Context:
Prime Minister Narendra Modi concluded his second state visit to Israel, building upon his historic first visit in 2017, during which the two countries significantly deepened bilateral cooperation across multiple sectors.
Key Highlights:
Bilateral Relations Upgrade
- India and Israel elevated their ties to a “Special Strategic Partnership for Peace, Innovation and Prosperity.”
- This reflects the growing cooperation in defence, technology, agriculture, innovation, and trade.
Diplomatic Recognition
- PM Modi received the Speaker of the Knesset Medal, the highest honour of the Israeli Parliament (Knesset).
- He also became the first Indian Prime Minister to address the Knesset, symbolising the strengthening diplomatic partnership.
Digital and Financial Cooperation
- Unified Payments Interface (UPI) will be operationalised in Israel, enabling:
- Easier digital payments for Indian tourists and professionals.
- Simplified cross-border remittances.
- Launch of the India–Israel Financial Dialogue to:
- Align banking regulations
- Promote fintech cooperation and financial innovation.
Workforce and Labour Mobility
- Israel plans to hire 50,000 Indian workers over five years in sectors such as:
- Commerce
- Hospitality
- Services
- Manufacturing
Technology and Security Cooperation
- Establishment of an Indo–Israel Cyber Centre of Excellence in India to:
- Combat cyber threats
- Protect critical infrastructure.
- Launch of a National Security Advisor (NSA)-led Critical and Emerging Technologies (CET) initiative focusing on:
- Artificial Intelligence (AI)
- Quantum computing
- Critical minerals supply chains.
Agriculture and Rural Development
- Creation of the India–Israel Innovation Centre for Agriculture (IINCA) to promote:
- Precision agriculture
- Satellite-based irrigation technologies.
- Expansion of the “Villages of Excellence” programme, which transfers Israeli agricultural technologies and practices to Indian villages.
Multilateral and Strategic Initiatives
- Both nations reaffirmed commitment to accelerate:
- India–Middle East–Europe Economic Corridor (IMEC).
- Cooperation under the I2U2 grouping (India, Israel, UAE, USA).
Academic and Research Collaboration
- Establishment of the India–Israel Academic Cooperation Forum (I2I Forum).
- The forum will facilitate annual research dialogues between universities and research institutions of both countries.
Relevant Prelims Points:
- Israel
- Located in West Asia (Middle East) along the Mediterranean Sea.
- Parliament known as the Knesset.
- Capital: Jerusalem (not universally recognised).
- I2U2 Grouping
- Members: India, Israel, United Arab Emirates, United States.
- Focus areas include food security, infrastructure, technology, and clean energy.
- India–Middle East–Europe Economic Corridor (IMEC)
- Announced during the G20 Summit 2023 in New Delhi.
- Aims to connect India with Europe through the Middle East via railways, ports, and digital infrastructure.
- Unified Payments Interface (UPI)
- India’s real-time digital payment system developed by NPCI.
- Enables instant bank-to-bank transactions through mobile platforms.
Relevant Mains Points:
Evolution of India–Israel Relations
- Diplomatic relations established in 1992.
- Cooperation has expanded across defence, agriculture, cybersecurity, innovation, and water management.
- Israel is among India’s key defence partners.
Strategic Importance of the Partnership
- Enhances India’s access to advanced defence and technological capabilities.
- Supports innovation-driven growth in agriculture, fintech, and digital infrastructure.
- Strengthens India’s presence in West Asian geopolitics and emerging connectivity corridors.
Economic and Trade Cooperation
- Bilateral merchandise trade: $3.62 billion in FY 2024–25.
- Declined from $10.77 billion in FY 2022–23 due to regional instability and disruptions in the Red Sea trade routes.
- India is Israel’s second-largest trading partner in Asia and among the top ten globally.
Key Trade Components
- India’s exports: Pearls, precious stones, petroleum products, organic chemicals.
- India’s imports: Rough diamonds, electrical machinery, fertilisers, defence equipment.
- Negotiations are ongoing for a Free Trade Agreement (FTA) to deepen economic ties.
Challenges in Bilateral Relations
- Geopolitical tensions in West Asia impacting trade routes.
- Balancing relations with Israel and Arab countries simultaneously.
- Need for greater diversification of trade beyond diamonds and defence.
Way Forward
- Accelerate FTA negotiations to boost bilateral trade.
- Expand technology collaboration in AI, cybersecurity, and innovation ecosystems.
- Strengthen agricultural technology transfer to improve Indian farm productivity.
- Deepen cooperation under multilateral frameworks like IMEC and I2U2.
UPSC Relevance:
- Prelims: Knesset, I2U2, IMEC, UPI.
- Mains (GS II – International Relations): India–Israel relations, West Asian diplomacy.
- Mains (GS III – Economy & Technology): Innovation cooperation, digital payments, strategic technology partnerships.