September 11, 2024 | International, Land
February 19, 2020 | International, Aerospace, Naval, Land, C4ISR, Security
New joint ventures hint at ‘burgeoning relationship’ between Israel and India
By: Seth J. Frantzman
JERUSALEM — Israel and India are deepening defense industry ties as Israeli companies seek long-term partnerships through India's efforts to encourage products to be locally produced under joint ventures.
Earlier this month, Israel Aerospace Industries and India's Bharat Electronics Limited signed a memorandum of understanding to establish a new center for technical and maintenance support for India's air defense systems. In addition, IAI on Feb. 5 signed a strategic collaboration memorandum with Indian firms Hindustan Aeronautics Limited and Dynamatic Technologies Limited to work on UAVs that will be made in India.
Sales have historically surpassed more than $1 billion annually, making India not only a core country for Israel's defense sales, but also strengthening the bilateral strategic partnership. IAI deals in 2017 included a $2.5 billion deal for Barak 8 missiles and $1.3 billion for surface-to-air missiles, with further deals in 2018, according to the company.
In the wake of the early February defense expo in Lucknow, India, IAI stressed that the Asian nation is one its main partners. “The important partnership is characterized by long-term collaboration, joint development and production, energy transfer, and technical support over many years,” according to Nimrod Sheffer, IAI's president and CEO.
The sentiment was echoed in interviews across Israel's major defense companies. Elbit Systems sees India is a strategic market, noting that it is “involved in a range of programs across the Indian defense sector.” Rafael Advanced Defense Systems said it has been doing business in India for more than two decades “supporting the Indian Armed forces with state-of-the-art systems.”
As part of bilateral relations, trade may be boosted to $20 billion in the coming decades from the $5 billion level at which it currently stands, according to the Begin-Sadat Center for Strategic Studies. India has been a consumer of Israeli arms exports for several decades, accounting for 49 percent of Israeli arms exports from 2013 to 2017, according to one count at Israeli media outlet Calcalist. And India was Israel's largest purchaser of arms in 2017 alone, though purchases here decreased in 2018.
India is one of the core countries involved in the International Defense Cooperation Directorate under Israel's Ministry of Defense. Known by its acronym SIBAT, the directorate in the government's outreach arm to the defense industry. Of $7.5 billion in defense exports in 2018, 46 percent went to Asia, Globes reported. Israeli companies have not divulged what percent of that went to India, but it is considered to be substantial. Last year's trade numbers are still being calculated, according to Israel's MoD.
“My sense is that both India and Israel see this as a burgeoning relationship, not just arms trade," Jonathan Spyer, a research fellow at the Jerusalem Institute for Strategy and Security, told Defense News. "After Russia, Israel is India's second-largest source for defense [acquisition] — there is a strong sense of shared challenges in the area of terrorism.”
Spyer, who has taken part in recent policy discussions and roundtables about India-Israel relations in Tel Aviv and New Delhi, says India admires Israeli defense companies' speed and lack of bureaucracy that has helped their growth in the the markets of air defense and UAVs. However, as the Center for a New American Security think tank notes, “India's weapons procurement is complex and slow in no small part because of India's desire to indigenize production.”
‘The sky is the limit'
Still, the relationship between India and Israel is evolving. India's economic policy “Make in India” means that foreign companies wanting business in India must work alongside domestic companies and develop products locally. And Israeli companies have indeed partnered with Indian firms via joint ventures.
For instance Elbit established a joint venture with Adani Defence in Hyderbad for the production of Hermes drones in 2018. Adani Defence noted that the 50,000-square-foot facility is the first outside of Israel for manufacturing the Hermes 900 medium-altitude, long-endurance UAV. Another joint venture with Alpha Design Technologies was also launched with Elbit in recent years, and the Israeli firm also works with Bharat Electronics in the field of electronic warfare and electro-optics.
And IAI inked MOUs with three Indian companies this month. Bharat Electronics' marketing director said Feb. 5 that the collaboration would enhance its offerings and provide an immediate and optimized maintenance solution for air defense systems.
“The sky is the limit,” said Ze'ev Mivtzari, IAI's corporate vice president of marketing for India. “It's a big change from five years ago.” Mivtzari, a former Israeli defense attache to India, pointed to the strengthening of bilateral ties seen in recent years.
It's Israel's advanced technology that attracts India as it seeks to upgrade its armed forces. High-altitude and medium-altitude UAVs such as the Heron and multimission tactical Searcher could help India protect its border and sensitive sites.
The same is true for air defense systems. India has acquired the Israel-developed Barak missile line for its medium-range surface-to-air missile requirement. Working with India's Defence Research and Development Organisation, IAI hopes to increase sales of the missile by setting up production lines in India.
“If you want to work in India, you don't just sell products, you need to create your own ecosystem,” the Israeli firm said. It's that ecosystem that Israeli companies are targeting. The ecosystem for IAI now includes more than 100 local Indian companies with which it works.
Like IAI, Rafael's interaction with India goes back decades and involves the Asian nation's Army, Navy and Air Force. Rafael's ecosystem is in Hyderbad, where it's focusing on missiles, air defense systems, communications technology and electronic warfare capabilities.
“The common ground for all our programs, with the Army, Navy and Air Force, is modernization. Some of them are upgrades to existing equipment, some are procurement. The Indian market is big and will remain big,” Rafael has said. The company currently works with India on the SPYDER air defense system and Spike missiles, and it showcased its sea-based air defense system C-Dome, based on the Iron Dome, at a recent defense expo in Lucknow.
Rafael is also discussing its Drone Dome system, which protects against smaller drones. A recent test showed the system can use lasers to simultaneously stop multiple drones.
In the market of communications systems, Rafael seeks to increase sales of its BNET system is India, and it's also pushing its Typhoon remote controlled weapons system for naval platforms.
