In West Asia, the transformed international order also dictated consequent changes in India's foreign policy. Economic and energy requirements have defined India's policy towards this region since the 1990s, more than the rhetoric of the past. Although India has not abandoned its traditional support for the long-pending Palestinian cause, it established full diplomatic relations with Israel in 1992. Since then, Indo-Israeli cooperation has spanned diverse sectors from defence and intelligence sharing to agriculture, science and technology, space exploration and trade. India must keep a cautious balance between Israel, Iran and the Arab world so that no one is ignored.

West Asia

Israel has emerged as one of the most important defence partners for India. In the past years, India’s economic and security ties with Israel have made remarkable strides, while its political relations with Arab countries have drifted. On the other hand, the growing oil trade and substantial remittances from Indians living in the Gulf have made India and the Arab states even more economically intertwined. India’s growing energy needs make energy trade one of the key elements in its security and economic health. While some thinkers see India’s future in a strategic relationship with Israel and Japan, a more likely Indian approach will involve concurrent efforts to build ties with Israel, Iran and the major Arab countries. India’s traditional view is against any human rights violations in West Asia. Managing Israel and Palestine at the same time needs a very balanced approach.

Introduction

• India-Israel relations have been sensitive and controversial in much of their relationship history. India recognised Israel in 1950 but established full diplomatic relations only in 1992.
• India’s attitude towards Israel has been guided more by diplomatic prudence rather than a moral basis. There were several reasons for this change of policy by India:

1. Soured Relations with the Arab world: India’s largely pro-Arab stance
2. By 1992, with the end of the cold war and the collapse of the Soviet Union, there was an urgent need for better relations with the sole superpower USA. Developing relations with Israel would be an important gesture for closer economic cooperation with Washington.
3. There were big advantages in developing closer ties with Israel which included cooperation in the spheres of agriculture, industry, trade, science and technology and defence.

• Since then, India-Israel relations have blossomed in the short period of nearly a quarter century into close military, economic and strategic ties. Both countries took a fresh look at each other and found substantial interaction in various fields ranging from economic, agricultural, and scientific to defence.
• Keeping India’s wider strategic interests in perspective, successive Indian governments since the early 1990s have walked the nuanced line between expressing genuine concern for the Palestinian cause and expanding its commercial and defence ties with Israel.
• Over the years, the Indian government has toned down its reactions to Israel’s treatment of Palestinians. India has also begun denouncing Palestinian suicide bombings and other terrorist acts in Israel, something that was seen earlier as rather justified in light of the Israeli policies against the Palestinians. India is no longer supporting anti-Israel resolutions at the United Nations.
• At crucial times, when India needed Israeli help, it got it unreservedly. Israel was willing to continue and even step up its arms sales to India after other major states curbed their technological exports following India’s May 1998 nuclear tests. Israel provided India with much-needed needed imagery about Pakistani positions using its UAV during India’s Kargil war with Pakistan in 1999. That was ultimately instrumental in turning the war around for India. Israel also provided humanitarian relief to India following a devastating earthquake in 2001.
• When India was planning to undertake a limited military strike against Pakistan in June 2002 as part of “Operation Parakram,” Israel supplied hardware through special planes.

Imperatives for closer cooperation

• The common threat to national security emanating from their neighbourhood in the form of cross-border terrorism, especially in the era of globalisation of jihadi politics necessitates closer cooperation between them. Both countries have been victims of terrorist violence for decades and have fostered closer cooperation to counter this threat.
• Israel is a reliable ally of India especially as seen in the regional dynamics of South Asian geopolitics. Unlike major powers’ ties with Pakistan (like the USA, China and even Russia), Indo-Israel ties will never be hyphenated with Indo-Pakistan relations. India is assured of strong Israeli support in this region including vis-à-vis China.
• As a rising power with the world’s fastest-growing economy, India offers immense opportunities for mutually beneficial ties for Israel ranging from a huge market, innovation, science and technology, agriculture and attractive investment destination. Conversely, Israel’s technical prowess in defence, dual-use high-technology, dry land agriculture, water management, technical education etc. makes it an indispensible partner for accelerating India’s economic development and security.
• India offers crucial diplomatic support to Israel in international arena where it is often isolated over many issues.  Also India’s geopolitical position makes it a gateway for Israel to South Asia, South-East Asia and East Asia where India’s standing as a responsible power is of great benefit to Israel.

