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Context

Israel’s former Prime Minister Benjamin Netanyahu is on the brink of a dramatic comeback, after partial election results showed he was on course to win a majority in parliament with the far right’s help.
Netanyahu is its master and Israel is a nation now shaped more by the right wing – and perhaps its most extreme elements – than at any point in its history.

Netanyahu’s comeback: Implications on the World

Netanyahu has proven himself inherently risk-averse when it comes to acting on matters of war and peace.

Crackdown on Palestine: The confrontation with Palestinians in the West Bank or in Jerusalem, between Israeli Jews and Arabs will likely grow.
Iranian rhetoric: On Iran, Netanyahu’s rhetoric will intensify. The US will have an opportunity to intensify its crackdown on Iran.

Implications on India

Netanyahu’s likely victory could see an upward trajectory in Indo-Israel ties, which flourished while he was in power till 2021.
Over this, Prime Minister Modi congratulated Netanyahu for his success in the Israeli general elections and said he looks forward to continuing their joint efforts to deepen the India-Israel strategic partnership.

A quick recap of bilateral ties

In January this year, India and Israel marked 30 years of full diplomatic relations.
Israel had opened its embassy in Delhi in February 1992.
The Indian Embassy in Tel Aviv opened on May 15 that year.

How PM Modi and Netanyahu re-shaped India-Israel Relations?

(1) First ever visit by Indian PM

An advocate of strong bilateral ties with India, Netanyahu was the second Israeli PM to visit India in January 2018.
PM Modi made his historic visit to Israel, the first by an Indian Prime Minister, in July 2017 when the ‘chemistry’ between the two leaders became the subject of intense discussion.

(2) Trade

The strong relations between the two nations can be gauged from the fact that the bilateral merchandise trade grew from $200 million in 1992 to $7.86 billion during 2021-2022.
The balance of trade is highly in India’s favour.
Discussions around a Free Trade Agreement are underway, but it has not matched the heightened hype so visible with Netanyahu in power.

(3) Strategic Partnership

India and Israel elevated their bilateral relations to a strategic partnership during Modi’s visit to Israel.
Since then, the relationship between the two countries has focused on expanding knowledge-based partnership, which includes collaboration in R&D, including boosting the ‘Make in India’ initiative.
India’s relations with Israel progressed with I2U2 (India, Israel, the United States and the United Arab Emirates).

Reasons for India prioritizing Israel

India’s exclusion from OIC: The formation of an Organisation of Islamic Cooperation (OIC) in 1969 which neglected the sentiments of Indian Muslims by blocking India’s membership to this group by Pakistan is one of the primary triggers for the change instance.
Backing of Kashmir: India has received no backing from the Arab countries on the Kashmir Issue. There have been no serious attempts by the Arab world to put pressure on Pakistan to reign in the cross-border insurgency in Kashmir.
Support in crucial wars: Israel supported India during the Indo-Pak wars even before full diplomatic ties were established.
India’s US allegiance: With the collapse of the Soviet Union and the rise of the US as a superpower, India started aligning itself with the US, and this further added to our improved relations with Israel.
Deviation from NAM: After decades of Non-Alignment and Pro-Arab policy, in 1992 India changed its stance and established full diplomatic ties with Israel.
Support at global forums: Israel has always been a vocal supporter of India’s permanent seat in the UNSC.
Technology: India’s world-class institutes of higher education could benefit from the strong culture of research and high-end innovation that thrives in Israel.

Israeli interests in India

Huge Indian markets: India presents a massive market for Israel’s manufactured goods and technology.
Respect for religion: India has for long enjoyed great goodwill among Israel’s citizens as the only country in the world where Jews have not faced anti-Semitism.
Support for holocaust survivors: There are many instances of Jews under Hitler’s persecution finding shelter in India including some that were said to have been facilitated by Nehru. The minuscule Jew community was able to rise to eminence in various fields.
Haifa war support: Israel cherishes its admirers in India for its ability to thrive in spite of very adverse situations in its short history as an independent nation.

Why is Israel India’s most crucial partner?

[A] Military Collaboration

Against terrorism: India and Israel have increased collaboration in military ventures since both nations face the threats of rising radical terrorism and separatism.
Arms trade: India is the largest buyer of Israeli military equipment and Israel is the second-largest defense supplier to India after Russia.
Security: Working groups in areas of border management, internal security and public safety, police modernization, and capacity building for combating crime, crime prevention, and cybercrime were established.
Defence R&D: IAI is developing the Barak 8 missile for the Indian Navy and Indian Air Force which is capable of protecting sea vessels and ground facilities from aircraft and cruise missiles.

[B] Agriculture collaboration

India has chosen Israel as a strategic partner (G2G) in the field of agriculture.
This partnership evolved into the Indo-Israel Agricultural Project (IIAP), under the Indo-Israel Action Plan, based on an MOU signed by Indian and Israeli ministers of Agriculture in 2006.
The partnership aims to introduce crop diversity, increase productivity & increase water use efficiency.
India has a lot to learn from the dryland agriculture of Israel. The Economic Survey 2016-17 batted for Indo-Israel cooperation in drip-irrigation technologies.

Various deterrents in ties

Bilateral Trade and investment still below potential: From just $200 million in 1992, bilateral trade (excluding defense) peaked at about $5 billion in 2012 but since then it has dropped to about $4 billion. Also, bilateral trade has not diversified much—diamonds and chemicals still make up for the large chunk of the pie.
Connectivity between the two countries is still poor with just one direct flight from Mumbai 3 times a week and no direct flights from Delhi.
Historical retrenchment: India’s consistent support for a sovereign, independent, viable, and united Palestinian state with East Jerusalem as its capital, living within secure and recognized borders, side by side, and at peace with Israel and Pro-Arab stance has been a sticky point.
Limited People to People ties and cultural differences: Israelis and Indian approach business differently and often find it difficult to get on the same page.
India’s support for Palestinian Cause: Though formal ties were established in 1992, the ideological divide resurfaces time and again due to India’s affinity for Palestine.

Way forward

Indian policy appears to be guided primarily by strategic considerations.
There is a strong need to use soft power diplomacy to build people-to-people bridges and to add to economic benefits through robust inter-country tourism.
The Indian and Israeli markets do not compete with one another but complete one another.
A potential quadrilateral with US and UAE can help this relationship soar to new heights.