TEL AVIV/ NEW DELHI: On Thursday, India and Israel formalized the terms of reference (ToR) to initiate negotiations for a free trade agreement, as stated by commerce and industry minister Piyush Goyal. The ToR, which will serve as the foundation for discussions, encompasses market access for goods through the removal of tariff and non-tariff barriers, facilitation of investments, simplification of customs procedures, enhancement of cooperation in innovation and technology transfer, and relaxation of regulations to foster trade in services. “We will soon finalize the dates to commence the negotiations for this… Considering the complementarities and challenges faced by both nations, this can provide a solid foundation for bilateral trade relations and create new opportunities,” the minister remarked. Goyal, who is at the helm of a 60-member business delegation, also noted that Israel has indicated it will not pursue market access in sensitive sectors such as dairy, rice, wheat, and sugar. Previously, India and Israel had engaged in discussions for a similar agreement, with eight rounds of talks conducted. This new dialogue arises amidst India’s increasing interest in trade agreements as it aims to diversify its exports to mitigate risks. Israel is regarded as a vital ally due to the strategic nature of their relationship, although trade has not yet been a significant driving force. While Israel may not possess a large market, it is recognized for its advanced technology, and several Israeli firms could utilize India as a manufacturing base for the Indian market as well as for exports. Israel’s economy minister, Nir Barkat, expressed that India represents a promising investment opportunity. “Make In India is one of the most astute concepts and is pertinent for numerous Israeli companies,” he stated. In the fiscal year 2024-25, India’s exports to Israel decreased by 52% to $2.1 billion, while imports fell by 26% to $1.5 billion.
India and Israel are poised to initiate discussions regarding a free trade agreement