Constraints to bilateral ties

• Lack of bipartisan support in India over ties with Israel is a major stumbling block. It is largely attributed to the unresolved Palestine dispute which soils Israel’s image for an electorally significant large Muslim population in India.
• India’s huge reliance on Arab countries and Iran for energy security, diaspora interests, security and connectivity issues forces it to have a nuanced approach to ties with Israel so as not to offend these countries. These regional power play dynamics circumscribe India’s choice vis-à-vis Israel.
• Israel’s ultra-aggressive style of military action in which it uses disproportionate force against weak adversaries and the consequent collateral damages including high civilian causalities makes it untenable for India. Besides, Israel’s isolation at the international stage where it is part of a few international groupings also constraints India’s policy options.

Ties during the Modi regime

Political ties

• Israeli policy-makers and analysts have often expressed displeasure at the lack of high-level political interactions with Indian leaders, despite the robust strategic engagement between the two countries.
• Israeli PM Benjamin Netanyahu, who has met Modi twice in the past year and a half, has said that “sky is the limit” that can be achieved between the two sides with “limitless” potential.
• There have also been other contacts between senior Indian and Israeli political leaders since the Modi government assumed office. Israeli Defence Minister Moshe Ya'alon visited India in February 2015, the first visit by an Israeli Defence Minister since the establishment of diplomatic ties in 1992.
• The first-ever Indian President’s visit to Israel and Palestine between October 12 and October 15 in 2015 was a marked departure from New Delhi’s standpoint. The Modi government still has to deal with the same constraints that have historically shaped Indo-Israel ties.
• Critics have argued that India’s growing relations with Israel dilute its commitment to the Palestinian cause. However, the fact remains that flourishing ties with Israel have not changed India’s stance on the conflict and it continues to support the realisation of a sovereign and independent state of Palestine. Nonetheless, it has also become sensitive to Israeli security concerns.
• This is evident in New Delhi’s voting pattern on matters relating to the conflict at the United Nations. In both 2015 and 2016, India abstained from voting on a resolution calling for Israel to face the International Criminal Court (ICC) for war crimes committed during its Gaza offensive. The abstention was a shock to the Palestinians. At the same time, India voted for a resolution on the creation of a database of companies operating within illegal Israeli settlements, a move which could facilitate the Boycott, Divestment, and Sanctions (BDS) movement against Israel. India appears to be maintaining its balancing act of Palestinian solidarity in tandem with cordial relations with Israel.
• Hence, India is at times seen as a suitable international interlocutor to facilitate negotiations. Given that India has friendly relations with all countries in the region, has good ties with both Israel and Palestine and has vital stakes in the Middle East, it can use diplomatic channels to emphasize to all stakeholders the need for the resumption of the peace process.
• The Palestinian side has on many occasions urged India to be more active along with other international players to facilitate Israel-Palestine negotiations. New Delhi has, however, so far kept away from any active involvement in the peace process.
• There are indications that the Modi government is rethinking New Delhi’s hands-off approach toward the Middle East peace process. For example, India sent the prime minister’s special envoy on counter-terrorism, Asif Ibrahim, to the Paris Peace Conference in January 2017, underlining its preference for the resumption of the peace process and indicating its willingness for involvement.
• In October 2016 in a dramatic turn, India changed its vote at UNESCO on a pro-Palestine resolution that questioned Israel’s claim and criticised it for excavations inside the walled city. While in April 2016, India voted in favour of the motion, in October it changed its vote to an abstention.
• A visit to Palestine in November 2016 by Minister of State M.J. Akbar for the first-ever Joint Commission meeting was also seen as a move to smooth ruffled feathers over both the UNESCO vote as well as the upcoming visit of the Israeli president in the same month.
• Israeli President Reuven Rivlin’s visit in November 2016 was the first such visit by the Israeli head of state to India in nearly 20 years. It a sign of the growing partnership between the two nations. The last Israeli president to visit India was Ezer Weizman, in January 1997.
• Rivlin was accompanied by a large government and business delegation and he visited the Centre of Excellence in Agriculture in Karnal, Haryana and the ‘Aqwise’ water treatment plant in Agra, both set up and run with Israeli support.
• He also jointly inaugurated the Agro Tech 2016 in Chandigarh with President Mukherjee. Further, India signed contracts worth USD 1.4 billion with Israel Aerospace Industries to purchase two Phalcon/IL-76 AWACS and 10 Heron TP UAVs.
• The four-day (May 14-17, 2017) visit to New Delhi of Palestinian President Mahmoud Abbas came at a crucial time. This is his fifth visit to India but the first since May 2014 when Prime Minister Modi came to power.
• The timing of Abbas’s visit to India was significant at many levels; most importantly because PM Modi was all set to undertake a maiden visit to Israel in July which was not to be accompanied by a customary visit to Palestine. So experts believed that Abbas’s visit was a balancing act.

