India–Israel Trade Talks Focus on Goods, Services and Digital
FTA Negotiations Reflect Strategic Push in India–Israel Ties
New Delhi: The first round of negotiations for the India–Israel Free Trade Agreement (FTA), held in New Delhi from February 23 to 26, 2026, concluded with both sides agreeing to pursue a comprehensive, balanced and mutually beneficial agreement and to continue technical engagements ahead of the next in-person round in Israel in May 2026. The talks were conducted under the Terms of Reference signed in November 2025 and covered trade in goods and services, rules of origin, sanitary and phytosanitary measures, technical barriers to trade, customs procedures, intellectual property rights and digital trade. Officials from both sides described the discussions as constructive and forward-looking, with agreement on continuing inter-sessional virtual consultations.
The negotiations take place against the backdrop of the elevation of bilateral ties to a Special Strategic Partnership and parallel political engagement between Prime Minister Narendra Modi and Prime Minister Benjamin Netanyahu. While the political momentum provides context, the FTA process itself is being framed as a technical exercise aimed at creating a stable and predictable framework for businesses in both countries.
Bilateral merchandise trade between India and Israel currently stands at about USD 3.62 billion. Both sides have identified untapped potential in sectors such as machinery, chemicals, textiles, agriculture, medical devices and advanced technologies. Indian negotiators view the agreement as a means to expand export opportunities while ensuring safeguards for sensitive sectors such as agriculture and small manufacturing. Israel, for its part, is seeking improved access in innovation-driven industries, services and high-value manufacturing, along with stronger provisions on intellectual property and digital trade.
The political signalling around the negotiations has emphasised speed and ambition. Addressing the Knesset in Jerusalem on February 25, Prime Minister Modi called for the early finalisation of an ambitious Free Trade Agreement to unlock trade potential between the two countries. A day earlier in New Delhi, Union Minister of Commerce and Industry Piyush Goyal met the visiting Israeli delegation and urged both sides to work towards a modern and future-ready agreement that links trade with innovation and growth. This reflects India’s broader trade policy approach of integrating market access with technology, digital rules and investment facilitation.
Analytically, the breadth of subjects under negotiation indicates that the proposed FTA is being designed as more than a tariff-reduction instrument. By including chapters on regulatory measures, intellectual property and digital trade, the agreement aims to shape longer-term economic integration between two economies with different structures but complementary strengths. At the same time, this breadth also introduces complexity, particularly in reconciling Israel’s interests in high-standard rules with India’s regulatory and developmental priorities.
The decision to defer substantive convergence to future rounds underscores that the New Delhi talks were primarily about establishing scope, process and negotiating intent. The outcome of the first round lies in setting a framework for continued engagement rather than in resolving core differences. Whether the negotiations result in a balanced agreement will depend on progress in sensitive areas such as rules of origin, intellectual property and digital trade in subsequent rounds.
In this sense, the New Delhi round positions the FTA as an economic pillar within a broader strategic relationship that also includes initiatives such as the India–Middle East–Europe Economic Corridor and the I2U2 framework. The negotiations signal a shared intent to move towards a rules-based trade relationship, while leaving open the question of how far and how fast both sides can align their economic and regulatory interests.
– global bihari bureau
