A significant transformation is currently underway in the strategic military partnership between India and Israel. Moving away from the traditional dynamic of India acting solely as a purchaser of Israeli hardware, Tel Aviv is now preparing to funnel substantial direct investments into India’s defence manufacturing sector. Senior diplomats and officials from both nations have indicated that this shift aims to integrate Israeli innovation with India’s industrial scale, effectively utilizing the “Make in India” initiative to supply advanced weaponry to global markets.
From Buyer-Seller to Strategic Co-Production
For decades, the defence relationship between India and Israel was defined by a clear transactional model: India imported sophisticated Israeli systems, including unmanned aerial vehicles (UAVs), surveillance radars, and precision missiles. However, emerging reports confirm that this framework is being fundamentally restructured.
According to sources within the Indian Embassy in Tel Aviv and the Israeli government, the new strategy emphasizes co-development and mass production of next-generation defence platforms within India. This initiative not only fulfills New Delhi’s own security requirements but is also designed to leverage India’s manufacturing ecosystem for exports to third-party countries. This aligns seamlessly with the Indian government’s Aatmanirbhar Bharat (Self-Reliant India) vision, effectively turning India into a global hub for Israeli-designed military technology.
Focus on Unmanned Systems and Advanced Technology
A key area of this expanded cooperation is likely to be unmanned systems. Israel has long stood as a global leader in drone technology; however, producing these systems domestically has become increasingly expensive. By shifting production lines to India, Israeli defence firms can significantly reduce costs while maintaining their high quality standards.
This model already shows promise, as evidenced by the Adani-Elbit Advanced Systems India Ltd. joint venture in Hyderabad, which manufactures the Hermes 900 UAV—inducted into the Indian Navy as the Drishti-10 Starliner—as well as exporting aerostructures to Israel. The new wave of investments aims to replicate and expand this success in other domains, including loitering munitions, artificial intelligence-led battlefield management systems, and high-tech sensors.
Economic Drivers Behind the Shift
The decision by Prime Minister Benjamin Netanyahu’s government to diversify its manufacturing base is motivated by three primary economic and strategic factors:
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Changing Market Dynamics: Direct exports of finished Israeli defence products to India have seen a decline, as New Delhi prioritizes indigenous development and reduces reliance on off-the-shelf imports.
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Cost Competitiveness: Israel faces rising domestic production costs. Manufacturing in India presents a cost-effective alternative, enabling Israeli companies to remain competitive in the global drone and missile markets.
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India’s Industrial Maturity: With government incentives, a skilled workforce, and a burgeoning private defence sector, India demonstrates its capability to support high-end military manufacturing effectively.
Timeline and Strategic Impact
Diplomatic officials have suggested that the outcomes of these negotiations are expected to become evident soon, with concrete project announcements likely within the next six to twelve months. This deeper integration promises to enhance India’s strategic sovereignty by embedding advanced technologies—such as electro-optical solutions and AI systems—directly into local production lines.
Furthermore, this partnership is expected to strengthen the geopolitical alignment between the two nations, especially in the Indo-Pacific and West Asia regions. By jointly exporting to friendly nations, India and Israel are positioning themselves to establish one of the world’s most advanced and mutually beneficial defence industrial partnerships.
This shift from a purely transactional relationship to a collaborative manufacturing effort signals a new chapter in Indian-Israeli defence relations, emphasizing innovation, strategic foresight, and mutual benefit.