and has extensive experience in undertaking market analysis projects, both in Australia and overseas. Mr Russell has experience in the organic, agricultural, manufacturing, food and energy industry sectors and has facilitated research and competitor analysis projects in USA, Canada, Europe, India, South-East Asia and the Middle East. He has a Bachelor of Business (Finance) and a Bachelor of Arts (Asian Studies). In 2005 he completed the Austrade Institute’s ‘Going International’ export advisors course and is a former member of the Export Consultants Association of Australia (ECAL). He has an ongoing interest in strategic issues and the critical role of Australia’s trade relationships.
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