India, Israel begin talks for free trade pact

INdia and sion feature started the number one labialize of negotiations for a release trade agreement (FTA) here with an aim to further boost commercial ties and promote investments, an official statement said on Tuesday.In November last year, the two countries signed the terms of reference (ToR) to formally start the negotiations for the pact."The first round of negotiations for the India-Israel Free Trade Agreement (FTA) commenced on February 23, 2026 in New Delhi, and is scheduled to take place until February 26, 2026," the commerce ministry said.In such pacts, two sides significantly reduce or eliminate import duties on maximum number of goods traded between them. Besides, they ease norms to promote trade in services and investments.The ToR include market access for goods by eliminating tariff and non-tariff barriers, investment facilitation, simplification of customs procedures, increasing cooperation for innovation and technology transfer, and easing norms to promote trade in services.The statement said that during this round, technical experts from both sides will engage in sessions covering various aspects of FTA such as trade in goods, trade in services, rules of origin, sanitary and phytosanitary measures, technical barriers to trade, customs procedure and trade facilitation, and intellectual property rights.During the opening session, Commerce Secretary Rajesh Agrawal underscored the significant opportunities available to both sides in sectors such as innovation, science and technology, artificial intelligence, cybersecurity, high-tech manufacturing, agriculture, and services.Chief Negotiator of India is Ajay Bhadoo, Additional Secretary in Department of Commerce. Chief Negotiator of Israel for the FTA is Yifat Alon Perel, Senior Director Trade Policy and Agreements.The ongoing negotiations are important as Prime Minister Narendra Modi is visiting Israel on February 25-26. India and Israel were engaged earlier also to negotiate a similar agreement. Eight rounds were held, but talks stalled later. The last round was held in October 2021.Now both sides have again started the negotiations. During 2024-25, India's exports to Israel dipped 52 per cent to USD 2.14 billion from USD 4.52 billion in 2023-24. Imports, too, fell 26.2 per cent to USD 1.48 billion last fiscal year.The bilateral trade stood at USD 3.62 billion. India is Israel's second-largest trading partner in Asia. 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, and medical equipment.Major exports from India to Israel include pearls and precious stones, automotive diesel, chemical and mineral products, machinery and electrical equipment, plastics, textiles, apparel, base metals and transport equipment, and agricultural products.Imports include pearls and precious stones, chemical and mineral/fertiliser products, machinery and electrical equipment, petroleum oils, defence, machinery, and transport equipment."The FTA will open the doors for greater market access, flow of capital, ..both in goods and services, remove obstacles in doing business, provide clarity and predictability to our economic engagement," Commerce and Industry Minister Piyush Goyal had said in November in Tel Aviv.In September last year, both countries inked a Bilateral Investment Agreement (BIA), under which India reduced the local remedies exhaustion period for Israeli investors to 3 years from 5 years. During April 2000 and June 2025, India received USD 337.77 million foreign direct investment (FDI) from Israel.Israel is a high-income, technology-driven market of under 10 million people.