The leading Israeli defense firms have positioned themselves in India. If the last decade’s defense trade of $10 billion is to be seen as an ‘opening salvo’, Israel is set to replace Russia as India’s largest defense trading partner. As India revisits her defense procurement policy, it could be time for Israeli firms to entre India’s small arms development and manufacturing segment in a big way.

According to a study released this week by the Economic Times (New Delhi); Indian government needs to replace large portion of its small arms – up to 5.6 million in military and paramilitary sector. The bulk of the Indian firearms in circulation is made up of archaic Lee-Enfield rifles, Sterling submachine guns and aging pistols.

The small arms segment in India can broadly be divided between two major players; the Defense Research and Development Organisation (DRDO) that deals with the design and development; and the factories run by the Ordnance Factory Board (OFB) that manufacture based on technology and design provided by the DRDO.

Since 2001, the private sector in India has developed impressive capabilities and Israeli counterparts must see Indian defense manufacturers as viable potential collaboration partners, but development of these small arms would primarily be handled by the DRDO.

The state-owned ordinance factories are undergoing a major modernization drive to the tune of $2.5 billion. Britain’s BAE Systems has offered to take up the modernization, but there has been no official confirmation from Indian side.

In 2012, a deal worth $240 million by Israel Military Industries (IMI) to build ordnance factories in India went terribly wrong and resulted in blacklisting of IMI for 10 years. However, IMI Tavor TAR-21 (Assault Rifle) and IMI Galil (Semi-Automatic Sniper Rifle) are being used by Indian Army in insurgency-ridden Kashmir region and inducted by various Indian Special Forces.

Just like Israel, India Armed Forces face asymmetric warfare – in Kashmir (Islamist militancy) and Central India (Maoist insurgency). In future, Indian Armed Forces would need small arms that factor in the challenges of urban warfare, close quarter combat and ambush scenarios. Israel with her unique understanding of counter-terrorism and asymmetric warfare is best place to offer these insights to India.

The small arms are one of the less lucrative segments of the transnational defense trade, but considering the magnitude of these upcoming deals in Indian small arms segment, it certainly opens profitable opportunities for Israeli firms in the field of design, consulting, know-how transfer and manufacturing capabilities.