From Strength to Innovation: Evolving Areas of Partnership

From Strength to Innovation: Evolving Areas of Partnership

The significant opportunities for cooperation between India and Israel in key areas and emerging sectors

The Indian economy is experiencing steady growth, driven by strong domestic demand, a thriving services sector, and a growing middle class. India’s GDP growth rate slowed down to 6.7% in the April-to-June quarter of 2024, but it remains one of the world’s fastest-growing large economies. The country’s resilience is reflected in labor market improvements, with government measures and growth of emerging sectors supporting job growth and consumer spending.

Here are some key indicators of the Indian economy, FY 2024-2025: 

In US$ trillion

Indian economy is ranked 5th (USD 4.06 Trillion), and is expected to overtake Japan and Germany in 2027 to become the world’s third-largest economy around 2027 behind USA and China

• Infrastructure

Infrastructure development is a cornerstone of India’s growth agenda, and Israel’s expertise in urban planning and smart cities presents immense opportunities for collaboration. With India’s ambitious initiatives such as Smart Cities Mission and Bharatmala Pariyojana, Israeli companies can share advanced technologies in water management, renewable energy, and urban planning.

Israel’s technological prowess in desalination and wastewater recycling can also play a pivotal role in addressing India’s water scarcity issues. Joint ventures in these domains could enhance India’s infrastructure resilience, while also providing Israeli companies access to one of the world’s largest and fastest-growing markets.

• Agriculture and Food Processing

Agriculture has always been a critical area of cooperation between India and Israel. Israel’s world-renowned agricultural technologies, particularly in drip irrigation, precision farming, and arid-zone farming, align perfectly with India’s need to modernize its agriculture sector. Through the Indo-Israel Agriculture Project (IIAP), both nations have established Centres of Excellence across India to transfer Israeli agricultural expertise to Indian farmers. 

Initiative to reduce post-harvest losses, would improve supply chain efficiency, and boost exports. There is immense potential for collaborations in agro-tech startups, crop diversification, food safety standards also present promising avenues for deeper engagement.

• Education

Education is a sector where India and Israel can foster stronger collaboration, particularly in Science, Technology, Engineering, and Mathematics (‘STEM’). Israeli universities and research institutions are globally recognized for innovation and cutting-edge research, while India boasts one of the largest pools of talented students and professionals. Joint academic programs, exchange scholarships and universities could drive mutual growth in areas like artificial intelligence, biotechnology, and nanotechnology. Skill development, digital technologies, artificial intelligence can empower both economies.

• Healthcare 

Healthcare is an area where India and Israel can work together to address global and regional challenges. Israel’s advancements in medical devices, telemedicine, and biotechnology can complement India’s vast pharmaceutical manufacturing capabilities. Israel’s innovative solutions in elderly care and disaster response mechanism, emergency and healthcare management are invaluable for India and its response to natural disasters.

• Defence 

Defence cooperation is a cornerstone of the India-Israel partnership. Israel is one of the largest suppliers of defence equipment to India, and the two countries have worked together on several high-profile projects, including missile systems, drones, and radar technologies. Make in India (‘MII’) initiative and Israel’s advanced defence technologies provide a solid ground for joint ventures, technology transfer. Cybersecurity, artificial intelligence in defence, and unmanned systems offer immense potential for collaboration. The partnership not only enhances India’s defence capabilities but also contributes to regional and global security.

• Emerging Sectors

Beyond the traditionally strong areas of cooperation, emerging sectors like renewable energy, fintech, and start-ups hold significant promise for India-Israel collaboration. Israel’s leadership in solar energy technology aligns with India’s commitment to achieving its renewable energy targets under the Paris Agreement. The fintech sector is another area ripe for partnership. 

Digital Payments: With India’s extensive digital payments ecosystem and Israel’s expertise in cybersecurity and financial technologies, the two countries can co-develop innovative solutions for financial inclusion and secure digital transactions. 

Start-up: The start-up ecosystems in both nations are vibrant and complementary as evidenced by The India-Israel Industrial R&D and Technological Innovation Fund (I4F). India provides a large and diverse consumer base, while Israel excels in developing cutting-edge technologies. Bilateral start-up accelerators, funding programs, and knowledge-sharing platforms can drive innovation and create new opportunities for entrepreneurs from both countries.

Conclusion

The India-Israel partnership stands as a model of mutual cooperation and shared growth. By leveraging their respective strengths, the two nations can unlock immense potential in infrastructure, agriculture, education, health, defence, and emerging sectors. Strengthened by shared values of democracy and innovation, this collaboration not only benefits India and Israel but also sets a precedent for global partnerships aimed at addressing common challenges.

As the world becomes increasingly interconnected, fostering such partnerships will be crucial for sustainable development and collective progress. With strong political will and a commitment to innovation, India and Israel are well-poised to redefine the future of bilateral cooperation.

Contributed by:

Himanshu Srivastava and Shyam Ramakrishnan, Baker Tilly ASA India LLP