INDIA-ISRAEL

INDIA-ISRAEL

Recent Developments

• 30 years of diplomatic ties: To mark 30 years of diplomatic ties, Israeli PM to visit India in first week of April to mark the 30th anniversary of the establishment of diplomatic relations between the two countries.
• UNGA: India voted in UN General Assembly against USA’s move to recognize Jerusalem as the capital of Israel
• Israel-Palestine violence: India has adopted a balanced approach to the current Israeli-Palestine conflict that has pushed the volatile region into yet another cycle of violence

Current Relations

1. Economic Relations
   • Bilateral Trade: 4.14 billion (excluding defence) in February 2021 from $200 million in 1992.
   • Trade Relations:
     • Trade partner: India is Israel’s third-largest trade partner in Asia and seventh largest globally.
     • Major component: Trade in diamonds constitutes about 50% of bilateral trade.
     • Israeli company: The presence of Israeli companies in India has grown to 300.
     • Indian export basket: India exports precious stones, metals, chemical products, textile, rubber & plastic products, and base machinery to Israel.
     • Recent development: However, in recent times it has diversified into sectors such as pharmaceuticals, agriculture, IT etc.
     • Services: Almost 75% of bilateral trade in services flow from India to Israel.
     • Israel Investment: The major investments from Israel in India include renewable energy, telecom, real estate, water technologies etc., and are also setting up R&D centres or production units in India.
   • Indian investment: India’s investments in Israel are mostly in drip-irrigation, pharmaceuticals, wastewater treatment, IT etc.
     • India import: Potash is a major item of Israel’s exports to India.
   • FDI: Apart from direct investments, FDI from Israel to India also flows through USA, Europe and Singapore.
   • IT and Services: During the last decade, Indian IT majors such as Infosys, Wipro and Tech Mahindra have also made significant investments in Israel.
2. Strategic Relations
   • Defence Supplier: Israel is the third largest supplier of defence items to India after Russia and the USA
     • Supplies: The Indian armed forces have inducted a wide array of Israeli weapon systems over the years, which range from Phalcon AWACS (Airborne Warning and Control Systems) and Heron, Searcher-II and Harop drones to Barak anti-missile defense systems and Spyder quick-reaction anti-aircraft missile systems.
     • Other: The acquisitions also include a host of Israeli missiles and precision-guided munitions, from Python and Derby air-to-air missiles to Crystal Maze and Spice-2000 bombs.
   • At the 15th Joint Working Group (JWG 2021) meeting on Bilateral Defence Cooperation, countries agreed to form a Task Force to formulate a comprehensive Ten-Year Roadmap to renew the same.
   • Defence FDI: India has collaborated with the Israeli defence companies under the new liberalised FDI regime in defence manufacturing.
   • India expressed interest in encouraging greater participation of Israeli defence companies in India’s defence manufacturing sector.
   • Middle East Quad: India and Israel have joined the minilateral along with USA and UAE known as the middle east quad
   • In 2014, India and Israel signed three important agreements: Mutual Legal Assistance in Criminal Matters, Cooperation in Homeland and Public Security, and Protection of Classified Material.
   • Cooperation in Homeland Security: Four working groups in the areas of border management, internal security and public safety.
   • UNHRC Abstention: India abstained from voting on resolution to probe Gaza bombing in May 2021.
3. Cultural/ People-to-People
   • Tourism: Israelis know India for its culture and tradition, making it an attractive alternative tourist destination.
     • In 2017, Indian tourists became the second largest from an Asian country.
     • In 2019, a large-scale summit was organised to boost cultural ties.
     • On February, 2020, the first of its kind Jerusalem-Mumbai festival was held in Mumbai to promote artistic and cultural ties
   • Jews community in India: The majority is from Maharashtra (Bene Israelis) and relatively smaller numbers from Kerala (Cochini Jews) and Kolkata (Baghdadi Jews).
   • Diaspora potential: There are approximately 85,000 Jews of Indian-origin in Israel (with at least one Indian parent), who are all Israeli passport holders.
   • Indian Jew migration: some Indian Jews from the North Eastern States (Bnei Menashe) have been immigrating to Israel.
4. Science and Technology
   • Area of cooperation: Specific areas of cooperation include IT, biotechnology, lasers and electro-optics.
   • i4RD fund: In 2005, India and Israel signed an MoU to set up i4RD fund to encourage bilateral investment into industrial research and development and specific projects.
   • Israel-India Industrial R&D and Technological Innovation Fund (I4F): First grant– are companies in efficient water use, improving communications infrastructure, solar energy use, and life-changing surgeries.
     • The fund aims to help Israeli entrepreneurs enter the Indian market.
   • Technical assistance in cleaning Ganga: Israel has also offered to assist with India’s Clean Ganga Mission by providing its expertise in water management to address water scarcity.
   • Space collaboration: India and Israel signed a cooperative agreement promoting space collaboration in 2002. Since then Israel Space Agency (ISA) and the ISRO are collaborating on using satellites to improve land and other resources.
     • India has successfully launched TecSAR and RISAT-2 radar imaging satellites of Israel from the PSLV of ISRO.
   • Agricultural Partnership and Water Conservation:
     • Arid land technology, biotechnology and a joint action plan to research India specific and export-oriented seeds deserve attention.
     • India is gaining Israel’s expertise in managing and improving dairy farming and high milk yield.
5. Other
   • COVID 19: Despite the Coronavirus outbreak, India and Israel’s friendship continued to shine. India also exempted Israel from the export ban and allowed Israel to import pharmaceuticals raw materials from India. The countries jointly developed a rapid COVID 19 testing technology to give test results in less than a minute.
   • ISA: Israel is also joining the India-led International Solar Alliance (ISA), which aligns very well with the objectives of both countries to scale up their cooperation in renewable energy and partner in clean energy.
   • Education
     • Academic collaboration: In recent years, several public and private Indian universities have entered into academic agreements with Israel’s educational institutions.
     • Scholarship from Israel: Since 2012, Israel has been offering post-doctoral scholarships to students from India and China in all fields for three years.
     • Scholarship from India: India too offers scholarships to Israelis every year and an equal number of scholarships are offered by Israel for 10-month programmes in specialized fields of study.
     • Fund setup: In 2014, the Indian diamond community in Israel had set up a fund to finance study tours to India for meritorious Israeli students of Hindi.

