Israel and India were poised to sign a memorandum of understanding on Monday to promote a free trade agreement between the two countries.
Manufacturers Association of Israel President Shraga Brosh, who is heading a delegation of over 100 business representatives accompanying Prime Minister Benjamin Netanyahu on his visit to India this week, will sign the agreement on Israel's behalf. Confederation of Indian Industry President Shobana Kamineni will sign it on India's behalf.
A free trade agreement would allow for the bilateral removal of tariffs and regulatory barriers and for coordination on investments and taxation, all steps that would make it easier for Israeli exporters to do business with India.
The Indian economy is one of the world's largest and is characterized by very high growth rates.
The memorandum of understanding also includes the possibility for collaboration and the exchange of information.
Brosh said Sunday that he believes the memorandum, "alongside the activity of the India-Israel CEO Forum that we launched during the Indian prime minister [Narendra Modi]'s visit to Israel, will serve as a catalyst for the advancement of ties between the countries. India is a country with vast economic potential, and we can significantly increase trade relations between the countries and even double exports in a number of fields, including security, agriculture, water, and others."
The Israeli business delegation represents some 70 Israeli companies from various fields. It comprises a dozen CEOs and 18 business leaders representing the Innovation Authority's Bridge to Innovation project that aims to increase innovation in Israel and India, among others.
Apart from cultural differences, one of the central problems faced by Israeli manufacturers interested in exporting products is that while Indians are interested in importing technological know-how, they prefer their products to be manufactured locally. One of the delegation's goals is to initiate preliminary meetings in an effort to help manufacturers establish business ties in India.
Trade between the two countries has decreased since 2015.
Israeli exports to India in 2016 amounted to $1.5 billion, 12.5% less than in 2015. Most of the exports comprised machinery and electrical equipment (37%), chemical industry products (26%), simple metals (18%), and optical appliances (11.5%).
In 2016, Indian exports to Israel amounted to $800 million, a 12.6% decrease from 2015. Most of these comprised chemical industry products (29.5%), textiles (18%), plastic and rubber (12%), and machinery and electrical equipment (11%).
