India and Israel have taken a major step toward strengthening their economic partnership by signing the Terms of Reference to begin negotiations for a Free Trade Agreement (FTA). Union Commerce and Industry Minister Piyush Goyal announced the decision during the India–Israel Business Summit in Tel Aviv, held alongside Israel’s Economy Minister Nir Barkat. Goyal highlighted that both nations have tremendous potential to grow their economic engagement and that India presents vast investment opportunities for Israeli companies.
Israel’s per capita income stands at around $60,000, giving India significant scope to expand its exports. Currently, bilateral trade between the two countries is valued at approximately $6 billion, and the proposed FTA is expected to boost this figure further.
Trade Snapshot
In September 2025, India exported goods worth $178 million to Israel while importing items worth $121 million, resulting in a positive trade balance of $56.8 million. However, between September 2024 and September 2025, India’s exports to Israel fell by 5.19 percent (about $9.74 million), and imports dropped by nearly 20 percent (around $31.1 million).
What Do India and Israel Trade?
Despite a temporary dip in trade, the FTA is expected to open doors for increased business between the two nations. At present, India’s key exports to Israel include:
• Precious and semi-precious stones – $48.7 million (around ₹432 crore)
• Consumer electronics – $10.4 million (around ₹92 crore)
• Miscellaneous engineering goods – $8.06 million (around ₹71 crore)
India’s major imports from Israel include:
• Manufactured fertilizers – $16.7 million (around ₹148 crore)
• Electronic components – $9.65 million (around ₹86 crore)
India also exports pearls, diamonds, machinery, automotive diesel, textiles, garments, and several agricultural products to Israel. The upcoming FTA is expected to make it easier for these goods to enter the Israeli market, providing a direct boost to Indian manufacturers, exporters, and farmers.
