The Hindu Business Line : India, Israel set up joint study group to boost bilateral trade

Mr Ehud Olmert, Israeli Vice-Prime Minister and Minister for Industry, Trade & Labour, with Mr Kamal Nath, Minister for Commerce & Industry, and Mr Y. K. Modi, President, FICCI, at a meeting in the Capital on Wednesday. — Kamal Narang

New Delhi , Dec. 8

INDIA and Israel have agreed to set up a joint study group to formulate a comprehensive economic partnership between the two countries.

This was announced by Mr Kamal Nath, Minister for Commerce and Industry, at an interactive meeting organised by FICCI on Wednesday with the visiting Israeli business delegation led by the Vice-Prime Minister and Minister of Industry, Trade, Labour and Communications of Israel, Mr Ehud Olmert.

Mr Kamal Nath also proposed a $ 5-billion target for bilateral trade between India and Israel in three years and noted that going by the present trends, it should be possible to achieve this target. He indicated that in 2004, Indo-Israeli trade should comfortably cross the $ 2 billion mark.

The basket of products for trade between the two countries is expanding, even though diamond continues to be the most important item. "We expect this positive trend to continue, as India expands its range of its goods and as its appetite for high-tech product grows," Mr Kamal Nath said.

Referring to the diamond trade between India and Israel, Mr Kamal Nath said that the creative and successful leveraging of mutual strengths witnessed in the diamond trade between the two countries should be replicated in other sectors.

He invited Israeli investors to participate in the development of infrastructure and the telecom sector, which offered vast opportunities for investments and collaborations.

India now has one of the most liberal policy frameworks for foreign direct investment (FDI) and foreign technology transfer. FDI up to 100 per cent is permitted on the automatic route in most sectors. There is no restriction on repatriation of original investment and returns on investment.

In the last decade, the approved FDI was in excess of $ 66 billion, with actual inflows touching $ 40 billion. In the first six months of the current year, FDI grew by almost 70 per cent over last year.

"Improvements in infrastructure, abundant raw materials, low-cost skilled manpower and a business-friendly policy framework is helping India fast emerge as a low-cost manufacturing centre for international markets", the Minister said.

In his address, Mr Olmert said Israel was looking to the East and India, indeed, is the first stop. "We offer a genuine, open-hearted and transparent invitation to Indian businessmen for forging joint ventures and collaborative agreements," he said.