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Friday, April 04, 2008

"Israel set to replace Russia as largest arms supplier to India," Daily News and Analysis, February 20, 2008.

NEW DELHI: India’s historic overdependence on Russia for defence equipment and supplies could soon be over. In just a few years from now, Israel will be India’s largest arms supplier.

After establishing strong links with the Indian defence establishment, landing several contracts, including joint ventures with the Defence Research & Development Organisation (DRDO), and armed with cutting-edge technology, Israel is emerging as the biggest beneficiary of India’s burgeoning defence budget.

A assessment by audit firm Ernst & Young (E&Y) released last week says Israel will overtake Russia in the immediate future as the largest arms supplier to India, as tectonic shifts take place in India’s defence purchases. Israel is demolishing the Russian dominance of six decades within 15 years of New Delhi and Tel Aviv establishing formal diplomatic relations. It would be one of the most stunning marketing successes anywhere—Israel already has over a billion dollars worth of defence purchases from India annually.

The current defence trade between India and Russia is estimated to be worth $10 billion by 2010, “but Israel has grown exponentially to become India’s second largest defence partner and is expected to overtake Russia in the coming years,” says E&Y’s report on “Indian Defence Industry: Reaching New Frontiers.”

The study says India currently spends 2.5% of its GDP on defence procurement, which is a little less than China’s, which has a declared defence budget of 1.6% of GDP. The US spends between 3.5-4% of its GDP on defence.

“In 2005-06, India became the world’s largest importer of defence articles and services, buying over US$ 6 billion worth of military hardware. As compared to India, Saudi Arabia and China, the next two large armament buyers in the developing world, notched up defence deals valued between US$ 2-3 billion each during 2006,” the report says. The report also estimates that India #’s defence budget will show an annual growth of 7% between 2008 and 2013.

Though India has an officially projected defence purchase of US$30 billion in 2007-12, many of the big arms firms at the exhibition believe India will end up ordering almost $100 billion worth of defence items over the next five to 10 years. Israelis, known for their ruthless marketing ways and admired for their products in military circles, could be laughing all the way to the bank.
At the Defexpo ’08 – the government’s defence exhibition which has become one of the world’s largest—that concluded in Delhi on Tuesday, a subdued Russian side was overshadowed by the aggressive Israeli presence. Turn to p9

The Israeli exhibits included a peep into several future technologies, including several unmanned vehicles - in land, sea and air - and high-precision offensive systems. The Americans and the Europeans were there, too, but it was hard to miss the Israeli overdrive and confidence.
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