Israeli Defense Exports Rise to $7.2 billion

JERUSALEM (GDC) — Backed by strong demand from Indian Air Force and Indian Navy, Israel’s defense export deals from 2019 totaled $7.2 billion and involved 120 different defense companies, according to the head of the Defense Ministry’s International Defense Cooperation Directorate.

Israel’s arms exports over the past four years were the highest ever, according to a new report by the Stockholm International Peace Research Institute.

The country’s defense-related sales have been slightly declining over the last decade. Israel’s defense export contracts in 2010 also totaled $7.2 billion, but was down to $5.7 billion in 2015.

In his announcement, Yair Kulas said the large number of companies selling abroad “reflects the strength of the Israeli defense industry.” The former brigadier general added that he anticipated growth in government-to-government agreements in 2020, but noted that the coronavirus pandemic has “devastated the global economy and the defense sector.”

The top three buyers of Israeli arms were India (45% of the total amount), Azerbaijan (17%) and Vietnam (8.5%). The top three arms suppliers to Israel were the US (78%), Germany (16%) and Italy (6.2%).

Israel has also inserted itself into the missiles market, among other products, in India, where there are several joint ventures. India procured large sum of Barak missiles, Derby missile, drones, radars, electronic warfare and targeting pods for its air force and navy.

Israel is also a leader in multilayered air defense thanks largely to its Iron Dome and David’s Sling systems, which Rafael co-produces with the American firm Raytheon. Elbit and other Israeli companies are also major suppliers of electro-optical technology.

Israel’s three largest defense companies are Elbit Systems, Rafael Advanced Defense Systems and Israel Aerospace Industries. The local defense industry has experienced consolidation in the past few years, with IMI Systems now part of Elbit, and Aeronautics Limited acquired by Rafael.

Ten years ago Israel was a world leader in UAV sales, but as its focus has changed, unmanned aerial systems now make up only 8 percent of the country’s sales. Today’s major markets for Israel are in radars and electronic warfare.

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The Elta ELM-2084 — the radar used in the Iron Dome air defense system — was sold to the Czech Republic in a government-to-government deal last year worth $125 million. Elta is a subsidiary of Israel Aerospace Industries.

Israel says radars and electronic warfare suites made up 17 percent of the sales last year; missiles at 15 percent; and optics at 12 percent. Naval systems and vehicles were among the smallest portion of contracts.

Slightly over 41 percent of sales were in Asia, while Europe and North America each accounted for a quarter of contracts. Africa and Latin America were both at 4 percent each.

Israel historically sold UAVs and other items to Latin America and Africa, but the size of the purchases and lack of demand for the highest-end technologies appear to have led to minor contracts in these regions.

Israel’s Defense Ministry says that Israel is among the top defense exporters in the world. Certainly per capita, the country is a global leader in defense exports. Up to 80 percent of its defense production is exported, according to the ministry.

From 2015-2019, Israeli arms exports accounted for 3% of the global total, the report said. Israel was the world’s eighth-largest arms supplier, and its arms exports were 77% higher than in 2010-2019, according to SIPRI.

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