In a moment that signals a deeper realignment of regional military-industrial alliances, Israel Aerospace Industries (IAI) and India’s DCX Systems Limited unveiled a landmark joint venture, ELTX, in April 2025. The formal signing took place in Bangalore, India’s tech hub turned strategic defense nucleus. Yet this was not merely another bilateral defense agreement—it was a strategic declaration, a signal to regional rivals and global allies alike.
The creation of ELTX—a localized defense tech entity with full Israeli technology transfer—is being seen by analysts as the most aggressive and high-stakes commitment yet by Israel to Indian defense modernization. Its mission is clear: to design, produce, and maintain next-generation radar, electronic warfare, and missile detection systems, all tailored for the unique needs of the Indian Armed Forces.
IAI’s Legacy in India: From Supplier to Strategic Stakeholder
The roots of Israel’s involvement in India’s defense sector run deep. Since the Kargil War of 1999, IAI has been a behind-the-scenes enabler of India’s evolving military posture. Over the past two decades, it has delivered:
- Barak missile defense systems to the Indian Navy
- Heron UAVs for real-time intelligence
- Phalcon AWACS via a strategic Israeli-Russian-Indian triangular deal
- Missile defense upgrades deployed along India’s northern borders
What sets ELTX apart, however, is that Israel is no longer just exporting weapons—it is exporting its technological DNA.
IAI’s president Boaz Levy called the new partnership a “strategic milestone,” declaring India as not only a customer but a “global defense manufacturing hub” and “trusted security partner.” Levy emphasized the joint development of airborne radars, multi-dimensional battlefield sensors, and edge computing-enabled fire control systems. The company has even launched an Innovation Acceleration Program, linking Israeli engineers with Indian deep-tech startups and academic incubators, including at IIT Delhi.
The launch of the ELTX joint venture between Israel’s IAI and India’s DCX didn’t happen in isolation—it benefited significantly from Washington’s robust support for Israel, especially in artificial intelligence, defense R&D, and advanced systems access.
US–Israel AI & Tech Cooperation: A Foundation for ELTX
In June–July 2025, the US and Israel signed a Memorandum of Understanding to jointly advance AI in energy security and defense. This was more than token cooperation: under a decades‑long Foreign Military Financing (FMF) framework, the US provides Israel with $3.3 billion annually, plus $500 million annually for joint missile defense projects.
The result is that Israel gains continuous access to cutting-edge US tech including AI systems, edge computing, early-warning radars, and encrypted comms, and technologies typically withheld from other US partners. US commercial platforms like Microsoft Azure, OpenAI, Amazon are integrated into Israeli military operations, including Gaza/Lebanon targeting that spotlighted both effectiveness and ethical concerns.
These developments mean IAI is not simply a standalone defense manufacturer, they are a proxy extension of US–Israeli advanced-tech synergy, carrying that edge into India through ELTX.
ELTX in Perspective: The Tech Ecosystem US Helped Build
When IAI deepens its presence in India by establishing an MRO facility in Hyderabad and engaging with IIT Delhi and startups, it brings not only Israeli engineering, but layers of US-trained, AI-enabled systems:
- Barak‑8 systems in India benefit from US-aided R&D collaboration since 2017, with some US-Israeli funding underpinning their guidance systems.
- IAI’s Heron UAV upgrades (Project Cheetah) including laser-guided munitions and SATCOM are enabled by American-derived electronics architectures.
- The extensive binational R&D channel, the BIRD Foundation, co-funds US–Israel civilian and dual-use innovation projects, seeding future systems later exported under ELTX.
Thus, in a now-global value chain, India receives what is effectively US-vetted and Israeli-honed defense tech, wrapped inside an ELTX package—without direct US branding.
Why would the US support this?
There are several strategic and geopolitical factors associated with this indirect funding and sponsoring of Indian military might like
- De-risking China: Elevating India’s defense tech sophistication aligns with US objective of countering China’s regional dominance.
- Indirect influence: US ensures interoperability without overt arms sales, India upgrades its radar, air-defense, and AI capabilities while maintaining plausible deniability.
- Economic leverage: American firms, Microsoft, OpenAI, Amazon, grow cloud & AI revenues by powering Israeli and now Indo-Israeli defense systems.
Analysts view ELTX as a triangulation whereby US–Israel tech flows to India, and India becomes more capable, yet the US presence remains indirect, strategic, and politically clean.
Integrating ELTX into the Geostrategic Puzzle
With ELTX, what emerges is not just a bilateral venture between Israel and Indian but a tripartite technological coalition:
| Stakeholder | Role | Strategic Gain |
| US | Provides core AI, missile-defense funding, cloud platform | Enhances India’s defense autonomy; counters China without direct involvement |
| Israel (IAI) | Integrates US tech, leads India’s R&D ecosystem with DCX | Expands market, deepens tech embedment, diversifies exports |
| India | Receives cutting-edge systems, localized production, workforce skill-up | Boosts air-defense capability; strengthens multi-front deterrence |
This synergy helps explain Israel’s deep investment in India and why ELTX is more than a commercial joint venture. It is a strategic node in a new western-aligned defense architecture in the Indo-Pacific.
By embedding US–Israel tech into India’s defense modernisation, ELTX becomes a cornerstone of a carefully calibrated, low-profile alliance. It allows Washington to project power without footprint, gives Israel direct influence in a rising Asian defense market, and positions India as a self-reliant security actor.
In short, ELTX is America’s weapon, Israel’s innovation factory, and India’s shield, without any of those three having to say so publicly.
