New Delhi: India and Israel are moving into a deeper phase of cooperation driven by trade discussions, technology partnerships and strategic coordination, according to a new India Narrative report.
The report said the signing of the Terms of Reference in Tel Aviv to launch negotiations on a proposed Free Trade Agreement (FTA) marks the beginning of an upgraded bilateral engagement. Alongside the FTA push, both countries are developing a new bilateral investment framework and expanding sectoral cooperation in agritech, water, cyber and defence.
Officials from both sides are signalling a phased approach to the FTA, starting with an “early harvest” package covering low-contention items to deliver quick commercial gains, followed by a more complex second phase addressing sensitive sectors.
The report noted that the next stage of India–Israel ties will depend on how effectively the evolving legal and institutional architecture translates into on-ground projects. A new Bilateral Investment Agreement (BIA), set to take effect in 2025, is expected to provide stronger legal assurance to investors. It includes a shorter local-remedies period for Israeli investors and extends coverage to portfolio investments, an area where India has typically been cautious.
The renewed push comes as bilateral merchandise trade has slowed, with India’s exports to Israel falling to around $2.14 billion in 2024–25 and imports dropping to roughly $1.48 billion, bringing total trade to about $3.6 billion.
Israel has also become India's first Organisation for Economic Co-operation and Development (OECD) partner to sign a modernised BIA, positioning the relationship as a testing ground for more advanced capital-flow frameworks.
According to the report, India should prioritise a phased FTA focused on high-technology goods, services and innovation, while expanding pilot collaborations in agritech, water management and cyber security into national-level programmes. Strengthening defence industrial cooperation should also remain a key priority, it added.
With IANS inputs