India Close to $1.5 Billion Defense Deal With IAI

High-ranking Indian delegation visits this week to discuss military and intelligence cooperation

India is negotiating a $1.5 billion deal to buy four intelligence and early warning planes from Israel.

An Indian delegation, lead by the Indian defense secretary Vijay Singh and including representatives of Indian defense industries, will be in Israel this week to discuss the purchase of the planes and missiles from Israel Aerospace Industries.

In addition, the delegation will discuss cooperating with Israel on intelligence matters and in the war on terror, sources close to the Israeli defense industry said.

The Phalcon AWACS plane radar deal is the continuation of a previous $1.1 billion sale signed by the IAI in 2004 for four intelligence gathering planes, to be completed by early 2010.

Negotiations over the present deal started a few months ago and will continue this week with the Indian delegation during its visit to Israel. Other recent big deals included a $640 million sea-to-sea missile project and a $260 million sale of antiaircraft missiles.

The delegation includes senior officials from the Defense Ministry and high ranking officers from the army and air force, as well as officials involved in military research and development.

The Times of India reported the delegation will discuss continued purchases of missile defense systems as well as cooperation between the two countries on military research and development and intelligence.

Since 1999 the two countries have conducted $8 billion in defense deals, the Times of India reported.

Unlike the previous administration, though, the present ruling coalition of political parties, the United Progressive Alliance, has preferred to keep the military relationship between India and Israel out of the public eye.

The Indians have complained over delivery delays of the first early warning plane. The delegation is expected to demand that no further delays occur.

A source close to the IAI said the first Phalcon AWACS will be delivered to India in the next few weeks. The delay stemmed from problems discovered during test flights, which have since been corrected.

The visit is also shadowed by an investigation of the Indian Central Bureau of Investigation into alleged kickbacks in previous deals between the two countries, including those with the IAI and Rafael Advanced Defense Systems.

The investigation has slowed another $1.5 billion deal for the development of the Barak anti-missile missile defense system for India, Israeli sources said, though they expect the agreement to be signed in the end.