Israel looks to shift defence manufacturing to India as bilateral ties move beyond buyer–seller model
The Netanyahu government’s move to diversify defence production outside Israel stems from declining military exports to India, which is now focusing on self-reliance to reduce import dependence
By Dalip Singh
Updated- December 09, 2025, at 05:11 PM | Tel Aviv/Jerusalem
Defence Secretary Rajesh Kumar Singh (right) and Director General of Israeli Ministry of Defence Maj Gen (Res) Amir Baram co-chair the 17th India-Israel Joint Working Group meeting in Tel Aviv.
India and Israel are moving beyond a traditional buyer–seller relationship, with Tel Aviv now actively exploring investments in India’s Aatmanirbhar Bharat defence initiative and shifting manufacturing of unmanned systems and other weapons platforms to India.
This was underscored during Defence Secretary Rajesh Kumar Singh’s visit to Israel in early November. Singh co-chaired the India-Israel Joint Working Group (JWG) meeting in Tel Aviv, where the two sides signed a new MoU on defence cooperation aimed at deepening ties through joint development, co-production of defence systems, and advanced technology sharing, including AI and cyber, training and R&D.
Sources in the Indian Embassy in Tel Aviv and the Israeli government confirmed that both governments are working to combine Israel’s innovation ecosystem with India’s engineering strengths to produce ‘Make in India, for the World’ defence products. The transformation will be visible in the next six months to one year, a senior diplomat from the Indian Embassy stated.
The Netanyahu government’s move to diversify defence production outside Israel also stems from declining military exports to India, which is now focusing on self-reliance to reduce import dependence. India has also broadened the procurement of equipment towards the US and France to manage global supply chain constraints arising out of ongoing conflicts.
Israel’s share of India’s arms imports has steadily declined from its peak of roughly 34 per cent in 2015-2019 to around 9 per cent in 2018-2022, and continued to soften further by 2020-2024, according to the annual reports of the Stockholm International Peace Research Institute (SIPRI), a Sweden-based independent global institute. But Israel still remains among the top three exporters of arms to India, rallying behind Russia and France.
Exports to India, however, are controlled by top Israeli government and private defence companies — Israel Aerospace Industries, Israel Weapon Industries (IWI), Rafael, and Elbit Systems. They account for 80-85 per cent of Israel’s defence exports. But the Israeli government is now pushing its MSMEs and start-ups to explore the Indian market, said a Netanyahu government official privy to defence trade.
“We have common interest, common challenges and common symmetric threats. If we produce together and export together, it will be better for us strategically,” said the official, underlining the similarities that have held the bilateral defence partnership together for decades.
But, strong export control regulation of US is a matter of concern for Israel, they admit.
Joint ventures
That said, some joint ventures for production in India are already operational for a while. For instance, IWI has set up local co-production in India through a joint venture (JV) with an Indian firm, PLR Systems — part of Adani Defence & Aerospace — for small arms. IWI will supply the first batch of 40,000 Negev light machine guns (LMGs) to India starting early next year, said CEO Shuki Schwartz during an interaction at its facility in Kiryat Gat.
Similarly, a senior official with Elbit Systems, who did not wish to reveal his identity, said his company has also shut shop in Israel and moved to India for co-production. Elbit Systems has partnered with Adani Defence & Aerospace to build a manufacturing facility in Hyderabad to produce the Hermes 900 MALE UAV. While the Indian Army and Indian Air Force have already inducted the platform, the Indian Navy has also opted for it during Emergency Procurement after Op Sindoor, an Elbit official stated.
Israeli firms are also sourcing materials, parts and sub-systems from India, with Elbit alone having 200–250 vendors to augment its supply chain — valued for high performance, good engineering and competitive pricing, an Israeli company official stated.
Looking to expand in India, a senior official from IAI said on condition of anonymity that “as an industry, we are very aware of the Make in India initiative, and we are working very hard towards that with our partners”. IAI has partnered with HAL and Alcom to produce Heron Mk-II UAVs in India, and has bid for a ₹30,000 crore tender for 87 Medium Altitude Long Endurance (MALE) drones. Herons were used during Operation Sindoor.
The trade is not one way, many companies are travelling to Israel to grab a pie of their defence industry, said the Indian diplomat.
(The writer was in Israel on an invitation of the Israeli government)
Israel looks to shift defence manufacturing to India as bilateral ties move beyond buyer–seller model