Ever since the outbreak of the Swords of Iron War, the State of Israel has faced an international campaign of delegitimization, trade embargoes, and arms restrictions, and even countries thought of as close friends have turned their backs on it. There are, however, exceptions. They are not many, especially among the world's most powerful economic powers, but the most prominent, without a doubt, has been India.
That country, which voted against the establishment of the State of Israel in 1947 and established full diplomatic relations only in 1992, has emerged as a true friend. Against the background of the war, India did not change its conduct toward Israel in any way, including in security affairs. According to foreign reports, despite the challenges and criticism in India and abroad, ships continued to leave the subcontinent for Israel.
Prime Minister of India Narendra Modi's government aspires to deepen relations with Jerusalem, and as part of these efforts, India’s Minister of Commerce and Industry Piyush Goyal visited Israel. He met Minister of Economy and Industry Nir Barkat, Prime Minister Benjamin Netanyahu, Head of the National Security Council Gil Reich, and senior members of the Israeli business community, with the goal of expanding trade ties between the two countries.
In an exclusive interview with "Globes," Goyal talks about the India-Middle East-Europe Economic Corridor (IMEC) project ("It's not yet at a stage where obstacles come up"), how close ties with Israel and Iran are being maintained at the same time ("based on the mutual benefits with each country"), and about the future of cooperation with Jerusalem ("We can leverage your technology to a larger scale").
"We’ll create a startup bridge between India and Israel"
Trade relations between Israel and India are on a growth trajectory They reached a peak in 2022 both in Israeli exports (about $2.79 billion) and imports (about $7.59 billion), according to Comtrade. The war took its toll; exports of goods from Israel came to $2.3 billion last year, according to Israeli figures, but business services from Israel to India were not affected, and continued to grow to $754 million in 2024.
"Technology and innovation are Israel's strengths. We are an advanced country in terms of production, and we can therefore leverage your technology to a larger scale," explains Goyal. "Thanks to our production capabilities, the whole world is turning to investment in India and jobs are being created. We are interested in creating a startup bridge for innovation in India and Israel. Given Israel's innovation capability, India's talent and skills can provide support. There can be development in defense, food-tech, agri-tech, artificial intelligence, and cybersecurity, so that the sky is the limit for Israel-India relations."
As the Indian minister points out, defense is a significant element in relations between the two countries. According to Stockholm International Peace Research Institute (SIPRI) data, India was Israel's main defense export destination between 2020 and 2024 (34%), and by a considerable margin from the second largest (13%). According to data from the International Defense Cooperation Directorate (SIBAT) at the Israel Ministry of Defense, total defense exports in those years amounted to about $60.3 billion, of which India imported about $20.5 billion in defense products,
At the same time, Israel’s defense industries are investing heavily in creating collaborations with India. For example, in December 2018, Elbit Systems launched a collaboration with Adani Defence & Aerospace for production of Hermes 900 and 450 UAVs. Subsequently, in March last year, Israel Aerospace Industries established its New Delhi subsidiary ASI, intended to strengthen IAI’s compliance with Modi's "Make in India" policy, which also includes the requirement for transactions to be conducted in rupees.
"Make in India" is just one of Modi's many successes. An equally strategic achievement was his fight against black market money in India, which was a cultural upheaval. Overnight, on November 8, 2016, the government announced it was cancelling 500- and 1,000-rupee notes, which constituted about 86% of cash turnover. At the same time, the prime minister acted to pass the Undisclosed Foreign Income and Assets and Imposition of Tax Act (the Black Money Act or BMA), as well as closing public procurement contracts to foreign bidders.
"Prime Minister Modi is a strong man who believes that the government must fight corruption, so he has implemented this policy since his election in 2014," says Goyal, who has made a long political journey with Modi. "He has been serving in the public sector for about five decades, including about 25 years in the government, and his integrity and honesty is unblemished. He is a strong leader with high morals, who has created a strong economic system. Previous governments had problems with business transactions between families and associates. He stopped it and required tenders. Following his battle over cash, the citizens realized that it was better for them to take part in the official economy, because they had to use banks."
The agreement: declaratory or visionary?
