If New Delhi Is Wary Of Israel’s Ties With China, Jerusalem Is Looking At India And Iran As Well

Everyone is going gaga over Prime Minister Narendra Modi's trip to Israel, and they should. Israel's welcome to the Indian prime minister stops one step short of a Roman triumph thrown in honour of a conquering emperor. For his part, Modi has shown equal respect to his counterpart, Israeli Prime Minister Benjamin Netanyahu, by avoiding the ritual visit to Palestinian Ramallah and playing up the construction of a special relationship between the two countries rather than a transactional defence bonanza. Netanyahu has cleared his schedule to accompany Modi for the duration of the state visit and both prime ministers are known to have warm feelings towards each other.

Much ink has already been spilled on the natural synergy between the two countries in terms of security and the economy; though a genuinely blossoming relationship will take time to mature, there seems to be little doubt that it will. However, it is only prudent that one casts an eye on two shadows that have the potential to cloud the bonhomie between Delhi and Jerusalem. India's relations with Iran and Israel's relations with China stand to possibly be grounds for recriminations later on.

Although China extended recognition to the Jewish state barely five days earlier than India, its relationship with Jerusalem is far stronger in terms of simple numbers. Like India, the two sides have maintained covert contacts for defence purposes since at least 1979. Today, trade between Israel and China stands at over $11 billion—almost three times that between Israel and India. Chinese firms have invested substantially in the Israeli economy, acquiring a controlling stake in several companies and donating to Israeli universities and research labs to establish technological academic institutes. Over a thousand Israeli firms operate in China and an innovation park has been set up in Changzhou. Overall, China is Israel's third-largest trade partner after the United States and Europe, and the largest in Asia. Militarily, Israel is China's second-largest supplier of arms after Russia.

Like many countries worldwide, Israel has found it difficult to keep away from the renminbi gravy train. Although the personal chemistry might have been missing, Netanyahu has been quite ebullient in his meetings with his Chinese counterpart, Xi Jinping, marketing Israel as the perfect junior partner for China and hoping to marry Israel's technology to China's capacity. As one newspaper termed it, make in Israel, expand in China.

Any money, especially Chinese money, comes with political strings attached as Sri Lanka and Cambodia have already realised and Australia seems to be waking up to the same reality. Beijing's deep forex pockets are difficult to compete with, even for advanced economies, let alone India. Delhi's concern would be two-fold: where might such lucrative ties lead in terms of outside influence on Jerusalem, and what might be the impact of China having access to many of the same technologies India acquires from Israel?

For the moment, US pressure on Israel has prevented the sale of sensitive technologies such as the Phalcon airborne early warning and control system to China. However, as Chinese firms invest in Israeli technology and enter into joint ventures, Washington's influence over Jerusalem would wane and Delhi might find itself in a very uncomfortable position vis-a-vis Israel and China.

Similarly, Israel has concerns about India's ties with Iran. Going by rhetoric alone - there has been precious little action between Delhi and Tehran—India hopes to invest in Iranian hydrocarbons, build Chabahar, and encourage Iran to become part of its International North South Trade Corridor, which would bypass Pakistan and give India access to the heart of Asia for valuable energy and mineral resources.

Thankfully for Jerusalem, Delhi has moved at its famed glacial pace and trade between the two countries stands at approximately $16 billion (per capita, that is less than half of that between India and Israel) despite the latter's energy addiction.

While India has no defence ties to Iran to speak of—the situation in Afghanistan has evolved to the detriment of the synergy of the 1990s between Tehran and Delhi—Jerusalem might worry that increased trade between one of the fastest growing economies in the world and its present archenemy might give the latter greater economic muscle to create more problems on Israel's doorstep.

Of course, there are many variables at play here still—Israel may offer India gas from its Tamar and Leviathan gas fields to offset Iranian gas, Tehran may prefer Bejing's reliability and largesse in a partner than Delhi, or Israel may get frustrated with China's notoriety in reverse engineering. The strongest counter to these concerns is to make a strong, unequivocal commitment, something that would indicate to the other side that the relationship means more than just dollars and sense.

For India's part, a proposal for nuclear cooperation may well be that indication, and Delhi may ask for something equally substantial from Israel in return. Yet the concerns remain for both Israel and India. Among friends, these are conversations best had as soon as possible. Of course, it is also impolite to discuss others one may be seeing on a first date.