Israel's Self-Sufficiency in Defence, and Lessons for India

Today, Israel is on the brink of achieving a state of near-total self-sufficiency in its defence sector. This comes as little surprise, as Israel has been one of the largest exporters of arms globally, and itself has an impressive arsenal of domestically produced defence equipment. However, what is often surprising to many, is how a tiny country like Israel--with an equally tiny population--reached this level of competence, given its exiguous natural resources unlike most of its Arab neighbours, while also lacking a large and powerful economy like Germany or the UK. The reasons for this will be discussed later below. 

The primary point of interest would obviously be the lessons India can learn from Israel's astounding success. India is a much larger and far more powerful country than Israel, and boasts a workforce and an economy exponentially larger than that of Israel. Yet, we remain almost entirely dependent on foreign suppliers to provide us with modern armaments of all sorts. Only a few notable exceptions exist, such as the Arjun tank, Agni-class missiles, and the Tejas fighter aircraft, amongst others. Why has India lagged behind, and what can we learn from Israel?

Israel and India: General Comparison

Similarities

·       Both countries became independent around the same time. India in 1947, and Israel in 1948.

·       Both were partitioned on religious grounds.

·       Both faced aggression and threats to their territorial integrity in the early years, from their immediate neighbours who were actively armed by hostile superpowers.

·       Both have disputed borders with their neighbours, and international peace-making efforts which have failed consistently.

·       Both possess nuclear weapons, and are known to pursue foreign policies independent of external influence.

·       Both face unconventional threats, in the form of radical Islamist groups, sponsored by hostile states.

·       Both have experienced international arms embargoes.

Differences 

·       India is much larger than Israel, both in terms of geographical size and population.

·       India has a much larger economy than Israel.

·       Unlike India, Israel faces existential threats.

·       India has an abundance of natural resources, and a much greater scope for economic growth and technological innovation than Israel.

·       India enjoys a greater influence at the international level.

The Status Quo

Israel is a major global arms manufacturer and exporter today. An inevitable consequence, is a budget with a heavy military burden. Despite this burden, Israel remains a developed and a rapidly growing economy (Broude 2013). Meanwhile, India is one of the largest arms importers of the world, and consistently struggles in adequate allocation of funds for defence and research purposes, despite having an economy much larger than that of Israel.

Even though both face similar threats of unconventional warfare and hostile neighbourhoods, Israel has been far more successful in becoming self-sustained in the defence sector than India, despite having exponentially less financial, natural, and human resources compared to India.

There are a variety of reasons for Israel’s astonishing success in this matter. The foremost being the many existential crises faced by Israel and the Jewish people over the past century, from the Holocaust to the Arab-Israel Conflict. As stated by Isaac Ben Israel, Chairman of Israel’s Space Agency,

Israel is a country born in a war, and since then…never stopped being in a war

Observing case in point India, which has historically remained dependent only on foreign suppliers for equipment, and has rarely striven to achieve self-reliance in defence manufacturing. Only in the past decade has there been a significant boost in development and manufacture of indigenous arms. Indian political leadership has usually been content with dependence on external powers like the former USSR, the US, France etc. Lack of political vision and inefficient allocation of funds are the primary reasons for this status quo in India.

Detailed analyses for both these cases follows below.

Analysis: Israel

History

·        Pre-1948, the combined territories of present-day Israel, Palestine, and Jordan together constituted the British Mandate of Palestine.

·       In the aftermath of World War II and the Holocaust, Jewish groups worldwide began to lobby for an independent Jewish state. The most likely candidate for the Jewish Homeland (Eretz Israel) was the territory of Palestine, the Biblical homeland of the Jews, and already populated with a significant number of Jewish settlers. However, these Jews were minorities in the mostly Arab-dominated region.

·       As a result of their activism for a Jewish state in Palestine, communal and ethnic conflicts often erupted between the Arab Muslims and the settled Jews in Palestine. This led to the formation of Jewish militias, united under the banner of the Haganah.

·       This is how the to-be Israelis first began to manufacture defence equipment. A group of Haganah fighters first established an armament factory in 1933, which served as the basis for Israel Military Industries (IMI) or Ta’as (Naaz 2008).

Zionists would work in small, underground workshops to manufacture and repair various types of small arms, ammunition, armoured vehicles, and other types of military hardware. (Naaz 2008)

·       During the independence movement, most military strategy worked with the premise of self-reliance (Naaz 2008).

