BE­YOND GUNS & DI­A­MONDS

A TEM­PO­RARY CHILL IN INDO-IS­RAELI TIES IS UN­LIKELY TO MAR PM BEN­JAMIN NE­TANYAHU’S HIS­TORIC FIRST VISIT TO IN­DIA AS THE TWO COUN­TRIES EX­PLORE WAYS TO EX­PAND THEIR STRATE­GIC RE­LA­TION­SHIP

India Today - - FUTURE TRENDS 2018 - By San­deep Un­nithan

There’s a rea­son the body lan­guage be­tween Prime Min­is­ter Naren­dra Modi and his Is­raeli coun­ter­part Ben­jamin Ne­tanyahu will be closely watched when Is­rael’s Air Force One lands in New Delhi on Jan­uary 14. The first ever visit to In­dia by an Is­raeli prime min­is­ter comes just six months af­ter Modi’s visit to Is­rael, the first by an In­dian PM. That visit saw a red car­pet wel­come in Tel Aviv, per­sonal chem­istry with even a photo op of the two PMs walk­ing on Olga beach in Haifa like re­united child­hood friends, their trouser cuffs rolled up. This time around, Ne­tanyahu’s visit, equally his­toric, comes amidst a per­ceived chill in ties be­tween New Delhi and Tel Aviv. On De­cem­ber 22, In­dia voted with 127 other coun­tries for a UN Gen­eral Assem­bly res­o­lu­tion re­ject­ing US Pres­i­dent Don­ald Trump’s de­ci­sion to recog­nise Jerusalem as Is­rael’s cap­i­tal. With­out sin­gling out In­dia, Ne­tanyahu called the vote “pre­pos­ter­ous” and “a theatre of the ab­surd”.

Then, barely a week later, Is­rael’s sta­te­owned Rafael Ad­vanced De­fence Sys­tems Ltd said on Jan­uary 2 that In­dia’s de­fence min­istry had can­celled a $500 mil­lion (Rs 3,186 crore) deal for sup­ply­ing 1,600 Spike man-por­ta­ble anti-tank mis­siles, one of the big­gest deals in re­cent years. The mis­siles were go­ing to be made in In­dia through trans­fer of tech­nol­ogy at the govern­ment-owned Bharat Dy­nam­ics Ltd with a pri­vate sec­tor part­ner, Bharat Forge. A Rafael spokesper­son ex­pressed “re­gret” over the col­lapse of the deal, which the com­pany had pur­sued for nearly five years. Not even a swift pla­ca­tory an­nounce­ment on Jan­uary 3 by In­dia’s MoD of a Rs 460 crore or­der for 131 Barak mis­siles from Rafael could make up for the gloom in Tel Aviv (this deal had been cleared ear­lier in 2017). The Spike deal has been restarted as a fast-track pro­posal now, and Rafael will once again be a con­tender.

An­other ma­jor deal in the pipe­line for five years—for sup­ply­ing 1,480 155/52 mm towed how­itzers worth Rs 15,000 crore—where Is­raeli gun maker El­bit is com­pet­ing with France’s Nex­ter, is also said to be on the chop­ping block. But it was clearly the UN vote which took Is­rael by sur­prise. Most be­lieved In­dia would ab­stain. A Jan­uary 3 ex­ter­nal af­fairs min­istry (MEA) state­ment in Par­lia­ment re­it­er­ated that “In­dia’s po­si­tion on Pales­tine is in­de­pen­dent and con­sis­tent. It is shaped by our views and in­ter­ests and not de­ter­mined by any third coun­try”.

‘In­dia wants an af­fair when it comes to Is­rael, not a se­ri­ous re­la­tion­ship’ said the Jan­uary 4 head­line of an opin­ion piece in the in­flu­en­tial Is­raeli news­pa­per Haaretz, ev­i­dently miss­ing the point of a new prag­matic In­dian for­eign pol­icy shaped by self-in­ter­est, di­vorced of Cold War bi­na­ries. Talmiz Ah­mad, In­dia’s for­mer am­bas­sador to Saudi Ara­bia, calls In­dia’s vote in the UNGA a prin­ci­pled one. “Un­der in­ter­na­tional law, no mil­i­tar­ily oc­cu­pied ter­ri­tory can be de­clared your own and the fi­nal sta­tus has to be ne­go­ti­ated by the two sides. In­dia is also in the same state as Is­rael and Pales­tine be­cause a large por­tion of Kash­mir has been un­der Pak­istani oc­cu­pa­tion since 1948 and we wouldn’t ac­cept any other coun­try’s suzerainty over it.”

