India and Israel have decided to revive long-pending conversations on crafting a free trade agreement, a move that officials say could reshape the economic landscape between the two nations. The announcement came on Thursday, signaling the first real progress toward a deal that has been under discussion for years.
Indian Commerce Minister Piyush Goyal revealed on X that he and Israel’s Minister of Economy and Industry, Nir Barkat, formally signed the Terms of Reference (ToR) that will steer the next phase of negotiations. According to Goyal, this agreement lays the foundation for building a free trade pact that is balanced, comprehensive, and mutually advantageous for both sides. The signing took place during his bilateral visit to Tel Aviv.
Goyal emphasized that the shared vision behind the renewed talks is to widen the scope of India-Israel trade ties. Both governments aim to explore fresh sectors, expand market access, and address key concerns across different industries. The intention is to create a broader economic corridor that encourages new investments, smoother trade processes, and opportunities for long-term collaboration.
Under the newly signed framework, negotiators will focus on reducing tariff and non-tariff barriers, improving investment facilitation, simplifying customs rules, and boosting cooperation in innovation and technology transfer. The plan also includes making it easier for service-based industries to operate across borders — a major area of interest for both countries.
This is not the first attempt to forge such an agreement. India and Israel previously engaged in eight negotiation rounds, though the discussions eventually stalled without a breakthrough.
India-Israel trade snapshot
India currently ranks as Israel’s second-largest trading partner in Asia and its seventh-largest partner worldwide, based on data from India’s Commerce Ministry. When diplomatic relations were established in 1992, their trade was barely around $200 million. Over the decades, this figure surged — driven heavily by the diamond sector — reaching a record $10.77 billion in the 2022–23 period.
However, officials note that trade dropped sharply afterward, falling by nearly two-thirds. The decline has been attributed to security tensions in the region and shipping disruptions that affected trade routes. Despite these challenges, both nations appear committed to rebuilding momentum through the renewed push for a free trade agreement.
