Why India and Israel still need an economic deal - opinion
India and Israel have a strong strategic partnership but trade only $3.93 billion in goods, and FTA negotiations remain unfinished. The article argues that while political trust exists, economic priorities differ: Israel seeks market access, India wants investment and technology transfers. Lessons from India's deals with the EU and New Zealand suggest a phased approach addressing regulatory barriers.
India and Israel have built a strong strategic partnership, but their economic relationship lags behind. Trade in goods reached approximately $3.93 billion in the 2025-26 financial year, and negotiations for a free trade agreement remain unfinished. The article argues that while political trust exists, the two countries have different economic priorities: Israel seeks market access to one of the world's fastest-growing economies, while India wants investment, technology transfers, and support for domestic manufacturing. India has recently secured trade agreements with the UK, New Zealand, and the EU, and its economy is projected to grow 7.1% in 2026-27. The authors suggest that Israel should focus on its strengths in water management, agricultural technology, medical equipment, and advanced manufacturing, and that a successful deal must address regulatory barriers and include phased tariff reductions. A Bilateral Investment Agreement signed in 2025 and effective in July 2026 provides a foundation, but the FTA remains elusive.