Israel & India Poised For Multi Billion Dollar Bilateral Trade 

The intersection of Israeli technology with the developing needs of the Indian market opens numerous opportunities for cooperation

 Credit: Chief Economist’s Review, Israel Export Institute | 2025

India presents a fascinating growth story – the world’s third-largest economy is expected to grow by 6.5% in 2025, well above the global average. The developing Indian market has become one of the important trade destinations for Israel, with diverse exports including software services and high-tech products such as electronic components, advanced agricultural equipment, and medical devices, totaling over $3 billion. Alongside the challenges, the intersection of Israeli technology with the developing needs of the Indian market opens numerous opportunities for cooperation, especially in the fields of security, artificial intelligence, precision agriculture, water technologies, cleantech, and healthcare.

Comparative Indicators between the Countries

Economic Environment

India, the world’s third-largest economy and most populous country, continues to show strong economic performance. While India and China showed similar growth rates of around 6% on annual average in the past decade (2015-2024), the next two years reveal a diverging economic trajectory: India is projected to grow at 6.5%, significantly outpacing China’s expected 4.3%. The Indian economy benefits from a large and developing local market, a young and skilled workforce, and ongoing economic reforms. The forecast points to a decline in inflation from 6% to 4% and an expected easing of monetary policy to support local demand and growth.

India is a democratic country with a decentralized political system that reduces governance risks. However, its federal structure creates challenges, as state autonomy and coordination complexities hinder national-level reforms. Under Prime Minister Modi’s government (NDA) since 2014, there has been progress in improving the business environment, though bureaucratic challenges persist.

Simultaneously, India is strategically positioning itself by cooperating with Western countries through the Quad alliance (USA, Japan, Australia) while maintaining balanced relations with Russia. This approach, especially amid growing West-China tensions, enhances India’s appeal as a strategic partner, despite market operational challenges.

SWOT Analysis of India’s Economic Trends for the Coming Years

Strengths

• Very large domestic market that provides significant support for local demand and rapid economic growth
• Skilled and cheap labor allows the country to export significant services to the global economy. Particularly young workforce with over 50% of the population under 25 years old

Weaknesses

• Despite rapid economic growth, India remains a very poor country. The International Monetary Fund estimates that GDP per capita will reach $2,850 in 2024, about a quarter of China’s
• About two-thirds of the population depends on agriculture for their livelihood, leaving the economy exposed to seasonal fluctuations and weather impacts like low monsoon rains
• India faces ongoing budget and trade deficits, with a significant portion of state revenues directed to mandatory payments instead of infrastructure investments

Threats

• India’s dependence on oil imports is a central challenge, affecting the deficit and inflation when global oil prices rise
• India is at risk of severe environmental problems. Many cities suffer from heavy air pollution and river pollution, raising doubts about the ability to maintain rapid growth over time

Opportunities

• Growth of the middle class and its impact on the economy: The developing middle class in India is expected to increase demand for new products and services. A wealthier society, alongside tax reforms, will help alleviate fiscal pressure
• Economic reforms and digitization: The government is promoting fiscal reforms, including the Goods and Services Tax plan from 2017 and recent digitization initiatives. These steps are expected to strengthen state revenues
• Competitiveness in global manufacturing: Due to rising Labor costs in China, India is in a strategic position to grow in global manufacturing. With a young and competitive workforce and the ‘Make in India’ program, the country is attracting multinational corporations and strengthening local manufacturing

Israel – India | Trade and Business Relations

Among the world’s countries, Israel’s trade in goods and business services with India is among the largest and most important. By the end of 2024, India is ranked as Israel’s 6th largest trading partner (4th including diamond trade).

For Israel, India is the 6th largest export destination worldwide and the 15th largest import source. In the past decade, trade between the countries has grown by approximately 90%, led by exports. 

The trade volume between the countries stands at an average of about 4.7 billion US dollars annually. The trade is predominantly industrial. According to estimates, about a third of the trade between the countries originates from business services.

The graph shows the trends in Israel-India trade over the past decade, with imports and exports in billions of US dollars, indicating significant growth from an average of 2.5 billion US dollars in 2015-2016 to 4.7 billion US dollars in 2023-2024 (excluding diamond which stood at around one billion US dollars).

Data: Processing by the IEI Economic Unit for the volume of trade in business services and goods for the years 2015-2024. Unless otherwise noted, trade data in this report refers to trade between Israel and India excluding diamond trade.

Top 10 Leading Export Sectors from Israel to India | In Millions of Dollars

India is a strategic export destination for Israel, representing about 3% of total exports in goods and business services. The leading export sectors include software services, electronic components and telecom products, optical and medical equipment, fertilizers and chemicals, and agricultural and mechanical machinery.

Top 10 Leading Import Sectors from India to Israel | In Millions of Dollars

Opportunities for Cooperation for Israeli Companies

Israel and India share promising trade and technology relations, anchored by their complementary strengths. Known globally as the ‘Start-up Nation’, Israel boasts a robust high-tech sector that comprises 20% of its GDP and generates 52% of its exports, totalling around US$ 80 billion in 2024, with over 8,500 active companies.

The Indian market presents a compelling counterpart, offering exceptional growth opportunities alongside significant challenges. Driven by a young, skilled workforce, a rapidly expanding middle class, and strategic initiatives like the ‘Make in India’ program, India provides a robust foundation for technological and industrial cooperation. The government’s ambitious plans in digital, energy, and infrastructure sectors create fertile ground for investments and technological collaborations.

A deep analysis reveals significant synergies: Israeli technological capabilities directly align with India’s developing market needs, particularly in key sectors such as cleantech, precision agriculture and water, security, artificial intelligence, and digital health.

The maturity of bilateral relations, underpinned by shared interests and the unique advantages of each nation, creates an unprecedented opportunity to deepen cooperation in the technological-economic ecosystem.

For more information: https://export.gov.il/en/