Increase in bilateral trade will be litmus test

There are high expectations from both sides regarding Netanyahu’s current visit.

January 13, 2018 20:49
2 minute read.
Indian Prime Minister Narendra Modi (L) and Benjamin Netanyahu shake hands Tel Aviv.

Indian Prime Minister Narendra Modi (L) and Israeli Prime Minister Benjamin Netanyahu shake hands as they wave to the crowd during a reception for the Indian community in Israel, in Tel Aviv, Israel July 5, 2017.. (photo credit: REUTERS/AMMAR AWAD)


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The visit of Prime Minister Benjamin Netanyahu to India, which begins today and will extend to January 18, will be the fourth meeting of the two countries’ highest officials since the visit of Indian president Pranab Mukherjee in October 2015. That visit was followed by President Reuven Rivlin’s trip to India in November 2016 and the visit of Indian Prime Minister Narendra Modi to Israel last July.

Based on the excellent interpersonal relationship demonstrated during Modi’s 2017 visit there are high expectations from both sides regarding Netanyahu’s current visit.

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Some of the initiatives launched during Modi’s visit, such as the NIS 140 million bilateral innovation fund and the India Israel CEO Forum are going to be taken further during Netanyahu’s visit as the Israeli delegation is going to include about 150 key persons from the private business sectors.

Although defense is the biggest sector of trade and collaboration between the countries, the discussions will cover many more sectors such as information technology and cyber, healthcare, agriculture and water and innovation.

India, with a population of about 1.3 billion, a median age of 28 and average growth of 7% per annum is anticipated to maintain its climb toward becoming the fourth or even third greatest economy in the world within the next decade or two.

The Indian economy is also transforming from services and agriculture to sophisticated industries and an R&D-based economy. This creates great opportunities for many Israeli companies, mainly from the technology sectors.

The volume of bilateral trade has increased from $200m. in 1993 to approx. $4.2 billion in 2017.


Although the magnitude of growth is impressive (20 times in 14 years), the bottom line is far from being sufficient, taking into account the infinite potential of the Indian market for Israeli companies and technologies.

The current moderate figures can be partially explained by the regulations and difficulties involved in investment and operation in India by foreign players and the relatively long decision- making process on the part of Indian companies with respect to investment in Israel.

Currently foreign companies face restrictions with regard to controlling Indian activities in various sectors (such as defense) as well as free flow of capital into and out of India. Many Israeli companies learned to run their Indian activities under Indian regulations, however regulations and difficulties are still keeping many Israeli companies out from the Indian market.

All these and other reasons for the insufficient materialization of the Indo-Israeli potential are to be addressed during Netanyahu’s visit this week as the discussions, decisions and actions, during the visit and after it, will all support and encourage the private sectors from both sides to increase their efforts toward the other country.

Though measured in few years only, the material criteria for the success of Netanyahu visit, as well as all previous visits, shall be the long-term substantial increase of the volume and diversity of the bilateral trade between the countries.

The writer is partner and head of Indian legal practice Amit, Pollak, Matalon & Co.

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