Analysis of PM Modi's visit to Israel: July 4-6, 2017

• Prime Minister Narendra Modi’s visit to Israel from July 4-6 was a significant milestone. It was the first-ever historic visit of an Indian Prime Minister and takes place as the two countries mark 25 years of the establishment of diplomatic relations. Israeli PM Ariel Sharon came to India during the Vajpayee regime in 2003.
• He visited Yad Vesham, the Holocaust Memorial. He paid homage to the soldiers in Haifa cemetery which contains the graves of Indian soldiers who had died during the First World War. He also unveiled a plaque commemorating Major Dalpat Singh, known as the ‘Hero of Haifa’ for his critical role in the liberation of the city during World War I.
• The outcome is an impressive joint statement which elevated the relationship to a ‘strategic partnership’.

Key agreements signed

India and Israel signed seven agreements to increase cooperation in key sectors like space, agriculture and water conservation.

• A Memorandum of Understanding (MoU) was signed for setting up of USD 40 million worth India-Israel Industrial Research and Development (R&D) and Technical Innovation Fund.
• In the water sector, two agreements were signed to increase cooperation on water conservation and state water utility reform in India.
• In the agriculture sector, the two countries have agreed for India-Israel Development Cooperation – a three-year work programme in agriculture from 2018 to 2020.
• Separate MoUs were signed on cooperation in GEO-LEO optical link and cooperation in Electric Propulsion for small satellites. They also agreed for cooperation regarding cooperation in atomic clocks.
• Indian and Israeli companies entered into agreements to bid jointly for defence contracts for the Indian military and locally build the systems under “Make in India.”
• Bharat Forge and Israel Aircraft Industries (IAI) have signed an MoU to expand the joint venture that the companies are establishing as part of a February 2017 agreement meant to develop, build, market and manufacture selected air defence systems and lightweight special purpose munitions.
• The new MoU covers the establishment of a maintenance centre for selected advanced air defence systems in Hyderabad in Telangana in India.
• Dynamatic Technologies, IAI and Elcom signed a strategic teaming agreement for industrial cooperation and local production of Unmanned Aerial Systems (UAS) in India.

Analysis of the visit

• The political message of the trip is clear – India is no longer uneasy in dealing with Israel as was the case in the past. Whether this was due to the possible impact such a relationship would have on domestic politics or on the vast Indian Diaspora is a matter of perception.
• Every country pursues its foreign policy to maximise its own national interests. Egypt and Jordan have peace treaties with Israel. Qatar had hosted an Israeli trade office for many years. There have been reports of contacts and back-channel links between several Arab countries and Israel. India realizes Israel is no longer a pariah with her having a working relationship with conservative states such as Saudi Arabia and the UAE.
• PM Modi had already undertaken visits to the United Arab Emirates, Saudi Arabia, Qatar and Iran before embarking on his trip to Israel. Receiving Palestinian President Mahmoud Abbas in Delhi in May 2017 eased the necessity of skipping a visit to Ramallah while visiting Israel.
• India has finally de-hyphenated its relationship with Israel and Palestine, engaging with the two arch-rivals separately and on mutually beneficial terms.
• In a clear departure from the Indian practice of keeping Palestinian leaders prominently in the loop, Mr. Modi made a point of not visiting the Occupied Territories. The departure was more prominent in the joint statement, which contained a short paragraph on the “Israel-Palestine” peace process, with no reference to UN resolutions, the two-state solution, or even the need to resume talks, that Mr. Modi had spoken of during the visit of Palestinian President Mahmoud Abbas to India just a couple of months ago.
• Defence ties have long underpinned Indian-Israeli relations. India is Israel’s top destination for arms exports, buying 41 per cent of Israel’s arms export between 2012 and 2016. But a string of deals signed reflected wider cooperation that could benefit Indian companies seeking advanced technologies and could pave the way for Israeli firms to access millions of consumers.
• Indian companies looking to get access to higher-end technologies than what was available domestically could then make acquisitions in Israel. It's a good complementary relationship between the two countries.
• It is worth remembering that during a visit to Beijing in March, Mr. Netanyahu had also described Israel’s relationship with China as ‘a marriage made in heaven’. An Israel-China comprehensive innovation partnership with an outlay of $300 million has been launched.
• Fortunately, there is enough content in the India-Israel relationship though successful summitry depends on the personal chemistry between leaders. Both sides have agreed to establish a task force to ensure the implementation of the announcements made. This will ensure that the relationship stays on track and Mr. Netanyahu’s return visit in 2018 is a success.

