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  • US Congressman will Prioritize Israeli and “European-Allies” in US Weapons Industry: Why Indian Companies should be the First to Join?

    Published on October 16, 2020

    It is said that The United States House of Representatives will debate on a bill that will result in giving European Allies of the United States (Like Germany and UK) accelerated licenses to sell weapons and establish industrial weaponry plants in the United States, says Reporter Joshua Horowitz. The only non-EU country to enjoy the benefit will probably be Israel, that corresponds with the Trump Administration’s close relations to Prime Minister Benjamin Netanyahu. 

    In recent years many European companies tried to establish connections in India. Army manufacturers are looking at Indian manufacturing giants like Reliance, Tata and others as a great potential for joint-ventures in this field to export weaponry to the United States. 

    UAE giant Caracal International, for instance, recently engaged in a major bid in India and now explores several commercial opportunities in the United States. Israeli CAA Group is also known to engage in few discussions in the United States, Morocco, Nigeria and even with Indian companies such as Reliance Group as was covered in 2017. 

    The recent legislation in India opens a path to immense opportunities in working with European and Israeli companies in this field, and the projected scope of such co-operation in selling the U.S is probably estimated in Billions of US Dollars. 

    Given India’s competitive advantage as a manufacturing economy, it is only a matter of time until Israeli and European countries will join hands with local companies. Having said that, it should be India’s interest to reach out first, as such deals can be a turning-point for many of them. 

    According the Indian Government’s officials, India plans to spend $130 bn on military modernization in the next 5 years, as achieving self- reliance in defense production is a key target for the Government of India. The Government has opened up the Defense industry for private sector participation to provide impetus to indigenous manufacturing. 

    The opening up of the industry also paves the way for foreign original equipment manufacturers to enter into strategic partnerships with Indian companies. Annual Turnover by Private sector in Defense and Aerospace sector in 2018-19 is $2.4 bn. 

    A Defense export strategy has been formulated with a view of facilitating Defense Public Sector Enterprises (DPSUs) and private defense players in exploring business opportunities abroad. 

    The total value of production for OFB & DPSUS together accounts for $8.0 bn. The government has formulated policies to boost defense exports and achieve defense export target of $5 billion in the next five years.