NEW DELHI, 6 March 2004 — A much-awaited Indian-Israeli defense deal was finally signed yesterday, though India will not take delivery of the Phalcon warning system for another four years.
The $1.1 billion Phalcon deal was signed by C.R. Mahapatra, joint secretary in the Indian Defense Ministry, and Israel Livnet, vice-president of Israeli Aircraft Industrial Corporation.
Under the deal, India will get the first of three Phalcon Airborne Warning and Control Systems (AWACS) from Israel 44 months after the advance payment, which would be made within 45 days of signing the agreement. Israel would deliver the second Phalcon in 53 months and the third six months later. India would pay around $300 million as down payment, sources said.
Israel expects the Phalcon deal, the largest ever for its defense export industry, to contribute to its economy as well as “improve the reputation of the Israeli defense industry in the global market.”
Israel will buy Ilyushin-76 cargo aircraft from Uzbekistan which would then be sent to Russia to be fitted with new high-powered engines. After structural modifications, the aircraft would be sent to Israel, and after being mounted with cutting-edge avionics the complete aircraft would finally be delivered to India.
Once included in the Indian defense industry, the Phalcon system will give India a lead in conventional weaponry over China and Pakistan. It detects low-flying objects over a distance of hundreds of kilometers.
While details of the deal were finalized during Israeli Prime Minister Ariel Sharon’s India visit last year and the preliminary agreement signed in October, Israel had to postpone the Phalcon sale under pressure from the United States. Indo-Pakistani tension was seen as a stumbling block in securing the US nod of approval.
But Indian, Israeli and Russian officials completed the required diplomatic protocol for the deal last month, with the final touches being given during Israeli air force chief Maj. Gen. Dan Halultz’s four-day India visit last week. The Israeli security Cabinet headed by Sharon approved the deal earlier this week.
The two countries have moved closer over the past five years after a Hindu fundamentalist-led coalition assumed power in India. Since then Israel has emerged as India’s second largest weapons supplier.
India has repeatedly asserted that its proximity with Israel has not changed its support for Palestinians and its desire to strengthen ties with Arab states. Although China failed to acquire the Phalcon system from Israel in 2000, it has voiced no objection against the deal. “This is something between Israel and India,” a Chinese Foreign Ministry spokesperson said in Beijing. US pressure had prompted Israel to cancel the Phalcon sale to China.
Pakistan has objected to the deal saying that it would accentuate the strategic imbalance in South Asia, according to a Pakistan foreign office spokesman. “Such transactions undermine the spirit of peace and stability being pushed by Pakistan, India and the international community in the region,” he said.