In­dia seems un­likely to shift away from its stance of a two-state pol­icy “in which both Is­rael and a fu­ture Pales­tinian state co­ex­ist peace­fully”, as PM Modi said in an in­ter­view to Is­rael Hayom, be­fore his visit to Tel Aviv in July. Soon af­ter Ne­tanyahu’s In­dia visit, PM Modi is set to visit Ra­mal­lah, the ad­min­is­tra­tive cap­i­tal of Pales­tine, with­out vis­it­ing Is­rael. The In­dian PM’s visit is a re­cip­ro­cal visit to Pales­tinian Pres­i­dent Mah­moud Ab­bas’s trip to New Delhi in May 2017, two months be­fore Modi vis­ited Tel Aviv. Sig­nif­i­cantly, the In­dian PM steered clear of vis­it­ing Jerusalem (claimed by both Is­rael and Pales­tine as their cap­i­tal).

Pales­tine has thus been de-hyphenated from the In­di­aIs­rael re­la­tion­ship as In­dia seeks to boost ties with both Is­rael and the six Gulf Co­op­er­a­tion Coun­cil (GCC) coun­tries— Saudi Ara­bia, the UAE, Qatar, Oman, Bahrain and Kuwait in­clud­ing a free trade pact. In­dia es­tab­lished full diplo­matic re­la­tions with Is­rael only in 1992 fear­ing an ad­verse fall­out on its ties with the GCC coun­tries, In­dia’s largest en­ergy sup­pli­ers and also home to nearly 70 per cent of its di­as­pora which re­mits $35 bil­lion in for­eign ex­change an­nu­ally.

In­dia’s re­newed GCC out­reach comes amidst the tur­bu­lence and fast-chang­ing geopol­i­tics of West Asia. A covert al­liance be­tween Saudi Ara­bia, Is­rael and the United States is cur­rently un­der way to counter a ris­ing Iran and a Shia block ex­tend­ing from the Mediter­ranean Sea to the Ara­bian Sea.

In­dia en­joys good re­la­tions with all th­ese coun­tries, es­pe­cially Iran which it needs for ac­cess into Afghanista­n and Cen­tral Asia by­pass­ing Pak­istan and for a shorter north-south trans­port cor­ri­dor via Ban­dar Ab­bas which will shorten the land route to Rus­sia.

Ne­tanyahu’s visit will be hec­tic and heav­ily loaded with sym­bol­ism—a pic­ture post­card mo­ment with wife Sara at the Taj Ma­hal, a stopover at the Sabar­mati water­front in Gu­jarat and a visit to Mum­bai where he will tour the Chabad House with Moshe Holtzberg, 11, whose par­ents were killed by Pak­istani ter­ror­ists dur­ing the 26/11 ter­ror at­tacks, an in­di­ca­tion

PALES­TINE HAS BEEN DE-HYPHENATED FROM THE IN­DIA-IS­RAEL RE­LA­TION­SHIP AS IN­DIA SEEKS TO BOOST TIES WITH BOTH IS­RAEL AND THE SIX GCC COUN­TRIES

of the shared con­cerns the two coun­tries have over ter­ror­ism.

Both In­dia and Is­rael are look­ing for ways to jump­start their eco­nomic re­la­tion­ship be­yond di­a­monds and de­fence. Bi­lat­eral trade stood at over $5.02 bil­lion in 2016-17 not in­clud­ing the de­fence trade (es­ti­mated at over $600 mil­lion per year). Raw, non-in­dus­trial di­a­monds ac­count for more than a bil­lion dol­lars in both im­ports and ex­ports. Ne­tanyahu’s 100-mem­ber del­e­ga­tion in­cludes rep­re­sen­ta­tives of firms in home­land se­cu­rity, agri­cul­ture, wa­ter man­age­ment, de­fence and tech­nol­ogy. Last June, his cabi­net agreed to in­crease non-di­a­mond ex­ports to In­dia by 25 per cent and es­tab­lish a $40 mil­lion joint in­no­va­tion R&D fund. Res­o­lu­tions also in­cluded in­cen­tives to Bol­ly­wood to shoot in Is­rael and boost­ing the num­ber of In­dian firms do­ing busi­ness there.