Defence ties

• Defence continues to be a “central pillar” of the bilateral relationship. Next to Russia and the United States, Israel is one of the largest arms suppliers to India with annual sales worth over $1 billion. In fact in past decade, Israel has been India’s fifth largest defence exporter.
• Israel has sold radar and surveillance systems as well as electronic components for military aircraft and has helped India’s defence itself through training in counter-terrorism methods. In November 2011, India's elite Cobra Commando unit bought more than 1,000 units of the Israeli X-95 assault rifles to use in counterinsurgency operation. Also in 2011, India placed orders for four advanced Israeli Phalcon AWACS planes (airborne warning and control systems).
• Indeed, under the Modi government, India and Israel have ramped up their cooperation on security and defence matters. In late 2014, the Indian Navy opted to purchase the Barak.
• Indian and Israeli warships successfully tested the jointly developed Barak-8 long-range surface-to-air missile system during November-December 2015, which will now serve as a missile defence shield for warships and key facilities such as offshore oil platforms. It was joint venture of DRDO and Israeli aerospace Industry (IAI).
• In July 2016, the medium range missile (MR-SAM) for the IAF was successfully test launched from a mobile launcher in the Integrated Test Range (ITR) at Chandipur. In September 2016 India successfully test fired a new, long range surface-to-air missile (LRSAM) jointly developed with Israel from a defence base off Odisha coast in a bid to galvanise its air defence capabilities. Many Indian industries like BEL, L&T, BDL and TATA group of companies besides other private industries have contributed to the development of a number of subsystems which have been put into use in this flight test.
• India has already deployed Israeli unmanned aerial vehicles (UAVs) along the rugged mountains of Kashmir for surveillance, as well as on the disputed border with China. In September 2015 the government approved the Air Force's request to acquire 10 Heron TP drones at an estimated Rs. 2,620 crore from the state-owned Israel Aerospace Industries (IAI). These drones can be fitted with weapons to engage targets on the ground for counter insurgency operations internally as well across the borders, including attacks on terrorist hideouts in mountainous terrain.
• Israel also wants to be a key player in the “Make in India” initiative, especially in defence manufacturing through technology transfers and joint research, technology start-ups and cyber-security.
• Indian firm Reliance Defence and Israeli firm Rafael Advanced Defence Systems signed a cooperative agreement worth an estimated $10 billion at Defexpo India on March 30, 2016. As per the agreement, Rafael and Reliance will cooperatively produce air-to-air missiles, various missile defence systems, and surveillance balloons for the Indian military. The undertaking is projected to provide employment for 3,000 Indians at a facility in Madhya Pradesh.
• India successfully tested the Israeli-made SPYDER quick-reaction surface-to-air missile in May 2017. The Indian Air Force (IAF) is planning to deploy this system on its western border.
• In April 2017, India signed a $2 billion deal with an Israeli firm for advanced medium-range, surface-to-air missiles (MRSAMs), the largest such deal for the Israeli industry. This will provide the Indian army the capability to shoot down aircraft, missiles and drones at ranges of up to 70 km.
• Three Indian naval ships, destroyer INS Mumbai, frigate INS Trishul and tanker INS Aditya, made a goodwill visit at the Haifa port in May 2017 to mark 25 years of full diplomatic relations between the two countries.
• India imported Pegasus (spying software) from Israel.

