India-China conflict spells a boom for Israeli defence sector

The standoff between India and China along the Line of Actual Control (LAC) in Ladakh is proving to be a boon for the Israeli defence sector. India is seeking to fill gaps in its precise weapons stockpile and its intelligence capabilities with Israeli weapons.

India will 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. In Balakot airstrike, Indian Air Force used spice bombs to bombard terrorist base.

India is planning to expand 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. Besides, India will purchase drones with missiles. 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 percent 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.