Middle East War Strengthens India-Israel-Gulf Economic Ties, Experts Say

Despite ongoing Middle East conflicts, business leaders and analysts argue that economic partnerships between India, Israel, and Gulf nations are becoming more resilient rather than weakening. The relationships span cybersecurity, defense technology, and infrastructure projects that have developed deep roots beyond political agreements.

Ongoing Middle East conflicts have sparked concerns in diplomatic and business communities about whether warfare might disrupt the growing economic connections between India, Israel, and Gulf nations. However, industry insiders suggest the opposite is occurring—the current crisis is demonstrating just how deeply rooted these partnerships have become and how challenging they would be to dissolve.

Ayush Singh, who founded the New Delhi-based cyber intelligence company ARPSyndicate, believes these relationships have evolved beyond dependence on any single administration or political climate.

“This partnership is not dependent on political leadership,” Singh explained to The Media Line. “It’s going to continue, and honestly, we can’t even predict how deep it will go.”

Some aspects of this framework are clearly visible. Trade agreements between the UAE and India, the Israel-UAE deal that emerged from the Abraham Accords—the 2020 diplomatic normalization between Israel and multiple Arab nations—and the EU-India agreement signed in January have created fresh commercial pathways throughout the region. Singh notes that beneath the surface lies a more complex network: military partnerships, acquisition processes, government approvals, and trust relationships developed over many years.

According to Singh, these connections existed before the Abraham Accords. Indian security personnel collaborated with Israeli colleagues in joint missions, built operational confidence, and subsequently brought those relationships into private industry after leaving government service.

Israeli companies recruited some of these former officials, leading to technology sharing arrangements. Singh emphasized these weren’t merely symbolic gestures or experimental startups. They emerged from established professional connections and received authorization from Israel’s Ministry of Defense, which must approve exports of offensive cyber technologies.

This development has created a specialized market in India. Singh reports that approximately 15 to 20 lawful interception suppliers—companies that provide surveillance and communications monitoring technology to governments—are now competing in that space. He says Israeli firms maintain preferred vendor status partly because they have invested years addressing specific operational challenges for Indian agencies.

“Every ministry, every agency has a gap in what they can do,” he noted. “Not everyone knows about these gaps. Only people at the leadership level know. But when you share one of those gaps with an Israeli vendor, they will pour money and resources into solving it, because they take the challenges Indians face seriously in a way that domestic vendors or American companies simply don’t match.”

While Singh describes the current foundation, Israeli investor and entrepreneur Erel Margalit is working to construct something more ambitious on that base.

“War cannot be won just on the battlefield,” Margalit stated in a phone conversation with The Media Line. “You need a diplomatic move at the end.”

Margalit envisions expanding bilateral relationships into a comprehensive India-Israel-UAE economic alliance connecting technology, investment capital, and infrastructure. He contends that India, Israel, and the UAE could serve as the foundation for a broader regional network combining Israeli innovation, Indian engineering capabilities, and Gulf financing.

“India, Israel, and the UAE hold the key to the next phase of the region,” he declared.

Two months before the current war started, Margalit assembled 450 entrepreneurs, investors, and technology leaders from Israel, Europe, the United States, and the UAE in Dubai to explore this concept. The group included founders and executive teams from Israeli artificial intelligence and cybersecurity companies, such as ControlUp, ThetaRay, Chain Reaction, and Quali. He said the most notable aspect was how Indian participants were already envisioning their role.

“The one thing that really stuck out was that in a lot of these conversations, we had Indian partners who said, ‘Yes, and we need to tie this to an ecosystem here. It’s a three-and-a-half-hour flight to India,'” Margalit recalled. “I found the conversations very engaging and eye-opening about what can be done.”

For Margalit, this represented part of an ongoing effort, not a single event. He remembered that shortly after the Abraham Accords, before regular commercial flights between Israel and the UAE had begun, he chartered an aircraft and traveled there with his companies.

“We didn’t come for symbolism,” he said. “We came to bring real value through technology and business.”

His current priority involves what he terms micro-vertical AI: specialized systems designed for specific sectors including banking, insurance, cybersecurity, and critical infrastructure. In simpler terms, he’s discussing customized AI systems integrated into the essential operations of major industries, rather than consumer-oriented applications. India’s engineering capacity, he argues, makes it a logical partner, while Abu Dhabi provides a practical pathway for expanding business relationships even without complete political normalization between India and Israel.

