Israeli defense companies taking part in the Aero India 2017 aeronautics exhibition opening tomorrow in Bangalore, India plan to expand their business in the Indian market, while extending their cooperation with local cyber companies. The plan involves joint development, mainly in cyber defense, which the Ministry of Defense International Defense Cooperation Authority (SIBAT) has marked as one of the sectors for development over the coming year, with increased worldwide marketing in addition to systems for Israel's defense.
The Ministry of Defense and the defense companies are aiming a major proportion of their efforts in the cyber industry at the Indian market, in view of the warm relations prevailing between the two countries, accompanied by huge arms deals and partnerships in the development of innovative defense systems.
Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1), which has close relations from the past with defense companies in India, is likely to develop joint cyber defense activity with an Indian company in the near future. IAI has no previous activity in this sector in the Indian market, and a senior company source told "Globes," "Cooperation will be in the form of a joint Israeli-Indian investment in this field." The source declined to disclose particulars about the size of the investment. At the same time, cyber deals are usually small in comparison with other defense deals, which include UAVs, missiles, and intelligence gathering systems, some of which amount to many hundreds of millions of dollars.
11 Israel companies will display various weapons systems they have developed at the exhibition, some of which are new. Ministry of Defense director general Maj. Gen. (res.) Udi Adam, SIBAT head Brigadier General (res.) Michel Ben-Baruch, and the heads of Israeli defense industries will attend the inauguration of the Israeli pavilion at the exhibition.
IAI plans to unveil its new IAV, the Heron TP-XP. The company says that its new UAV is strategic and multi-purpose, designed for long-range missions, and capable of staying airborne for a long time. It has all the speed, height, and range advantages of IAI's existing Heron TP UAVs, while conforming to the globally prevalent regulations, which restrict the payload weight of UAVs to only 450 kilograms.
On the eve of the exhibition's opening, IAI announced that it had completed a project for defending and securing several Indian seaports, the most recent of which was Mumbai.
As part of these ventures, defense and intelligence systems developed by IAI subsidiary Elta Systems were installed in the ports capable of neutralizing sea and undersea threats. These systems make it possible to monitor small vessels, divers, swimmers, undersea vessels, and more. The command and control system operated in the ports integrates information obtained from a large number of integrated and automated sensors.
From drone detection to missiles
At the exhibition, Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) will display many capabilities and solutions for helicopters, intelligence, electronic warfare, and training of forces. One of the many systems that the company will display is its main UAV, the Hermes 900, which is used by a number of air forces, including the Israeli air force. It will also display a system for detecting hostile drones approaching guarded facilities.
Rafael Advanced Defense Systems Ltd. will display systems adapted to the future warplane being developed by India, a variety of air-to-air and air-to-surface missiles, aerial defense systems such as Spider, and the Iron Dome and David's Sling rocket and missile interception systems. Other companies with displays at the exhibition in India include Aeromaoz, Al Cielo Inertial Solutions, Aeronautics, Logic Industries, and Controp Precision Technologies.
The Israeli companies and the Ministry of Defense are complying with the policy announced by Indian Prime Minister Narendra Modi of giving preference to cooperative enterprises between Indian and foreign companies, provided that production is carried out in India and exchanges of information are included.
Cooperation along these lines already exists between Israeli and Indian companies, and is expected to continue and become closer in the coming years. "Transferring production to India is no easy task. From a broader perspective, however, we like working in the framework of long-term cooperation, because it's worthwhile for both us and them in the end," says Rafael executive VP marketing and development Giora Katz. He adds, "Thanks to this attitude, we are obtaining direct access to the customer and the ability to have a focused relationship with him. At a time of intense competition in the global defense market, this is important."
According to Katz, "India is a rising power, and in contrast to what is usually said, it is developing rapidly and building capabilities for itself in all areas, including in defense. It can definitely be predicted that in a few years, India will have very strong independent capabilities. The made-in-India approach led by the Indian administration is expediting this process in India."
Ben-Baruch says that the closer economic ties between the countries could enable Israel to continue positioning itself in a key role in the Indian economy and its defense establishment. "Israel is positioning itself as a leading partner for India in joint defense production, with the long-term perspective that all Indian procurement in the coming years will come from local Indian companies," he says.
Sea defense systems
Other sources involved in the Indian defense market say that this attitude is already prevalent in India. Nine out of 10 government tenders published in India are directed at local suppliers, even if they have no experience. "This situation constitutes an enormous opportunity for Israeli companies with great expertise in various sectors to enter as subcontractors in a series of ventures, due among other things the extensive experience they have accumulated in cooperating with other companies," a defense source says.
Among the major enterprises by Israeli defense industries in India in recent years, the plan by IAI and the Indian Ministry of Defense research and development agency for the development of the Barak 8 land and sea defense system stands out. This missile system is also designed for the Israeli navy, which is preparing for a wide range of naval warfare scenarios, while allocating many resources to providing a solution for possible attempted attacks against natural gas platforms, trade ships, and Israeli Navy vessels employing advanced missiles, some of which are in the hands of Hezbollah.
In recent years, Elbit Systems has reached a long series of agreements with Indian companies for the development of artillery and mortars, advanced electro-optical systems, and a venture with an Indian company for joint development of UAVs.
Two years ago, Rafael and Kalyani Group of India signed a cooperation agreement under which missiles systems and remotely controlled weapons positions will be produced for the Indian army. In late 2014, it was reported that Rafael would sell Spike anti-tank missiles to the Indian army in a deal estimated at $500 million.
Published by Globes [online], Israel Business News - www.globes-online.com - on February 13, 2017
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