Israeli Economy and Industry Minister Nir Barkat said that the proposed Free Trade Agreement (FTA) between Israel and India will open up important business opportunities for the industries of both the countries and promote bilateral trade and investment flows.
He said that both the countries have signed the Terms of Reference (TOR) here on November 20 to start negotiations on the agreement. Barkat said that both the countries have decided not to include sensitive areas in the FTA talks. He told news agency PTI, ‘There are immense opportunities to promote trade and investment between the two countries. We are going to see huge growth in business.
Barkat said that many Israeli companies are interested in opening their subsidiaries in India, which can serve as a gateway to Asia for them. He said, ‘People are now realizing that there are huge opportunities (in India) because India is no longer the India of yesterday.’
The Israeli minister said that India is in a good position to compete with China. The elements of the TOR include market access for goods by eliminating tariff and non-tariff barriers, investment facilitation, simplification of customs procedures, enhanced cooperation for innovation and technology transfer and easing of norms to promote trade in services.
India and Israel were negotiating a similar agreement since May 2010. The talks stopped after eight rounds of talks. The last round of talks took place in October 2021. India’s exports to Israel declined by 52 percent to US $ 2.14 billion in the financial year 2024-25 from US $ 4.52 billion in 2023-24. Imports also declined by 26.2 percent to 1.48 billion US dollars. Bilateral trade stood at 3.62 billion US dollars.
India is Israel’s second largest trading partner in Asia. Bilateral trade mainly involves diamonds, petroleum products and chemicals but recent years have also seen growth in sectors such as electronic machinery and high technology products, communication systems and medical devices.
Major export items from India to Israel include pearls and precious stones, motor vehicles diesel, chemical and mineral products, machinery and electrical equipment, plastics, textiles, apparel, base metals and transport equipment and agricultural products.
The two countries had signed a Bilateral Investment Agreement (BOEA) in September. Under this, India has reduced the local processing period for Israeli investors from five years to three years. Israel is the first member of the Organization for Economic Co-operation and Development (OECD) with which India has signed this agreement. India received Foreign Direct Investment (FDA) of US $ 337.7 million from Israel between April 2000 and June 2025.