January 15, 2018
PM Netanyahu was accompanied by a team of around 130 executives, the largest-ever business delegation from Israel, representing a cross-section of industries seeking to partner with India
India and Israel, traditional partners in the fields of defence and agriculture and bound by deep cultural roots, have sought to expand bilateral collaborations across a multitude of sectors
Bilateral trade between India and Israel, an integral part of thriving diplomatic relationship, has steadily increased from around US$200 million in 1992 to about US$4.5 billion a year ago
The two countries will start an annual exchange of bilateral visits by 100 young people from science-related study streams. Additionally, an Indian Cultural Center will soon open in Israel
Prime Minister Shri Narendra Modi on January 15th welcomed Israel’s Prime Minister, Benjamin Netanyahu, who is on a six-day state visit to India. This marks PM Netanyahu’s first visit to India and comes at a time when India and Israel are commemorating 25 years of diplomatic relations. PM Netanyahu’s visit comes roughly six months after PM Modi’s momentous trip to Israel. The two countries, traditional partners in defence and security and bound by deep cultural roots, have sought to expand their collaborations across a multitude of sectors. The strategic partners are also keen on expanding partnerships from transactions on finished products to joint research and development activities.
At the inception of India-Israel trade ties, the majority of trade was represented by diamonds; this has now expanded to a range of sectors, including defence, agriculture, pharmaceuticals and IT. Bilateral trade between India and Israel has steadily increased from around US$200 million in 1992 to about US$4.5 billion in 2017. Thriving two-way trade and investment, supported by a forum of Indian and Israeli companies, is an integral part of India’s vision for a strong partnership. In line with this strategy, PM Netanyahu is accompanied by a team of around 130 executives – the largest-ever business delegation from Israel. The team represents a cross-section of industries seeking to partner with India.
Expanding field of cooperation
The Governments of India and Israel signed a number of memorandums of understanding (MoU), agreements and letters of intent (LoI) during PM Netanyahu’s visit. The agreements are related to cyber security cooperation, oil and natural gas exploration and production, civil aviation, film production and homeopathic medicine, among others. Additionally, the Indian Institute of Space Science and Technology (IIST) and the Technion- Israel Institute of Technology have entered into an MoU for cooperation in the field of space research. Meanwhile, the investment platforms of both the countries, Invest India and Invest in Israel, have joined forces to boost opportunities for a variety of stakeholders.
The preliminary agreements also concern cooperation in the field of manufacturing, including an LoI signed between Indian Oil Corp Ltd and Israel’s Phinergy Ltd for cooperation in the area of high-capacity metal-air batteries technology. Indian Oil has signed another LoI with Israel’s Yeda Research and Development Co Ltd for cooperation in the area of concentrated solar technologies. Such tie-ups will strengthen ties and foster capabilities in both countries. The increasing business interaction between India and Israel has gained further momentum from initiatives taken up by Governments of both the countries to cut bureaucratic red tape and simplify regulations to further raise trade and investment.
Strengthening bilateral relations
The expanding relation is supported by the strengthening of existing pillars of cooperation in areas that are critical to both the nations, such as agriculture, science and technology and security. Consequently, India is looking to scale up the Centers of Excellence that are core to agricultural cooperation by bringing in advanced Israeli practices and technology. In defence, India has invited Israeli companies to take advantage of the liberalised foreign direct investment (FDI) regime to make more in India with local companies. The Indian Government has also encouraged activities in less explored areas of cooperation, from traditional fields of oil and gas exploration to activities in the up-and-coming startup industry.
So far, Israeli companies’ participations in India have concerned sectors related to energy, renewable energy, telecoms, real estate and water technologies. Israeli entities are also setting up research and development centres and production units in India. The relationship has also seen a rising count of merger and acquisition activities between Indian and Israeli companies. In his welcome address, PM Modi said that the India is committed to facilitating free exchange of ideas and human resources. This will facilitate improved innovation for both the countries. India is also working with Israel to make it easier for its citizens to work and visit each other’s countries, including for longer work durations.
Deepening cultural ties
To bring people closer on both sides, an Indian Cultural Center will soon open in Israel. The countries have also decided to start an annual exchange of bilateral visits by 100 young people from science-related educational streams. Such opportunities are facilitated by Israel’s growing relationship with Industry bodies such as the Associated Chambers of Commerce and Industry of India (ASSOCHAM), the Confederation of Indian Industry (CII), the Federation of Indian Chambers of Commerce and Industry (FICCI) and the National Association of Software and Services Companies (NASSCOM). These tie-ups are backed by India’s enabling initiatives such as Make in India, Digital India, Startup India and Skill India. These movements have strengthened grassroot innovation, unique to both India and Israel. Going ahead ties between India and Israel are bound to get stronger as the nations share a lot in common in terms of challenges as well as aspirations.