Prime Minister Narendra Modi has recently made an important announcement during his visit to Israel. He said that talks on Free Trade Agreement (FTA) between India and Israel have resumed and it may be finalized soon. This announcement is a big step towards strengthening economic relations between the two countries.
The Free Trade Agreement between India and Israel was announced on 26 February 2026 in Israel, where PM Modi held a joint press briefing with Israeli Prime Minister Benjamin Netanyahu. PM Modi clearly said in his address that discussions on FTA have started between the two countries. He stressed that this agreement will take both the countries to new heights. The visit focused on strategically strengthening bilateral ties, including in areas such as defence, science-technology, trade, agriculture and water management.
PM Modi said that ‘Mutually Beneficial Free Trade Agreement’ between the two countries will be finalized soon. The first round of talks on FTA started from 23 February 2026 in New Delhi, which continued till 26 February. Representatives from both sides attended and a consensus is expected to be reached soon.
This FTA is important because the current trade volume between India and Israel is limited. The total trade between the two countries in the financial year 2024-25 stood at about $3.62 billion, of which India’s exports were about $2.14 billion and imports were about $1.6 billion. Main traded commodities include diamonds, chemicals, electronics, agricultural products, machinery and high-tech goods. Once FTA is implemented, tariffs will be reduced, which will boost trade, open new sectors and increase investment. MSMEs and other businesses will also benefit from this.
Special Strategic Partnership
During this visit, both the countries have given the status of ‘Special Strategic Partnership’ to the relations. PM Modi said, “Our relations have stood the test of time.” Apart from this, more than 16 agreements were signed, which include AI, cyber security, education, use of UPI in Israel, defense, agriculture, water management and critical technology. Implementation of UPI in Israel will make digital payments easier and will boost tourism trade.
PM Modi also stressed on unity against terrorism and said that both the countries stand shoulder to shoulder. The visit marks a milestone in strengthening India-Israel relations, which will open up new opportunities in defence, technology, trade and strategic sectors.
This agreement can prove to be a game-changer for the economies of both the countries, especially when India is moving towards joining the top economies of the world and Israel is the hub of innovation.