India and Israel are two nations maintaining extensive military, economic and strategic relations. India imports massive military equipments from Israel and is currently the largest buyer of Israeli military equipment.
To boost exports, Israel is eyeing the strong middle class base in India. The visit of Prime Minister Narendra Modi has been a “historic” moment, as none of preceding Prime Minister had attempted a visit to Israel. Dubiety persists here due to discussions on a free trade agreement (FTA).
The negotiations have worked on from past seven years. Despite that, FTA between the two nations has remained elusive. On May 26, 2010, the first rounds of negotiations were held. On a question concerning the long-pending pact, Israeli foreign ministry officials said that India was “re-evaluating” it, but giving little weight to its significance, said that there are newer developments that will help enhance the potential of the economic relationship between the two countries.
“India is a key export market for Israel. Tightening relations with India and this historic visit of the Indian Prime Minister will lead, beyond increasing security exports, to growth in trade in goods and services,” Israeli minister of economy and industry Eli Cohen said.
“The Indian economy is becoming a prime destination for Israeli exports, with its 1.3 billion consumers led by 300 million citizens in the middle and upper-middle class, with purchasing power equal to the middle class of Western economies,” Cohen noted.
In an interview, Modi mentioned that India was not looking forward to a traditional “import-export relationship” with the Jewish nation. “It is more than a buyer-seller relationship. We are more interested in a tech-based partnership with an emphasis on ‘Make in India.’” he added.
According to the ministry of economy and industry of Israel, trade allying the countries has mounted up from $200 million in 1992 to $4.13 billion in 2016 (including diamonds). Exports had reached to $1.29 billion, but later it had a drop down, with exports totalling $1.15 billion(excluding diamonds). There was a dip by 13% in 2016.
Alliances on R&D creation of a joint fund and identifying key sectors like water, agriculture and space technologies have been taken into consideration. For this, two nations have to collaborate, extend support and deepen ties, majorly to increase economic cooperation between the nations.