Intelligence, surveillance and reconnaissance (ISR) aircraft with ELTA Systems’ multi-mission airborne reconnaissance and surveillance system (MARS2 ELI-3150). Israeli Aerospace Industries (IAI) has acquired an Indian maintenance, repair and overhaul (MRO) services company to consolidate the company’s India portfolio after the United States expressed great interest in India’ defence industrial base at the end of June. Credit: IAI.

Israeli Aerospace Industries (IAI) acquired the Indian radar and electronic warfare systems provider, HELA Systems on 9 July 2023.

IAI claims the deal will support the Indian government’s Atmanirbhar Bharat (Make in India) vision.

GlobalData forecast India’s defence spending to reach $445.7bn (Rs3.6tn) between 2024-28; this constitutes a compound annual growth rate (CAGR) of 4.96%, after an 8.8% spike between 2023-24.

This projection tells us a lot about the country’s plan for self-reliance. India’s FY23 budget has reserved about 75% of the defence acquisition budget to fund the procurement from domestic enterprises.

The Israeli company’s investment in India’s growing defence industry demonstrates its desire to consolidate years of partnership with Indian businesses in supplying India’s Armed Forces.

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The acquisition will give IAI a foothold within India’s growing, indigenous defence industry. HELA Systems will provide full Maintenance, Repair and Overhaul (MRO) services for another one of IAI’s subsidiary companies in India, ELTA Systems.

Israel jostles with the US to supply India

This deal comes off the heels of the United States’ recent interest in India’s defence industry last month.

On 21 June, the US Department of Defense (DoD) and the Indian Ministry of Defence (MoD) launched the India-US Defense Acceleration Ecosystem (Indus-X). This programme expands the strategic technological partnership and defence industrial co-operation between the two governments, their businesses and academic institutions.

According to intelligence from GlobalData, over the last few years, the US has succeeded in breaking into the Indian defence market and is behind Israel as the third largest supplier of defence equipment to India.

The threat to Israel’s trade activity in India lies in America’s strategy of reaching out to lesser known start-ups to leverage dual-use technologies. A joint innovation fund will be set up: IndiaSpora, IndUS Tech Council, Forge/Coimbatore and T-Hub/ Hyderabad will engage private investors to garner support for investment in defence and dual-use startups.

HELA’s MRO services to provide IAI with a reliable consumer base

HELA has a facility in Hyderabad’s fast-growing industrial belt. Its management and technical team comprise radio frequency and microwave specialists, familiar with cutting-edge technologies and working on future military applications.

In addition, they are well-versed with the relevant industry standards to serve India’s armed services as well as India’s other defence organisations.

“The acquisition of HELA Systems reflects our strategic transformation to provide fast direct access to ELTA’s superior solutions in full support of India’s Atmanirbhar Bharat vision of becoming self-reliant.

“HELA leverages top technology, innovation, and talent to deliver customer satisfaction so customers can focus on their mission,” Yoav Turgeman, IAI Vice President and ELTA CEO, stated.