Tel Aviv, Nov 20 (PTI) India and Israel on Thursday inked terms of reference (ToR) to formally launch negotiations for a free trade agreement, Commerce and Industry Minister Piyush Goyal said.
The ToR include market access for goods by eliminating tariff and non-tariff barriers, investment facilitation, simplification of customs procedures, increasing cooperation for innovation and technology transfer, and easing norms to promote trade in services.
“We have signed the ToRs today. Now we will soon finalise the dates for starting the negotiations for that,” Goyal told reporters here. Goyal, who is leading a 60-member business delegation to Israel, met leaders and businesses to discuss ways to boost bilateral trade and investments.
He said that services such as IT, tourism and movement of skilled professionals will get a boost from the proposed pact.
Both countries will make a bridge for the movement of skilled professionals like doctors, engineers and nurses, he added.
The TOR was signed by Goyal and Israeli Economy and Industry Minister Nir Barkat.
Goyal said that the Israeli side has conveyed that they will not seek market access in sensitive areas such as dairy, rice, wheat and sugar.
He also informed that Israel has come out with pre-qualification documents for a metro project. It is a USD 50 billion (Rs 4.5 lakh crore) worth project and Indian companies can participate in this, Goyal said, adding that at present, in over 20 cities, India has metro lines.
India and Israel had been negotiating a similar agreement since May 2010. Eight rounds were held, but talks stalled later. The last round was held in October 2021.
“We have already agreed that whatever will be the sensitivities of Israel, India will keep out that from the agreement and similarly, whatever is sensitive for India, Israel will keep that,” he said, adding, “We want a win-win agreement for both the countries”.
During 2024-25, India’s exports to Israel dipped 52 per cent to USD 2.14 billion from USD 4.52 billion in 2023-24. Imports, too, fell 26.2 per cent to USD 1.48 billion last fiscal year. The bilateral trade stood at USD 3.62 billion.
India is Israel’s second-largest trading partner in Asia.
Though bilateral merchandise trade is dominated mainly by diamonds, petroleum products, and chemicals, recent years have witnessed an increase in trade in areas such as electronic machinery and high-tech products, communications systems, and medical equipment.
Major exports from India to Israel include pearls and precious stones, automotive diesel, chemical and mineral products, machinery and electrical equipment, plastics, textiles, apparel, base metals and transport equipment, and agricultural products.
Imports include pearls and precious stones, chemical and mineral/fertiliser products, machinery and electrical equipment, petroleum oils, defence, machinery, and transport equipment.
“The FTA will open the doors for greater market access, flow of capital, ..both in goods and services, remove obstacles in doing business, provide clarity and predictability to our economic engagement,” Goyal said.
In September, both countries inked a Bilateral Investment Agreement (BIA), under which India reduced the local remedies exhaustion period for Israeli investors to 3 years from 5 years.
During April 2000 and June 2025, India received USD 337.77 million foreign direct investment (FDI) from Israel.
When asked about the boost the FTA will give to the bilateral trade, Barkat indicated a 10-fold increase.
Goyal said it can help push trade to USD 30-40 billion over the next five years.
Barkat added that he would like Israeli companies to invest in India as the country can become a centre to serve the whole of Asia for Israeli firms.
“India is one of the best friends that Israel has around the world,” he said, adding Israel has technologies to boost productivity, and it can share that with India.
He added that Isreali companies understand the potential of India and “We have to make the ecosystem simple”. PTI RR MR
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