Bilateral Trade Relations Economic & Commerce

Bilateral Trade Relations

India-Israel Economic and Commercial Relations

 1. 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 5.84 billion (excluding defence) in calendar year 2018 (DGCIS figures) with the balance of trade being in India’s favour by more than USD 1.8 billion.

2. India is Israel’s third largest trading partner in Asia and seventh largest globally. Though bilateral trade is dominated mainly by diamonds and chemicals, recent years has witnessed an increase in trade in areas such as electronic machinery and high tech products; communications systems; medical equipment etc. India continues to be a 'focus' country for Israeli Government’s increased trade efforts.

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 pearls and precious stones, chemical and mineral products, machinery and electrical equipment, base metals, defence, machinery and transport equipment.

5.  Investment

(a) Indian Investments in Israel: Indian investments in Israel (April 2000-June 2017) totaled USD 122.4 million (Department of Industrial Policy & Promotion, GoI). Indian companies are marking their presence in Israel through mergers and acquisitions and by opening branch offices. TCS started operations in Israel in 2005; State Bank of India opened a branch in Tel Aviv in 2007; Jain Irrigation fully acquired NaanDan, an Israeli irrigation equipment manufacturing company, in 2012 and Sun Pharma has a 66.7% stake in Israel’s Taro Pharmaceutical Industries. Infosys, Tech Mahindra and Wipro Infrastructure Engineering are some other major Indian companies which have made notable acquisitions/investments in Israel during the period 2015-2016. In 2017, India-based Saisanket Enterprises Private Limited acquired Shtula, a leading Israeli manufacturer of metal parts and metal devices. In January 2019, India's Lohia Group acquired Israeli defense company Light & Strong. There are also representatives of Think Future Technologies and Cyient in Israel.

 (c) Indian major companies are also making a mark in the Israeli innovation eco-system. In 2013, Tata Group invested USD 5 million in the Momentum Fund of Ramot, Technology Transfer Center at Tel Aviv University. Subsequently, 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. L&T Technology Services opened a R&D Centre in Jerusalem and a Sales Office in Tel Aviv in November 2017. Antill Ventures has reportedly announced to open a startup accelerator in Tel Aviv and to invest USD 1 million in Israeli startups recently.

(b) Israeli investments in India: There are over 300 investments from Israel in India mainly in the high-tech domain and in 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 (invested more than USD 25 million in India, 2017), ADAMA (invested over USD 50 million in India, 2017),etc. are among the leading Israeli companies, which have notable investments in India.

Cooperation in Agriculture and Water Technologies:

6.  Agriculture: Under a comprehensive Work Plan for 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 between the two sides is formalized through 3-year Work plans wherein 3-year Action plans are developed.

 7. The Second Action plan (2012-15) expanded bilateral cooperation to nine States in India (Haryana, Maharashtra, Karnataka, Rajasthan, Gujarat, Tamil Nadu etc.) Under the plan, 26 Centres of Excellence (CoE) were proposed. The CoEs’ have exposed the Indian farmers to scientific approach in farming across produces:  Mango (Ratnagiri); Citrus (Akola); Pomegranate (Rahuri) etc.

8. The Third Action plan (2015-18) was signed in September, 2015. Under this, Israel envisages to expand cooperation into six more states, as well as new sectors such as water, dairy and honey production value chain, pollination as well as modern technologies to ensure food security.

9. Thus far, out of 29 CoEs’ expected to be fully active by 2020 (3 more CoEs’ are yet to be approved or in stages to be approved in Punjab, Telangana and Madhya Pradesh bringing the total CoEs’ to 32) in twelve Indian states (Bihar, Gujarat, Haryana, Karnataka, Maharashtra, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh, Mizoram, Andhra Pradesh and West Bengal), 25 have been commissioned In 2017, India and Israel inaugurated a CoE for Integrated Beekeeping Development in Ramnagar, Haryana which is the first of its kind between India and Israel, and will address a number of issues like “Queen Rearing, Quality Control Labs, Enhanced Production, Honey Production Value Chain, [and] Pollination. It is the 4th CoE to be inaugurated in Haryana.

10. Indian officials have been receiving 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 2018, India’s participation included the MoS Agriculture and the Chief Minister from Haryana, apart from official delegations from Uttarakhand and Punjab.

11. 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.

12. In 2014, Naan-Dan Jain was awarded the world’s largest micro- irrigation project in Karnataka and in 2017, the Poorigali Integrated Micro Irrigation Project by Cauvery Neeravari Nigam Limited, Govt. of Karnataka through National Competitive Bidding. Netafim won a USD 62 million project in Karnataka which is expected to benefit 6,000 farmers. Other Israeli companies like Adama, Aqwise, IDE, Ayala and Tahal are also working extensively in India for integrated water and agricultural solutions. As for 2017, it is estimated that about 15 million Indian farmers are benefiting from the use of drip irrigation.

 13. Water Technologies: Ongoing cooperation between the two countries in the sector was formalized through an MOU on Water Resources Management and Development Cooperation 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. During the visit of Prime Minister to Israel in July 2017, both the sides signed MoUs on (i) National Campaign for Water Conservation in India and (ii) With UP Government on Reforms of UP Jal Nigam. The State Government of Punjab and Mekorot (Israel’s National water Carrier) recently signed an Agreement on ‘Water Conservation and Management Plan for the State of Punjab’.

14. 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 (IDE has India’s largest desalination plant in Jamnagar with a capacity of 160,000 cubic meters/day). Mekorot, is providing its expertise to concerned organizations in Greater Mumbai and West Bengal. Tahal group signed a USD 74 million deal with the Karnataka Government to design, construct and operate a water supply system to 131 villages in the State. An Israeli company, Aqwise, has a joint venture with Triveni Engineering that is providing clean drinking water to Uttar Pradesh Jal Board for almost 2 million residents of Agra with a special water treatment plant on the river Yamuna. Another Israeli company, Ayala, won a contract in February 2017 to clean an eight-kilometer stretch along the river Yamuna in Delhi.

 Industrial and R&D Cooperation

15. 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.

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

 17. In March 2013, under an MOU between IIA, on behalf of the Office of the Chief Scientist (OCS) in Israel and the Karnataka Science &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. 

18. Visit of Prime Minister of India to Israel in July 2018: Both sides signed and exchanged seven MoUs on cooperation in the areas of innovation, technology, water, agriculture and space & science. A USD 40 million India-Israel Industrial R&D and Technological Innovation Fund (14F) for joint-projects was also set up (The second round of calls took place in Tel Aviv on 6 March 2019 during the India-Israel Innovation Week bringing the total number of awarded joint-projects to seven).

19. Visit of Prime Minister of Israel to India in January 2018: The two countries signed nine agreements in various sectors, including cyber-security, oil and gas, solar energy, space science, air transport, medicines and film production.

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April 2019