It takes two to tango, says Israeli official on investment pact with India

Ohad Cohen said, 'Israel can't compete with India. We are simply too small. However, both the countries have diversified economies'

Accompanying Israeli Prime Minister Benjamin Netanyahu on his ongoing visit to India, Foreign Trade Administration Head Ohad Cohen, Israel, tells Subhayan Chakraborty that a bilateral investment pact may be concluded soon. He says Israel has no issues with the current rules of allowing international arbitration to companies only after exhausting all domestic legal options. However, the talks on the trade pact are stuck on market access issues. Edited Excerpts:

When can we expect the proposed bilateral investment treaty between the two countries to be in place?

The government of both countries are currently discussing a bilateral investment treaty focusing on protection of investments. We have begun talks with India's Finance Ministry and I hope to be done soon, but it takes two to tango.

Have Israeli firms complained of the current investment rules, which allow international arbitration only once all domestic judicial options have been exhausted?

We appreciate and respect local rules. We will not tell the Indian government on how to do their domestic regulations. If they think this is something good for foreign investment, then it's fine.

Are there any figures on the number of Israeli company's looking to invest in India?

India is a large market and to penetrate it and have an established presence, you need to have local operations. They can vary from just an office to a factory facility. It depends on the country. We do have Israeli investments in India and more people are interested. The number of queries from Israeli investors to Invest India have risen by 16 times over the past one year.

This time, not much has been said by both Prime Ministers on the proposed Foreign Trade Agreement between India and Israel. When can a significant announcement be expected?

I think one should remember that when you are done negotiating an FTA, there are both opportunities and competition, and you need to make a balance between both. I think that India has, for quite some time, been a little hesitant about concluding FTAs. Maybe it's because of previous FTAs, which were not as promising as one would have expected, and therefore, the Indian government is very cautious regarding having more FTAs. 

Israel can't compete with India. We are simply too small. However, the technological cooperation we could have will enable technologies and sophisticated products from both countries to enter each other's markets. When we talk about agriculture, we are referring to the use of sensors, big data and satellites to increase yields. If you want to use Israeli technology in India to make Indian agriculture more efficient, then you must open your market.

So market access is holding back the agreement?

Of course. Market access is always something that is present. This is not only in the agricultural space. In all aspects, Israel has a very diversified economy and so does India. We are trying to have as widest and as open an agreement as possible.

So has any deadline been fixed for its conclusion and will it also cover services trade as well?

Normally I would say the deadline is liberating, but in this case, I want to be a little bit more cautious about when it's going to be. A lot depends on both sides and an FTA usually takes about a few years. Also, normally when Israel holds negotiations on FTAs, we cover services as well. We are an open economy.

Israel is known for its large number of start-ups and recently joint partnership between Israeli and Indian start-up firms have been growing. What are the ways India's start-up policy can be further developed?

Any policy must suit the local economy. Whats good for Israel may not be so for India and vice versa. The government needs to introduce ways to enable things. You need to create an environment for entrepreneurs to open companies. Many large corporates from India have come out over the past 30 years, which started off as startups. The government should make the life of venture capitalists as easy as possible from the tax perspective, make it easier to invest in start-ups and make sure the intellectual property regime is strict."