India Strikes Israel Military Industries

Roy Tov – March 6, 2012

Sharon scatters petals on Mahatma Ghandis tomb. Click to enlarge

Ever since the 2004 tsunami in Southeast Asia, international news seem obsessed with earthquake reports. Silent political earthquakes rippling through the political fabric of the Middle East with far more devastating results are barely mentioned, and invariably kept out of context. Maybe the answer for this riddle is the dramatic quality of earthquake pictures. An image of Ariel Sharon scattering petals at Mahatma Gandhi’s tomb—irony’s epitome—is not attractive enough for a public that grew up on violent video games. Today, March 6, 2012, Ehud Barak—Israel’s Defense Minister—got bad news. India’s Defense Ministry barred Israel Military Industries from bidding on defense contracts for 10 years. This follows the collapse of Israel-Turkey’s alliance. The ongoing failure of the Iron Dome missile shield system may result in the damaging of the Israel-Singapore alliance. Is Israel losing its Asian allies?

Claims of corruption in state-related industries—especially those linked to the military—are never new, not even in India. Such reports can be found regularly in the media around the world; yet, seldom have they reached beyond the gossip sections. Three years ago, India’s Central Bureau of Investigation conducted an investigation on international suppliers of the Indian army, on allegations that they won contracts through improper means, including bribing of senior officials. A more difficult task for this fine investigative institution would have been finding an honestly achieved contract; not surprisingly, they found six guilty companies. One of them was IMI—Israel Military Industries—another one was Singapore Technologies Kinetics. The companies were given a chance to plead their case before the ministry; however, the explanations were insufficient. All the six corrupt companies were barred from submitting bids for Indian defense contracts for the next ten years. The decision was published today, three years (!!!) after the investigation; this odd delay and the fact two companies belong to close allies—Israel and Singapore—hint we may be witnessing a restructuring of India’s alliances

A few days before this decision was published, the BBC reported on February 29, that Iran is to accept gold instead of dollars as payment for its oil. This came shortly after Iran announced it would conduct transactions with India in Indian rupees, strengthening the move of Asian economies out of the American dollar financial world. At least China and Russia, and China and Japan, have reached similar agreements. India and China already announced that they would continue buying Iranian oil after new US and European Union sanctions on oil deals with Iran are imposed on July 1, 2012. There is little doubt India is objecting to Israeli-American violence against Iran and is beginning to realign its finances and commerce. Since Israel is a major provider of the Indian army the process will take time.

Friend or Foe?

Breaking its traditional non-aligned and pro-Arab policy, India established relations with Israel in January 1992. As of now, India is the largest customer of Israeli military equipment and Israel is the second-largest military partner of India after the Russian Federation, with bilateral commerce crossing the US$9 billion per year. This is almost 5% of Israel’s GDP. The links between the two countries extend also to military and intelligence cooperation, including friendly links between Mossad and the parallel Indian external intelligence agency, Research and Analysis Wing (RAW). Another remarkable testimony of the countries closeness was an Israel Aerospace Industries $2.5 billion deal with India to develop an anti-aircraft system and missiles for the country. In March 2011, India signed a $1 billion deal with Israel’s Rafael for a variety of missile-related items. Rafael is the producer of the abovementioned Iron Dome.

In 2008, India supported Israel’s aggressiveness against Iran. Israel’s TecSAR radar satellite was launched by India on January 22, 2008. The Indian PSLV launch-vehicle was chosen by Israel instead of its own Shavit rocket, due to the lower cost of the Indian launcher. Tecsar is an Israeli spy satellite, primarily meant to monitor Iran’s military activities. Relations between countries can’t get much closer than this. Yet, things seem to be changing.

IMI (“Taas”—acronym for “Ta’asia Tzvait,” “Military Industry” in Hebrew) can be considered the weapons’ factory of the IDF ground forces. It manufactures firearms, ammunition and military technology, dating back to 1933. This was one of the key industries and institutions that predated the State of Israel, and which were founded as essential precursors to statehood. Its best known product is the militarily obsolete (at least in Israel) Uzi submachine gun. Overall, IMI is Israeli aristocracy. Yet, it is a complicated type of aristocracy. It is owned by the government, which has troubles transforming it into a profitable company. In 2005, Magen—“Defender,” the Small Arms Division of IMI—was privatized, and is now known as IWI (Israel Weapon Industry). However, other divisions of IMI are much more difficult to privatize. Since India was a main customer of IMI, the Indian decision to bar it for a decade, will halt the privatization efforts. An Indian missile hit Israel’s Ministry of Defense.

Given the ongoing escalation in the relations between Israel and Iran, and Israel and Turkey-Lebanon on the gas-fields issue, it is difficult to accept that the Indian decisions to bar IMI while improving the terms of its oil-deals with Iran were randomly published at roughly the same time. More probably, we have just seen the first strike—and a very accurate one—of an Indian missile at an Israeli target. Israel is losing Asia. Pax Iraniana is in the air.


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