One of the highlights of Goyal's visit, which was led by the Director of Foreign Trade at the Ministry of Economy and Industry, was the signing of a document of principles to relaunch talks on a free trade agreement. This is a significant step for Israel’s image vis-à-vis India, which this year overtook Japan to become the world’s fourth largest economy. However, on the ground, as far as trade between the countries is concerned, this step is essentially symbolic, since most of the goods entering Israel are in any case completely exempt from customs duties. At the same time, Israel's main strength is in software and services, which are also fully exempt from customs.
If the agreement includes regulatory relief for the absorption of workers from India to make up the shortage of labor for less attractive jobs, that will be significant news, all the more so given the non-employment of Palestinian workers since the beginning of the war. Also, if the agreement includes mutual investment, and an even greater expansion in defense trade, then that will definitely bring added value.
The good news for the time being is the announcement that Air India is coming back to Israel. From January 1, 2026, the airline will operate five weekly flights on the Tel Aviv-New Delhi route from Sunday to Thursday, with the flight taking about five and a half hours. "The aviation connections are very important for deepening our relationship," says Goyal. "I understand that already at the beginning of next year, there will be flights from Delhi to Tel Aviv with Air India, and we will move on to flights to other cities in India. The goal is to create more connectivity and bridges between people and businesses."
Heavy tariffs due to Russian oil: "We’re in talks"
Piyush Goyal (61), a married father of two, is a member of the Bharatiya Janata Party (BJP or "Indian People's Party"), which is headed by Modi. He was first elected to parliament in 2010 and has held several positions in the Indian government over the years, including Minister of State for Coal, Power, New and Renewable Energy; Minister of Mines; Minister of Railways; Minister of Consumer Affairs, Food & Public Distribution; Minister of Textiles, and - since 2019 - Minister of Commerce and Industry.
One of the unique features of India's foreign policy is its relations with many countries, some of which are enemies, such as Israel and Iran. How does that happen? "There’s no connection," Goyal replies. "Our relationship with each country stands on its own, and is based on the mutual benefits shared with each country. We wish peace and prosperity for every country in the world."
What’s the best way to integrate foreign and trade policy to work effectively with both Eastern and Western partners?
"Since the dawn of time, India has believed that the world is one family, and has strived for very good relations with every person, every nation around the world, because we believe that the world is one. Everyone should be together. Our aspiration is that if we work together and thrive together, we will all flourish. Therefore, relations with Israel are very important to us."
But tradition did not prevent India becoming trapped in a political dilemma between its insistence on purchasing oil from Russia and US President Donald Trump’s demand that it should stop doing so. Trump took two main actions: imposing tariffs of 50% (tariffs on Israel are currently15%), and demanding an annual payment of $100,000 for an H-1B work visa. Of the nearly 400,000 applications approved last year, some 71% were Indian.
How significant are the tariffs imposed by Trump on India?
"It is built on each country individually. India and the US maintain a very strong relationship, with a strategic partnership in many areas. For example, in the defense sphere, we reached a ten-year cooperation agreement this past October. These agreements are being completed, and have various dimensions. We’re in talks on trade issues, and significant progress with the US will take place soon."
"The planning phase of the IMEC corridor will be critical"
Ultimately, US-India relations have cast a pall over a historically significant strategic project in which Israel is supposed to be involved: the IMEC corridor, which is intended to connect India to Europe via the United Arab Emirates, Saudi Arabia, Jordan, and Israel. Former US President Joe Biden presented the plan in September 2023, but the Swords of Iron War delayed it greatly. Last February, Trump expressed support for it alongside Modi, but the bottom line is that no substantial progress has been made, especially in Israel.
"Projects like IMEC are long-term," Goyal notes. "There are many collaborations between different countries, governments, and different layers to deal with. Therefore, we need to bring all the countries together; the planning stage will be critical. All the countries in the IMEC corridor are very interested in promoting this. India is very committed to the project, Israel is an integral part of the process, and we hope to develop it soon."
So, what are the obstacles?
"This is still in the stage of contacts between different governments, not yet a stage in which obstacles come up. We are in talks and creating a plan."
Published by Globes, Israel business news - en.globes.co.il - on December 11, 2025.
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