The deepening strategic partnership between India and Israel is set to receive a significant boost with the renewed push for a Free Trade Agreement (FTA). Initiated on November 20, 2025, the FTA negotiations aim to enhance trade, investment, and innovation between the two nations, with a particular focus on strengthening ties within the startup ecosystems.
India's Commerce and Industry Minister Piyush Goyal, during his visit to Tel Aviv, emphasized the importance of technology-driven collaboration as a key pillar of the proposed bilateral trade agreement. He highlighted India's ambition to become the "startup capital of the world" and views Israeli partnerships as a crucial step toward achieving this goal. Goyal also noted the significant interest among Israeli founders in collaborating with Indian companies, citing the scale and future opportunities presented by the Indian market.
The FTA is expected to significantly increase the current trade volume between India and Israel, opening up opportunities in key sectors such as agriculture, pharmaceuticals, electronics, defense, and digital services. This agreement aims to build upon the existing strategic partnership between the two countries, which already encompasses defense, technology, and agriculture.
One of the key initiatives under discussion is the establishment of a "startup bridge" to institutionalize cooperation between Indian and Israeli startups. This bridge would facilitate the exchange of ideas, technologies, and talent, fostering joint ventures and cross-border innovation hubs. Focus areas for collaboration include cybersecurity, medical devices, mobility, climate action, and green steel.
Minister Goyal pointed out that Israel has one startup for every 1,000 people, showcasing the country's ability to transform adversity into opportunity through advanced technologies in agriculture, health, and climate change. He expressed confidence that India can collaborate with Israel to elevate its startup ecosystem, driving deep tech and high-quality innovation at competitive prices, leveraging India's economies of scale.
Nir Barkat, Israel's Economy and Industry Minister, echoed this sentiment, stating that the FTA would unlock significant business opportunities and boost bilateral trade and investment flows. He also mentioned that both countries have agreed to exclude sensitive areas from the FTA negotiations.
The India-Israel partnership aims to capitalize on their complementary strengths. India offers a vast consumer market and manufacturing ecosystem, while Israel excels in agritech, water management, cybersecurity, and research and development. By combining these strengths, the two countries can create a powerful innovation engine that drives economic growth and addresses global challenges.
The signing of the Terms of Reference (ToR) on November 20, 2025, marks a crucial step towards finalizing the FTA. The ToR lays the foundation for structured negotiations covering trade in goods and services, investment promotion and protection, market access, regulatory cooperation, and technology transfer. The FTA is expected to include frameworks for dispute resolution, timeline targets, and sectoral dialogues, ensuring a balanced and mutually beneficial outcome for both nations.
With the FTA on the horizon, the startup ecosystems of India and Israel are poised for a new era of collaboration and growth. By leveraging each other's strengths and fostering innovation, the two countries can create significant opportunities for entrepreneurs, investors, and businesses alike.
