Bilateral Economic 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 have progressed rapidly. From US$ 200 million in 1992 (comprising primarily of diamonds), merchandise trade diversified and reached US$ 10.77 billion (excluding defense) in FY 2022-23^#, with Indian merchandise exports to Israel at US$ 8.45 billion and Israeli merchandise exports to India at US$ 2.32 billion.  In FY 2023-24 (April-October)^#, the bilateral trade stands at US$ 4.42 billion (excluding defense).

2.  During the visit of Prime Minister of India to Israel in July 2017, both sides signed and exchanged seven MoUs on cooperation in the areas of innovation, technology, water, agriculture, and space & science. A US$ 40 million India-Israel Industrial R&D and Technological Innovation Fund (14F) for joint projects was also set up.

3.  During the 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.

4.  In April 2023, the Israeli Minister of Economy and Industry, MK Nir Barkat, paid an official visit to India, along with a fifteen-member business delegation. In May 2023, the then-Foreign Minister of Israel (FM) Eli Cohen paid an official visit to India accompanied by a high-level business delegation. During the visit, FM Cohen also co-chaired the India-Israel Business Forum with our Minister of Jal Shakti.

5.  India is Israel’s second-largest trading partner in Asia and the seventh-largest globally. Though bilateral merchandise trade is dominated mainly by diamonds, petroleum products 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. India continues to be a 'focus' country for the Israeli Government’s increased trade efforts. 

6.  Major exports from India to Israel include pearls and precious stones, automotive diesel, chemical and mineral products, machinery and electrical equipment, plastics, textile and apparel products, base metals and transport equipment, agricultural products.

7.  Major exports from Israel to India include pearls and precious stones, chemical and mineral/fertilizer products, machinery and electrical equipment, petroleum oils, defense, machinery and transport equipment.

8.  Investment

(a) Indian Investments in Israel: Cumulative ODI from India during April 2000 to November 2023 was US$ 384 million*. Indian companies are marking their presence in Israel through mergers and acquisitions and by opening branch offices. TCS, State Bank of India, Sun Pharma, Infosys, Tech Mahindra and Wipro Infrastructure Engineering, Lohia Group are some major Indian companies which have operations or made acquisitions/investments in Israel. In 2022, a consortium led by India’s Adani Ports and Special Economic Zone Ltd (APSEZ) acquired the Haifa Port Company Ltd from the Government of Israel with an investment of US$ 1.18 billion.

(b) Indian major companies are also making a mark in the Israeli innovation ecosystem. Tata Group, Wipro, Sun Pharma, Reliance Industries, L&T Technology services are some of the major Indian firms that have made notable investments in Israeli startups directly or indirectly through venture capital firms or academic institutions. In March 2021, Indian Oil Corporation Limited launched a JV with Israel’s Phinergy to manufacture aluminium-air battery systems in India and promote green mobility through the development of fuel cells and indigenous hydrogen storage solutions. In March 2022, Ola Electric invested US$ 5 million in an Israeli battery technology company StoreDot specializing in extremely fast charging technology, as part of its plans to manufacture advanced chemistry cells/new energy systems in India. 

(c) Israeli investments in India: During April 2000 – September 2023, Israel's direct FDI into India was US$ 286.15 million^&. There are over 300 investments from Israel in India mainly in the high-tech domain, agriculture and water. These investments are varied in nature - manufacturing plants; R&D centers; subsidiaries, joint ventures and technology partnerships with Make in India etc. There is a growing preference for Israeli companies in sectors such as renewable energy, water technologies, homeland security, aerospace, defence, energy, health and real estate in addition to traditional areas such as agriculture, cyber, chemicals, etc. Teva Pharmaceuticals, Ecoppia, Naa’n Dan Jain, Aqwise, Polemix, Eli Hajaj, Rivulis, Alumayer, Plasson, Huliot, Metzerplas, Avgol, IDE, Netafim, ADAMA, Mellanox, Dan Hotels, Watergen, Rivulis etc. are among the leading Israeli companies which have notable investments in India. 

