India-Israel Relations | 27 Feb 2026

Source: PIB

Why in News? 

The Indian Prime Minister made a historic State visit to Israel. During this visit, the bilateral relationship was elevated to a “Special Strategic Partnership for Peace, Innovation & Prosperity.” 

• Furthermore, the first round of negotiations for the India-Israel Free Trade Agreement (FTA) was successfully concluded in New Delhi, signaling a push to deepen economic integration.

What are the Key Outcomes of the Prime Minister of India State Visit to Israel?

• Technology:
  • Indo-Israel Cyber Centre of Excellence (CoE): A Letter of Intent (LoI) was signed to establish Indo-Israel Cyber Centre of Excellence (CoE) in India to foster digital resilience, showcase emerging tech, and build synergies between government, academia, and industry.
  • Artificial Intelligence (AI): A dedicated MoU to promote ethical AI development, civilian applications, and public-private capacity building.
    • Additionally, an MoU was signed to promote AI-enabled education, focusing on human-centered learning, innovative pedagogy, equitable access to AI, and the integration of AI and data literacy into the education system.
  • Horizon Scanning: A Declaration of Intent (DoI) signed to collaborate on strategic foresight, risk assessment, and long-term technology planning using AI-driven tools.
  • Geophysical Exploration: MoU signed to promote utilization of advanced AI and geophysical technologies for sustainable mineral exploration and data sharing.
  • Critical and Emerging Technologies: Both countries agreed to elevate the Joint Commission on Science and Technology (JCM) to the Ministerial level and launched a new initiative on Critical and Emerging Technologies, to be led by the National Security Advisors of India and Israel.
• Economic Integration and Financial Cooperation
  • UPI Integration : A landmark MoU to enable cross-border remittances between India and Israel utilizing India's indigenous Unified Payments Interface (UPI).
  • Financial Services Cooperation: MoU between India's IFSCA (International Financial Services Centres Authority) and the Israel Securities Authority (ISA) to share best practices in fintech, regtech, and regulatory frameworks.
  • Commercial Arbitration: Agreement between the Indian Council of Arbitration (ICA) and the Israeli Institute of Commercial Arbitration (IICA) to strengthen alternative dispute resolution mechanisms.
• Labour Mobility and Employment: In a major boost to India's demographic dividend, three separate Implementation Protocols on Labour Mobility were signed, allowing regulated channels for Indian workers in Israel across:
  • Commerce and Services: Retail, logistics, hospitality, cleaning, and warehousing.
  • Manufacturing: Textiles, electronics, chemicals, plastics, metals, and food processing.
  • Restaurants: Recruitment for cafés, restaurants, and food sales businesses.
• Agriculture and Allied Sectors:
  • India-Israel Innovation Centre for Agriculture (IINCA): MoU signed between ICAR and MASHAV for the India–Israel IINCA to advance precision farming, irrigation technologies, pest management, and farmer capacity building.
    • India announced the creation of “Villages of Excellence” to further deepen agricultural cooperation between the two countries.
  • Fisheries and Aquaculture: Cooperation on sustainable, tech-driven practices including disease management, mariculture, and seaweed R&D through a new Centre of Excellence.
• Culture, Heritage:
  • National Maritime Heritage Complex (NMHC), Lothal: Israel will collaborate with India to develop NMHC in Gujarat, celebrating shared maritime history through exhibitions and research.
  • Academic Exchange: An MoU between Nalanda University and the Hebrew University of Jerusalem (HUJI) for faculty/student exchange in fields like Buddhist studies, mathematics, archaeology, and international relations.

How have India-Israel Relations Evolved?

