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Bilateral Trade Relations
Home › Economic & Commerce › Bilateral Trade Relations

India-Israel Economic and Commercial Relations


Since the establishment of diplomatic relations between India and Israel in 1992, bilateral trade and economic relations progressed rapidly. From US$ 200 million in 1992 (comprising primarily of diamonds), merchandise trade diversified and reached USD 4.16 billion (excluding defence) in 2016.


2. India-Israel two-way trade in 2016 remained almost unchanged compared to 2015 – it grew by a mere 0.85%.  The balance of trade has tilted in favour of Israel with Israel exporting goods worth USD 2.4 billion as opposed to India’s exports of USD 1.76 billion. India continues to be a 'focus' country for Israeli Government’s increased trade efforts. Trade with India constituted 3.3% of Israel’s total trade in 2016.


3. Major exports from India to Israel include pearls and precious stones, chemical and mineral products, machinery and electrical equipment, textile and textile articles, plastics, rubber, plants and vegetable products, mineral products, rubber and plastic products, base metals and transport equipment.

4. Major exports from Israel to India include defence, pearls and precious stones, chemical and mineral products, machinery and electrical equipment, base metals, machinery, and transport equipment.


5. Trade in diamonds constitute almost 54% of the bilateral trade. Nearly 40 diamond dealers have opened offices at the Israeli Diamond Exchange in Ramat-Gan. Some of these dealers have been active in Israeli for nearly 30-40 years. Though bilateral trade is dominated mainly by diamonds and chemicals, recent years have witnessed an increase in trade in areas such as electronic machinery and high tech products; communications systems; medical equipment etc.


6. Investment: According to figures released by the Department of Industrial Policy & Promotion, India, FDI inflows from Israel to India from April 2000 to September 2016 totaled USD 107.6 million. These figures may not accurately reflect FDI from Israel, as many Israeli companies invest in India through the US, Europe and Singapore.

 7. There are over 300 Israeli investments in India mainly in high-tech and agriculture. These investments are varied in nature - manufacturing plants; R&D centers; subsidiaries etc. There is a growing preference for Israeli companies in sectors such as water technologies, homeland security and real estate in addition to traditional areas such as agriculture, chemicals etc. Teva Pharmaceuticals, IDE, Netafim are among the leading Israeli companies which have notable investments in India.


8. Indian companies are marking their presence in Israel through mergers and acquisitions and by opening branch offices. TCS started operations in Israel in 2005 and State Bank of India opened a branch in Tel Aviv in 2007. In 2012, Jain Irrigation fully acquired Naan-Dan, an Israeli irrigation equipment manufacturing company. Sun Pharma has 66.7% stake in Israel’s Taro Pharmaceutical Industries. Infosys, Tech Mahindra and Wipro Infrastructure Engineering have made notable acquisitions/investments in 2015 and 2016.


9. Indian majors are also leveraging on the Israeli innovation eco-system. In 2013, Tata Group invested US$5 million in the Momentum Fund of Ramot, TechnologyTransferCenter at TelAvivUniversity. In 2016, Tatas joined hands with several leading global players to set up a new technology incubator, called i3 Equity Partners (i3), which focuses on developing next-generation IoT technologies. Wipro has invested in TLV Partners, an Israel-based venture capital firm. Sun Pharma has collaborations with Weizmann Institute of Science and Technion Institute of Technology.


Cooperation in Agriculture and Water Technologies:

10. Agriculture: Under a comprehensive Work Planfor cooperation in agriculture signed on 10 May 2006, bilateral projects are implemented through MASHAV (Center for International Cooperation of Israel’s Ministry of Foreign Affairs) and CINADCO (Centre for International Agricultural Development Cooperation of Israel’s Ministry of Agriculture and Rural Development). Agricultural cooperation was formalized through three year work plans.


11. The Action Plan for 2012-2015 expanded cooperation to various States in India. Under this Action Plan, Israel agreed to set up 26 Centers of Excellence across 9 States. These Centers demonstrate an integrated and scientific approach to farming. These Centers were spread across different fields - in Maharashtra, Centers of Excellence was set-up for Mango at Ratnagiri; Citrus at Akola; and Pomegranate at Rahuri. A Center of Excellence for vegetables was set up in Karnal, Haryana. In Sirsa, Punjab the Center for fruits was established. 15 such Centers have already been commissioned. Third phase of agricultural work plan (2015-18) was signed in September, 2015. Under this plan, cooperation will be expanded into 6 more States.


12. Indian officials receive training in Israel from time to time. Indian official and business delegations regularly attend Israel’s triennial international agricultural exhibition event Agritech, which showcases Israel’s achievements in agriculture. In Agritech 2015, India’s participation included the Chief Ministers from Maharashtra and Meghalaya and official delegations from Telangana, Mizoram and Punjab.

13. MASHAV, Israel’s Agency for International Development Cooperation, is active in India with many experimental and demonstration projects. MASHAV operates an agricultural demonstration farm in Pusa and regularly runs courses on developing small and medium sized businesses in rural areas. NaanDan Jain Irrigation and Netafim have won major agricultural projects in India.


Water Technologies

14.Ongoing cooperation between the two countries in the sector was formalized through a MOU on Water Resources Management and Development Cooperation which was signed in November 2016. India’s companies and official delegations regularly visit the biannual event WATEC in Israel which showcases Israel’s water and energy technologies.


15. Israeli company IDE has built several desalination plants in India. A 100 MLD per day desalination plant set up by IDE at Nemelli in Tamilnadu was commissioned in 2013, the second such plant in Chennai. Israel’s national water company Mekorot, is providing its expertise to concerned organizations in Greater Mumbai and West Bengal. Tahal group signed a US$ 74 million deal with the Karnataka Government to design, construct and operate a water supply system to 131 villages in the State


Industrial and R&D Cooperation

16. Under a bilateral agreement in May 2005 the India-Israel Initiative for Industrial R&D (i4RD) was set up to support joint industrial R&D projects, aimed at development of products or processes leading to commercialization in the global market. This cooperation agreement was signed between the Ministry of Science and Technology, Department of Science and Technology (DST), India and the Ministry of Economy, Israel. i4RD provides partner matching services and funding for joint bilateral research and development (R&D) projects, involving at least one Indian and one Israeli company.


17. The framework is jointly implemented by Global Innovation and Technology Alliance (GITA), and MATIMOP, Israeli Industry Centre for R&D. Currently funded projects are focused on the hi-tech sector, for development of both software and hardware technologies.


18. In March 2013, under an MOU between MATIMOP, on behalf of the Office of the Chief Scientist (OCS) in Israel; and the Karnataka Science and Technology Promotion Society (KSTePS) and the Karnataka State Council for Science and Technology (KSCST), the Karnataka-Israel Industrial R&D program was set up to provide partner matching assistance and access to funding for industrial R&D by Israeli and Indian companies based in Karnataka. 


February 2017


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