TOP ISRAELI ARMS MAKER UNWITTINGLY REVEALS ITS LARGEST FOREIGN CUSTOMER: INDIA

Top Israeli Arms Maker Unwittingly Reveals Its Largest Foreign Customer: India

It turns out that India accounted for a quarter of Israel Aerospace Industries' export revenues last year. Details on Azerbaijan and Morocco are also revealed in the Israeli company's annual report

May 09th, 12PM May 09th, 12PM

India is the largest foreign customer of Israeli defense giant Israel Aerospace Industries, the company revealed in its 2023 annual report based on a Haaretz analysis of company statements from recent years.

According to the annual report, sales to India came in at $953 million last year, about a quarter of the company's export sales. IAI's sales to India last year were 17 percent lower than in 2022.

According to statements by IAI, last year India paid the company $631 million for missile and space systems, $202 million for radar, electronic warfare and intelligence systems, and $94 million for drones.

According to the last report by the Stockholm International Peace Research Institute, which tracks global arms shipments, India is the world's largest arms importer – with Russia, France, the United States and Israel its biggest suppliers. India is the largest buyer of Israeli arms, and from 2019 to 2023 it accounted for 37 percent of Israel's defense exports.

IAI's exports totaled $3.7 billion last year, 51 percent of them to Asia, according to its Hebrew-language annual report. Sales to the Israeli market totaled $1.5 billion.

The annual report, published two months ago, does not explicitly name India but mentions "Material Customer A." However, the report's section "Material Agreements" lists past transactions signed at different dates with this customer.

On those dates, the company released statements on arms deals with India. Other transactions cited in the annual report were disclosed separately in India.

According to the annual report, "In October 2018, IAI entered into an agreement with a government company in Material Customer A's country for the joint manufacture and supply of air defense systems totaling $777 million."

According to IAI's website, in that month, the company announced an agreement with Indian government company Bharat Electronics to supply the naval version of the Barak 8 air defense system for $777 million.

According to the annual report, "In April 2017, IAI entered into an agreement with Material Customer A for the development, manufacture and supply of air defense systems for a total of $1.6 billion." On its website, IAI unveiled in April 2017 a $1.6 billion agreement to supply the Barak 8 system to India.

The annual report states: "In October 2018, IAI entered into an agreement with Material Customer A for the supply of air-defense command, control and communications (C3) systems for a total of $550 million." In October 2018, it was reported that IAI was selling India its Sky Capture C3 system for $550 million.

Finally, "In 2006 and 2009, IAI entered into an agreement with Material Customer A for the development and production of air defense systems for a total of $1.85 billion." In 2009, the Indian media reported that the government had agreed with IAI to buy the Barak air defense system in a deal nearing $2 billion.

The annual report's section "the nature of agreements with Material Customer A" contains more hints about the country's identity. According to the report, in October 2020, a new procurement procedure came into effect that included "a local-content requirement of between 40 percent and 60 percent of the products. … Material Customer A has an option for fast-track procurements under a requirement for the product to be supplied within 12 months of signing."

In 2020, new defense procurement procedures came into effect in India. Following tensions with Pakistan and China, India's armed forces received emergency procurement powers under which they could make "fast-track" purchases for delivery within 12 months of signing. These procedures also mention the 50 percent local-content requirement.

Azerbaijan and Morocco

The annual report also unintentionally reveals that the $1.2 billion transaction that the company announced last November – "for the supply of air defense systems to Customer C" – was with Azerbaijan. In September, Azerbaijan's Defense Ministry announced that the country's military had conducted major air defense drills that included the Barak 8 air defense system.

The annual report does not explicitly name Azerbaijan, but it states that in 2012, IAI signed a $1.6 billion deal with Customer C for "miscellaneous defensive and offensive systems," and that these agreements were updated in 2017. In 2012, a $1.6 billion arms deal with Azerbaijan was reported by the Israeli media. Over the years the agreement was updated; IAI supplied to Azerbaijan the Barak missile system and drones, including suicide drones.

The annual report also reiterates a February 2022 transaction that was mentioned in last year's annual report: "The company entered into an agreement with Customer D for the supply of air defense systems totaling $560 million."

This deal was never mentioned in an IAI press release or statement to the Tel Aviv Stock Exchange. Customer D, it turns out, is Morocco. That month, the Israeli media reported that IAI had sold advanced Barak air defense systems for half a billion dollars to Morocco, which had earlier signed the Abraham Accords.

2024-05-08T13:47:07Z dg43tfdfdgfd