Cooperation in Agriculture and Water Technologies:

9.  Agriculture: An Agreement for cooperation in agriculture was signed between the two countries in 1993. The Agreement provided for cooperation in Agricultural Science and Technology including Research & Education, Extension, and Training & Joint Research Projects. Under a comprehensive Work Plan for cooperation in agriculture, signed on 10 May 2006, bilateral projects are implemented through MASHAV Agency for International Development Cooperation under 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. MASHAV is active in India with many experimental and demonstration projects and operates an agricultural demonstration farm in Pusa. In May 2023, Indian Council for Agriculture Research (ICAR) and MASHAV signed a Declaration of Intent on the establishment of India Israel Innovation Centre for Agriculture (IIICA).

10.  The Fifth three-year bilateral work program (2021-2023) was signed in May 2021. The work program aims to grow the existing Centers of Excellence (CoE), establish new CoEs, increase CoE’s value chain, bring the CoEs into the self-sufficient mode, and encourage private sector companies and collaboration. The new work programme also focuses on converting the villages surrounding these CoEs into Villages of Excellence through outreach programmes. The concept of Villages of Excellence is aimed at creating a model ecosystem in agriculture across eight states in India, alongside select Centers of Excellence within 75 villages.

11.  31 CoEs’ are fully active in 13 Indian states (Bihar, Gujarat, Haryana, Karnataka, Maharashtra, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh, Mizoram, Andhra Pradesh, Telangana and West Bengal).

12.  Indian officials have been receiving training in Israel from time to time. Indian officials and business delegations regularly attend Israel’s international agricultural exhibitions. In AGRITECH 2018, India’s participation included the Union MoS Agriculture and the Chief Minister of Haryana, apart from official delegations from Uttarakhand and Punjab. Hon’ble Union Minister of Agriculture and Farmers Welfare Shri Narendra Singh Tomar visited Israel in May 2022 and held bilateral discussions with his counterpart.

13.  Water Technologies: Ongoing bilateral cooperation in the sector was formalized through an MOU on Water Resources Management and Development Cooperation signed in November 2016. During the visit of Prime Minister to Israel in July 2017, both sides signed MoUs on (i) National Campaign for Water Conservation in India and (ii) With UP Government on Reforms of UP Jal Nigam. In October 2018, the State Government of Punjab and Mekorot signed an MoU wherein Mekorot will formulate a Water Conservation and Management Plan for Punjab. Pursuant to this MoU, Punjab and Mekorot signed an Agreement for formulation of Water Conservation and Management Master Plan. A Plan of Cooperation between Israel and the Government of Uttar Pradesh for addressing water issues in the Bundelkhand region was signed in August 2020, after which an Israeli company has worked on the feasibility study in water management in Bundelkhand region. In June 2022 MASHAV signed a joint declaration with Haryana government in the field of integrated water resource management and capacity building. 

14.  In May 2023, India and Israel signed Letters of Intent to establish Centers of Water Technology (CoWT) in the Indian Institute of Technology, Madras and the Indian Institute of Technology, Roorkee respectively. These Centers will focus on Water Technologies and Water Resource Management in India with the key objective of implementing Israel’s water technologies, tailor-made to Indian requirements, on sustainable management solutions for the Indian water sector.

15.  Bilateral water cooperation received an impetus with the first-ever visit by a Water Minister from India to Israel in November 2019. During the visit, Shri Gajendra Singh Shekhawat, Minister of Jal Shakti, participated in the “India-Israel Strategic Partnership on Water” Symposium along with his Israeli counterpart Dr. Yuval Steinitz, Minister of Energy, and was a keynote speaker at the WATEC 2019. The Minister also held bilateral consultations with his Israeli counterpart and interacted with Israeli experts in the water domain Indian companies and official delegations regularly visit key events in Israel such as WATEC, which showcases Israel’s water and energy technologies. Indian officials have also been receiving training in Israel from time to time.

