India and Israel have formally signed the Terms of Reference (ToR) to initiate negotiations for a comprehensive Free Trade Agreement (FTA). The ToR was signed in Tel Aviv on November 20, 2025, by India’s Minister of Commerce and Industry, Piyush Goyal, and Israel’s Minister of Economy and Industry, Nir Barkat. This agreement marks a significant milestone in strengthening the bilateral economic and strategic partnership between the two nations, which do not see themselves as direct economic competitors.
The ToR lays the groundwork for structured, formal negotiations that will cover an extensive array of economic sectors. Key areas of focus include market access for goods (by eliminating tariff and non-tariff barriers), trade in services (particularly in IT, health, and BPO sectors), investment facilitation, and the simplification of customs procedures. This comprehensive approach is designed to provide clarity, predictability, and stability to their economic engagement.Crucially, the agreement prioritizes increasing cooperation for innovation and technology transfer, particularly in high-growth sectors such as agritech, fintech, artificial intelligence, quantum computing, and cybersecurity. Both ministers expressed confidence that the FTA will act as a “force multiplier” and significantly boost current bilateral trade, aiming for a ten-fold increase in the next decade.
