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What India wants in Israel

July 4, 2017 | Expert Insights

Indian Prime Minister, Narendra Modi, is in Israel as part of his two-day visit to the state. This would be the first time an Indian Prime Minister will be visiting the country.

Background

For decades after the creation of Israel, India did not pursue a robust relation ties with Israel. India’s policy was to support the Palestinian cause and hence, the two nations kept their distance.

In 1992, the nations established diplomatic ties. And while it has only been 25 years, the relationship has flourished. While military agreements form the backbone to this equation, Israel has a strong imprint in the Indian agricultural sector as well. In a joint op-ed published in Times of India by both leaders of the state, both Netyanhu and Modi have said, “India and Israel are walking hand in hand into the future as partners. India is a growing economic powerhouse with a large market and talent pool. Israel is a world leader in high technology and innovation.”

What India expects

In short, when Modi meets with Israeli Prime Minister, Benjamin Netyanhu, he will have a clear agenda that will revolve around – trade, defence, agriculture and water management. Israel has pulled all stops ahead of the arrival of the Indian contingent. That includes, the Israeli cabinet approving a 23-page document that outlines bilateral measures and a budget of $75.6 million to make sure they happen. According to the Israeli newspaper, The Haaretz, this budget is higher than anything set aside for China, Africa and Latin America combined.

Arms and defence

Both nations have expressed that one of the key discussions that will take place between the two leaders will center around counter terrorism. As reported yesterday, India is the largest buyer of military equipment from Israel and Israel is India’s second largest defence supplier.  Between 2012 and 2016, India bought 41% of Israel’s arms export. 

In April 2017, India and Israel signed a $2 billion missile agreement. The deal stipulated that the Indian Army would get advanced medium-range-surface-to-air missile (MSRAM) systems from the Israel Aerospace Industries. There are other deals that are likely to be cleared during this trip or right after. Approval is still pending for the Indian army to buy 8,356 Spike anti-tank guided missiles and 321 launchers. This deal is worth nearly $500 million. In addition, the Indian Air Force is also looking to get clearance to buy two Phalcon airborne surveillance radars to the tune of $1.16 billion.

In lieu of increased cyberattacks, India might also look to tap into the expertise of Unit 8200, an Israeli Intelligence Corps unit, which is considered among the best in the world.

Agriculture

One of the most successful landmarks of the Indo-Israel relationship is in the agricultural sector. The Indo-Israel Agricultural Project (2012-2015) was implemented in 10 states. A report in 2014 from the plan said that there had been 5 to 10-fold increase in crop yields as a result of this as well as reduction in water usage (65%). This plan was extended beyond 2015 and there are now 15 centres across the country.

Water management

Israel is one of the global innovators in water technology. The rainfalls occur in the region only during the winters and there is always a shortage of water. However, they have been successfully solving it through the innovative water reclaiming and desalination techniques. And that’s what India would want to tap into. There are parts of the country that often suffer from drought and it has to be addressed. During his visit, Modi will visit a research drone. This drone, according to reports can detect water needs. He will also be visiting a desalination unit in the country.

Trade

Trade between the nations rose by 2.3% in 2016-2017 to $5.02 billion. This was a marked increase from the previous four years when it actually fell. Modi would be looking to rejuvenate this further. Reports have suggested that he will be positioning India’s diamond polishing and processing trade for lucrative partnerships among others.

Innovation

India and Israel are likely to ink a deal worth $40 million for join innovation in various fields including water management and agriculture. India might also want to tap the country’s advances in solar energy.

Assessment

Our assessment is that collaboration between India and Israel will prove to be advantageous for both countries. India will seek to address such urgent problems such as food and water security and for Israel it will be an opportunity to access one of the fastest-growing major markets of the world. For a small country like Israel, it would be easier for them to export the product to India than to far off markets like China. Israeli companies are also worried about intellectual property and seem comfortable working with companies in India.