16.  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 US$ 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. In 2017, Israeli company, Ayala, won a contract to clean an eight-kilometer stretch along the Yamuna river in Delhi. In 2019, the Metzerplas unit of Metzer Group, Israel’s drip irrigation company, inaugurated a plant in Hyderabad as a joint venture between Metzer India LLP and India’s Skipper Ltd. In May 2022, Israel’s Watergen and India’s SMV Jaipuria Group formed a JV in the field of water-from-air technology and announced investment plans of over USD 50 million in India in the next 3 years, including a manufacturing plant.

Innovation and Science & Technology Cooperation:

17.  India-Israel cooperation in Science & Technology (S&T) is overseen by the Joint Committee on S&T, established under Agreement of Science & Technology cooperation signed in 1993. The JCM promotes joint research programmes in select areas of mutual importance through a bilateral mechanism by extending financial support for undertaking joint research activities by Indian and Israeli researchers through various modes viz. i) joint R&D projects; ii) exchange visit of scientists and researchers; and iii) organization of bilateral symposium and workshops. The tenth JCM on Science and Technology was held on July 25, 2022, under which the India-Israel Joint Research Program (IIJRC) 2023 was launched seeking proposals in the field of Artificial Intelligence (AI) application in climate change and agriculture for food security.

18.  Under the bilateral MoU on Industrial Research and Development Initiative, signed in May 2005, the India-Israel Initiative for Industrial R&D (i4RD) was set up to support joint industrial R&D projects, to promote joint development of products or processes leading to commercialization. During the visit of PM Modi to Israel in July 2017, an MoU for establishing the India-Israel Industrial R&D and Innovation Fund (I4F) by the Department of Science and Technology, India, and the National Authority for Technological Innovation, Israel was signed. This MoU, with a contribution of US$ 20 million from each side over 5 years (2018-2022), enabled Indian and Israeli enterprises to undertake joint industrial R&D projects in priority technology sectors such as agriculture, water, energy, healthcare and ICT. Both sides have renewed the I4F programme for a further period of 5 years (2023-27) by making the fund available for joint projects across various fields under four separate tracks (feasibility study; R&D projects; pilot projects; and strategic projects). Ten rounds of calls for proposals have been held between 2018 and 2023. I4F has funded twenty-five R&D projects, including the Apollo-Zebra Medical Artificial Intelligence-based project for the early detection of tuberculosis.

Agreement/MoU signed since 2020:

19. MoU to collaborate in tech innovation: In September, 2020, a Memorandum of Understanding (MoU) was signed between Israel’s Start-Up Nation Central and India’s International Centre for Entrepreneurship and Technology (iCreate) to initiate a bilateral program to accelerate innovation and technology cooperation between start-ups and corporates from both countries. This program aims to bring together Israeli and Indian entrepreneurs and startups to collaborate on innovative projects.

20.  Agreement on Health Cooperation: In December, 2020, India and Israel signed an Agreement on Cooperation in the fields of Health and Medicine. The Agreement includes sharing expertise for facilitating climate resilient infrastructure & expediting cooperation in exchange & training of medical doctors & other health professionals, assisting in the development of human resources & setting up of health care facilities. The Agreement also facilitates the exchange of information regarding regulation of pharmaceuticals, medical devices and cosmetics.

21.  Binational Innovation Agreement: In November 2021, a Bilateral Innovation Agreement was signed between Israel’s Directorate of Defence Research and Development (DDR&D) and India’s Defence Research and Development Organisation to promote innovation in startups & MSMEs of both countries in next-generation technologies and products.

22.  MoU on Industrial Research and Development Cooperation: In May 2023, India’s Council of Scientific and Industrial Research (CSIR) and Israel’s DDR&D signed an MoU on Industrial Research and Development Cooperation with a focus on key industrial technology fields of mutual interest through the implementation of specific projects. 

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December 2023 

(Sources: ^#DGCIS trade figures, *DEA ODI Factsheet, ^&Invest India).