India cools military ties with Israel as thirst for Iranian oil grows New Delhi appears to be purposefully cooling its long-standing and intense military cooperation with Israel as India's dependence on oil and gas imported from Iran grows. In a move last week, largely overshadowed by India's successful test of an Agni-5 missile with a range of 5,000 kilometres and capable of raining nuclear warheads on most of China, New Delhi took an unprecedented swipe at an Israeli arms company. Israel's Military Industries (IMI) had a $70-million guarantee confiscated by the New Delhi government and was banned from doing business in India for 10 years for allegedly attempting to bribe the director-general of India's OFB (Ordinance Factory Board). It was the first time the Indian government has ever penalized a foreign company for breaching contractual anti-bribery provisions. In a country where backhanders are more the norm than the exception, this was clearly a move intended to send a message. The symbolism of the New Delhi government's action has not been lost on anyone, especially as Israel has for years been the first or second major supplier of military equipment to India, their intelligence ser-vices have cooperated since the 1960s, and most recently they have worked closely together to counter Islamic terrorist groups. But as India works to find ways around the American-led new round of sanctions against Tehran, aimed at halting Iran's nuclear development program, New Delhi appears ready to sacrifice its close military liaison with Israel to maintain its supply of oil. India imports about 12 per cent of its oil requirements from Iran, at a cost of about $11 billion a year. There is also the prospect of a direct pipeline link across southern Pakistan to Iran's huge Pars natural gas reserves. Early last week, Israel made every effort to dissuade New Delhi from making its potentially far-reaching gesture against their bilateral military and intelligence relationship. Israeli Prime Minister Benjamin Netanyahu dispatched his security adviser Yaacov Amidror to New Delhi to try to sort things out with Indian Defence Minister A.K. Antony, but to no avail. In competition with four other bidders, the Israeli company, IMI, obtained the $260-mil-lion contract to build a factory for OFB to manufacture specialized charges for the Indian army's 155-mm howitzers. The contract contained an anti-bribery "integrity pact" and it was this that was invoked by the New Delhi government to seize the $70-million guarantee. The Israeli company denies the allegation and points out that an Indian court has already ruled that the government's seizure of the money was improper. IMI intends to appeal the decision. Now, it is entirely possible that India's apparent breach with Israel is a piece of performance art aimed at promoting confidence in Tehran, affirming New Delhi's independence from Washington's apron strings, and placating the pro-Palestinian left-wing parties in the Indian parliament on which the government of Prime Minister Man-mohan Singh often depends for survival. There are many governments that find it politic to vilify Israel in public while happily doing business or fostering security links in private. Israel is used to dealing with such antics and is usually happy to go along with the charade. India, the country with the world's second-largest Muslim population after Indonesia, did not establish diplomatic relations with Israel until 1992. However, the Indian intelligence service, the Research and Analysis Wing, and its Israeli counterpart Mossad have worked together since the late 1980s against perceived threats, such as Islamic extremism in the Middle East and Pakistan, and the weapons proliferation habits of China and North Korea. This relationship became closer and more pointed after the 2008 attack by Pakistan-based terrorists on India's commercial centre, Mumbai. India has become the largest customer for Israeli military equipment, spending about $1.5 billion a year on average. For India, Israel is its second-largest arms supplier after Russia, though in some years Israel is the top source. The materials supplied by Israel range from rifles and anti-missile defence systems to the most sophisticated spy satellites. And Israel has used Indian waters to test its submarine-launched, nuclear-capable cruise missiles. The two countries also cooperate extensively on the development of military systems, especially missiles. It would also be surprising if there were not some Israeli elements in India's Agni-5 missile launched two days after the public pillorying of the Israeli company IMI.