In a significant diplomatic development, India and Israel have reignited their economic partnership after a prolonged hiatus, with both nations committing to accelerate negotiations for a comprehensive Free Trade Agreement (FTA). The renewed push came during Commerce and Industry Minister Piyush Goyal's high-profile meetings with Israeli Prime Minister Benjamin Netanyahu and President Isaac Herzog in Jerusalem on Sunday.
Strategic Meetings in Jerusalem
The meetings mark a crucial turning point in bilateral relations, coming after more than a decade of stalled progress on trade liberalization. Piyush Goyal led a 60-member delegation facilitated by industry chambers, signaling India's serious intent to deepen economic engagement with Israel.
Following his meeting with the Indian minister, Prime Minister Benjamin Netanyahu announced that both countries were entering a new phase of enhanced cooperation. In a post on social media platform X, Netanyahu emphasized the strategic importance of the partnership, stating: "Israel and India are strengthening our strategic partnership, more investments, more innovation, and a strong economic corridor from India through Israel to Europe. Together we are building economic power."
FTA Negotiations Back on Track
The diplomatic exchanges culminated in a significant milestone on November 20, when both sides signed the terms of reference for the FTA. During the signing ceremony, Goyal and Israel's Minister of Economy and Industry Nir Barkat expressed confidence that the negotiations would progress constructively toward a balanced and mutually beneficial agreement.
This development assumes particular importance given the recent contraction in bilateral trade. Official data reveals that India's exports to Israel plummeted from $4.52 billion in FY24 to $2.14 billion in FY25, while imports declined from $2 billion to $1.48 billion during the same period.
The FTA negotiations have experienced multiple delays since their inception in May 2010. The eighth round of talks held in November 2013 had stalled over several contentious issues, including:
- Pharmaceutical market access
- Tariff reduction on plastic and chemical products
- Rules of origin requirements
- Services mobility provisions
Areas of Strategic Cooperation
Trade experts identify several sectors with significant potential for enhanced collaboration under the proposed FTA framework. The agreement could unlock substantial opportunities in:
- Cybersecurity and digital services
- Agricultural technology and precision farming
- Clean energy solutions
- Food processing industries
- Water management technologies
According to Binod Anand, Secretary General of the Confederation of NGOs of Rural India, agriculture represents a natural area for collaboration. "Israel's strengths in precision farming, water-use efficiency and protected cultivation align well with India's needs, especially as climate stress rises," Anand noted, adding that a comprehensive trade framework could accelerate technology transfer and reduce costs of critical equipment.
The renewed engagement reflects strategic alignment between both nations. For India, Israel represents another crucial partner in its broader strategy to diversify export markets and reduce dependency on traditional partners. For Israel, closer ties with India offer access to one of the world's fastest-growing markets and strengthen its economic partnerships in Asia amid evolving geopolitical dynamics.
While both sides have demonstrated political will to revive the FTA process, no specific timelines for concluding the negotiations have been announced. The successful conclusion of this agreement could potentially transform the economic relationship between the two nations and create a robust economic corridor connecting India with European markets through Israel.
