India, Israel considering FTA rollout in 2 phases, says Goyal

Commerce and Industry Minister Piyush Goyal on Sunday said that India and Israel were exploring a two-stage implementation of their proposed Free Trade Agreement (FTA) to deliver quicker gains to businesses in both countries.

His remarks on Sunday came days after the two sides signed the terms of reference (ToR) to formally launch negotiations for the long-pending agreement.

The ToR covers a wide sweep of priorities — market access through reduction of tariff and non-tariff barriers, smoother customs procedures, stronger investment facilitation, cooperation in innovation and technology transfer, and liberalised norms for services trade.

“We are considering doing this in two tranches. A decision will be taken when the talks begin. Both ministers are keen to finalise the first phase early so that the trade community benefits sooner,” Goyal said, adding that India and Israeli Economy and Industry Minister Nir Barkat will initially focus on “low-hanging fruit”, while temporarily putting aside sensitive issues.

Goyal, who is in Israel with a 60-member business delegation, said both countries were looking to leverage each other’s strengths — Israel’s innovation and R&D prowess and India’s scale, markets and manufacturing capacity — to drive investments and joint projects. During his three-day visit to the country, Goyal also met Israeli Prime Minister Benjamin Netanyahu among other key leaders.

“It is quite possible that we may come out with the first phase of an FTA so that we can kick-start the benefits faster,” he said.

Goyal also pointed to Israel’s $50 billion metro project in Tel Aviv — involving nearly 300 km of underground tunnelling — for which pre-qualification documents have been issued.

“Israel is ‘very seriously’ keen that Indian firms bid for the mega project. We have sev

eral players who have done massive works. We have 23 cities in India setting up metros,” he added.

Bilateral trade dipped sharply in 2024-25, with India’s exports falling 52% to USD 2.14 billion and imports dropping 26.2% to USD 1.48 billion.

Despite the downturn, India remains Israel’s second-largest trading partner in Asia, with growing exchanges in high-tech, machinery, communications systems and medical equipment, alongside traditional sectors like diamonds, petroleum products and chemicals.