Make in India push: Israeli companies keen to partner with India in Defence; FDI a sticking point

NEW DELHI: Israeli defence companies such as IAI, Elbit and Rafael have said they are keen to manufacture UAVs, missiles, radars and other defence equipment through joint ventures (JVs) with Indian private companies.

Representatives from frontline Israeli defence companies on Tuesday said India is a key market for them and several projects are lined up under the Make in India initiative, but added that the limit on foreign direct investments and stringent offsets policy were major constraints.

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“We want to establish JVs. We are not sure if it will involve equity but we are in the process of locating partners in the areas of UAVs, missile systems and loitering weapons and radars and communication,” Joseph Betsalel, vice-president at IAI, said at a Indo-Israel strategic cooperation seminar organised by industry association Ficci.

Israeli representatives, however, said lack of manufacturing expertise, quality standards, operational performance and risk management in Indian entities hindered expansion of partnerships. “There is challenge of local content. There are no Indian made electronics, sensors, airborne quality metals, high quality castings. So it will only be 50 per cent Make in India,” said Uzi Melamed, industrial cooperation director of Rafael.

Israeli companies also suggested a series of changes in Indian procurement rules, like the inclusion of services and maintenance of systems as valid offsets, to improve ease of business. “In the coming years maintenance will be a major area and we hope the defence procurement policy will allow maintenance for offsets,” said Betsalel of IAI.