India and Israel on Thursday signed the Terms of Reference (ToR) of a free trade agreement (FTA) that marks the start of negotiations to reach a deal. The pact is expected to increase bilateral trade ten-fold in the next decade..
“India and Israel have decided to enter into negotiations for a FTA soon after having executed a bilateral investment treaty (BIT). And collectively FTA and BIT will open the doors for greater market access, flow of capital, investments and trade,” commerce and industry minister Piyush Goyal said after the signing of ToR in Tel Aviv.
While ToR for India was signed by Goyal, from the Israeli side Minister of Economy and Industry of Israel Nir Barkat initialled the document,
The ToR of a FTA formally launches the negotiations, outlines the areas it will cover and sets a roadmap and timelines of negotiations. The BIT between India and Israel was signed in September.
What did Piyush Goyal say?
“We will be aspiring for very large outcomes from our agreement. Rapid outcomes. We should aspire for a $ 30-40 billion bilateral trade in the next five years and look in the next decade to grow 10 times,” Goyal said. In 2024-25 India-Israel trade stood at $ 3.62 billion.
Israel’s comments
Israel’s trade minister Barkat said, “the foundation FTA that we have laid today will enable us to do things we would not have done with other countries.”
He said that the Israeli government is willing to help Israeli companies to invest in India through help in raising capital to deploy in India and share even a bit of risk of that investment. He also offered India access to critical defence technologies.
Goyal said that trade complementaries exist between India and Israel and they do not really compete with each other. “Sensitives on both sides will be respected,” he added.
The minister is on a three-day visit to Israel starting Thursday. He is also leading a 60 strong delegation of Indian businessmen. This visit follows the visit of 130 strong Israel business delegation to India in February for meetings with their Indian counterparts. It was the biggest business delegation from Israel that has visited any country and was led by Barkat.
Goyal’s visit comes just before the likely visit of Israeli President Benjamin Netanyahu to India next month. 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.