As Prime Minister Narendra Modi lands in Israel on July 4, it will be the first ever visit by an Indian Prime Minister to that country, commemorating 25 years of diplomatic relations. Israel is the original startup nation, a pioneer in innovation. To take only an example, the Prime Minister can touch base on an exciting prospect – driverless cars which are creating a buzz in the Israeli economy. Israel has become the centre for R&D in the area of autonomous car technology, adding to a long line of stunning hi-tech breakthroughs which offer the world the most dynamic innovation ecosystem outside America.
This is just a microcosm of the possibilities India can explore with Israel. There is immense scope for improving collaborations in agriculture, defence and science.
Turning pointIndia and Israel are experiencing a new bilateral energy, flowing out of interactions on the sidelines of global events between Prime Minister Modi and Israel’s Prime Minister Benjamin Netanyahu who has hailed this visit as a “very significant step”. In the 25 years since India and Israel normalised relations, we have learnt to do business with each other and have developed a substantial bilateral agenda in security, defence and agriculture, among others. From $200 million in 1992 (comprising primarily trade in diamonds), bilateral trade has reached $4.5 billion and the presence of Israeli companies in India has grown to 300.
The time is now just right for a calibration in their economic engagement. Israel, led by strong growth of private consumption, low inflation, rising labour force participation, a positive investors’ climate because of low interest rates, natural gas finds and responsible fiscal policies, has a lot to offer businesses.
India’s economy is projected by IMF to grow by more than 7 per cent, powered by reforms such as the Goods and Services Tax. Policy initiatives on ease of doing business and the opening of defence, construction and pharma sectors have added to India’s attractiveness as an investment destination.
What can be done to initiate the transformative moment in India-Israeli ties?
The first stop here is defence. The India-Israel equation in defence has acquired strategic dimensions but there is need and opportunity to make it “more broad-based” through production and manufacturing partnerships. Israeli defence industries are well inclined towards joint ventures to give a boost to the ‘Make in India’ campaign. Current global geopolitical trends make it ideal for India and Israel to work in tandem. A larger role for the Indian private sector in co-production and co-development and the India-Israeli deal to jointly develop a medium range surface-to-air missile system is a good business model to work on.
Israel embodies a culture of entrepreneurship highlighted by power of innovation, global leadership in R&D spending and VC investment. A joint innovation and research and development fund can work wonders.
A modern economy like Israel goes well with our own flagship programmes like Make in India. Indian companies with their engineering and scale and Israeli companies with their innovation and technology can together stimulate our domestic manufacturing sector, particularly in defence. Private sector stakeholders on both sides would do well to build business and investment ties in these areas.
Prime Minister Modi’s visit to Israel is also about an opportunity to boost an already strong agricultural partnership between the countries. Arid land technology, biotechnology and a joint action plan to research Indiaspecific and export-oriented seeds deserve attention. Israel has tackled its rain deficiency by developing technology solutions for waste water management, purification and water reuse in agriculture and industry. The Israeli dairy industry with its proven know-how and design, technology and genetic material can revolutionise the dairy industry in India.
Medical technologies and devices could be the next growth areas for collaboration.
No doubt there are challenges. India and Israel do not know each other enough. Tourism is not up to the mark and academic links are low key. A multi-dimensional partnership needs to be sustained.
The writer is President, FICCI