India-China tensions spell a boom for Israel’s defense industry

Military tensions between India and China are leading to new deals for the Israeli defense sector, with the Indian military seeking to fill gaps in its precise weapons stockpile and its intelligence capabilities.

According to reports in the Indian press, the military has decided to make an emergency purchase of Spice 2000-guided bombs manufactured by Israeli defense contractor Rafael Advanced Defense Systems Ltd., a deal that is expected to include hundreds of bombs worth tens of millions of dollars. A year ago, amid heightened tensions with Pakistan, the Indian government purchased about 100 spice bombs worth $30 million.

The reports also reveal that India is interested in expanding its fleet of Heron UAVs, an IAI-made drone that is already in use by the Indian air force, navy and ground units, in order to increase its ability to continuously monitor the contested territory in the Himalayan Mountains.

The Indian press is also reporting that the government is running a project of arming the drones with missiles as part of the so-called “Project Cheetah.”

The two deals are expected to garner the Israeli defense industry sales of more than $100 million. Despite the urgency, some of the systems will be assembled in India, in accordance with Prime Minister Narendra Modi’s policy of promoting local production as a condition for the acquisition of foreign weapon systems.

India is currently the largest client of the Israeli defense industry. According to figures provided by the Ministry of Defense, defense exports totaled $7.2 billion in 2019. While the ministry does not break down exports by country, exports to the Asia-Pacific region made up 41% of the total amount.

Other major purchases currently in the pipeline include an Indian order of Heron-TP AUVs and interest in Elbit-made Hermes UAVs, though neither deal has yet to be completed.