·       Finally, in November 1947, the UN approved the Partition Plan of Palestine as Resolution 181 (II), which mandated the creation of an independent Jewish state and independent Arab state, the withdrawal of British troops, and the creation of an international regime to govern the Holy City of Jerusalem. This plan, while welcomed by Jewish groups, was unanimously rejected by Arab leaders, who refused to accept the existence of Israel.

UN Partition Plan (Blue: Jewish Territories, Orange: Arab Territories)

·       The State of Israel was declared as an independent state on 14^th May 1948. The next day, four Arab countries—Egypt, Syria, Transjordan, and Iraq—invaded the newly-born Israel, and attempted to wipe it from existence. Against all odds, hastily assembled Israeli forces defeated the combined Arab armies, and seized more land than had been allotted to it by the Partition Plan, while Egypt and Jordan seized control of the Gaza Strip and West Bank respectively. Hostilities concluded with the signing of Armistice Agreements between Israel and the Arab powers in 1949. 

1949 Armistice Lines (Blue: Israel, Green: Gaza Strip, Pink: West Bank)

·        1950s: The defence industry was concentrated within the armed forces and state-owned companies. It gradually, began to acquire a certain degree of self-sufficiency in small arms and mortars, and also acquired the ability to modify tanks, aircraft, and electronic systems (Naaz 2008).

·       1965: Israel reached the capability to produce aircraft and electronic systems (Naaz 2008).

·       1967: Up until 1967, France supplied heavy weapons to Israel. However, after Israel’s perceived aggression in the Six Day War, France placed an arms embargo on Israel, which caused great difficulty to their defence sector, and caused Israel to recognize the importance of domestic arms production. This was followed by an Israeli policy to attain self-sufficiency to fulfil all its defence needs. (Naaz 2008)

·       1968-1972: This was a period of major investment in Israel’s defence sector. (Naaz 2008)

·       1973: Israeli industry was now capable of producing advanced military hardware such as tanks, missile engines, and jets. In the 1973 Arab-Israel War, Israeli produced equipment was the key to victory on the naval front. (Naaz 2008)

·       1981: Now, Israel could produce a great deal of the equipment it required to protect itself. (Naaz 2008)

·       1982: Israeli equipment played a key role in the Lebanon War, with the debut of the iconic Merkava Battle Tank. (Naaz 2008)

·       Massive defence investment post-1967 led to the establishment of three major defence industries—Israeli Aviation Industries, Israeli Military Industries (Ta’as), and Rafael Advanced Defence Systems. (Razdan 2019)

   Major Achievements

·       Kfir C-2: One of the most sophisticated fighter aircraft domestically produced in a developing country (Naaz 2008)

·       Barak anti-missile defence system

·       Merkava Battle Tank

Contributing Factors

Motivations

Firstly, Israel’s primary motivation has been to counter the many threats it faces in its neighbourhood and own backyard, in order to protect itself from what it perceives as existential threats. Israel has always been at war, ever since its independence in 1948, and therefore finds great incentive in becoming self-reliant in defence production, especially in light of the many arms embargoes imposed on it by France, US, and the UK, in 1967, 69, 70, and 73, among others. Israeli policymakers realized that they could not afford to be in a position where they are unable to effectively counter enemy aggression because of excessive dependence on foreign suppliers. Today, there is a prevailing attitude among Israelis that they need to develop technology in sync with the way the modern background is developing (Setton 2018).

Economic Factors

We first need to understand the economic burden caused on any developing economy by significant arms purchases, especially in Israel’s case. Israel has constantly been in a state of conflict since before coming into existence as a state, which greatly increases their requirement for military equipment. Already, arms build-ups led to a significant trade deficit for the Jewish State, causing great distress to its fledgling economy (Naaz 2008). Stimulating domestic arms production would solve this problem.

Secondly, there are the many positive impacts the domestic defence industry has had for other sectors in Israel’s economy. For example, boosting domestic arms production provides more employment opportunities and boosts R&D activities throughout other sectors (Naaz 2008). Israel has managed to thrive for so long with a heavy defence budget thanks to large magnitudes of foreign aid, primarily from the USA, and rather than hindering economic growth, military expenditure in Israel has in fact had positive impacts for economic growth (while many remain sceptical of its overall macroeconomic impacts on Israel) (Broude 2013). Further, application of military technology in the civilian sector has given a boost to the economy by enhancing the technological capabilities of the civilian sectors. This process takes place by developing physical spin-offs of military technology in civilian commerce.