Irritants

• Prolonged delay in delivering weapon systems as well as few unsettled cost issues – as reflected in AWACS deal have been one of India’s prime complaint against Israel.
• Israel’s reticence in transfer of technology as encountered in Barak 8 missiles was also a significant irritant. India continues to suffer delays in getting the Israeli Barak 8 SAM (surface-to-air missile) system into service. This should not be happening because Barak 8 entered Israeli service in 2013.
• The growing Israeli-China Defence ties are a cause of worry for India. The recent inauguration of a top Israeli defence company's factory in China has negated some 15 years of spirited Indian diplomacy to thwart the two from defence cooperation that enters the realm of joint research and development. With active US help, the Atal Bihari Vajpayee Government had forced Israel to return Chinese advance payment for AWACS. Though this deal was for civilian sector, yet the Chinese breakthrough in poaching companies exclusively equipping the Indian armed forces is the second strategic set back in the defence sphere after Russia-Pakistan deal for supply of Mi-35s attack helicopters.
• The increasing competition for lucrative Indian defence market between Israeli and American companies may result in USA blocking transfer of defence technologies to India by Israeli companies, most of which use technologies which are either copied US technologies or funded by US.

Counter-Terrorism

• In January 2012, India and Israel stepped up their counter-terrorism coordination strategy. The two countries also signed an Extradition Treaty and a pact on Transfer of Sentenced Prisoners. Both countries signed an intelligence-sharing agreement in July 2014, hoping to fight radical Islamic extremism in the region together. Joint working Group on counter-terrorism meets periodically.
• India eyes advanced Israeli foliage penetrating radar capable of detecting human and vehicular activity in dense forests. In the Indian use case, the radar would be a handy monitoring tool for the porous Line of Control with Pakistan, the de facto boundary in the disputed territory of Kashmir. Israeli radars could considerably improve intelligence, surveillance and reconnaissance of the difficult terrain.
• This would help India plug leakages in LOC to prevent infiltration and incidents like Pathankot and Uri attack. There is thus immense scope for collaboration on border security sphere.

Trade & Investment

• The trade and investment relationship has grown impressively in the last few years. From US$ 200 million in 1992 (comprising primarily trade in diamonds), bilateral merchandise trade has diversified and reached US$ 7.86 billion in 2021-22 with balance of trade being in India's favour.
• India is Israel’s tenth largest trade partner overall, and Israel’s third largest trade partner in Asia after China and Hong Kong. In recent years, the bilateral trade has diversified into several sectors such as pharmaceuticals, agriculture, IT and telecom and, homeland security.
• During April 2000-March 2022, FDI from Israel into India has reached $270.91 million. The data does not capture FDI flows from Israel to India that come through USA, Europe and Singapore. Israeli companies have invested in India in energy, renewable energy, telecom, real estate, water technologies, and are also setting up R&D centres or production units in India.
• The two countries are negotiating a free trade agreement, and have been trying to encourage greater investments from the other. The success of Indian and Israeli information technology companies has particularly led to interest in collaboration in that sector. 

