The first round of India-Israel Free Trade Agreement (FTA) negotiations concluded in New Delhi from February 23 to 26, 2026, marking a key step toward a comprehensive trade pact. The talks covered goods, services, digital trade, intellectual property, and customs rules under the Terms of Reference signed in November 2025. Bilateral merchandise trade between India and Israel stood at around $3.62 billion in FY 2024–25. The next round of negotiations is scheduled to be held in Israel in May 2026, with both governments aiming to unlock untapped trade potential in technology, machinery, and advanced sectors.
What Happened in India–Israel FTA Negotiations
India and Israel successfully completed the first formal round of negotiations for a proposed Free Trade Agreement in New Delhi, involving multi-sector discussions on trade in goods, services, sanitary and phytosanitary measures, rules of origin, and digital trade frameworks. The engagement followed the signing of the Terms of Reference in November 2025, which set the institutional roadmap for structured negotiations.
Union Commerce and Industry Minister Piyush Goyal met the Israeli delegation during the talks and emphasized the need for a modern, future-ready trade framework. Prime Minister Narendra Modi, during his address at the Knesset on February 25, 2026, also called for early finalization of an ambitious FTA to accelerate economic cooperation and strategic trade engagement.
| Key Parameter | Details |
| First Negotiation Round | February 23–26, 2026, New Delhi |
| Next Round | May 2026, Israel |
| Current Bilateral Trade | $3.62 billion (FY 2024–25) |
| Core Discussion Areas | Goods, services, digital trade, IP, customs |
Why Did India–Israel FTA Talks Happen
The negotiations are driven by strategic economic diversification and the need to deepen high-technology trade partnerships amid shifting global supply chains. India is actively pursuing FTAs to reduce dependence on traditional trade partners and boost export competitiveness in manufacturing, pharmaceuticals, and services.
For Israel, the FTA aligns with its strategy to expand access to fast-growing Asian markets, especially in sectors like defense technology, cybersecurity, agri-tech, and medical devices. Both countries see the agreement as a tool to create a predictable trade environment and reduce tariff and non-tariff barriers.
Bigger Context Behind India–Israel Trade in Economy and Geopolitics
The India–Israel FTA discussions come at a time when global trade blocs are fragmenting and countries are prioritizing bilateral economic alliances over multilateral frameworks. India has accelerated trade negotiations with strategic partners to strengthen supply chain resilience and technology collaboration.
Geopolitically, India and Israel already share strong cooperation in defense, innovation, and agriculture. Expanding trade integration through an FTA could formalize economic ties beyond defense and diamonds, which currently dominate bilateral trade flows. The agreement also fits into India’s broader geopolitical strategy of strengthening ties in West Asia while maintaining balanced global trade relations.
Additionally, as advanced technologies and digital trade become central to global commerce, India’s push to include digital trade and intellectual property chapters indicates a shift toward next-generation trade agreements rather than traditional tariff-focused deals.
| Strategic Sector | Potential Impact of FTA |
| Technology & Innovation | Increased joint R&D and startup collaboration |
| Defense & Electronics | Supply chain integration and technology transfer |
| Agriculture & Agri-Tech | Improved irrigation and food-tech cooperation |
| Medical Devices | Export growth and regulatory alignment |
How India–Israel FTA Affects Markets, Companies, Investors, and Economy
A finalized FTA could benefit export-oriented sectors such as chemicals, textiles, machinery, pharmaceuticals, and precision engineering by improving market access and reducing tariff costs. Indian companies in technology and manufacturing could gain easier entry into Israel’s innovation-driven economy.
For investors, the agreement signals stronger bilateral economic stability, which may support long-term investment flows, joint ventures, and cross-border startup funding. Defense, agri-tech, and cybersecurity firms could emerge as key beneficiaries if regulatory barriers are reduced.
From a macroeconomic perspective, enhanced trade flows and services exports can support India’s external trade balance and boost high-value exports, while Israeli firms may expand investments in India’s digital infrastructure, AI, and semiconductor ecosystem.
| Stakeholder | Expected Impact |
| Indian Exporters | Lower tariffs and expanded market access |
| Startups & Tech Firms | Higher collaboration and funding opportunities |
| Investors | Improved trade predictability and policy stability |
| Government | Stronger strategic and economic partnership |
What Happens Next in India–Israel FTA Talks
The next round of negotiations in May 2026 in Israel will focus on deeper tariff negotiations, services market access, and regulatory alignment across digital trade and intellectual property rights. Inter-sessional virtual engagements are also planned to accelerate progress.
Policy experts expect that a comprehensive agreement may take multiple negotiation rounds due to sensitive areas such as agricultural tariffs, data regulations, and rules of origin. However, both sides have indicated a forward-looking approach toward a balanced and mutually beneficial trade pact.
Frequently Asked Questions
What is the India–Israel Free Trade Agreement?
It is a proposed bilateral trade pact aimed at reducing tariffs, boosting trade flows, and strengthening economic cooperation across goods, services, and technology sectors.
When will the next round of FTA talks take place?
The second round of negotiations is scheduled for May 2026 in Israel.
How much trade currently happens between India and Israel?
Bilateral merchandise trade stood at approximately $3.62 billion in FY 2024–25.
Which sectors could benefit the most from the FTA?
Key sectors include machinery, chemicals, textiles, agriculture, medical devices, and advanced technology industries.
Conclusion
The successful conclusion of the first round of India–Israel FTA talks signals a strategic push toward deeper economic integration and technology-driven trade growth. If negotiations progress steadily, the agreement could reshape bilateral trade dynamics, enhance investment flows, and strengthen geopolitical alignment in high-value sectors. Markets and policymakers will closely track upcoming negotiation rounds, as the deal has the potential to become a significant pillar in India’s global trade expansion strategy.
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