Trade between India and Israel will get a boost. (PTI)
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Digital Desk, New Delhi. India and Israel have started the first round of negotiations for a free trade agreement here with the aim of further enhancing commercial relations and promoting investment. In November last year, the two countries had signed the Terms of Reference (ToR) to formally begin negotiations for the agreement.
"The first round of negotiations for the India-Israel Free Trade Agreement (FTA) began on February 23, 2026, in New Delhi, and will continue till February 26, 2026," the Commerce Ministry said.
In such agreements, both parties significantly reduce or eliminate import duties on most of the goods traded between them. Furthermore, they ease regulations to promote trade in services and investment.
The ToR includes improving market access for goods by eliminating tariff and non-tariff barriers, facilitating investment, simplifying customs procedures, enhancing cooperation for innovation and technology transfer, and simplifying rules to promote trade in services.
First round of talks on FTA begins
During this round, technical experts from both sides will engage in sessions covering different aspects of the FTA such as trade in goods, trade in services, rules of origin, sanitary and phytosanitary measures, technical barriers to trade, customs procedures and trade facilitation, and intellectual property rights, the statement said.
During the opening session, Commerce Secretary Rajesh Aggarwal highlighted the huge opportunities that exist for both sides in sectors such as innovation, science and technology, artificial intelligence, cyber security, high-tech manufacturing, agriculture and services.
India's Chief Negotiator is Ajay Bhadu, who is Additional Secretary in the Department of Commerce. Israel's Chief Negotiator for the FTA is Yifat Alon Perel, Senior Director Trade Policy and Agreements.
Increase in trade of communication systems and medical equipment
India's exports to Israel are expected to decline by 52 per cent to USD 2.14 billion during 2024-25 from USD 4.52 billion in 2023-24. Imports also declined by 26.2 percent to USD 1.48 billion in the last fiscal year. Trade between the two countries stood at USD 3.62 billion. India is Israel's second largest trading partner in Asia.
Although merchandise trade between the two countries mainly consists of diamonds, petroleum products and chemicals, recent years have seen growth in trade in areas such as electronic machinery and high-tech products, communication systems and medical equipment.
Main exports from India to Israel
Major exports from India to Israel include pearls and precious stones, automotive diesel, chemical and mineral products, machinery and electrical equipment, plastics, textiles, clothing, base metals and transport equipment, and agricultural products. Imports include pearls and precious stones, chemical and mineral/fertilizer products, machinery and electrical equipment, petroleum oil, defence, machinery and transport equipment.
Commerce and Industry Minister Piyush Goyal had said in Tel Aviv in November, "The FTA will provide greater market access, flow of capital, both goods and services, removal of barriers to doing business, and clarity and predictability in our economic engagement."
(With inputs from news agency PTI)
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