One of the key reasons for Israel’s success in building a domestic defence industry is that the public and private sectors harmoniously function together in the development and manufacture of equipment. This sector is not a monopoly of state-owned companies, but private companies (like the ones mentioned earlier) are major players in this sector, and this privatization assures efficient performance and new innovations in the field. The primary factor for the success of private entities in Israel’s defence industry is the profitable nature of this sector. This sector is vastly profitable because a) Israel remains a major exporter of arms, and b) Enterprises can capitalize on Israel’s conflict ridden history, coupled with existing threats to its survival (Setton 2018). Further, Israel’s defence companies increase their productivity through diversification and specialization. Quoting Gilad Alper, Head of Research at Excellence Nessauh Trust Company—

The companies do a lot of things…more than what a US company of the same size would do

Human Resource Factors

Most of Israel’s successes may eventually be attributed to its human capital, and the defence industry is no exception. While their human capital is limited, it is very efficiently utilized, owing to decisive policymaking and an inbuilt determination among the people of the Jewish State to make the most of their homeland, which they fought so hard for.

One of these policies is of conscription. All Israeli citizens, on attaining 18 years of age, must join the IDF (Israel Defence Forces). This policy has a spill over effect on the defence industry as well, in a variety of ways.

a)       It creates significant defence expertise among the general populace, which allows for application of skills and knowledge learnt in military service in civilian fields in the future.

b)      Once the mandatory service term expires, those who transition to civilian life retain their military contacts, and a human link is thus formed between the military and civilian sectors.                        (Broude 2013)

This inherent bond between the civilian and military sectors implies that the civilian and private sectors are finely attuned to the needs of the military, and this naturally leads to the growth of a defence industry in the private sector, with civilian policymakers providing necessary support for the same.

Analysis: India

History

·               India gained independence in 1947, which was shortly followed by a war with Pakistan over the state of Jammu and Kashmir, along with several internal military actions against the rebellious states of Hyderabad and Junagadh, and later Goa. Most of these operations were dependent on weapons used by the erstwhile British Indian Army in World War II.

·               1947-71: Up until 1971, India would go on to fight two more major armed conflicts with its neighbours—with China in 1962, and Pakistan again in 1965. Throughout this time period, India remained dependent on weapons purchased from the UK, and even the 1971 Bangladesh War was fought primarily with British made weapons. Also notable in this period is the establishment of the DRDO (Defence Research and Development Organisation) in 1958.

·               1971 onwards: In 1971, India and the Soviet Union signed the Treaty of Friendship and Cooperation. This cemented a long-standing Indo-Soviet friendship, and this friendship also culminated in the supply of Soviet weapons to India.

·               1974: India conducted its first ever nuclear tests, in Pokhran, and as a result, the US and its allies essentially imposed an arms embargo on India. Instead of focusing on domestic production of military equipment, India became more dependent on the USSR for sale of arms.

·               In the 2000s finally India’s ties with the West thawed, and it began purchasing arms from Europe and the US, along with other suppliers such as Israel and Russia.

·               Today India has a modest defence industry, having developed several advanced defence technologies independently, and also exporting some equipment (such as vehicles, bulletproof jackets etc).

Major Achievements

1.             Arjun Main Battle Tank

2.            Tejas Fighter Aircraft

3.             Kolkata-Class Destroyer

4.             BrahMos Missile (the fastest cruise missile in the world, jointly developed with Russia)

Problems Faced by the Indian Defence Industry

Firstly, it has consistently proven difficult for any incumbent government to smoothly carry out any major defence acquisition because of excessive politicization of these defence deals. Opposition parties love taking pot-shots at sitting governments, always causing major controversies in these defence deals, leading to delays and court cases etc. While sometimes there is a fragment of truth in the allegations of corruption, most arguments tend to be hype and misinformation. Some major defense scandals in India include the Bofors Scandal, Agusta-Westland Scandal, and the Rafael Scandal. These scandals erupt because a) there is often some corruption in these cases, and b) because foreign acquisitions of advanced equipment tends to be publicized, wherein both the incumbent and the opposition parties aim to gain political capital through their various narratives.

Also lies in the political sphere the second problem. Most Indian politicians lack military and strategic expertise and have a problematic mindset that would emphasize more on acquisition of equipment from foreign suppliers (Kelkar 2017). While this seems to be gradually changing, with politicians and policymakers adopting more visionary mindsets, it remains a significant hurdle towards developing a formidable domestic defence industry. This mindset also has financial implications for the defense industry, as it is often seen that more budget is allocated to acquisitions and purchase rather than R&D, which remains an impoverished sector in India, at least compared to Israel, USA etc.  

