India-Israel Economic Ties Strongest Ever, Despite Mumbai Attacks
By Andrew L. Jaffee, netwmd.com
… Indo-Israeli business relations are on a roll. Bilateral trade is set to touch $3.3 billion this year, some 20% more than the previous year. India is emerging as one of Israel’s largest global trading partners. In Asia, India has overtaken China, and is placed after Hong Kong and Japan as far as trade with Israel is considered. …
The Economic Times, 11/29/2008
Perhaps one of the motives of this week’s terrorist attacks in Mumbai, India was to damage the burgeoning trade relationship between Israel and India. The two countries have much in common: they both won their independence from the British Empire in and around 1948; Israel and India are democracies; both have free market economic systems; the two countries have large, restive Muslim populations; and, both are surrounded by hostile Muslim neighbors. Remember that the Islamist terrorists, the Deccan Mujahideen, stormed, took control over, and killed all hostages (Israeli nationals) at the Chabad center in Mumbai this week. This cowardly attack may already have had an impact on Indo-Israeli economic relations:
… The increased collaboration between the two countries [India and Israel] was more than evident: two Indian companies were on the verge of signing large deals with the Israeli government and a large delegation of Israeli businessmen and industrialists was scheduled to visit Mumbai in December. …
However, this first ever attack in India on an Israeli target may force both the governments to reschedule the delegation’s visit. A senior central government functionary indicated to ET [The Economic Times] that this is not being seen as a random attack but as a carefully targeted one. …
“There is growing interest in both countries to collaborate in numerous areas. Many large Indian companies are finalising plans to set up or expand operations in Israel. The attack on Chabad centre in Mumbai is to try and snap this relationship.” …
Long-term, I doubt there will be any weakening of Israeli-Indian economic cooperation. Both nations’ economies have flourished despite repeated Islamist terrorist attacks and wars with neighboring Muslim polities (see here, here, and here). Here’s a summary of India and Israel’s continually growing economic collaboration from an article entitled, “Indo-Israeli trade ties the real target” by Girish Kuber of The Economic Times:
… The list [of areas of interest for Indian-Israeli business deals] is growing now, with engineering, chemicals, telecom and textiles industries gaining in prominence. …
Indo-Israeli business relations are on a roll. Bilateral trade is set to touch $3.3 billion this year, some 20% more than the previous year. India is emerging as one of Israel’s largest global trading partners. In Asia, India has overtaken China, and is placed after Hong Kong and Japan as far as trade with Israel is considered.
But this does not include Israeli defence business with India. Though governments do not reveal details about defence deals, it’s estimated that Israel is set to replace Russia as India’s second-largest defence supplier. Last year, this tiny nation is believed to have supplied defence equipment worth $1.5 billion.
In the past three years, India has bought defence equipment worth $5 billion from Israel. Two weeks ago, defence secretary Vijay Singh led a delegation to Israel to discuss the purchase of AWACS planes and missiles from Israel Aerospace Industries.
The terrorists’ choice of the Israeli centre in Mumbai could partly be driven by the fact that a large number of Israeli companies have, over the past three years, invested in the property market around Mumbai. There are many property deals either in the pipeline or at various stages of completion.
Jerusalem Economic Corporation (JEC), through its Indian subsidiary, was eyeing a huge tract of farm land in Thane district. The deal size could be around $300 million, sources say.
Last year, Elbit Medical Imaging, an Israeli medical equipment maker, had signed an agreement with Ambuja Realty to invest over $1 billion in India. It plans to invest in hospitals and hotels, besides establishing a chain of hospitals in partnership with Ambuja.
Another Israeli group, Alony Hetz, has set up a consortium with Israeli and Australian companies to invest in Indian real estate sector. Alony Hetz holds 40% share in the consortium that plans to invest $100 million. It recently signed an MoU to build a $160-200 million, 450,000-sq m holiday home project near Mumbai. Electra Real Estate, Nochi Dankner and Gershon Salkind have also charted plans for Indian realty sector.
The Indo-Israeli connection, of course, transcends business. “Some 25,000 to 30,000 Israeli youths — apart from business visitors and regular tourists — take a break in India after completing rigorous, mandatory military training. Goa, Himachal Pradesh and Mumbai are popular tourist destinations for Israelis. So, one can imagine why Mumbai was the first target for an attack on Israeli centres in India,” said a home ministry official. …
The future is bright for both Israel and India. Democratic, free-market nations, with transparent economic and legal systems, have historically prevailed over the forces of tyrannic polities. The greatest weaknesses of dictatorships are their inherently opaque legal, political, and economic infrastructures, in which power and wealth is concentrated in the hands of a few. By virtue of this concentration, those at the top get more corrupt and more greedy. A spiral ensues, where corruption and greed breed more corruption and greed, and the bureaucracy supporting such negativity becomes more rigid and implacable. Of course, such tyrannical systems are doomed to eventual failure.
India and Israel are places where innovation, risk-taking, and seeking out similarly-minded entrepreneurs on the international stage are rewarded. Thus, India and Israel will continue to evolve and become stronger, while their enemies will atrophy and eventually fail.
For Israel and India, the sky’s the limit.
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Cross-posted at netwmd.com and NeoConstant