Agriculture and Water Management

• In 2006, Israeli and Indian ministers of agriculture signed a long-term cooperation and training deal, which has since been supervised by field experts from Mashav, an international development program of Israel’s Foreign Ministry.
• In 2008, the two nations started a $50 million shared agriculture fund, focusing on dairy, farming technology and micro-irrigation. This constituted the Agriculture Cooperation Agreement. In 2011, India and Israel signed an agreement to foster cooperation on urban water systems, which came after more than a decade of joint research, development and shared investment in the countries’ respective water technologies.
• With Israeli’s help under Agricultural plan for cultivation of Mediterranean crops, Rajasthan produced more than 100 tonnes of olives in 2014.
• In May 2013, Israel announced that it will help India diversify and raise the yield of its fruit and vegetable crops by offering the country advanced technology and know-how. Israel will help set up 28 centres of excellence across India focussed on specific fruit and vegetable crops. By 2015, 10 Centres of Excellence operated throughout India offering free training sessions for farmers in efficient agricultural techniques using Israeli technological expertise and know-how with focus on mangoes, pomegranates and citrus fruits and the idea is to expand to flowers, bee keeping and dairying.
• In June 2013, a delegation of 16 high-ranking Indian officials of the water authorities of Rajasthan, Karnataka, Goa and Haryana came to Israel and visited wastewater treatment plants. As India faced major water crisis in April-May 2015, there is lot to learn from Israel’s expertise at successfully implementing water conservation technologies including drip irrigation. Israel is a global leader in drip irrigation and has pioneered dry land agriculture especially citrus fruits.
• Israel has also offered to help the Indian government with a project to clean the Ganga.
• On 3rd December 2015, Indian government has given approval on Memorandum of Understanding (MoU) between India and Israel in the field of water resources management and development cooperation. The bilateral cooperation will benefit both the countries in strengthening the techniques in efficient use of water, micro-irrigation, recycling/re-use of waste water, desalination, aquifer recharge and in-situ water conservation techniques. A Joint Working Group shall be formed to monitor the activities to be carried out in fulfilment of the MoU.

People to People Contact

• There are approximately 80,000 Jews of Indian origin in Israel. The majority is from Maharashtra (Bene Israelis) and relatively small numbers from Kerala (Cochini Jews), Kolkata (Baghdadi Jews) and North East (Bnei Menache).
• Besides, there are about 10,000 Indian citizens of whom about 8000 are care givers while others are diamond graders, IT professionals, students and unskilled workers.
• India is a popular tourist destination of Israelis. Every year, over 40,000 Israelis visit India for tourism and business.
• Both governments also encourage collaboration among Universities and Educational institutions involving faculty and student exchange programmes, joint academic research, fellowships, Industrial R & D in IT and electronics, promoting innovation etc.
• During his visit to Israel, PM Modi while addressing Indian-Israelis recalled several Jewish Indians who had served in India, including General JFR Jacob, and hundreds of Indians who worked to “make the desert bloom” in Israel in farming jobs. He also referred to Baba Fariduddin, who had travelled to Jerusalem in the 13th century, calling him a symbol of the fact that while India and Israel have had full diplomatic ties for 25 years, they go back “hundreds of years” in history.
• India announced easing of the rules for applying for Overseas Citizen of India cards for Israeli citizens of Indian origin. PM Modi also met Moshe Holtzberg, the boy who lost his parents in the 2008 Mumbai terror attacks to symbolise the common threat to both nations.

Potential for deeper engagement

• Israeli companies, with their acknowledged strengths in technology and products, would clearly benefit from Indian partnership as they sought to scale up for markets or production. Israeli companies have invested in India in renewable energy, telecom, water technologies, and R&D. Indian companies have invested in Israel in drip irrigation, pharmaceuticals, waste-water treatment.
• As a water-challenged state, Israel recycles 90% of its water, and 95% of sewage is processed for agricultural use, making it virtually a closed water cycle.
• Given Israel’s strengths in innovation and its having, despite its small population base, the second largest number of start ups in the world (after US), Indian companies have also taken stake in such ventures and in R&D. The two governments have worked to finance and promote scientific collaborations, and Indian companies are now beginning to partner with Israeli universities and scientific institutes for development and commercialization of technologies.
• Defence and homeland security have also been among the critical pillars of the relationship. The regular exchanges of senior leadership in this field, the purchase of critical equipment and co-development of technology are a reflection of high-level mutual confidence. Israel is seen as a reliable partner.

Recent Developments

• Both India and Israel are partners in I2U2 - a dialogue arrangement in a group of four countries - India, Israel, UAE and the USA.
• India's Adani Group-led joint venture has won a bid to privatise Israel's Haifa Port.
• Free Trade Agreement (FTA) between India and Israel is also on cards.
• In recent years, bilateral trade has diversified to include several sectors such as pharmaceuticals, IT, telecom, and homeland security.
• In 2021, the two countries entered into a three-year joint programme for agriculture cooperation. It aims at establishing centres of excellence, intensifying value chains, and encouraging private investment.
• In 2021, India abstained from voting on a UNHRC Resolution which intended to set up a permanent commission to probe human rights violations in Gaza, West Bank, and Palestine. This is a clear shift in India's previous stance on the issue.