Tel Aviv, Nov 21 (PTI) A proposed free trade agreement (FTA) between Israel and India will open up significant business opportunities for industries in both countries and boost bilateral trade and investment flows, Israeli Economy and Industry Minister Nir Barkat said.

He said that the two countries have signed terms of references (ToRs) on November 20 here to start negotiations for the agreement.

Barkat said that both counties have decided not to include sensitive areas in the FTA negotiations.

"Huge opportunities are there to boost trade and investments between the two countries. We are going to see huge growth in business," Barkat told PTI.

He added that a lot of Israeli companies are interested in opening up subsidiaries in India, which can act as a gateway to Asia for them.

"People are now understanding that there are big opportunities (in India) because India's tomorrow is not the India of yesterday," he said, adding India is well positioned to compete with China.

The elements of ToRs include market access for goods by eliminating tariff and non-tariff barriers, investment facilitation, simplification of customs procedures, increasing cooperation for innovation and technology transfer, and easing norms to promote trade in services.

India and Israel had been negotiating a similar agreement since May 2010. Eight rounds were held, but talks stalled later. The last round was held in October 2021.

During 2024-25, India's exports to Israel dropped 52 per cent to USD 2.14 billion from USD 4.52 billion in 2023-24. Imports, too, fell 26.2 per cent to USD 1.48 billion last fiscal year. The bilateral trade stood at USD 3.62 billion.

India is Israel's second-largest trading partner in Asia.

Though bilateral merchandise trade is dominated mainly by diamonds, petroleum products, and chemicals, recent years have witnessed an increase in trade in areas such as electronic machinery and high-tech products, communications systems, and medical equipment.

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, and agricultural products.

Imports include pearls and precious stones, chemical and mineral/fertiliser products, machinery and electrical equipment, petroleum oils, defence, machinery, and transport equipment.

In September, both countries inked a Bilateral Investment Agreement (BIA) to promote two-way investments.

During April 2000 and June 2025, India received USD 337.77 million foreign direct investment (FDI) from Israel. PTI RR HVA

Proposed Israel-India free trade agreement aims to eliminate tariffs, ease customs, and boost investment and services. A proposed free trade agreement between Israel and India has entered formal negotiations under signed terms of reference that exclude sensitive areas. The ToRs focus on market access by eliminating tariff and non tariff barriers, investment facilitation, simplification of customs procedures, cooperation on innovation and technology transfer, and easing rules to promote trade in services, with the aim of expanding bilateral trade and investment.