IAI signs strategic agreements with Indian cos

Heron TP-XP UAV Photo: PR
Heron TP-XP UAV Photo: PR

Through the agreements, Israel Aerospace hopes to wins tenders worth billions of dollars for UAVs and other defense systems.

After signing a $2.5 billion deal to supply Barak 8 defensive missiles to the Indian army, Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) is preparing for a tender by the Indian Ministry of Defense for the purchase of dozens of unmanned aerial vehicles (UAVs). Company sources said that Indian UAV procurement would amount to hundreds of millions of dollars. IAI is offering India its Heron model UAVs.

The company today announced that it had signed a cooperation agreement with Indian companies Dynamatic Technologies and Elcom Systems for production, assembly, and support involving IAI's UAV-related projects in India. The agreements with the two companies, which include the transfer of know-how from Israel to India, were drawn up many months ago, but were signed today in the framework of Indian Prime Minister Narendra Modi's visit to Israel.

IAI has signed two additional cooperation agreements with Indian companies during the visit. IAI said that these agreements will enable it to increase its business in India, while improving its chances of winning future tenders in the country. Under an agreement signed yesterday with Indian group Kalyani, the two companies will cooperate in setting up a maintenance center for advanced air defense systems, and for joint development and production of precise munitions. Under another agreement, IAI's civilian aircraft division and Indian company Wipro Enterprises will set up a plant in India to manufacture aviation products based on composite materials.

IAI told "Globes" today that these agreements were consistent with its policy in India of giving preference to local companies in tenders published by the state authorities. In preparation for these tenders, IAI will be involved in founding local companies in which Indian companies will own a 51% controlling interest. The local companies founded will compete in tenders published in the coming years.

Modi today ended his historic visit to Israel. He earlier participated in a joint economic forum of Israel and Indian CEOs in Tel Aviv that discussed tightening commercial ties and a free trade pact between the countries aimed at increasing bilateral trade from its current annual level of $4 billion to $20 billion within five years. The forum was established by the Manufacturers Association of Israel and the Federation of Indian Chambers of Commerce and Industry (FICCI). The forum's recommendations to Modi and Prime Minister Benjamin Netanyahu include the signing of a free trade agreement, examining regulations that current restrict trade between the two countries, the discussion of new agreements designed to protect foreign investment, less demanding restrictions on visas for professional workers, increasing the number of flights between Israel and India, etc.

Published by Globes [online], Israel Business News - www.globes-online.com - on July 6, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

Heron TP-XP UAV Photo: PR
Heron TP-XP UAV Photo: PR
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