Since its establishment as a commercial company, Rafael maintained continuous growth, generating annual revenue above one billion US$ in 2009. India provides a major growth opportunity for Rafael – the company has invested much in preparing its presence in the Indian market through joint ventures and establishment of local operations complying with Indian military import regulations.
“We are fully aware of the new Defence Procurement Procedure (DPP) and are studying it.” Major General (Ret.) Ilan Biran, Rafael’s Chairman of the board of directors told Defense-Update, “We hope it will pave the way to open more opportunities and expand partnerships, offering better quality of cooperation in the future.” On the agenda is Rafael’s planned establishment of partnership with a major Indian public company. Both TATA and Bharat Electronic Ltd (BEL) were negotiating with the Israeli company for JVs producing components and subsystems of air defense systems. However, formal establishment of the JVs are yet to be announced. “We made our position clear, that foreign ownership of 26% limits such potential cooperation, yet, we oblige to India’s directives and will meet them to the full extent.” Said Biran.
Local partnerships and cooperation is not strange to Rafael. “We follow this strategy in each of our strategic markets.” Biran said, “In the USA we partnered with several leading defense contractors such as Northrop Grumman (producing electro-optical pods), General Dynamics (armor protection), and Raytheon (missiles). In Europe we are working with Rheinmetall Defence and Diehl, on the local production of tactical missiles. We expect establishing similar partnerships with leading companies in India, to seek mutually beneficial solutions in answer to India’s specific requirements.”
He expects some of these programs to evolve through Rafael’s cooperation with India’s Defence Research & Development Organization (DRDO) and the military services. “DRDO is the leading authority for defense technology in India and, together with Rafael as its Israeli pier, we can both benefit from such cooperation.” Biran added noting that such cooperation could also provide the basis for technology transfer, required by the current DPP.
Biran acknowledge the significant role India pose for Rafael; “we respect India as a prime customer for every major program, and consider India, along with the U.S.A and Europe among the markets ready to absorb our highest, most advanced solutions.” He said. In the past, Israel enjoyed a ‘premium’ on India’s limited access to advanced military systems, but this factor has diminished with the warming U.S.-India relations. “Competition is growing but we are not intimidated by it,” Biran added, “competition opens more opportunities, from which India can choose from, We promise our best products at top quality – and unlike other countries – with no political margin, since our mutual cooperation is managed at low key.”