Free Trade Agreement Between India and Israel

In Context

• India is in dialogue with Israel for concluding a Free Trade Agreement (FTA).
  • The announcement coincides with the 30th anniversary of the establishment of diplomatic ties between the two countries. 

India-Israel Relations

Political Relations:

• India announced its recognition of Israel on September 17, 1950.
• Full diplomatic relations were established in 1992.
• Since the upgradation of relations in 1992, defence and agriculture formed the two main pillars of bilateral engagement.
  • Bilateral ties have broadened into sensitive areas like high technology products, defence equipment, space, security, and intelligence.
• Political ties between the two countries are friendly.

Commercial Relations:

• From US$ 200 million in 1992 (comprising primarily trade in diamonds), bilateral merchandise trade stood at US$ 5.65 billion (excluding defence) in 2018-19, with the balance of trade being in India’s favour by US$ 1.8 billion. 
• In recent years, bilateral trade has diversified into several sectors such as pharmaceuticals, agriculture, IT and telecom and homeland security.
•  India is Israel’s third-largest trade partner in Asia and seventh largest globally.
• In recent years, bilateral trade has diversified into several sectors such as pharmaceuticals, agriculture, IT and telecom, and homeland security. 
  • Major exports from India to Israel include precious stones and metals, chemical products, textiles and textile articles, etc.
  •  Major imports by India from Israel include precious stones and metals, chemicals and mineral products, base metals and machinery and transport equipment. 

Agriculture:

• Under a comprehensive Work Plan for cooperation in agriculture signed on 10 May 2006
• India has benefited from Israeli expertise and technologies in horticulture mechanization, protected cultivation, orchard and canopy management, nursery management, micro-irrigation and post-harvest management particularly in Haryana and Maharashtra. 
• Israeli drip irrigation technologies and products are now widely used in India. Some Israeli companies and experts are providing expertise to manage and improve dairy farming in India through their expertise in high milk yield.

Defence & Security: 

• India imports critical defence technologies from Israel and There are regular exchanges between the armed forces. 
• There is cooperation on security issues, including a Joint Working Group on Counter-Terrorism. 
• India and Israel signed three important agreements on Mutual Legal Assistance in Criminal Matters, Cooperation in Homeland Security, and Protection of Classified Material.
• Since 2015, IPS officer trainees have been visiting the Israel National Police Academy every year for a one-week long foreign exposure training at the end of their training in the National Police Academy, Hyderabad.
• The Army has decided to order launchers, Spike Anti-Tank Guided Missiles (ATGM) and additional Heron Unmanned Aerial Vehicles (UAV), from Israel through the emergency procurement route.

Cooperation in S&T and Space:

• India-Israel cooperation in S&T is overseen by the Joint Committee on S&T, established under the S&T Cooperation Agreement signed in 1993.
• In 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 $ 20 m from each side over 5 years, is expected to play an important role in enabling Indian and Israeli enterprises to undertake joint R&D projects

Culture & Tourism:

• India is known in Israel as an ancient nation with strong cultural traditions.
• In popular Israeli perception, India is an attractive, alternative tourist destination. 
• Several courses related to India are taught at Tel Aviv University, Hebrew University and Haifa University. 
• Several private and public Indian universities have entered into an academic agreement with their Israeli counterparts
• In May 2013, India and Israel launched a new funding programme of joint academic research with the University Grants Commission and the Israel Science Foundation as nodal organizations.

Indian Diaspora:

• There are approximately 85,000 Jews of Indian origin in Israel (with at least one Indian parent), who are all Israeli passport holders. 
• The majority is from Maharashtra (Bene Israelis) and relatively smaller numbers are from Kerala (Cochini Jews) and Kolkata (Baghdadi Jews). 
• In recent years some Indian Jews from North-Eastern states of India (Bnei Menashe) have been immigrating to Israel. 

Image Courtesy: BBC

Conclusion

• The full potential of this relationship will be achieved only when business and commercial interests are mutually beneficial and the associations directly affect people. The benefits will need to be accessible and available for common citizens. 
• Nothing touches our lives better than cultural exchanges and connections.
• There is a strong need to use soft power diplomacy to build people-to-people bridges and to add to economic benefits through robust inter-country tourism.
  • This needs to be revived after the current disruption and a two-way street needs to be created.

• India’s world-class institutes of higher education could benefit from the strong culture of research and innovation that thrives in Israel. 
• The current crisis scarcity of semiconductor chips can occasion a partnership by building chip manufacturing in India. 
  • Israel is one of the few countries that can help India in achieving self-reliance in the production of semiconductors.

• On citizen-to-citizen level engagement, both countries must come forward to build an institutional mechanism to share their community practices.
  • For example, India needs to learn a lot from the inspirational role Kibbutz and Moshav as agriculture cooperatives play in nation-building in Israel. 
  • Similarly, Israel can benefit from the transformational journeys of many self-help womens’ collectives in India that have shown the way with the grassroots development model.

Source: TH