New Delhi. Relations between India and Israel have always been special, but the recent meeting in Jerusalem has given this relationship a new height. Commerce and Industry Minister Piyush Goyal met Israeli Prime Minister Benjamin Netanyahu and also handed over a special message sent by Prime Minister Narendra Modi. In this meeting, both the countries signed the Terms of Reference to start official negotiations on India-Israel Free Trade Agreement i.e. FTA. This is not just a paper process but a blueprint to decide the entire structure of the future economic partnership of the two countries.
During this three-day visit, high level meetings were held between the Indian business delegation and Israeli companies. The Business Forum and CEO Forum worked to directly connect industrialists, tech companies and startups of both the countries. Indian companies like Tata, Reliance and Israeli companies like Check Point Software, MobilEye now seem ready to move forward in the direction of greater cooperation.
The friendship between Modi and Netanyahu strengthened this partnership.
One thing became clear during Piyush Goyal’s visit that the foundation of relations between India and Israel is not just on trade but on trust and political coordination. Netanyahu clearly said that India and Israel together are building economic power and preparing a strong economic corridor for the future. This is important because India is playing a big role in the Middle East India Economic Corridor i.e. IMEC. This is the same corridor which in future can become a fast trade route from India to Europe via Israel.
What is ToR and how will it lead to FTA?
The Terms of Reference is the document that sets the entire framework for the upcoming FTA negotiations. Consider it like before making a big economic agreement between two countries, deciding on which topics will be discussed, which sectors will be considered sensitive, on which goods the duty will be reduced and in which timeline the entire process will be completed.
In this ToR, both the countries have decided that the talks will be held in two phases and the first phase will be completed by 2026. The target has been set to prepare the entire FTA by 2027. Issues like goods, services, investment, intellectual property, rules of origin and dispute mechanism have been included in this. The special thing is that both the countries have agreed to keep sensitive areas safe so that there is no direct pressure on farmers and small industries.
Which sectors should become the center of India-Israel talks?
In this meeting, not only trade but also strategic cooperation got more importance. Both sides agreed to do deeper work in these areas.
High Tech and Innovation
Israel’s technology in areas like cyber security, chip design and artificial intelligence will connect with India’s vast market and young talent. High tech corridor between Bengaluru and Tel Aviv was also discussed.
agriculture and irrigation
Drip irrigation, water conservation and high yield seeds will expand in India. This can strengthen farming in areas like Rajasthan and Gujarat.
water management
Desalination technology and waste water recycling will help in reducing India’s urban water problem.
defense technology
The possibility of joint production in drone, cyber warfare and missile technology will increase. The defense strategy of self-reliant India will directly benefit.
Startups and Science
Startups of India and Israel will be linked so that joint innovation can be promoted. Partnership will also be increased in space and biotech.
Big benefit of this FTA for India
- This agreement can be beneficial for India on many levels.
- Trade could increase from $10 billion to $20 or 25 billion.
- Exports of pharma and IT services from India will increase while Israel’s high tech machinery and components will be available cheap in India.
- There will be a possibility of 1 to 2 lakh new jobs in sectors like tech, agriculture and cyber.
- Due to IMEC corridor, India will get a new fast trade route to Europe.
However, there will also be challenges such as providing security to small industries and handling the geopolitical situations of the Middle East. But overall this partnership is a big step towards making India a global innovation hub.
A new economic powerhouse is being prepared
At the end of the meeting, Piyush Goyal clearly said that this partnership between India and Israel will create the economic power of the future. Netanyahu also said that this relationship is not just friendship but an engine of economic progress. With FTA in the next two years, both the countries want to create an economic chain that can impact from Asia to Europe.
