India-Israel plan to implement FTA in two phases for early benefits, says Piyush Goyal, as exports drop 52% in FY25
NEW DELHI : India and Israel plan to implement the proposed free trade agreement (FTA) in two phases with the aim to offer early benefits to trade communities of both countries, PTI reported on Sunday, citing Commerce and Industry Minister Shri Piyush Goyal.
The development comes after a decline in the country’s exports to Israel, which dropped by 52% in 2024-25 to $2.14 billion from $4.52 billion in 2023-24. Imports also fell by 26.2%, amounting to $1.48 billion during the same period, according to the report.
Both countries recently finalised the terms of reference (ToR) to formally launch negotiations for the deal.
What does the India-Israel ToR comprise?
The ToR include market access for goods by removing tariffs and non-tariff barriers, facilitating investment, simplifying customs procedures, increasing cooperation for innovation and technology transfer, and easing norms to promote trade in services.
“We are considering doing this in two tranches. A decision will be taken when the talks begin. Both ministers are keen to finalise the first phase early so that the trade community benefits sooner,” Goyal said, who is currently in Israel. The minister led a 60-member business delegation to meet leaders and businesses to discuss ways to boost bilateral trade and investments.
Goyal mentioned that he and Israeli Economy and Industry Minister Nir Barkat have decided to initially concentrate on low-hanging fruit in the deal, rather than addressing sensitive issues on both sides.
He said that the two countries may consider “how innovative and R&D can drive greater investments in each other’s countries, work on joint projects where we can leverage on their skill sets and they can leverage on the economies of scale in a large market like India.”
The minister added, “it is quite possible that we may come out with the first phase on an FTA, so that we can kickstart the benefits faster.”
Update on metro project in Israel
On a major metro project in Israel, the minister announced that Israel has released pre-qualification documents for a USD 50 billion metro project in Tel Aviv.
The metro project involves 300 km of underground tunnelling, marking one of the largest projects.
“We have several players, both in the public and private sectors, who have done massive works. We have 23 cities which are setting up metros in India,” Goyal said, adding that Israel would “very seriously” like India to be a part of that project and “I hope Indian companies take interest and join the bidding process”.
India-Israel trade basket
Although bilateral merchandise trade is primarily dominated by diamonds, petroleum products, and chemicals, recent years have seen an increase in trade in areas such as electronic machinery and high-tech products, communications systems, and medical equipment.
Major exports from India to Israel include pearls and precious stones, automotive diesel, chemical and mineral products, machinery and electrical equipment, plastics, textiles, apparel, base metals, transport equipment, and agricultural products.
Imports consist of pearls and precious stones, chemical and mineral/fertiliser products, machinery and electrical equipment, petroleum oils, and defence, machinery, and transport equipment.
Source : Mint