Indian flag_311 reuters.
(photo credit:Navesh Chitrakar / Reuters)
India will become a hub for Israeli exports to the Middle East once a free trade
agreement is signed between the two countries, the CEO of the Ramat Gan branch of
the State Bank of India said Wednesday.
Speaking at a seminar on Israeli-
Indian trade at Tel Aviv University, A. Purushothoman said India provided Israel
with a gateway not only to Arab countries with which it has no direct relations,
but also to large Asian markets such as Malaysia and Indonesia.
seminar was hosted by the Israel-Asia Center, a non-profit organization
dedicated to promoting cooperation between Israel and Asia, and Tel Aviv
University’s Sofaer International MBA Program.
It was held as part of a
series of events to mark 20 years of relations between Israel and
Eli Belotsercovsky, director of economic relations with India at
the Israeli Foreign Ministry, said the two countries were aiming to complete
free trade negotiations by the end of this year, although he stressed that this
“won’t be easy,” as there were many issues to be resolved.
trade reached $5 billion last year, but this figure will rise significantly once
the FTA is signed, Belotsercovsky said.
The Indian government has
prioritized the expansion of economic relations with Israel, he said, pointing
out that Israel and New Zealand are the only non-regional countries with which
it is has opened free-trade negotiations.
Water and agriculture are the
obvious areas in which bilateral trade can be expanded, homeland security also
provides untapped potential, Belotercovsky said, adding: “We have a lot of
experience [in homeland security], and India has great demand,” Vani Rao, head
of the commercial wing at the Indian embassy in Tel Aviv, said Israeli companies
must look beyond just selling goods to India’s 1 billion-plus population, and
that India could also become a manufacturing and R&D hub for Israeli
The two countries create a good match, she said, because
Israel is a leader in innovation, and India provides skill and high-quality
manufacturing at low cost.
Anat Bernstein-Reich, president of
Israel-India Friendship Association and co-founder of project management firm
A&G Partners, said Israeli companies typically make two mistakes when they
enter the Indian market: they misunderstand the price-sensitive nature of the
Indian economy; and they do not budget properly.
Many companies try to
sell their product for 10-20 percent less in India than they do in Israel, but
A& G recommends they sell for 30-40% of the Israeli or American shelf price,
She added that Indian labor is no longer cheap, and
that Israeli companies should manufacture there because of the unlimited supply
of skilled manpower, and not because it costs less to employ an engineer there
than it would in Israel.
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