Economic Cooperation between India and Israel

Abstract

The article deals with the India–Israel economic relations within 1990–2020s. The authors stress that the Israeli direction is among the priorities in the external economic policy of India at the present time. The authors examine the importance of mutual trade stressing that it is well balanced and its volume has increased more than twice since 1992. A number of indices are calculated to conclude that the mutual trade is characterized by its high intensity. Intra-industry trade is also relatively high as there is high complementarity of India and Israel economy and the trade balance is usually positive for India. As a whole both India and Israel are interested in one another’s market. Countries have been conducting negotiations on creating a free trade zone but due to many obstacles from both parts the agreement is not yet reached. The authors underline that India–Israel investment cooperation has been rather well developing for the latest decade. Israeli investors are more active on Indian market and the average volume of their investments is usually about twice higher than the Indian direct investments to Israeli economy. Nowadays there are more than 300 companies with the participation of Israeli capital registered in India operating mainly in the sphere of medicine, telecommunications, chemical industry, energy, including the use of unconventional energy sources, as well as agriculture. Investments are very diverse in nature: among them there are the organization of manufacturing enterprises, the opening of research centers, the creation of subsidiaries etc. Scientific and technical cooperation is another important direction of India–Israel ties. Thanks to scientific and technical cooperation with Israel, the rapidly developing Indian economy is successfully compensating for the lack of advanced technologies that it needs. In addition to bilateral interaction, the countries also cooperate with each other through the I2U2 Dialogue and two large-scale projects in the field of food security and clean energy are being implemented in India at the present time. At the end of the article the authors underline that there is every reason to sure that economic relations between India and Israel will reach a fundamentally new level in the near future, which will contribute to the further development and modernization of the Indian economy.