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Israel Aerospace lands India deal worth $777 million

A new contract puts Israel Aerospace Industries over the $3 billion mark in sales to India in just over a year.

By Batya Jerenberg, World Israel News

Israel Aerospace Industries (IAI) announced Wednesday that it has secured another huge deal with the Indian navy, this one worth $777 million.

The agreement is the third that the world’s biggest democracy has signed with Israel’s state-owned company for missile defense systems since last June, totaling over $3 billion in sales.

The Barak-8 Surface to Air missile (SAM) system will be installed on seven Indian Navy vessels at a cost of $111 million each. The package, which includes command and control technology as well as the missiles and launchers, is a maritime version of the land-based system that India began incorporating into its forces in 2016.

Israel uses the Barak-8 on its own vessels; it is capable of intercepting aerial threats such as missiles and jets from hundreds of kilometers away, including the kinds of anti-ship missiles that Hezbollah has in Lebanon.

The Barak-8 was developed in a joint effort with other Israeli companies such as Rafael, but also with India’s Defense Research and Development Organization, its navy and other local companies. This cooperation is part of Prime Minister Narendra Modi’s long-term plan to become more self-reliant in defense, reduce defense costs and provide thousands of jobs for his countrymen.

Modi’s policy was noted by IAI Chief Executive Officer Nimrod Shefer when talking to Reuters about the latest deal.

“IAI’s partnership with India dates many years back and has culminated in joint system development and production,” he said. “India is a major market for IAI and we plan to… reinforce our positioning in India, also in view of increasing competition.”

The current agreement is very similar to the $630-million contract awarded to IAI last May by India’s state-owned Bharat Electronics Ltd (BEL), which is the main contractor in the Mumbai project. That deal was to supply four ships with the naval version of the Barak 8 SAM system.

The first contract, signed a mere four weeks earlier, was to supply the army version to India, with an additional system to the navy to be installed on the first aircraft carrier ever built by Mumbai once completed. Valued at nearly $2 billion, IAI described it at the time as Israel’s largest-ever defense deal.

India has gone on quite a spending spree in defense over the past several years, with Israel being one of its major suppliers along with Russia and the United States.

Defense Minister Avigdor Liberman, commenting on the latest deal, tweeted that it was ““proof that security is investment, and not expenditure.”

“The IAI is a national asset that must be maintained and strengthened,” he stated.