As Prime Minister Benjamin Netanyahu tours India in a historic six-day visit, hundreds of accompanying Israeli businessmen and diplomats are scouring the country for lucrative opportunities.
India and Israel are in talks to start drafting a free trade agreement, according to diplomatic officials from both countries. It’s a step that could greatly boost annual bilateral trade, currently valued around $4.5 billion. To put that number in context, trade between Israel and China was worth $11.35b. in 2016.
A free trade accord with Israel would break precedent, as India has not signed free trade agreements with countries outside of Southeast Asia. But Narendra Modi was the first Indian premier to ever visit Israel, last July.
During this visit, Modi and Netanyahu oversaw the signing of Memorandums of Understanding regarding oil and natural gas, tourism and cybersecurity.
Israel has also given New Delhi a list of 200 products on which it would like tariffs removed, to make it easier for Israelis to overcome unwieldy bureaucracy in India. India is known for its cumbersome mercantilist policies, part of an attempt to encourage local manufacturing.
That drive to produce goods domestically may have led India to recently cancel a half-billion dollar acquisition from Haifa-based Rafael Advanced Defense Systems. Netanyahu is expected to raise that issue, at least behind closed doors.
On the flip side, Indian businessmen have complained about the arduous wait to obtain one-time entry visas to Israel, along with the lack of long-term visas. Many are clamoring to visit.
“I see more and more Indian businesses are coming to scout out technologies, to scout out joint venture projects,” said Anat Bernstein-Reich, chairwoman of the Israel-India Chamber of Commerce, who is traveling with the prime minister’s delegation. “Indians are now looking to invest in startups, it’s totally a new thing to Indians in general, since they’re risk-averse. But they’re willing to look at Israeli start-ups, understanding that the innovation is here.”
Aside from traditional agriculture- tech and water-tech collaborations, Bernstein-Reich sees greater Indian investment in Israeli financial-technology, as the South Asian country recently eased restrictions on online finance.
And Indian businessmen are interested in Israeli insurance- tech, auto-tech and drones, she added, as a thousand people have attended joint seminars in the past two days. India had made it easier to get licenses to operate drones, which can help with parcel delivery and leapfrog country’s extreme congestion.
At least 130 Israeli businessmen are visiting the country and taking part in several Indian- Israeli business summits, being held in New Delhi and Mumbai. Visiting CEOs and executives include those from drip irrigation manufacturer Netafim, engineering firm Tahal, water treatment company IDE Technologies, Israel Aerospace Industries and Rafael.
At the India Israel Business Innovation Forum held on Monday, dozens of Israeli executives met with Indian businessmen to discuss selling Israeli products from water conservation to food-tech, cybersecurity tools, software and the “Internet of Things.”
At the same time, a number of corporate MoUs were signed, with Israeli firm Watergen – which extracts water from air – reaching an agreement with Tata. The Israel Electric Corporation is joining up with the government of Andhra Pradesh state to help with critical infrastructure.
And Israeli start-up Phinergy is cooperating with Ashok Leyland on clean energy systems from aluminum-air batteries.
And both countries announced a $40 million Industrial Research and Development fund for collaboration between Indian and Israeli companies, almost like the US-Israeli Binational Industrial Research and Development (BIRD) Foundation. Start-ups from both countries have to apply for the grants together.
Separately from the visit, Indian information technology firm Tech Mahindra is launching a start-up collaboration program in Tel Aviv, the company announced on Tuesday.
Based in Mumbai, Tech Mahindra is seeking to invest in 20 Israeli start-ups in the first year of the program, especially in fields such as cybersecurity, fin-tech, AI and data analytics.
A similar program is already in place in Silicon Valley, and it will provide mentoring to selected companies.
Tech Mahindra also announced on Monday that it would be signing a MoU with Israeli cybersecurity firm ContextSpace. The Indian firm has worked in Israel since 2014, after purchasing Israeli telecom network services provider Lead- Com from a US company for $240m.