From Defence Buyer to Deep-Tech Partner: How India–Israel Ties Are Shifting Toward Co-Development

• Israel’s strength as a Startup Nation and how leveraging it will enable India’s Digital & Tech Sector to experience tremendous growth.
• The partnership will enable both countries to co-develop products addressing shared and global challenges, especially in Precision Agriculture and Water Purification, where Israel leads.
• The establishment of ToRs demonstrates a strong political commitment by India and Israel to work together and accelerate stalled negotiations.
• The visit went beyond trade figures, laying the legal and structural groundwork for a lasting strategic partnership in the 21st-century knowledge economy.

Union Minister Piyush Goyal’s visit to Israel recently represented a substantial diplomatic achievement, as well as an indicator that India and Israel’s economic partnership (B2B & P2P) has entered the next phase of growth. Diplomatic Relations were officially established on 28 January 1993; however, those relations were subsequently and gradually transitioned to forming a Strategic Alliance in many areas (Defence, Agriculture, Water Management, Innovation, High Tech, etc.). The mission of Minister Goyal was to expedite the Government-to-Government (G2G) relationship between Israel and India and facilitate the growth of direct business and individual economic interaction between Indian and Israeli entrepreneurs, companies, and citizens. 

Focus on Innovation, Technology, and Startups

Minister Goyal spoke about Israel’s strength as a Startup Nation and how leveraging that strength will allow for India’s Digital & Tech Sector to experience tremendous growth. Israel has the highest number of Startups (per capita) in the world and is considered to be one of the leaders in cybersecurity, Artificial Intelligence (AI), Deep Tech and Defence Technology. India also offers a huge market, a huge talent pool of Engineers and a Startup India Initiative, which makes it a Natural Partner for Israel. Therefore, Minister Goyal’s talks were directed towards establishing an efficient mechanism that would allow Israeli Venture Capital and Technology companies to develop partnerships and invest in Indian Startups.

The India-Israel partnership will allow both countries to develop products that will help to solve some of the issues facing both Nations and the World, especially in terms of Precision Agriculture and Water Purification, where Israeli Technology is pioneering. Minister Goyal’s trip to Israel was designed to demonstrate India’s willingness to embrace new Israeli Technology and Investments for the Purpose of transitioning from a Traditional Buyer/Seller relationship with Israel in Technology to a co-development and co-production of Technology relationship.

Advancing the Free Trade Agreement (FTA) Negotiations

During the visit, it became abundantly clear that a major deliverable was the major progress toward completing the long-awaited India-Israel Free Trade Agreement (FTA). One of the major agendas of the visit included meeting with Israeli representatives regarding the Development of Terms of Reference (ToRs) to begin this process. The current state of bilateral trade between India and Israel (excluding defence) is very large, but a comprehensive FTA will likely realise its true potential.

An FTA will also serve an important role in lowering tariffs on goods, improving access to services and improving Customs handling of goods. FTA will help India gain access to Israeli high-tech products and investment and create a competitive advantage to help Israel benefit from one of the most rapidly growing consumer markets on the globe. The successful establishment of ToRs demonstrates a strong political commitment from both India and Israel to work together and expedite negotiations that have previously faced challenges. The resulting FTA will include an overarching clause intended to be a “forward-looking” FTA designed to cover modern-day issues such as digital trade and intellectual property rights instead of solely focusing on traditional merchandise trade. The engagement of Minister Goyal has reinvigorated and added meaningful political will toward finalising an initiative that could shape the long-term economic pathways for both India and Israel.

Strengthening Political and Strategic Bonds

Although the recent visit to Israel by India’s Minister of Commerce and Industry was motivated mainly by the economy, it also had political and geopolitical underpinnings with respect to India-Israel relations. During the visit, Minister Piyush Goyal conveyed warm greetings that represent normal protocol for diplomatic relations; in addition to reaffirming the continuity and consistency of the high-level dialogue between India and Israel throughout the last six years since 2014.

This aspect of India’s relationship with Israel is part of an ongoing process that has included substantial defence/security co-operation, with India being an important purchaser of Israeli military hardware. The current co-operation goes beyond just the importation of military equipment; it now includes counter-terrorism collaboration and regular strategic consultations on regional security matters. By visiting Israel during a business trip, Minister Goyal has sent a very clear message regarding solidarity and mutual acknowledgement of shared strategic interests, as the geopolitical situation in the Middle East and the Indo-Pacific continues to evolve.

Long-Term Implications

The Union Minister Piyush Goyal’s visit to Israel was a critical chapter in India-Israel bilateral ties. It effectively served to:

1. ​Prioritise Innovation: Cementing a commitment to link India’s talent pool with Israel’s deep-tech expertise.
2. ​Accelerate Trade Integration: Providing the necessary political impetus to formally launch the FTA negotiations.
3. ​Affirm Strategic Continuity: Reaffirming the high-level political trust and strategic partnership.

Not only should there be an immediate impact for each country from the work resulting from this engagement, but the partnership may evolve so that each country can have deeper economic and technological relations than what has existed until now, as evidenced by the extensive amount of time spent discussing these subjects during the most recent visit. By successfully concluding the FTA, a permanent framework of cooperation will be established for increasing trade and investment; additionally, emphasising that both parties work together on developing new industries, such as water, clean energy, and artificial intelligence, will provide both regions with a significant, long-lasting benefit in relation to their respective sustainable development goals. In essence, the visit was not just about trade numbers; it was about laying the legal and structural foundation for an enduring strategic partnership in the 21st century’s knowledge economy.

References: 

• _{Commerce Minister Shri Piyush Goyal Ends Israel Visit, Strengthening Bilateral Strategic and Economic Cooperation – Press Information Bureau (PIB) – Ministry of Commerce & Industry}
• _{India, Israel sign Terms of Reference to begin Free Trade Agreement negotiations -ANI News}
•  _{India and Israel sign terms of reference to guide free trade agreement negotiations –  The Hindu}
• _{Piyush Goyal meets Israeli PM Netanyahu as India-Israel FTA talks gain momentum– The Hindu.} 
• _{India-Israel FTA: GTRI says opportunities lie in strategic sectors; limited boost seen for goods trade– Times of India} 
• _{Union Minister Piyush Goyal concludes three-day Israel visit, terms it “very successful”– ANI News}

Hridbina Chatterjee

Hridbina Chatterjee is a final-year postgraduate student in International Relations at Jadavpur University, Kolkata. She has written for newspapers and think tanks, with interests in South Asian politics, India’s foreign policy, and the Indo-Pacific. Views expressed are the author’s own.