India and Israel will hold their next round of negotiations for the proposed free trade agreement in May, the commerce ministry announced on Thursday. The two nations recently concluded the first round of four-day discussions in New Delhi, marking a renewed effort to fast-track the long-pending pact. Both sides remain engaged across various sectors that include trade in goods and services, rules of origin, sanitary and phyto-sanitary measures, technical barriers to trade, customs procedures, intellectual property rights, digital trade and several other important chapters. The ministry noted that “Both sides also agreed to continue inter-sessional engagements virtually. The next round of in-person negotiations will be held in May 2026 in Israel.”
During his two-day state visit to Israel, Prime Minister Narendra Modi addressed a special plenary of the Knesset in Jerusalem on February 25. He urged an early finalisation of an ambitious FTA to unlock the untapped trade potential between the two countries. Both nations acknowledged significant opportunities in sectors such as machinery, chemicals, textiles, agriculture, medical devices and advanced technologies. In November last year, the two countries signed the terms of reference to formally initiate negotiations for the trade pact.
What the terms of reference cover
In such agreements, both nations substantially lower or eliminate import duties on most traded goods. They also work towards easing norms that promote trade in services and investments. The terms of reference cover market access for goods through tariff and non-tariff barrier removal, investment facilitation, simplified customs processes, deeper cooperation in innovation and technology transfer and relaxed norms for trade in services.
India's Chief Negotiator is Ajay Bhadoo, Additional Secretary in the Department of Commerce, while the Israeli delegation is led by Yifat Alon Perel, Senior Director Trade Policy and Agreements. Earlier attempts between the two nations included eight negotiation rounds, but talks stalled after the last meeting in October 2021. Negotiations have now resumed with renewed vigour.
Trade figures reflect sharp declines
During 2024 to 2025, India's exports to Israel fell by 52 per cent to USD 2.14 billion from USD 4.52 billion in 2023 to 2024. Imports also dipped by 26.2 per cent to USD 1.48 billion last fiscal year. The bilateral trade value stood at USD 3.62 billion, yet India continues to remain Israel’s second-largest trading partner in Asia. Although the bilateral merchandise trade has historically remained dominated by diamonds, petroleum products and chemicals, recent years have seen a rise in exchanges involving electronic machinery, high-tech products, communication systems and medical equipment.
Key export and import dynamics
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 alongside agricultural goods. Imports from Israel include pearls and precious stones, chemical and fertiliser products, machinery and electrical equipment, petroleum oils, defence equipment, machinery and transport equipment.
In September last year, the two countries signed a Bilateral Investment Agreement under which India shortened the local remedies exhaustion period for Israeli investors from five years to three. Between April 2000 and June 2025, India received USD 337.77 million in foreign direct investment from Israel. Israel remains a high-income, technology-driven market with a population of under ten million.
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