The first successful operational trial of Israel Aerospace Industries Ltd.'s (IAI) (TASE: ARSP.B1) innovative Barak-8 defense missile system is further evidence of the close defense relations between Israel and India. The Indian Ministry of Defense, through the Defense Research and Development Organization (DRDO), the Indian equivalent of the Israel Ministry of Defense's Administration for the Development of Weapons and Technological Infrastructure, is a key partner in the development and financing of the advanced missile, and the Indian Navy will be among the first to procure it. According to IAI Program Director for Air & Missile Defense Systems Boaz Levy, the missile has a sales potential in the billions of dollars in the coming years.
Representatives of the Indian Defense Ministry, including DRDO head Dr. Shri Avinash Chander, participated in yesterday's successful interception trial in on the test field in Israel, in which an interceptor was launched at a simulated warplane. Chander is also the scientific advisor of the Indian Minister of Defense. Following the trial, he praised defense cooperation between the two countries, calling the progress in the joint program to develop the new missile a "significant milestone in cooperation between Israel and India."
Only two weeks ago, the Indian Defense Ministry decided in favor of Israel in another procurement program, when it selected Rafael Advanced Defense Systems Ltd. to supply Spike anti-tank missiles to India's ground forces. The agreement with Rafael is worth $525 million. Some weeks earlier, in another decision, the Indian authorities purchased hundreds of Barak-1 missiles for the Indian Navy for NIS 500 million.
At a time when many countries are economizing and being very selective about defense procurement, India is paying a great deal for weapons. The Israeli defense companies are among the major beneficiaries of the Indian defense shopping spree. Over the past decade, the Indians have already bought three rounds of IAI unmanned aerial vehicles (UAVs) (paying $280 million for the most recent round), among other things for its special forces deployed on the border with Pakistan, and radar and warning systems. According to past assessments in the foreign media, the Indian Defense Ministry may decide next year to acquire several Phalcon intelligence airplanes from IAI.
Beyond good deals with billions in potential revenue that are essential to IAI and other Israeli companies, the IDF is also benefitting from this cooperation: it is getting a defense system that provides a solution for difficult threats that have until now given its commanders a great many headaches. The Barak-8 is considered a versatile medium-range missile system capable of intercepting warplanes that can also be installed on missile boats, thereby providing an answer to coastal missiles threatening the natural gas platforms in the Mediterranean Sea. The Israel Defense Ministry's working assumption is that Russian Yakhont supersonic missiles have been passed from Syria to Hezbollah, and that during a future military conflict, Nasrallah will not hesitate to order them used against Israeli marine targets. These targets can also be Israel Navy missile and patrol boats, and even ports. "This is a breakthrough defense system that answers a broad range of land and sea threats, and has demonstrated impressive capabilities," IAI CEO Joseph Weiss said yesterday following the successful trial.
Development of the Barak-8 took six years, and senior IAI officials said today that the navy could make operational use of them already in 2015: "It's very possible that without Indian participation in the new missile program, Israel would have found itself with technology, but without a product. The money they put into this project was the fuel that made it possible to bring it from the drawing board to a working product," an informed source told "Globes." Former IAI CEO Yitzhak Nissan was the one who persuaded the Indian authorities to sign on for the missile development program, whose success in the operational trial IAI has been celebrating for the past two days. The Indians heard about the idea, were exposed to the technical drawings, became enthusiastic, and invested over $1.5 billion.
Elements of the new system have already been installed on one of the Israel Navy's Sa'ar 5 missile boats. Boaz Levy said, "When the new missiles are made operational by the IDF, there is no doubt that Israel will be a safer place."
Published by Globes [online], Israel business news - www.globes-online.com - on November 11, 2014
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