India and Israel have agreed to resume negotiations on a long-pursued free trade agreement, officials announced after a bilateral meeting in Tel Aviv. Indian Commerce Minister Piyush Goyal and Israel’s Economy and Industry Minister Nir Barkat signed a Terms of Reference (ToR) on Thursday to guide the negotiations.
Goyal described the step as the first crucial move toward concluding a balanced, comprehensive and mutually beneficial FTA to deepen trade, economic and strategic ties. He said the two sides aim to diversify and expand bilateral commerce by identifying new cooperation areas while addressing sectoral sensitivities.
The framework that will steer talks covers multiple elements: improving market access for goods through the reduction of tariff and non-tariff barriers; facilitating investment; simplifying and harmonizing customs procedures; boosting cooperation on innovation and technology transfer; and easing rules to promote trade in services.
The countries previously negotiated a similar pact and completed eight rounds of talks. Restarting the process signals a renewed intent to reach an agreement that reflects both economies’ priorities.
Bilateral trade has grown markedly since diplomatic relations began in 1992, rising from roughly $200 million to a peak of $10.77 billion in 2022–23, driven in large part by diamonds. Officials say trade later fell by as much as two-thirds from that peak, a decline they attribute to regional security tensions and disruptions to shipping routes.
India is Israel’s second-largest trading partner in Asia and its seventh-largest globally, according to India’s Ministry of Commerce and Industry. Domestic concerns remain: some Indian trade unions have publicly opposed aspects of cooperation with Israel, particularly around proposed labor arrangements, underscoring that any final deal will need to manage both economic and political sensitivities.
Negotiators will now use the signed ToR as the basis for resumed rounds of discussion; no timeline for concluding the agreement was announced.