New Delhi, February 24 India and Israel have begun the first round of negotiations for a free trade agreement (FTA) here with the aim of further strengthening commercial ties and promoting investment, an official statement said on Tuesday.
In November last year, the two countries signed the terms of reference (ToR) to formally begin negotiations for the agreement.
"The first round of negotiations for the India-Israel Free Trade Agreement (FTA) commenced on February 23, 2026 in New Delhi, and is scheduled to take place until February 26, 2026," the commerce ministry said.
In such agreements, the two sides significantly reduce or eliminate import duties on a large number of goods traded between them. In addition, they ease regulations to promote trade in services and investment.
The ToR include market access for goods by eliminating tariff and non-tariff barriers, investment facilitation, simplification of customs procedures, increased cooperation for innovation and technology transfer, and easing regulations to promote trade in services.
The statement said that during this round, technical experts from both sides will engage in sessions covering various aspects of the FTA, such as trade in goods, trade in services, rules of origin, sanitary and phytosanitary measures, technical barriers to trade, customs procedures and trade facilitation, and intellectual property rights.
During the opening session, Commerce Secretary Rajesh Agrawal highlighted the significant opportunities available to both sides in sectors such as innovation, science and technology, artificial intelligence, cybersecurity, high-tech manufacturing, agriculture, and services.
The Chief Negotiator for India is Ajay Bhadoo, Additional Secretary in the Department of Commerce. The Chief Negotiator for Israel for the FTA is Yifat Alon Perel, Senior Director of 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 previously engaged in negotiations for a similar agreement. Eight rounds were held, but talks stalled later. The last round was held in October 2021.
Now, both sides have again started the negotiations. During 2024-25, India's exports to Israel dipped by 52% to USD 2.14 billion from USD 4.52 billion in 2023-24. Imports also fell by 26.2% to USD 1.48 billion in the last fiscal year.
The bilateral trade stood at USD 3.62 billion. 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 and high-tech products, communication systems, and medical equipment.
Major exports from India to Israel include pearls and precious stones, automotive diesel, chemical and mineral products, machinery and electrical equipment, plastics, textiles, apparel, base metals, and transport equipment, and agricultural products.
Imports include pearls and precious stones, chemical and mineral/fertiliser products, machinery and electrical equipment, petroleum oils, defence equipment, machinery, and transport equipment.
"The FTA will open the doors for greater market access, flow of capital, and in goods and services, remove obstacles in doing business, provide clarity and predictability to our economic engagement," Commerce and Industry Minister Piyush Goyal had said in November in Tel Aviv.
In September last year, both countries signed a Bilateral Investment Agreement (BIA), under which India reduced the period for Israeli investors to exhaust local remedies to 3 years from 5 years. During April 2000 and June 2025, India received USD 337.77 million in foreign direct investment (FDI) from Israel.
Israel is a high-income, technology-driven market with a population of under 10 million.
