FTA Negotiations Set to Reinforce India-Israel Economic Partnership

• India and Israel have signed terms to begin formal FTA negotiations.
• The pact aims to boost trade, investments, and business opportunities across sectors.
• Sensitive areas will be excluded from the early stages of negotiations.

India and Israel are preparing to restart discussions on a long-awaited free trade agreement (FTA), a move expected to strengthen economic ties and unlock major business opportunities for both nations. Israeli Economy and Industry Minister Nir Barkat said the agreement could significantly increase bilateral trade and investment flows as companies on both sides look to expand.

Both countries signed the Terms of Reference (ToRs) on November 20, marking the official start of FTA negotiations. Barkat noted that sensitive sectors will not be part of the initial talks, allowing negotiators to focus on areas with strong growth potential.

He said many Israeli companies are keen to set up subsidiaries in India, using the Indian market as a strategic gateway to Asia. According to him, global investors now view India as a fast-growing, competitive economy capable of rivaling major markets like China.

The ToRs outline key goals, including greater market access for goods by reducing tariff and non-tariff barriers, smoother investment processes, easier customs procedures, stronger cooperation in innovation and technology transfer, and simpler rules for trade in services.

India and Israel have attempted to negotiate an FTA before, holding eight rounds of talks between 2010 and 2021. Discussions eventually paused, but both governments now aim to revive the process.

Also Read: India and Russia Advance EAEU Trade Agreement to Strengthen Bilateral Growth

Bilateral trade stood at USD 3.62 billion in 2024-25, with exports from India falling sharply due to global conditions. Israel remains India’s second-largest trading partner in Asia, with trade expanding beyond traditional sectors like diamonds and chemicals to include machinery, electronics, medical devices, and high-tech products.

In September, both nations signed a Bilateral Investment Agreement to promote two-way investments. Israel has invested USD 337.77 million in India between April 2000 and June 2025.

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