UVision, an Israeli company that makes loitering munitions, also signed a deal this month with India's Aditya Precitech to set up a joint venture to manufacture the PALM (precision attack loitering munition) Hero system. UVision's company in India is called AVision.
Pivot east
Israel's MoD characterizes the bilateral relationship as meaningful and involving “vast cooperation” between the two defense industries. The deepening defense and strategic relationship is part of India's multi-decade political and strategic shift, as it moves away from its former link to the Soviet Union in the 1980s, and improves ties with Israel and the United States. This complement's Israel's pivot eastward.
But there are differing security priorities between New Delhi and Jerusalem. India is more concerned about China, while Israel is wary of Iran. Though the bilateral relationship has still grown under Israeli Prime Minister Benjamin Netanyahu and Indian Prime Minister Narendra Modi, and their meetings in 2017 and 2018 that resulted in government-to-government agreements.
The ecosystem built by joint ventures between Israeli and Indian defense companies is complex and involves sensitive defense technology, know-how from which India hopes to acquire to lessen its dependence on foreign defense imports.
Spyer, the analyst out of Israel, said there is bipartisan consensus in both countries to advance the existing relationship. “It is a really important element of Israel's strategic stance and the broader pivot to Asia. No other burgeoning relationship, whether Vietnam, South Korea, Singapore or Japan, has the dimensions, depth and shared interests as India does for Israel.”
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September 28, 2018 | International, Naval
Navy Awards Ingalls 6 Destroyers, Bath Iron Works 4 in Multiyear Deal; Ingalls to Build Both 2018 Ships
By: Megan Eckstein The Navy awarded six of its next Arleigh Burke-class destroyers to Ingalls Shipbuilding and four to General Dynamics Bath Iron Works, in a combined $9-billion purchase right at the end of the fiscal year. The two companies had been competing for work in a five-year multiyear procurement (MYP) deal that would cover at least 10 Flight III destroyers. The contracts span Fiscals Years 2018 – which ends on Sunday – through 2022. “These contract awards are further evidence of the Navy's continued delivery of lethal capacity to the nation with a sense of urgency while ensuring best value for the taxpayer,” Navy acquisition chief James Geurts said in a Navy news release. “The Navy saved $700 million for these 10 ships by using multiyear procurement contracts rather than a single year contracting approach. We also have options for an additional five DDG 51s to enable us to continue to accelerate delivery of the outstanding DDG 51 Flight III capabilities to our Naval force. We executed this competition on a quick timeline that reflects the urgency in which the Navy and our industry partners are operating to ensure we meet the demands of the National Defense Strategy.” Ingalls Industries' contract is worth $5.1 billion and covers two ships in FY 2018 and one a year in FY 2019 through 2022. It also includes options for additional ships, which may be subject to a future competition with BIW. Bath Iron Works' contract is valued at $3.9 billion and covers one ship a year in 2019 through 2022 – and none in the short-term in 2018. According to the Navy statement, “each shipbuilder's contract contains options for additional ships in FY18/19/20/21/22, providing the Navy and/or Congress flexibility to increase DDG 51 build rates above the 10 MYP ships in the Navy's FY 2018 budget request, if appropriated.” Lawmakers in the House and Senate armed services committees have pushed for faster acquisition of the destroyers, and in the FY 2018 National Defense Authorization Act they authorized the Navy to enter into a multiyear procurement contract with the two builders for as many as 15 destroyers – three a year, compared to the previous shipbuilding rate of two a year. The lawmakers on the appropriations committees only provided money to buy two ships in 2018, but they did fund three DDGs in the 2019 spending bill, which the Senate passed last week and the House passed this week. It is unclear if that third ship in FY 2019 would have to be competitively awarded or if the Navy would be allowed to select a shipyard based on schedule, performance or other factors – the contract announcement notes the options “may” be subject to a competitive process. Program officials had been mum during the competition on their acquisition strategy and how to handle options for additional ships. All the ships covered under this pair of contracts is for the Flight III configuration, which is built around the powerful AN/SPY-6(v) Air and Missile Defense Radar. “This procurement will efficiently provide Integrated Air and Missile Defense capability for our future fleet while strengthening our critical shipbuilding and defense industrial base,” DDG-51 program manager Capt. Casey Moton said in the news release. “The Navy is proud to be working alongside the dedicated shipbuilders at BIW and Ingalls to continue to deliver these warships to the fleet.” Moton told USNI News in a December 2017 interview that the contracts would be structured in such a way that additional ships – beyond the previous two-a-year rate – could be added easily if the Navy deemed it a priority in its spending request or if lawmakers wanted to add in more funding. With this contract award, the two shipyards – who, for a time after the production line had restarted remained neck-and-neck on contract awards and deliveries – will further diverge. Ingalls Shipbuilding was awarded a contract in June 2017 to begin work on its first Flight III ship, DDG-125. Two months later, Bath Iron Works was awarded a contract that would have the yard build DDG-126 with a Flight III configuration but DDG-127 in the older Flight IIA design, like the rest of the ships in the previous multiyear procurement contract. Though Navy and congressional officials would not comment while the competition was occurring, Bath Iron Works had been challenged to balance the Arleigh Burke-class program and the DDG-1000 Zumwalt-class destroyer program. Keeping DDG-127 – which Congress incrementally funded in FY 2016 and 2016 – at the Flight IIA design would help ease the yard into Flight III production. The yard will not be building any new destroyers in FY 2018, according to the contract announcement, whereas Ingalls will take on two Flight III ships. https://news.usni.org/2018/09/27/navy-awards-ingalls-6-destroyers-bath-iron-works-4-in-multiyear-deal-ingalls-to-build-both-fy-2018-ships