India, Israel FTA not likely to be signed soon

Indian and Israel companies are seeking collaborations and joint-ventures in water technology

The free trade agreement (FTA) between India and Israel might not be signed anytime soon.

Amit Lang, director-general of Israel’s Ministry of Economy, told Business Standard: “As I understand they (Indian government) are a little bit afraid of FTA as a whole because of the industry and the impact on the local industry. But Israel is not a big market player globally, it is not Europe and it is not the US. FTA with Israel can only do good. We should not look at each other as competitors but each others’ complementaries.”

The West Asian nation is planning to expand its footprint in water management, pharmaceuticals and biotechnology.

Lang said India and Israel are toying with the idea of completing the talks one step at a time — FTA on goods will be signed, followed by an agreement on trade in services and investment.

“India mentioned that the FTA should be more comprehensive and not just about trade in goods…. But I am not sure whether it will be concluded as a whole. It may be concluded in steps. We have so far had seven to eight rounds, which is normal when you negotiate a FTA, especially when India does not have a lot of FTAs. But Israel has much more FTAs and that, too, with big nations like the US, EU, Canada and others,” he added.

During the visit of Israel's  economic minister, Naftali Bennett, both sides had agreed to increase bilateral trade to $10 billion from around $5 billion now. Lang said as a result, both sides are trying to identify common areas of interest. “We explained to each other what the obstacles are to the free trade agreement. The Indian side explained to us what is holding back the negotiations.… We concluded that we will try to move forward. I don’t know eventually if we will get to a full-scale agreement but there are things that we want to proceed with in areas of mutual interest.”

Israel, he said, can introduce to the Indian market efficient use of technology in water management and agriculture. Israel is also keen on entering cyber security and life sciences. “We would like to enlarge our areas of cooperation and go beyond defence. India faces a big challenge today in terms of water. Be it the Ganga river or any other river (cleaning), India needs technology. We know it well because we in Israel have faced worse water scarcity and we have overcome that in the last decade.”

Indian and Israeli companies are looking at joint ventures in water technology. Lang, who is heading a delegation of 10 leading Israeli firms, also held discussions with some leading Indian companies.

Some of the leading Israeli companies interested in the water management technology space are Mekorot, Baran Group, ARI, Amiad, Aqwise and Arad Group. Some of the states where Israel is focusing are Haryana, Rajasthan, Maharashtra, Karnataka, Andhra Pradesh and Punjab.