ISRAEL 
HIGH-TECH & INVESTMENT REPORT

from the November 2003 issue


India-Israel: An Alliance Built on Shared Experience


The invitation was to attend the wedding of our neighbor's grandson. From the outset it was clear it would differ from any other wedding that we had ever attended. For one thing the venue was Bombay. Our neighbor Kirtilal Mehta had chartered a plane to fly out the guests, mostly diamantaires, from Tel-Aviv to Bombay. At the same time guests were on their way from Belgium, New York, Hong Kong and Tokyo.

Mr. Mehta moved to Tel-Aviv in 1968. "Too rainy in Belgium, too cold in New York," he explained as his rationale for moving to Tel-Aviv. Though he lacked formal education he was a man of great vision and he established a global presence for his diamond companies. . During our stay in India, he introduced me to a number of influential local people. "Israel can make desert blossom. They can help us to do the same," he declared.

But the time was not propitious. It was 1990, two years before India recognized Israel. We returned from the India visit full of impressions, but without expectations that the two countries would develop economic ties in the near future.

When the interests of two nations become aligned their innate differences tend to melt and diminish. India had been the prime target of international terrorism, for over two decades. More than 60,000 of its citizens, including two Prime Ministers have fallen victim to this scourge. During those years Israel had developed modern weaponry to protect itself. India was badly in need of defense systems as well as modernization of its armed forces.

In this issue, basing ourselves on reliable sources, we estimate that India will order from Israel $3.0-$3.75 billion worth of specialized defense systems including the Phalcons and the Arrow Anti-Missile Defense System. The latter sale requires approval by the U.S. However, it is not all about weapons. Israel's agricultural expertise is being offered to India. The single largest delegations to attend last month's Agritech 2003 came from India. The major step for any economy is to free up agricultural workers for production in other fields. Technology can help that process.

An analysis of published figures in the Indian press, Jane's Defense Weekly and Israeli press indicates that New Delhi hopes to complete an agreement to buy three of Israel's advanced PHALCON radar systems. The United States, Israel's most powerful ally, has lifted its objection to the $1 billion deal, despite warnings from Pakistan that "it could raise tensions in South Asia and destabilize the region". The three Phalcon radar planes would put large parts of Pakistan under Indian surveillance. Dr.Subhash Kapila, of the South Asia Analysis Group, has identified some of the shared experiences. "India and Israel emerged as nation states within months of each other. Following India's emergence as an independent nation on 15 Aug. 1947, Israel emerged as state on 14 May 1948, as a result of a decision by the United Nations, the first such nation. Both India and Israel emerging, as "new nation states" are states steeped in over five thousand years of history " says Dr. Kapila. He adds that "India and Israel are democracies and have survived in a sea of hostility, surrounded by implacable adversaries and a heavily militarized security environment. Israel has been in almost permanent state of war since its birth in May 1948. It is surrounded by hostile nations and under constant, threat, so the rules of defense and intelligence must differ from those that apply in America or other Western countries. India is in a similar predicament and the Israel experience would be valuable". India has cast its eyes on the Arrow Anti-Missile System which Israel deployed prior to the War in Iraq. Essentially India wants Washington to allow Israel to sell its Arrow anti missile system, which was developed with U.S. support and could ward off nuclear threats from Pakistan. Washington worries that the sale could set off an arms race on the volatile subcontinent. India and Pakistan have fought three wars since independence from Britain and nearly clashed last year when India blamed Pakistan for a deadly suicide attack on its Parliament complex.

"Israel's defense industry is viewed by India as having some critically important advantages," states Dr.Subhash Kapila. "Israel offers a valuable autonomous source for purchase of sophisticated weapons and military equipment, indigenously developed; it therefore, precludes external pressures on Israel not to supply. Israel's defense industries have earned a global reputation for upgrading old weapon systems with latest technological capabilities. It applies to India's vast holdings of Russian combat aircraft and tanks". Israel has upgraded these satisfactorily for a number of countries. "Israel's technological advances in the fields of satellites, satellite imagery, missiles, rockets and nuclear fields are appreciable. Most of them are indigenous developments. They can be a source of advanced technology for India. Israel's border management and counter - terrorism techniques could help India in overcoming its major weaknesses of internal security management".

During the Kargil War, between India and Pakistan, Israel, will be remembered by Indians as having responded magnificently, despite pressures from various quarters, not to supply UAVs for high altitude surveillance, laser - guided systems and many other items which were supplied within 24 hours.


Reprinted from the Israel High-Tech & Investment Report November 2003

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