Israeli trade negotiators to visit India in January for FTA talks

India's proactive engagement in Free Trade Agreement (FTA) negotiations, as highlighted by the upcoming visits for talks with Israel and the Eurasian Economic Union (EAEU), signals a determined push towards diversifying its trade partnerships and strengthening its position in the global economy. This strategy is a cornerstone of India’s contemporary economic diplomacy, aiming to unlock new markets, attract investment, and enhance its manufacturing and service sector competitiveness.

The background context for these negotiations is rooted in India's broader economic liberalization efforts and its ambition to achieve a $5 trillion economy. Post-global financial crisis and more recently, the COVID-19 pandemic, nations worldwide have increasingly focused on resilient supply chains and diversified trade relationships. India, under its 'Make in India' and 'Atmanirbhar Bharat' initiatives, seeks to integrate more effectively into global value chains while also protecting domestic interests. The government has prioritized signing 'balanced, equitable, and mutually beneficial' FTAs, moving away from past cautious approaches. This pivot is also influenced by geopolitical shifts, necessitating stronger economic ties with strategic partners.

The news details two significant developments. Firstly, Israeli trade negotiators are set to visit India in January for 'pre-round' talks on a Free Trade Agreement. This follows years of discussions and underscores the mutual desire to deepen economic engagement beyond the existing robust defence and technology cooperation. Bilateral trade between India and Israel stood at $3.62 billion in Fiscal Year 2025, a figure both nations believe can be substantially increased with an FTA. Secondly, Indian negotiators are slated to visit Russia after Budget 2026 for the second round of talks concerning a trade pact with the Russia-led Eurasian Economic Union (EAEU). The EAEU, comprising Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan, represents a significant market with substantial resource endowments, particularly in energy and raw materials.

The key stakeholders in these negotiations are multifaceted. For India, the Ministry of Commerce and Industry leads the charge, supported by various line ministries and industry bodies representing Indian businesses (exporters, importers, manufacturers) and consumers. On the Israeli side, the Ministry of Economy and Industry, along with Israeli businesses, are primary stakeholders. For the EAEU talks, the Russian government, as the largest economy within the bloc, plays a pivotal role, alongside the EAEU Commission and other member states. The outcomes will directly impact businesses in sectors like pharmaceuticals, IT, agriculture, textiles, and defence for the Israel FTA, and energy, minerals, machinery, and food processing for the EAEU pact.

The significance for India is profound. Economically, FTAs promise reduced tariffs and non-tariff barriers, leading to increased exports, greater market access for Indian goods and services, and potentially lower import costs for consumers and industries. This can boost manufacturing, create jobs, and attract foreign direct investment (FDI). For Israel, an FTA could open doors for Indian IT, pharma, and agricultural products, while India could benefit from Israeli high-tech and defence expertise. With the EAEU, India seeks to secure access to critical resources and diversify its energy imports, while offering its agricultural and manufacturing products to a vast market. Geopolitically, these agreements strengthen India's strategic autonomy by diversifying its trade basket and building stronger alliances in both West Asia and Central Asia/Eastern Europe, crucial regions for India's 'Act West' and extended neighbourhood policies. The historical context shows India's long-standing strategic partnership with Russia, particularly in defence, and a growing convergence of interests with Israel.

From a constitutional perspective, the power to enter into and implement international treaties and agreements rests with the Executive. However, for domestic implementation that requires changes in law, Parliament plays a crucial role. Article 253 of the Indian Constitution empowers Parliament to make any law for implementing any treaty, agreement, or convention with any other country or any decision made at any international conference, association, or other body. While the Executive (under Article 73) negotiates and signs treaties, legislative action might be required to give effect to certain provisions, especially those impacting tariffs (Customs Act, 1962) or other domestic regulations. These trade pacts align with India's Foreign Trade Policy, which aims to make India a major participant in global trade and promote exports.

Looking ahead, the successful conclusion of these FTAs could significantly reshape India's trade landscape. Increased trade volumes, enhanced technological collaboration, and deeper diplomatic ties are expected. Challenges, however, include navigating complex geopolitical dynamics, addressing concerns of domestic industries regarding potential competition, and ensuring that the agreements are truly balanced and beneficial for all stakeholders. These negotiations highlight India's commitment to multilateralism, yet also its strategic embrace of bilateral and regional trade blocs to secure its economic future and geopolitical standing.