Why Israel Is Embedding Itself Deeper in India
The scale of IAI’s strategic embedding in India is unusual, even by the standards of modern defense partnerships. Ironically, India’s strategic importance to Israel has grown alongside the rise of China’s regional dominance and its deepening ties with Iran and Pakistan. Israel sees India as a natural counterbalance, not only geographically, but technologically and politically.
While China supplies Pakistan with drones, radars, and missile systems, Israel is helping India develop an indigenous and more advanced response. The goal is not just military parity, but technical superiority.
As Israel faces growing diplomatic headwinds in the West, particularly over its actions in Gaza and tensions with Iran, deepening ties with non-Western partners like India offers a diversification of strategic dependencies.
India, which did not sever ties or condemn Israel during its recent war with Iran, is viewed in Tel Aviv as a reliable long-term partner.
India is investing billions under its ‘Atmanirbhar Bharat’ (Self-Reliant India) defense strategy, offering foreign OEMs access to subsidized land, low-cost labour, and favourable FDI norms, while ensuring India retains rights to local manufacturing and eventual technology absorption.
In 2024 alone, India spent $11.2 billion on defense R&D and systems acquisition, almost equals to Pakistan’s entire defense budget, and now on pace to approach 40% of China’s defense R&D spend by 2027, according to SIPRI and official Indian MoD disclosures.
Therefore, this isn’t just altruistic alignment. Israel’s motives are layered:
- Revenue diversification amid shrinking Western defense contracts
- Tech dominance by embedding proprietary systems within Indian frameworks
- Strategic positioning in the Indo-Pacific, where India’s reach extends deep into the Indian Ocean
- Deterrence value against shared adversaries (Iran for Israel, China/Pakistan for India)
According to analysts at Tel Aviv University’s INSS, the Indian defense market could bring IAI $6–8 billion in system-level revenues over the next 5 years, a sharp uptick from its previous decade average of $300–400 million per annum.
What About Pakistan and China? A Look at the Flip Side
As India and Israel deepen cooperation, the China–Pakistan axis is not standing still. In April 2025, Pakistan signed off on $1.5 billion worth of new arms deals with NORINCO and CETC, two Chinese state giants. China has also begun joint development of a space-based early warning system with Pakistan, as a response to India’s acquisition of Green Pine–derived radar arrays from Israel.
The China-Pakistan strategic nexus is evolving in parallel. China is rapidly advancing its own anti-access/area-denial (A2/AD) systems, quantum radar, and space-based early warning infrastructure, many of which it is reportedly co-developing with Pakistan under the cover of civilian space collaboration. Sources confirmed that some key developments in these areas include:
- Pakistan’s SUPARCO (space agency) has increased joint satellite launches with China’s CNSA, including dual-use observation and communication constellations.
- Shared development of anti-satellite (ASAT) capabilities has been speculated, especially after China’s 2007 ASAT test and Pakistan’s increasing reliance on Beidou over GPS.
- JF-17 Block IV, Pakistan’s new-generation multirole jet developed with Chinese tech, is reportedly being upgraded with AI-based radar jamming and space-link datalinks.
Pakistan’s public narrative remains focused on deterrence, but the underlying strategy is symbiotic: China supplies the tech, Pakistan deploys the regional application, thereby dividing India’s military attention on two fronts.
Pakistan’s Balancing between US and China
But Islamabad now faces a strategic conundrum. Even as China remains its main supplier, the US has rekindled ties with Pakistan, hosting General Asim Munir and PAF Chief Zaheer Sidhu in Washington and Florida for unprecedented discussions on counter-terrorism, crypto, AI, and even F‑16 upgrades.
China is watching this shift warily. Its Foreign Ministry has repeatedly declared the China–Pakistan bond to be an “iron-clad” friendship, but Beijing’s unease is palpable. Editorials in Global Times and statements from President Xi have emphasized the need for “strategic clarity and loyalty” in partnerships—thinly veiled messaging aimed at Islamabad as it walks a tightrope between two rival superpowers.
A New Axis in South Asian Security
The launch of ELTX is not just an economic venture. It marks a turning point in the geopolitics of the Indo-Pacific—where Israel becomes a key enabler of India’s rise as a regional security hegemon, and India becomes the industrial engine for one of the most battle-hardened and tech-driven defense ecosystems on Earth.
In the shadows of an unpredictable US administration and a more assertive China, India and Israel are building something autonomous, durable, and deeply strategic. And the radar arrays they’re developing won’t just spot missiles, they will likely reshape alignments across South Asia, West Asia, and beyond.
India’s partnership with Israel through ELTX is not just a business arrangement, it is a declaration of strategic direction. It signals India’s willingness to invest massively in next-generation warfare, space-based defences, AI-enhanced radars, and layered missile interception, even as conventional tensions with Pakistan flare and shadow wars with China deepen.
Yet, Israel’s recent experience shows that no defense system is foolproof, and the battlefield is evolving faster than technology can mature. India may achieve localized air superiority or surveillance dominance, but it risks over-militarizing its posture at a time when diplomacy with both adversaries is deteriorating.
Meanwhile, China and Pakistan are not idle. They are quietly, and jointly, crafting a counter-architecture that mirrors India’s ambitions and seeks to neutralize its qualitative edge through volume, asymmetry, and dual-use innovation.
What we are witnessing is not just an arms race, but a technological chess match over who will define the rules of engagement in South Asia’s airspace and outer space in the decades to come.
The question is not whether India is investing enough in its defense dream — but whether this dream, in the face of two nuclear-armed and technologically agile adversaries, is becoming a trap of overreach.
