JERUSALEM: India and Israel have agreed to kickstart talks on signing a financial pact next month to promote bilateral trade and lay the ground work for signing a free trade agreement (FTA), a media report said.
Israeli Finance Minister Yuval Steinitz met his Indian counterpart Pranab Mukherjee in Washington on the sidelines of last week’s semi-annual meeting of the IMF and World Bank , business daily Globes reported.
The two leaders have agreed to prepare the ground for an FTA, it added.
Besides, the daily said, Steinitz would visit India in early 2011 with the heads of leading Israeli companies.
Indo-Israel trade has grown from USD 200 million in 1992, when diplomatic relations were established between the two nations, with projections of USD 5 billion this year.
India has jumped from the eighth position to second as the favoured destination for Israeli exports in the first half of 2010, according to Israel’s Export and International Cooperation Institute.
Israeli exports to India in the first half of this year were worth USD 990 million, an increase of 102 per cent compared to last year.
“Israel cannot rely just on the markets in the US and Europe. We need new markets. We must look eastwards especially to India and China. I am interested in a closer connection between India and Israel, similar to the economic ties we have with the US and Europe,” Steinitz was quoted by the business daily as saying.
“I want to see Indian investments in Israel, just as there are investments by Israeli companies in India,” he added.
Steinitz dismissed apprehensions that an FTA with India would lead to jobs moving away from Israel to that country.
India has leaped to become Israel’s second largest export destination, only next to close ally the US, as the Jewish state focusses at tapping potential in Asian markets.
The reason for this year’s sharp jump in exports to India was a 63 per cent leap in shipments by Israel’s mining, minerals and quarrying sectors, which exported USD 228 million worth of products, mainly fertilisers.
One of the biggest exporters to India in this sector was Dead Sea Works, a subsidiary of Israel Chemicals.
Exports of electronics equipment, including warfare systems, to India grew from less than USD 10 million in the first half of last year to USD 160 million this year, the institute reported.
Major exporters in this sector included ECI Telecom and Comverse, TowerJazz, Elbit Systems and Rafael .
Israeli exports to India of metals and metal products also increased from USD 21 million to USD 130 million, a sharp increase of 524 percent.