Commerce and Industry Minister Piyush Goyal has said that India and Israel have inked terms of reference (ToR) to formally launch negotiations for a free trade agreement (FTA). 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. He noted ‘now we will soon finalise the dates for starting the negotiations for that’. Goyal, who is leading a 60-member business delegation to Israel, met leaders and businesses to discuss ways to boost bilateral trade and investments.

He said that services such as IT, tourism and movement of skilled professionals will get a boost from the proposed pact. He added both countries will make a bridge for the movement of skilled professionals like doctors, engineers and nurses. The ToR was signed by Goyal and Israeli Economy and Industry Minister Nir Barkat. He said that the Israeli side has conveyed that they will not seek market access in sensitive areas such as dairy, rice, wheat and sugar.

He also informed that Israel has come out with pre-qualification documents for a metro project. It is a $50 billion (Rs 4.5 lakh crore) worth project and Indian companies can participate in this, Goyal said, adding that at present, in over 20 cities, India has metro lines. India and Israel had been negotiating a similar agreement since May 2010. Eight rounds were held, but talks stalled later. The last round was held in October 2021. Goyal said FTA can help push trade to $30-40 billion over the next five years.

During 2024-25, India's exports to Israel dipped 52 per cent to $2.14 billion from $4.52 billion in 2023-24. Imports, too, fell 26.2 per cent to $1.48 billion last fiscal year. The bilateral trade stood at $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.