India & Israel Sign Terms of Reference to Initiate Free Trade Agreement Negotiations

In a major step to boost bilateral economic relations, India and Israel signed the Terms of Reference (ToR) on November 20, 2025, officially initiating negotiations for a comprehensive Free Trade Agreement (FTA). The signing ceremony in Tel Aviv was attended by India’s Commerce and Industry Minister Piyush Goyal and Israel’s Economy and Industry Minister Nir Barkat. This agreement marks a significant moment in enhancing trade, innovation, and strategic cooperation between the two nations.

What the ToR Entails

The Terms of Reference lay the groundwork for structured and formal negotiations on an FTA that is expected to cover,

• Trade in goods and services
• Investment promotion and protection
• Market access and regulatory cooperation
• Technology transfer and innovation partnerships

The ToR ensures both nations are aligned in their objectives of forging a balanced, transparent, and mutually beneficial trade agreement, with strong frameworks for dispute resolution, timeline targets, and sectoral dialogues.

Strategic Significance of the Move

The initiation of FTA talks comes at a time when both India and Israel are seeking to deepen their strategic partnerships beyond defence and technology. The move carries the following importance.

• Enhancing bilateral trade: The FTA is expected to significantly boost the current trade volume, opening up sectors like agriculture, pharmaceuticals, electronics, defence, and digital services.
• Complementary strengths: India’s vast consumer market and manufacturing ecosystem align with Israel’s expertise in agritech, water management, cybersecurity, and R&D.
• Investment and innovation: The FTA will encourage capital flows, joint ventures, and cross-border innovation hubs between Indian and Israeli companies.
• Global supply chain role: Strengthening economic ties with Israel aligns with India’s broader push to diversify global trade relationships and reduce supply chain vulnerabilities.

Focus Areas in the Proposed FTA

The agreement is expected to prioritize the following sectors and issues,

• Tariff reduction and customs cooperation
• Services trade, particularly in IT, health, and education
• Start-up collaboration and tech innovation ecosystems
• Regulatory harmonization and standardization
• Investor protection and facilitation mechanisms
• E-commerce, digital trade, and fintech innovation
• Joint research initiatives in agriculture and clean energy

These focus areas will help shape a new economic partnership model grounded in innovation, technology, and inclusive growth.

Static Facts

• Date of signing: November 20, 2025
• Location: Tel Aviv, Israel
• Signatories: Piyush Goyal (India) and Nir Barkat (Israel)
• Purpose: Launch negotiations for a comprehensive Free Trade Agreement (FTA)
• Trade Focus: Goods, services, investment, digital trade, innovation
• Bilateral Relations: The move is a continuation of the India-Israel strategic partnership that spans defence, tech, and agriculture
• India’s FTA landscape: This is part of India’s wider strategy to negotiate FTAs with the EU, US, Oman, New Zealand, and others