But that’s eas­ier said than done. Sec­tors like agri­cul­ture, wa­ter and de­sali­na­tion tech­nolo­gies where Is­rael wants to be­come a ma­jor player will pose a chal­lenge for var­i­ous rea­sons like cost and the small size of In­dian farm hold­ings. Tech­nolo­gies like de­sali­na­tion and mi­cro-ir­ri­ga­tion are ex­pen­sive for an In­dian farmer but wa­ter and power are cheap be­cause they are heav­ily sub­sidised.

Which is why the Indo-Is­raeli de­fence re­la­tion­ship where the state is the sole cus­tomer, is a far more lu­cra­tive growth sec­tor. Is­rael is In­dia’s third largest de­fence hard­ware sup­plier, ac­count­ing for 7.2 per cent of the coun­try’s arms im­ports be­tween 2012 and 2016 (a re­mark­able feat con­sid­er­ing Is­raeli de­fence in­dus­tries do not make plat­forms like war­ships and fighter jets which cost more), built on sub-sys­tems like radars, mis­siles, elec­tronic war­fare sys­tems and bombs. Arms to In­dia make up over 40 per cent of Is­rael’s de­fence ex­ports, earn­ing it close to $1 bil­lion a year in for­eign ex­change.

In 2017, Is­raeli firms recorded arms con­tracts worth over $1 bil­lion for smart bombs, ra­dios, laser des­ig­na­tion pods and mis­siles even as South Block strug­gled to slash arms im­ports to shore up its flagging Make in In­dia pro­gramme. Is­rael has suc­ceeded in cre­at­ing mo­nop­o­lies in sev­eral key ar­eas: Is­rael Aero­space In­dus­tries (IAI) com­pletely dom­i­nates the mar­ket for surveil­lance drones in In­dia—the three armed forces use nearly 176 Heron and Searcher-2 drones, more than those used by Is­rael it­self. IAI and Rafael also con­trol the mar­ket for medium range sur­face-to-air mis­siles (range 70 km) for the In­dian navy and the air force. Th­ese are off-the-shelf im­ports where Is­rael has been re­luc­tant to share tech­nol­ogy. The ‘joint-de­vel­op­ment’ con­tracts for medium range sur­face-to-air mis­siles (MRSAM) worth $350 mil­lion (Rs 2,230 crore) in 2006 and $1.1 bil­lion (Rs 7,014 crore) in 2009 were to have been made in In­dia with trans­ferred tech­nol­ogy over the years, but DRDO sci­en­tists com­plain the mis­siles still mostly fea­ture Is­raeli com­po­nents.

Last April, the In­dian army be­came the third user of the MRSAM when the MoD signed a $2 bil­lion (Rs 12,749 crore) deal with IAI for one reg­i­ment of (MRSAM) mis­sile sys­tems—16 launch­ers and 560 mis­siles—one of the largest deals in Is­rael’s his­tory. IAI and Rafael are prime con­tenders for an­other $1.5 bil­lion (Rs 9,562 crore) project for the In­dian navy’s 10 short range sur­face-to-air mis­sile sys­tems (SRSAM) and 600 mis­siles. Lurk­ing ahead is a still big­ger deal—a $3 bil­lion (Rs 19,131 crore) con­tract for two Phal­con Air­borne Early Warn­ing and Con­trol (AEW&C) mounted on IL-76 air­craft which can de­tect en­emy air­craft, mis­siles and drones 800 km away. A metaphor for the In­dia-Is­raeli re­la­tion­ship where, clearly, the sky is the limit.

BIG WAVE Modi and Ne­tanyahu at the Olga beach, July 6, 2017

BLAST OFF An MRSAM mis­sile dur­ing test fir­ing

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