Part 2. New Eastern Outlook
Economic cooperation. Indo-Israeli relations are not based on economic cooperation, although trade between the two countries has grown steadily since 1992. In 2008, for example, the bilateral trade volume amounted to $4 billion, and India became Israel’s third-largest trading partner in Asia. However, precious stones form the basis for trade between the two countries.
Economic ties in agriculture, science and technology have significantly expanded. Scientific and technological cooperation has primarily involved joint scientific research projects, especially in the fields of telecommunications and programming. Cooperation on outer space, which is strategically important to both countries, was expanding as early as the 1990s. Indian and Israeli companies and scientific research institutions established a number of joint enterprises in the field of agriculture, primarily in irrigation, distribution of water resources and crop production.
Currently, there are a number of reasons for the expansion of Indo-Israeli economic relations. First of all, there is the limited nature of Israel’s domestic market, which is a major constraint on its economic development. The enormous size of the Indian market and prospects for a high sales volume make India especially attractive for Israeli companies. Collaboration with Indian firms facilitates Israel’s entry into the Indian market and gives Israel access to Southeast Asian markets through Indian trade ties with those countries.
Secondly, India benefits from acquiring cutting-edge Israeli technologies, which have helped India’s economy to modernize and grow. In addition, Israel’s friendly relations with the United States and the European Union ease access by Indian goods to markets in America and Europe.
Thirdly, Indo-Israeli joint enterprises in agriculture, science and technology allow India and Israel to profitably carry out high-cost scientific research projects while avoiding substantial financial outlays.
Diplomatic and political obstacles. One significant obstacle in this area is the unequal nature of bilateral visits. Whereas a number of Israeli delegations have been led by the country’s highest ranking officials—the Prime Minister and the President—the heads of India’s delegations have been limited to the ministerial level. With the Indian National Congress (INC) party in power, the country’s highest-ranking officials are unlikely to visit Israel.
Two specific interrelated aspects of India’s activities form the second obstacle: the domestic political environment and the Muslim issue. Although the majority of the country’s Muslim population are not especially hostile towards Israel—in part because most adhere to a more moderate school of Islam—there exists a widespread opinion among India’s elite and in its political establishment that they need to tread carefully on the Muslim issue when contemplating relations with Israel. Although the Bharatiya Janata Party (BJP) holds radical views towards Muslims and thus stands by Israel, the Muslim factor is actually important in the INC’s policies because the majority of India’s Muslim population traditionally votes for the INC. Therefore, the party’s leadership is concerned that a too-friendly attitude towards Israel would cost them some of the Muslim vote.
Also, Indian political and military figures fear that part of India’s Muslim population could be radicalized by Muslim fundamentalists. India’s leadership, especially the INC, has begun exercising more care in its relations with the Muslim population. Therefore, relations with Israel have been restrained, and the government has avoided overtly expanding bilateral relations.
In addition, India’s ruling party needs to take into account the presence on the country’s political stage of several left-wing parties that are openly hostile towards Israel, particularly the Communist Party of India (Marxist) (CPI M). The elections in 2004 returned the INC to power at the head of a coalition. The government was pressured by left-wing political parties (members of both the coalition and the opposition) that demanded the government distance itself from Israel. That pressure had little effect. However, Israel’s leaders see the role played by leftists in the government as a significant factor restraining bilateral relations.
Thirdly, the Indians believe that the stubbornness of Israeli politicians is an obstacle to the expansion of Indo-Israeli relations when they put forward proposals that are unacceptable to India and are too inflexible to compromise.
Military Obstacles. Military cooperation between India and Israel is limited by three main obstacles: the American factor, bureaucracy and corruption, and competition with foreign companies.
The United States has played a dual role in Indo-Israeli military relations, both restricting and supporting them. The United States is Israel’s main source of high-technology weapons and military hardware. That allows Washington to significantly limit Israel’s exports of weapons and military equipment to third countries. In 2003, for example, the United States opposed Israel’s sale of the Arrow missile defense system to India. The trade agreement was canceled as a result. At the same time, the United States approved Israel’s sale to India of the Phalcon Airborne Early Warning and Control System (AWACS).
Some Israeli scholars believe that close military ties between India and Israel also serve American strategic interests. Martin Sherman points out that in the new geostrategic environment the United States needs the support of countries in the region to secure America’s global leadership as a counter to China’s growing dominance. A strong, progressive India supported by Israeli technologies is an agreeable and practical option. Another scholar—Efraim Inbar—has suggested that a tripartite US-Indo-Israeli alliance could result from the new US-Indo-Israeli convergence on strategic issues such as counterterrorism, missile defense and preemption.
The Israelis describe India’s bureaucracy as sluggish and difficult to work with. It often takes a long time to negotiate, conclude and implement projects with India, especially in the military field, when India’s domestic politics can unexpectedly affect negotiations.
Corruption is a serious threat to Indo-Israeli military ties. The so-called Barak contract was marred by possible corruption in Indo-Israeli military ties. In October 2006, six years after the contract was signed, India’s Central Bureau of Investigation opened an investigation, alleging that bribes had been paid to influence the decision of India’s defense minister. The Barak investigation was still ongoing in early 2010.
Competition with foreign companies is an additional obstacle to Indo-Israeli military relations. The high degree of cooperation and integration between Israeli defense firms and the United States and European countries in the production of military hardware obligates Israeli manufacturers to coordinate possible third-country sales. That procedure became more complex after India conducted nuclear tests in 1998. The restrictions on transfer of high-technology weapons to India will likely create additional obstacles to the further expansion of Indo-Israeli military ties in the coming years.
Economic obstacles. In economic relations, the Indian bureaucracy, corruption and competition by foreign companies are also big obstacles to the expansion of Indo-Israeli cooperation. In addition, many experts have observed that differences in the way business is conducted and in business culture sometimes hinders bilateral cooperation.
Prospects for the development of Indo-Israeli relations. Some media specialists point out that India and Israel are “strategic partners,” or are close to it. However, strategic partnership implies long-term obligations for cooperation. It also means that the two countries share a common understanding of world politics and their position on the international stage.
It should be noted that a number of strategic concepts form the basis of Indo-Israeli relations, but they are insufficient for us to characterize the relations as a “strategic partnership.” Therefore, we can expect a strategic partnership between India and Israel under limited circumstances in the midterm or, more likely, in the long term.
Despite some obstacles, relations between India and Israel have a tendency to expand. The primary effort may be to promote economic ties, especially in high-technology sectors, agriculture and science, where they have accumulated a great deal of experience in cooperation. This, in turn, may in the future expand Indo-Israeli ties to somehow compensate for the possible reduction of bilateral military cooperation.
In addition, both India and Israel are expected to pay more attention to such unofficial contacts as: organizing and conducting joint academic seminars, implementing exchange programs between leading academic institutions in both countries, organizing Israeli cultural events in India and, conversely, joint projects between Indian and Israeli non-governmental organizations, among others.
Thus, we can say that Indo-Israeli relations in the current environment are successful. Despite a number of obstacles that adversely affect the development of relations between the two countries, we should expect stable political and diplomatic relations, less active military relations and livelier economic relations.
Vasily Gamov is an expert on South Asia. This article was written especially for New Eastern Outlook.