III. Technological Independence and Qualitative Superiority, Indian Airforce
III. Technological Independence and Qualitative Superiority

India is both a regional power and an emerging market and it serves Israel's interest to maintain close political as well as economic ties with India. Both have adopted similar positions on various arms control issues, and Islamic radicalism does pose a serious threat to both countries. However, the real scope for Indo-Israeli strategic partnership can be found in India's search for technological independence and Israel's quest for qualitative superiority. India's substantial difficulties in upgrading and modernizing its armed forces, due to lack of suitable technology and financial constraints, compel India to seek long-term collaboration with Israel. The framework for a sustained and substantial security dialogue and strategic partnership involving the military/security establishments is particularly likely to revolve around the areas of light combat aircraft, main battle tanks, aircraft upgrading, and missile development, while in the absence of immediate monetary gains, the same cannot be said of other financially attractive military transactions nor of the transfer of earlier generation Israeli technology.

Arms export remain an essential and integral part of Israel's security, since they reduce the unit cost of production, offset the cost of research and development, reduce Israel's balance of payment deficits, provide employment to significant portion of the labor force and moderate the 'brain drain'. In the words of one analyst: In a broad sense, exports [of advanced weapons, including missiles and technology] are necessary to offset the high cost [of strategic deterrence] and the overall cost of maintaining Israel's technology-intensive weapons industry. ... Although sales of small arms and ammunition to a number of states in Asia and Western Europe provide some income, they are not nearly as profitable as advanced weapons and technology.

Explaining the rationale behind arms exports, former Defense Minister, Moshe Arens, told an American audience: "Our industrial base is microscopic compared to the US industrial base, and so Israel has no choice but to export some defense items ..."

Similarly, the incumbent Defense Ministry Director-General, Ilan Biran, warned the defense industries that in order to be viable, they cannot depend on the Israeli market. 75 percent of the orders received should be designated for export. Confronted with growing security demands and meager internal financial resources, the Israeli defense industries have two options: "either to abandon all efforts to develop the systems, or to find a foreign partner willing to finance the development cost in exchange for a partnership arrangement during the course of the project."

For the recession-ridden Israeli military industry, a military relationship with India presents an attractive and challenging offer. However, it is unlikely to be a cash-and-carry affair. There is no cash in India and Israel does not have as many complete systems as India requires. The problems facing Indian and Israeli military industries and security forces are real. Prolonged external dependence for supplies, technology and financial aid and assistance have seriously eroded their freedom in security procurement. Over the years, the dependency has grown to alarming levels which can only be tolerated at the expense of a heavy cost in future. Normalization between the two came at a time when India's dependence on the Soviet Union was exposed, and the continued supply of hardware, spares and other support facilities became uncertain. The disintegration of the Soviet Union and the multiplicity of suppliers meant that India had to negotiate with numerous and independent production units from various countries of the Commonwealth of Independent States. The fragmentation of the supply system made India extremely vulnerable, considering that any military confrontation at that period would have been disastrous.

The position of Israeli military industries is not encouraging either. The recession following the cancellation of the Lavi fighter in 1987 continues, and the dismissal of a third of the work force has not improved the situation. Even after posting nearly $2 billion worth of sales (most of them in exports) in 1997, the Israel Aircraft Industries (IAI) had to depend on government assistance to pay the salaries of its work force. As the IDF orders dwindle, Israel's ability to economize production, develop special weapons and continue research and development is jeopardized.

In short, India's search for technological independence and Israel's quest for maintaining a large scale defense industry, in order to guarantee a qualitative superiority over its regional rivals, cannot be achieved by either alone. Neither side can generate enough internal sources to continue some of the sensitive and vital projects, nor do they enjoy the largesse of a generous benefactor. This precarious situation presents the best scope for a strategic partnership. It is essential for both countries to look for unconventional solutions to challenges and opportunities, such as the vast domestic Indian market, difficulties facing Defense Research and Development Organization (DRDO, the prime force behind India's defense projects), India's great power aspirations, Israel's lead-time in a number of areas and its need to reduce the unit cost of production through exports or external assistance.