Israel, India look to broaden commercial ties

India and Israel have set themselves on a course to realise the full potential of their relationship as the two sides entered into agreements on economic and commercial ties in various fields, including agriculture, medical technology, space, water preservation and pledged to invest more in their shared culture and values so as to make commercial run deeper.

In fact, Indian Prime Minister Narendra Modi and his Israeli counterpart Benjamin Netanyahu spent more time discussing companies that sell medical devices, hi-tech and water systems.

Rather than making the first visit by a sitting Indian prime minister all about the value of deals signed, Israel's Prime Minister Benjamin Netanyahu and Modi appear intent to retrieve the ground that distanced India and Israel due to Arab pressure.

The intent now is to build a broad economic base, rather than merely a contractual exchange based around defence. The timing also suits a diplomatic shift that could be more acceptable to the region as well.

Modi is also more conscious of the need for India to adopt innovation and new technology to update its business and infrastructure and how closer ties with Israel could benefit the country.

"India and Israel are walking hand in hand into the future as partners," Modi and Netanyahu wrote in a joint editorial this week. "From start-ups to space, communications to cybernetics, Israel's technological capabilities are merging with India's."

The two men are spending 48 hours together with Modi, accompanied by Indian business leaders, getting a political and business tour that covers Israeli history, culture and innovation, as well as the signing of economic agreements.

There have only been a handful of Indian investments in Israel over the past decade, as opposed to the $16.5 billion received from China in 2016 alone.

During Modi's visit, Zebra Medical Vision, a company from a kibbutz near Tel Aviv, and Bangalore-based Teleradiology Solutions will sign a partnership to use analytics in 150 health-care centres.

For Netanyahu who is looking to reorient Israel's economy toward Asia, more deals with India will help the country's exports – wich is projected to increase by 25 per cent in the next four years.

While export-dependent Israel and India, which is focused on supplying its huge population, are complementary, it may take a while before the Modi-Netanyahu relationship sparks a serious expansion in investment and trade.

Israel is a global leader in water and food systems, two critical fields India needs to upgrade. India wants to strengthen its manufacturing base and is looking to do so with technologies coming from Israel. Both countries host major diamond trading and polishing hubs.

Israeli exports to India last year totalled $1.15 billion, excluding diamonds, just 2.5 per cent of total exports. Bilateral trade was less than $2 billion, which jumped to $4.13 billion including diamonds. Israel's foreign direct investment in India totals only $100 million.

Israel's ambassador to India, Daniel Carmon, said it is becoming easier to do business between the two countries, even if there may remain some differences in practice.