Importance/Benefits

1. Economic benefits
   • Make in India: The export-oriented Israeli defence industry and its openness to establishing joint ventures complement both ‘Make in India’ and ‘Make with India’ in defence.
   • Trusted Supplier: Israel has always been a ‘no-questions-asked supplier’, i.e., it transfers even its most advanced technology without placing limits to its use.
   • In 2018, G2G agreement on cybersecurity, oil and gas cooperation, film cooperation and air transport were signed, along with five other semi-government agreements.
2. Strategic benefits
   • Against terrorism: India and Israel have increased collaboration in military ventures since both nations face the threats of rising radical terrorism and separatism.
     • For example: 26/11: Following the 2008 Mumbai attacks, Israel offered a team of about 40 special-operations forces and assistance in the investigation.
   • Arms trade: India is the largest buyer of Israeli military equipment and Israel is the second-largest defense supplier to India after Russia.
     • For example: Precision guided bombs used in the Balakot strike in February 2019 were imported from Israel.
   • International support: Israel was one of the few nations, including France and Russia, that did not condemn India’s 1998 Pokhran-II nuclear tests.
   • Patrolling and Surveillance: The Israeli imports eases the operational ability of armed forces in wartime.

• For example: Its credibility was reinforced during the Kargil War of 1999 when it supplied the IAF with the UAV ‘Searcher’ and surveillance systems for Jaguar and Mirage squadrons.

• Ready to Use Technology: India suffers from technical expertise, lack of manufacturing infrastructure, inadequate funding and project delays. Israel fills these shortcomings by supplying ready-to-use critical technologies, even on short notices.
• Defence R&D: IAI is developing the Barak 8 missile for the Indian Navy and Indian Air Force which is capable of protecting sea vessels and ground facilities from aircraft and cruise missiles.
• Security: Working groups in areas of border management, internal security and public safety, police modernization, and capacity building for combating crime, crime prevention, and cybercrime were established.

Concerns

1. Economic
   • U.S. Influence: Some Israeli technology uses American components, giving the U.S. veto power over technology sales.
   • Trade Decline: Bilateral trade has dropped from a peak of about $5 billion in 2012 to around $4 billion, with diamonds and chemicals dominating trade.

• Private Sector Engagement: Indian companies like Sun Pharma and ATG are growing their presence in Israel, although Chinese firms maintain a stronger foothold in Israeli tech sectors.
• Direct Flights: Connectivity is limited, with only one direct flight from Mumbai to Israel operating three times a week and no flights from Delhi.
• Energy Dependence: India’s dependence on Arab oil affects its policy in West Asia, limiting its ability to fully engage with Israel in the region.

1. Strategic Challenges
   • Historical Retrenchment: India supports a two-state solution, endorsing an independent Palestinian state with East Jerusalem as its capital, which sometimes conflicts with its relationship with Israel.
   • Cold War Politics: India navigates the complex dynamics involving Arab-Israeli tensions, the Iran-Israel conflict, and the influence of countries like the USA and Russia in the region.
   • Non-Alignment: India’s non-aligned stance is sometimes perceived by Israel as leaning toward the West’s adversaries.
   • Israel-Palestine Conflict: This remains a sensitive issue, influencing India’s relations with Israel.
   • Iran Relations: While Israel sees Iran as a significant threat, India cooperates with Iran on regional initiatives like the Chabahar Port for Central Asian connectivity.
   • Different Approaches Toward the Arab World: India’s voting record at the UN often reflects its ties with Arab nations, which sometimes contrasts with Israel’s interests.
   • Pegasus Spyware Concerns: Israel’s spyware software, allegedly used in surveillance, has raised legal and ethical questions for India.
   • Human Rights Issues: India’s stance on Israel’s treatment of Palestinians is often ambiguous, balancing its diplomatic ties with strategic interests.
2. Cultural Aspects
   • People-to-People Ties: Cultural differences and historical ideological divides sometimes hinder personal and social connections between Indians and Israelis.
   • Limited Connectivity: Physical connectivity remains sparse, with limited flight options between the two nations.

Way Forward for India-Israel Relations

• Recalibrating Balance: India should maintain a balanced approach in West Asia, emphasizing its national interest while being sympathetic toward Israel.
• Collaborative Work: Jointly addressing issues like climate change, water security, food security, and religious extremism can foster a stronger bond.
• Proactive Policy: India could benefit from a proactive Middle Eastern policy to leverage geopolitical shifts, particularly under frameworks like the Abraham Accords, enhancing its regional influence.