This lack of sufficient funding to R&D, coupled with an incapacity to design critical defense technologies, major subsystems, present a significant hurdle to achieving self-sufficiency and leave India dependent on foreign suppliers even after acquisition of weapons (Misra 2015). For example, in order to upgrade Russian-made Su-30s already in India’s arsenal, HAL (Hindustan Aeronautics Limited) remains at the mercy of the Russians.

Solutions and Recommendations

Indian policymakers must realize the great importance of creating an indigenous defence industry and achieving self-sufficiency in this sector. It will make India far less dependent on foreign suppliers, reduce trade deficit, and create massive employment opportunities, especially in the IT sector.

Firstly, greater allocation of funds to R&D would be a step in the right direction. We mustn’t be afraid to dream a little bigger, and the USA’s DARPA (Defense Advanced Research Projects Agency) could be held up as a role-model for India’s DRDO (Defense Research and Development Organization). While DRDO remains mostly inept, DARPA’s research ended up creating the internet.

Along with DRDO and the public sector, the government can assist in creating a strong R&D base outside of DRDO as well, to facilitate greater involvement by the private sector in the industry (Deora 2019). No doubt, this can lead to early successes, just like Israel had with Ta’as and others, who continue to play invaluable roles in Israel’s indigenous defence industry.  

Another essential step towards achieving this, is the simplification of procedures for defence exports, and for the industry licensing process. Such policies are already being envisioned by the government and are a step in the right direction.

One of the most important things that can be done in terms of human resources is the mobilization of the significant IT sector existing in India today. We have world-class education and research institutions for the same (notably the IITs), and all that needs to be done is to recognize the individuals coming out of these institutions as assets for this industry, and to provide them with the opportunities to hone their skills and expertise for the defense sector. India has a large number of highly trained and creative individuals, which is evident when we look at the number of Indian-trained and Indian-origin professionals who run the offices of Google, Microsoft, Apple et al.

There are several lessons we can directly learn from the case-study of Israel as mentioned earlier. Firstly, privatization is essential. Israel’s government could not shoulder the burdens of the entire defence industry all on its own, therefore it created liberal policies to allow private players to thrive. This drove up innovation in defence technologies. Such an approach will certainly be pertinent in the long run for India as well. The government, with its significant defence budget, together with well-mobilized private players, could create a formidable Indian defence industry of a behemoth scope, that could possibly rival great powers like the US, Russia, and China. Another important lesson to be learnt from Israel is the R&D allocation. Israel has learnt the importance of R&D, and has gone on to develop world-class weapons that a great deal of countries are willing to purchase. India must invest more in R&D rather than spending money on buying arms from abroad.

Conclusion

It is indisputable that India certainly has far greater scope than Israel for creating a successful indigenous defence industry, and in creating one that is truly world-class and renowned across the board.

Israel’s real success began in understanding the fact that it could not remain dependent on foreign suppliers to fulfil its essential need for defence equipment, especially in a hostile neighbourhood where its adversaries were being armed by a superpower hostile to itself. India also needs to adopt such a standpoint, as we live in a mostly hostile neighbourhood too, wherein one of our adversaries is a potential superpower itself, while others are armed by more.

We are slowly moving out of our outdated  approach and our policymakers are adopting visionary attitudes and policies in order to make India more self-sufficient for its defence needs, which is just another step towards allowing India to match its potential and achieve an elevated and respectable global status.

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Bibliography

Broude, Deger, Sen. 2013. Defence, Innovation, and Development: The Case of Israel. Journal of Innovation Economics and Management.

Deora, Milind. 2019. India Must Seriously Invest in Stregnthening its Indigenous Defence Industry. Economic Times.

Kelkar, Keshav. 2017. Challenges to Defence Modernisation in India. Asia and the Pacific Policy Society.

Misra, Dr SN. 2015. Make in India: Challenges Before Defence Manufacturing. Indian Defence Review.

Naaz, Farah. 2008. Israel's Arms Industry. IDSA India.

Razdan, Divya. 2019. Israel Defence Sector--A Role Model for India. indiandefenceindustries.in.

Setton, Keren. 2018. Feature: Israel's defense industry continues thriving despite facing less security threat. Xinhua.