An Opportunity For Business And Investment
The official establishment of diplomatic ties between two nations creates room for cooperation. In the case of India and Israel, there has been cooperation in diverse sectors especially trade since 1992. Israel is one of India’s top 50 largest trading partners and India is one of Israel’s top 10 trading partners.
Early in 2022, it was revealed that merchandise trade alone between Israel and India hit $6.35 billion within nine months. It is noteworthy that bilateral trade cooperation between both nations became especially favorable in 2014. Soon after Narendra Modi assumed office as Indian Prime Minister, weapons, and defense items worth $662 million were imported from Israel.
In the past, diamonds and chemicals were the major commodities that Israel exported to India.
Today, however, the exports have grown to include medical and electronic equipment, machinery, vehicles, clothing, and tech systems among others. India also exports metals, precious stones, Organic chemicals, rubber, vegetables, textiles, plastic, electrical equipment, and other valuables to Israel.
India-Israel Free Trade Agreement (FTA)
Since 2010, negotiations have been ongoing to take the bilateral trade cooperation between Israel and India to another level. Both nations intend to enter into a Free Trade Agreement (FTA) to make business easy and smooth between them.
Indian external affairs minister, S Jaishankar had hinted in October 2021 that the Free Trade agreement will be signed by June 2022.
While they are yet to finalize the trade deal, the business relationship that both countries share has continued to grow. In 2020, when the coronavirus disease plagued the world, India sent a five-ton shipment of chemicals and drugs to Israel. The raw materials were used for the production of hydroxychloroquine and chloroquine drugs.
Some few months before the consignment was sent, India had placed an export ban on raw materials used for drug production. It, however, exempted Israel because of the solid bilateral trade cooperation that they have. The materials sent to Israel were used to make medicines for people affected by the disease. Israel, on the other hand, exported oxygen generators, respirators, and other lifesaving equipment to India to help combat the disease.
Expected Benefits of the Free Trade Agreement
● Ease Trade Barriers
The agreement will remove barriers to trade in both nations. It will encourage more Israeli companies to set up subsidiaries in India and vice Versa.
● Strengthen Trade and Economic Cooperation
The bilateral trade cooperation between Israel and India can only get better once the Free Trade agreement is signed. They will both look for more avenues to collaborate and improve their respective economies.
● Lower the Cost of Living in Both Countries
With the establishment of more companies and businesses comes employment. More and more people will be able to work, earn money and improve their standard of living.
India-Israel Funding Opportunities
On more than one occasion, India and Israel have pulled resources together to finance projects that have benefited their citizens. The bilateral trade cooperation between both nations has made these funding schemes a success. Here are four of the most notable India-Israel funding collaborations:
● 2003 Science and Technology Joint Funding Project
In 2003, India and Israel agreed to raise $1 million to promote research and innovation in the science and technology sector.
● 2005 Initiative for Industrial R&D (i4RD)
An MoU to promote bilateral investment was signed in 2005 by India and Israel. Under the agreement, both nations agreed to jointly set up funds to support Indian and Israeli companies that are working together on specific projects.
● 2012 Academic Research Agreement
India and Israel came together in 2012 to sign a five-year academic research agreement of $50 million. The funding scheme is designed to promote collaborative research in diverse disciplines.
● 2017 Industrial R&D and Technological Innovation Fund (I4F)
The government of India and Israel together with the Department of Science and Technology (DST) and Israel Innovation Authority is in charge of the 14F project. The initiative aims to facilitate joint industrial R&D projects handled by companies from Israel and India.
Israeli Companies Operating in India
The admirable bilateral trade cooperation that India and Israel have has led business owners in Israel to set up their businesses in India and vice versa. The friendly trade environment, as well as the large market that both countries provide for each other, has motivated the establishment of foreign businesses in recent years. Here are some of the Israeli companies that are operating in India.
Water-gen is in the business of converting air to water. The Israel domiciled company also produces Atmospheric Water Generation Machine. Thanks to the existence of the Water-gen in India, the country now has a new industry known as the Atmospheric Water Generation industry.
TEVA is one Israeli-owned business that stands strong in India. The pharmaceutical company has the support of Invest India and has received assistance from it on many occasions. TEVA and Invest India share a warm relationship that has benefited the company over the years.
● Dan Hotels
This Israeli-owned hospitality chain has been in operation since 1947. In December 2017, it launched its first international property in Bengaluru, India. The $70 million luxury hotel sits pretty in the suburb of Whitefield.
● Sarine Technologies
A leading provider of grading and documentation services, Sarine Technologies opened its second tech lab in Mumbai, India. Their first lab ever is located in Ramat Gan, Israel.
This company specializes in providing translation, quality control, and localization services. The Net-Translators office in India is located in Gurugram.
● Avgol Nonwovens
With its headquarters in Israel, Avgol Nonwovens specializes in the production of non-woven fabrics. A few years ago, the company launched a production facility in Mandideep, Bhopal. Avgol Nonwovens manufactures hygiene-grade non-woven fabrics for baby diaper production and feminine hygiene products among others.
NeoLync was founded in Israel and it is known to undertake large-scale production of electronics. In 2019, the company was incorporated in India as UTL Neolync. Its goal is to expand production in India over the next few years.
Indian Companies Operating in Israel
● NaanDanJain Irrigation
This Indian-owned company is a global producer of high-quality irrigation solutions with a vast network of distributors and agents. The company boasts of 9 subsidiaries and 6 production sites around the world. Two of the production sites are located in Israel.
Wipro-Givon caters to the aviation and hi-tech industries. It manufactures titanium products that are used in the aviation industry. One of the company’s manufacturing sites is located in Israel.
● Larsen & Toubro
In 2017, L&T Israel launched a Center of Excellence in Jerusalem. It also opened a sales office in Tel Aviv. The Center of Excellence was set up to develop and provide technological solutions to certain problems in the telecom, IoT, automotive, and media industries. The sales office, on the other hand, provided engineering services in different industries.
● Light & Strong
The existing bilateral trade cooperation between India and Israel made it possible for India’s Lohia Group to acquire Light & Strong Ltd In 2019. The company specializes in the production of military and aerospace carbon fiber and glass fiber composite components. Even after the acquisition, the company maintained operations in Israel.
India and Israel have conscientiously made a success of their bilateral trade cooperation. When both nations eventually sign a Free Trade Agreement (FTA) more companies and investors will be ready to take advantage of the trade deal.
Some of the most profitable industries in both countries that investors can buy into include the healthcare, defense, textile, pharmaceutical, IT, automotive, and hi-tech industries.