New Delhi: India and Israel have moved a step closer to a long-discussed Free Trade Agreement after both sides formally signed the Terms of Reference (ToR) that will guide the negotiation process. The document, signed in Tel Aviv on November 20, 2025, provides the structure and objectives for talks that officials say they aim to complete within the next year and a half.
A Major Step Toward a Comprehensive Trade Pact
The signing took place during the Gateway to Growth India–Israel Business Summit, where Commerce Minister Piyush Goyal met Israel’s Economy and Industry Minister Nir Barkat. A delegation of around 60 Indian business representatives also attended the summit.
The ToR outlines the issues the two countries intend to address in the negotiations. Among the priorities are reducing tariff and non-tariff barriers, easing investment procedures, improving customs processes, opening more space for services trade, and strengthening cooperation in technology and innovation.
Goyal described the FTA framework as one that could expand opportunities for businesses in both nations. Both India and Israel are members of the World Trade Organization, and the proposed FTA will follow principles commonly used in international trade agreements such as transparency, reciprocity, and non-discrimination. At present, the two countries trade under MFN rules, but the FTA aims to define clearer terms and provide legal certainty.
Negotiators are expected to focus on:
- market access in goods and services
- rules of origin
- dispute-resolution procedures
- intellectual property rights
- digital trade and e-commerce
- standards related to labour and the environment
Legal experts anticipate that the FTA may include investment protection provisions similar to those in India’s FTAs with the UAE and Australia, which include options for arbitration under specific conditions.
In FY 2024–25, trade between India and Israel totalled roughly USD 7.86 billion. India primarily exported machinery, pharmaceuticals, and diamonds, while importing chemicals, electronics, and defence items from Israel. Officials expect these numbers to grow once the agreement lowers existing barriers.
Diplomatic Context and the Way Forward
The ToR signing is part of Goyal’s official visit to Israel from November 19 to 22, 2025. His schedule includes meetings with senior government officials, business leaders, and technology organisations.
India and Israel have maintained strong ties since establishing full diplomatic relations in 1992, particularly in areas such as defence, agriculture, cybersecurity, and water management.
With the ToR in place, the next steps involve forming working groups and setting negotiation timelines. Both sides have indicated their intention to move quickly and conclude the FTA within 12 to 18 months.