Some of this expansion is already evident. Jonathan Zanger, chief technology officer at Israeli cybersecurity company Check Point Software Technologies, told The Media Line that India has become a significant center in the company’s worldwide engineering operations, with Israeli and Indian engineers working together on fundamental products.

“India is a central engineering and capability-building hub for us,” Zanger confirmed.

The partnership is also extending beyond cybersecurity. Earlier this year, more than 550 representatives from international infrastructure firms met in Tel Aviv to discuss contracts for the $50 billion Tel Aviv Metro project. Multiple Indian companies participated, including the Delhi Metro Rail Corporation, indicating a broader transition from technology collaboration to physical infrastructure development.

This same reasoning drives interest in the India-Middle East-Europe Economic Corridor, or IMEC, a proposed network of ports, railways, energy connections, and digital infrastructure designed to link India to Europe through the Gulf and Israel. Given current warfare and threats to major shipping routes, the project has gained additional strategic importance as governments seek secure alternative pathways.

Speaking at the Raisina Dialogue, the annual geopolitical conference hosted by India’s Observer Research Foundation, former Indian Ambassador to the UAE Sanjay Sudhir said momentum behind the corridor remains strong. An intergovernmental framework agreement has been signed, a digital trade platform to simplify customs is functioning, and feasibility studies are proceeding for projects including undersea power connections between India and the Gulf.

Harsh Pant, vice president for studies and foreign policy at the Observer Research Foundation, said the war has delayed implementation but hasn’t altered the overall direction.

“We have not seen a declining commitment,” Pant observed. “It’s just that things have happened in the region.”

The war, however, is testing more than physical trade routes. Corridors like IMEC depend as heavily on digital systems as on ports, rail, and power connections. This is where the conflict is revealing another layer of vulnerability. Zanger cautioned that geopolitical tensions are increasingly affecting the cyber realm, where attacks can disable the systems modern economies rely upon.

“I don’t think the world is very protected,” he warned. “This mega cybersecurity incident based on AI has not happened yet. But my concern is that it is going to happen.”

Singh provided a more specific example. He said Iran has invested years studying vulnerabilities in surveillance cameras, most of which are manufactured in China. If those weaknesses are being shared, he explained, Tehran can purchase access rather than develop reconnaissance capabilities independently.

“They can buy a single exploit and gain visibility into a location,” Singh said. “We’ve seen this in practice.”

In his assessment, this type of attack matters both militarily and economically. Inexpensive cyber tools and low-cost reconnaissance methods can compel governments to respond with far more costly defenses.

“They’re using very cheap methods. They fail a lot. But when they succeed, they succeed cheaply, and you’re countering those cheap weapons with expensive ones. Economically, you’re the one taking the hit.”

He argued that India cannot approach this conflict the way it handled the Russia-Ukraine war—as a significant international crisis with limited direct impact. India’s connections to the Middle East run deeper, affecting workers, services, trade routes, and supply chains.

“In wars, that kind of damage rarely gets counted,” he said. “But it’s real.”

Singh said only the United States and Israel currently provide the modeling capabilities India requires to understand that exposure in real time.

“They’re the ones who can model actual collateral—if we do X and it goes wrong, what’s the damage? That’s not a calculation a person makes anymore. It requires algorithms, advanced systems. India can’t go anywhere else for that.”

When asked whether the war will ultimately accelerate or complicate the regional integration he has promoted for years, Margalit said the outcome will depend on whether political and business leaders view this moment as an opportunity rather than merely a crisis.

“Military victory is only the first step,” Margalit said. “Wars are ultimately won through diplomatic clarity, agreements, and alliances that can move the region forward.”

He said the next phase must be built on new alliances, economic cooperation, and a shared strategic vision connecting the UAE, Saudi Arabia, Bahrain, Kuwait, Jordan, and Egypt with Israel and the United States.

This perspective is finding support in Europe as well. Italian Foreign Minister Antonio Tajani, speaking after a Monday call with India’s Foreign Minister S. Jaishankar about the partial Hormuz blockade, said the crisis demonstrated why secure infrastructure and alternative routes are important. He referenced IMEC as the framework and is scheduled to open an IMEC forum in Trieste on Tuesday.

For Margalit, the strategic reasoning is already advancing faster than the diplomacy. Since Iran began attacking Gulf infrastructure, Israel has engaged in active security cooperation with nations with which it maintains no formal diplomatic relations.

“The next step is to take it to more of a formal alliance,” Margalit said. “I think it is already being discussed.”

In this context, the war may not be dismantling the India-Israel-Gulf network at all. It may be increasing pressure to formalize relationships that, in business, technology, and security, already function in practice.