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Indian passports issued before 1992 carried two exclusions: The document was not valid for South Africa or Israel. If you wished to travel to the latter, the visa was issued by the Israeli Consulate in the erstwhile Bombay as a separate document without a passport stamp. That changed when the two nations established full diplomatic relations.
However, there was a strong, if clandestine, relationship. During the Indo-Pak War of 1965, Israel supplied mortar shells and other munitions. In 1971, Israel again supplied munitions. By the Kargil War of 1999, the defence relationship was well-established and no longer clandestine. Israel supplied sophisticated laser-guided munitions for the Mirage 2000 as well as reportedly provided intelligence inputs.
Israel is now the third-largest supplier of defence