Mumbai’s  terrorist attacks( nariman House) seems to break the  good relationships in future between India and Israel.  Two Indian companies were on the verge of signing large deals with the Israeli government and a large delegation of Israeli businessmen and industrialists was scheduled to visit Mumbai in December.

According to government sources, two large Indian industrial houses have won mega contracts from the Israeli government. One of these will provide vehicles to Israel Defence Forces (IDF), while the other is planning to set up a large software park in the Holy Land. Interestingly, it’s the first time the IDF is buying a vehicle not built by US or German automakers.

However, this first ever attack in India on an Israeli target may force both the governments to reschedule the delegation’s visit. A senior central government functionary indicated to ET that this is not being seen as a random attack but as a carefully targeted one.

Said the official: “There is growing interest in both countries to collaborate in numerous areas. Many large Indian companies are finalising plans to set up or expand operations in Israel. The attack on Chabad centre in Mumbai is to try and snap this relationship.” Until now, the diamond industry has been the most significant contributor to Indo-Israeli trade.

The list is growing now, with engineering, chemicals, telecom and textiles industries gaining in prominence. Efforts to get an Israeli viewpoint on the issue were futile. However, Yoram Schweitzer of Tel Aviv University’s Institute for National Security Studies admitted in leading Israeli daily ’Haaretz’, that “the broad security co-operation between Israel and India increased motivation for the attack”.

Indo-Israeli business relations are on a roll. Bilateral trade is set to touch $3.3 billion this year, some 20% more than the previous year. India is emerging as one of Israel’s largest global trading partners. In Asia, India has overtaken China, and is placed after Hong Kong and Japan as far as trade with Israel is considered.

But this does not include Israeli defence business with India. Though governments do not reveal details about defence deals, it’s estimated that Israel is set to replace Russia as India’s second-largest defence supplier.Last year, this tiny nation is believed to have supplied defence equipment worth $1.5 billion.

In the past three years, India has bought defence equipment worth $5 billion from Israel. Two weeks ago, defence secretary Vijay Singh led a delegation to Israel to discuss the purchase of AWACS planes and missiles from Israel Aerospace Industries.

The terrorists’ choice of the Israeli centre in Mumbai could partly be driven by the fact that a large number of Israeli companies have, over the past three years, invested in the property market around Mumbai. There are many property deals either in the pipeline or at various stages of completion.

Jerusalem Economic Corporation (JEC), through its Indian subsidiary, was eyeing a huge tract of farm land in Thane district. The deal size could be around $300 million, sources say.

Last year, Elbit Medical Imaging, an Israeli medical equipment maker, had signed an agreement with Ambuja Realty to invest over $1 billion in India. It plans to invest in hospitals and hotels, besides establishing a chain of hospitals in partnership with Ambuja.

Another Israeli group, Alony Hetz, has set up a consortium with Israeli and Australian companies to invest in Indian real estate sector. Alony Hetz holds 40% share in the consortium that plans to invest $100 million. It recently signed an MoU to build a $160-200 million, 450,000-sq m holiday home project near Mumbai. Electra Real Estate, Nochi Dankner and Gershon Salkind have also charted plans for Indian realty sector.

The Indo-Israeli connection, of course, transcends business. “Some 25,000 to 30,000 Israeli youths — apart from business visitors and regular tourists — take a break in India after completing rigorous, mandatory military training. Goa, Himachal Pradesh and Mumbai are popular tourist destinations for Israelis. So, one can imagine why Mumbai was the first target for an attack on Israeli centres in India,” said a home ministry official.

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