The Hindu BusinessLine | 10 January 2018
Israel set to make a strong push for goods FTA
by Nayanima Basu
New Delhi: India and Israel are expected to make an important announcement on long pending free-trade agreement (FTA) in goods during the upcoming visit of the Prime Minister of Israel Benjamin Netanyahu next week.
Netanyahu, who will be accompanied by a high-powered business delegation, is expected to hold a bilateral meeting with Prime Minister Narendra Modi on January 14. The dates for the visit are yet to be officially announced.
Since this will be Netanyahu’s first visit to India, the Israeli government is keen that the trip yields positive results. The top priority will be to expedite the talks for a goods FTA, while negotiations on services and investment continue, according to sources.
“There is going to be an important announcement on the FTA. The idea is to take one step at a time. Both sides have come to a point where they have agreed to sign the pact on goods first followed by an agreement on trade in services and investment,” a top official told BusinessLine requesting anonymity.
The negotiations for having an India-Israel FTA were launched by former Prime Minister Manmohan Singh in 2007. The deadline to conclude the talks was set for 2014.
However, the present government wants to re-launch the talks and both sides might exchange a comprehensive list of tariff lines, which will be different from what was presented by both sides earlier, sources said.
“India is a very big market for Israel, but Israel is not a big market for India as far as business is concerned. Any market access negotiations should be strategic. We should see what are we getting in exchange in terms of benefits by opening up our markets which is both growing as well huge,” said Sanjaya Baru, Secretary-General, FICCI.
According to another official, the issue of FTA has become a “sticky point” with between the two countries. While Israel intends to hold the negotiations on a regular basis with India to conclude the talks at the earliest, India is not keen on negotiating the pact as it sees very little benefit in it.
In the last 10 years since the negotiations began, both sides have held nine rounds of talks. Two-way trade between India and Israel stood at $5.04 billion in 2016-17, up 2.68 per cent from $4.91 billion in 2015-16, according to official statistics by the Ministry of Commerce and Industry.
Israel is keen to boost the bilateral trade to $10 billion by 2021-22 and it believes that a comprehensive trade pact will be instrumental in augmenting two-way trade as well flow of investments, sources added.
“The negotiations could not make progress all these years due to patent issues and other pharmaceuticals related issues. Now the focus is on two-three focus areas. There can be an effort to kick-start the talks,” said S Samuel C Rajiv, Associate Fellow, IDSA.