An official statement said on Tuesday that India and Israel have begun the first round of negotiations on a free trade agreement here with the aim of strengthening trade relations and encouraging investments.
In November last year, the two countries signed the terms of reference to formally begin negotiations on the agreement.
The Indian Ministry of Commerce said, “The first round of negotiations on the free trade agreement between India and Israel began on February 23, 2026 in New Delhi, and is scheduled to continue until February 26, 2026.”
In such agreements, the two sides significantly reduce or eliminate import duties on the maximum number of goods traded between them. Moreover, it relaxes rules to promote trade in services and investments.
The terms of reference include market access for goods through the removal of tariff and non-tariff barriers, facilitating investment, simplifying customs procedures, increasing cooperation in innovation and technology transfer, and facilitating rules to promote trade in services.
The statement said that during this tour, technical experts from both sides will participate in sessions covering various aspects of the free trade agreement such as trade in goods, trade in services, rules of origin, sanitary and phytosanitary measures, technical barriers to trade, customs procedures, trade facilitation, and intellectual property rights.
During the opening session, Commerce Secretary Rajesh Agrawal emphasized the significant opportunities available to both sides in sectors such as innovation, science and technology, artificial intelligence, cybersecurity, high-tech manufacturing, agriculture and services.
India’s chief negotiator is Ajay Bhadu, Additional Secretary in the Ministry of Commerce. Israel’s chief negotiator in the FTA is Yifat Alon Berel, Senior Director for Trade Policy and Agreements.
The ongoing negotiations are important as Prime Minister Narendra Modi is visiting Israel on February 25-26. India and Israel had earlier also engaged in negotiating a similar agreement. Eight rounds were held, but the talks later stopped. The last round was held in October 2021.
Now the two sides have started negotiations again. During 2024-25, India’s exports to Israel fell by 52 per cent to US$2.14 billion from US$4.52 billion in 2023-24. Imports also fell by 26.2 percent to $1.48 billion in the last fiscal year.
The volume of bilateral trade reached 3.62 billion US dollars. India is Israel’s second largest trading partner in Asia. Although bilateral merchandise trade is mainly dominated by diamonds, petroleum products and chemicals, recent years have seen an increase in trade in areas such as electronic machinery, high-tech products, communications systems and medical equipment.
Major exports from India to Israel include pearls and gemstones, automobile diesel, chemical and mineral products, electrical machinery and equipment, plastics, textiles, apparel, basic metals and transportation equipment, and agricultural products.
Imports include pearls, gemstones, chemical and mineral products, fertilizers, electrical machinery and equipment, petroleum oils, defence, machinery and transportation equipment.
Trade and Industry Minister Piyush Goyal said in November in Tel Aviv: “The free trade agreement will open the doors to greater market access and the flow of capital… whether in goods or services, remove obstacles to doing business, and provide clarity and predictability to our economic participation.”
In September last year, the two countries signed the Bilateral Investment Agreement (BIA), under which India reduced the period of exhaustion of domestic remedies for Israeli investors to 3 years from 5 years. During April 2000 and June 2025, India received US$ 337.77 million in FDI from Israel.
Israel is a high-income, technology-driven market with a population of less than 10 million people.
