India Deepens Bilateral Cooperation with Israel

November 14, 2014 Posted by India Briefing Reading Time: 5 minutes

India’s relationship with Israel has once again been thrust into the spotlight. Last week, India’s Home Minister Rajnath Singh completed a two-day trip to the West Asian country to discuss defense and security ties, whilst on November 6 former Israeli President Shimon Peres met with Indian Prime Minister Narendra Modi to advance cooperation in trade and technology.

These two trips followed Narendra Modi’s meeting with his Israeli counterpart Benjamin Netanyahu in September at the United Nations General Assembly, and the three events have now been widely interpreted as affirmation of stronger bilateral links between India and Israel.

India’s relationship with Israel is a controversial one. Historically, India has lent its support to Palestine in its ongoing dispute with Israel. It has supported Palestine’s position in international organizations, repeatedly condemned any Israeli military aggression, and voted for pro-Palestine resolutions in the UN.

However, recent governments have worked towards developing links with Israel. The two countries established full diplomatic relations in 1992 and have since steadily been strengthening bilateral ties. Trade has advanced rapidly, and in the last few years India has stopped sponsoring Palestine in the UN.

With the events of the past couple of months, it now seems that the new Modi administration will not only carry on this trend and continue to develop links with Israel, but place a greater emphasis on India’s relationship with Israel than it does Palestine. The Indian government remained neutral during the recent conflicts in Gaza, and India’s media are even suggesting that Prime Minister Modi will become the first Indian leader to make an official state visit to Israel. Such speculation is hardly surprising, for Modi made several trips to Israel during his tenure as chief minister of Gujarat.

Bilateral trade

Since opening diplomatic relations, bilateral trade between India and Israel has grown from US$200 million in 1992 to US$4.4 billion last year. Below, we take a look at trade amounts between the two countries over the last five years:

India Israel chart

Military equipment is one of the most important sectors of trade between the two countries, making up approximately two thirds of total trade. As the world’s biggest buyer of arms, India has gradually been increasing the amount of military equipment it imports from Israel and is now its most important customer, accounting for over half of Israel’s weapons exports.

Other key exports from Israel to India include:

Precious stones and metals
Chemical and mineral products
Base metals
Machinery
Transport equipment

India’s most common exports to Israel include:

Textile and textile articles
Plants and vegetable products
Mineral products
Rubber and plastic products
Base metals and precious stones

Future Outlook

India is likely to deepen its trade links with Israel in the near future. Negotiations for a free trade agreement (FTA) have been ongoing since 2008 and are anticipated to be concluded next year. The agreement is expected to be used to further expand and diversify trade between the two countries, with India particularly keen to gain access to Israel’s energy and agricultural technologies, which will help in its struggle to combat power shortages and agricultural inefficiencies.

Relations will also likely flourish further under Narendra’s Modi’s leadership. Modi’s BJP party and Israel’s Likud are ideologically closely aligned, and this will undoubtedly have an impact on future bilateral ties. Tablet, a Jewish current affairs magazine, ran an article in which it claimed that: “to his Israeli partners, Modi’s profile as an opponent of Muslim extremism — a perceived common enemy, particularly in the wake of the 2008 terrorist attacks in Mumbai — only made him more appealing [to Israel].”

For his part, Narendra Modi recently released a statement through his office in which he expressed: “the strong desire of India to further expand and strengthen its relations with Israel both in traditional areas as well as in new areas of cooperation”.

Where once it looked very much like an opponent, India now looks set to become one of Israel’s closest allies.

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