India and Israel may negotiate their free trade agreement (FTA) in two phases so that in areas where convergence of the views is faster, the business communities from both sides can start benefiting from it earlier, Commerce and Industry Minister Piyush Goyal said on Sunday.
Prioritising “Low-Hanging Fruit”
The minister said that he and Israeli Economy and Industry Minister Nir Barkat have agreed that they will first focus on low-hanging fruit in the FTA. They have also decided not to avoid the sensitive issues on both sides in the FTA negotiations.
“ Both ministers are keen to finalise the first phase early so that the trade community benefits sooner,” Goyal said in Jerusalem.
Goyal is leading a 60-member business delegation to Israel. This visit follows the visit of 130 strong Israel business delegation to India in February for meetings with their Indian counterparts.
On the concluding day of the visit that began on November 20, Goyal met Prime Minister of Israel Benjamin Netanyahu and President Isaac Herzog. At the minister’s meeting with Netanyahu FTA issues that aim to boost trade, investment and technology cooperation came up for discussion, Goyal posted on X.
Netanyahu is expected to visit India next month.
“Discussed strengthening our innovation partnership by combining Israel’s tech strengths with India’s scale and talent. Took his guidance on further deepening bilateral economic and strategic engagement across sectors of agriculture, water, defence, science and technology and innovation,” Goyal posted on X.
Quadrupling trade via tech and investment
On November 20 India and Israel signed the Terms of Reference (ToR) of their FTA that marks the start of negotiations to reach a deal that will help grow the bilateral trade ten-fold in the next decade. The FTA follows the Bilateral Investment Agreement (BIA) both countries entered into in September this year.
The ToR of a FTA formally launches the negotiations, outlines the areas it will cover and sets a roadmap and timelines of negotiations. With the FTA both sides are aiming to take their bilateral trade to $ 30-40 billion in the next five years from $ 3.62 billion at present. India’s exports to Israel stood at $ 2.14 billion in 2024-25 and imports were $ 1.48 billion.
Both sides are of the view that FTA and BIA will complement each other and lead to greater trade and investment flows. Israeli minister for Economy and Industry of Israel Nir Barkat said that his government may even look at supporting investments from Israel into India through help in raising capital to deploy in India and share even a bit of risk of that investment.
India’s biggest exports to Israel are gems and jewellery, machinery and chemicals. Fertilizers, precious and semi-precious stones, and machinery are the biggest items of import.
