India, Israel strategic cooperation

Global Trade Research Initiative (GTRI) said Israel is a high-income, technology-driven market of under 10 million people, limiting demand for Indian mass-market exports such as textiles, automobiles or general engineering goods

The renewed push by India and Israel to restart free trade agreement (FTA) talks should be guided more by strategic cooperation in areas such as defence manufacturing, electronics, semiconductors, water and irrigation technology, precision agriculture, and cybersecurity than by gains in merchandise trade, think tank GTRI said on Monday.

The Global Trade Research Initiative (GTRI) said Israel is a high-income, technology-driven market of under 10 million people, limiting demand for Indian mass-market exports such as textiles, automobiles or general engineering goods.

In sectors where India is competitive -- agriculture, generics, steel, chemicals -- Israel is either self-sufficient, tightly regulated through quality and phytosanitary norms, or already offers tariff preferences to partners like the EU and the US.

This keeps Indian products at a structural disadvantage and as a result, commerce remains concentrated in a few niche categories such as diamonds, rice and ceramic tiles, it added.

“For both countries, therefore, the value of the renewed FTA effort lies less in merchandise trade and more in strategic cooperation -- in defence manufacturing, electronics, semiconductors, water and irrigation technology, precision agriculture, cybersecurity, and frontier R&D,” GTRI Founder Ajay Srivastava said.

The two countries last week inked terms of references to formally start FTA talks again soon. New Delhi and Jerusalem first opened FTA talks in 2010, held several rounds through 2012-13, and then allowed the process to drift after 2014 as both sides struggled over tariffs, standards and access for sensitive products.

After nearly a decade of inactivity, the effort has been re-energised following a series of high-level exchanges in 2024-25, the two governments have finalised new Terms of Reference to relaunch negotiations, he said.

India exported $2.1 billion in goods, led by cut and polished diamonds ($555 million), rice ($102 million), organic chemicals ($96 million), ceramic tiles ($81 million) and aircraft parts ($54 million). Imports from Israel reached $1.5 billion, dominated by diamonds ($333 million), electronics ($350 million), including integrated circuits ($117 million) and electronic components ($66 million), as well as fertilisers ($135 million), insecticides ($63 million), and machinery ($91 million).