• Early Years: India officially recognized Israel in 1950 but established full diplomatic relations only in 1992, largely due to Cold War alignments and India's strong traditional support for the Palestinian cause.
• De-hyphenation Policy: In 2017, the Indian PM’s first-ever visit to Israel marked a formal shift to a "de-hyphenation" policy. This allowed India to treat its relationship with Israel independently of its stance on Palestine.
• Current Status (2026): The relationship has transformed from a distant, buyer-seller dynamic into a deep strategic, technological, and defence partnership. 
  • It is increasingly shaped by minilateral frameworks like I2U2 (India, Israel, USA, UAE) and the strategic India-Middle East-Europe Economic Corridor (IMEC).
• Economic & Commercial Relations: Since 1992, India–Israel trade has grown from USD 200 million to USD 3.75 billion (FY 2024–25) despite regional disruptions. 
  • India is Israel’s second-largest country partner in Asia for merchandise trade. 
  • India exports pearls and precious stones, diesel, chemicals, machinery, textiles, and agricultural products, while imports include diamonds, fertilizers, petroleum products, machinery, and defence equipment.
  • India’s cumulative Overseas Direct Investment (ODI) to Israel stood at USD 443 million (2000–2025), while Israeli Foreign Direct Investment (FDI) in India reached USD 334.2 million (2000–2024), reflecting steady bilateral investment flows.
• Innovation & Technology: Initiatives like the India-Israel Industrial R&D and Innovation Fund (I4F) (2023–2027) aim to foster joint research and technological advancements.
• Defence Cooperation: Defence ties include naval port calls and participation in exercises such as Blue Flag. 
  • India is one of the largest importers of Israeli defence equipment, and the two countries have co-developed the Barak-8 missile system. The Indian Navy also conducts regular port calls at Haifa, Israel.
• Agriculture Cooperation: India hosts 43 Indo-Israel Centres of Excellence (CoE), which are high-tech, intensive agricultural hubs established to facilitate the transfer of Israeli agri-technologies adapted to local conditions.
• Water Cooperation: The 2016 MoU on Water Resources drives joint initiatives in conservation, irrigation reforms, and integrated water management.
• Evacuation Operations
  • Operation Ajay (2023): Evacuated over 1,300 Indians after Hamas attacks.
  • Operation Sindhu (2025): Evacuated around 818 Indians during Israel–Iran conflict via Jordan and Egypt.

What is the Significance of India-Israel Relations?

For India

• Strengthens Defence Preparedness: Cooperation with Israel provides India access to advanced military technologies such as Phalcon AWACS (airborne warning and control systems) and Heron, Searcher-II and Harop drones and Spyder quick-reaction anti-aircraft missile systems and electronic warfare tools, helping bridge capability gaps along hostile borders.
• Promotes Defence Indigenisation: Joint development projects like the Barak-8 missile system mark India’s transition from a buyer to a co-developer, supporting Atmanirbhar Bharat in defence manufacturing.
• Enhances Water Security: Israeli expertise in desalination, drip irrigation, and wastewater recycling offers sustainable solutions for India’s water-scarce regions, especially in western and peninsular states.
• Supports West Asia Balancing Strategy: Strong ties with Israel, alongside robust relations with Gulf countries and Iran, demonstrate India’s strategic autonomy and multi-alignment in West Asia.
• Enhances Connectivity And Geo-Economic Influence: Participation in initiatives like IMEC and I2U2 strengthens India’s access to European markets and positions it as a key player in emerging trade corridors.
  • India reaffirms that the peace and stability in West Asia are directly linked to India’s security, energy interests, and diaspora welfare.

For Israel

• Expands Strategic Presence In Asia: Partnership with India strengthens Israel’s diplomatic outreach to the Global South and enhances its geopolitical relevance beyond Western allies.
• Ensures Stability For Defence Industry: India’s position as a major defence partner provides Israel with a reliable market and opportunities for joint production and innovation.
• Addresses Labour Shortages: Indian workers contribute to Israel’s construction, caregiving, and service sectors, supporting economic stability and infrastructure growth.

What are the Challenges in India-Israel Relations?

• The Iran Dilemma: Israel perceives Iran as an existential threat. Conversely, India views Iran as a crucial strategic partner for energy security and regional connectivity, most notably through the Chabahar Port, which provides India access to Afghanistan and Central Asia bypassing Pakistan.
• The Palestinian Stance: India historically and officially supports a two-state solution for the Israel-Palestine conflict. 
  • Sustaining the "de-hyphenation" policy, becomes increasingly difficult during escalations in the Middle East.
• The China Factor: China remains Israel's largest trading partner in Asia. Past instances of heavy Chinese investment in Israeli infrastructure and technology sectors have raised security sensitivities for India, requiring careful diplomatic navigation to ensure shared defense technologies remain secure.
• Intellectual Property Rights Concerns: Israel is a high-technology export economy. Israeli technology firms often share concerns with other Western nations regarding India's relatively lenient Intellectual Property Rights regime, which creates friction in the transfer of sensitive software, digital innovations, and agricultural technologies.
  • Israel's extreme reluctance to transfer source codes and deep technical know-how directly bottlenecks India’s "Make in India" defense indigenization goals.
• Risk to Megaprojects: Ambitious minilateral connectivity projects, such as the IMEC, aim to utilize Israeli infrastructure (like the Port of Haifa) to connect Indian goods to European markets. 
  • However, the escalating military conflicts and shadow wars in the region severely threaten the viability and physical security of these multi-billion-dollar infrastructure networks.

What Measures can Strengthen India-Israel Relations?

• Institutionalising Minilateral Cooperation: Strengthen I2U2 to finance renewable energy and food security corridors.
  • Develop a maritime security framework with joint naval exercises to protect IMEC and key ports like Haifa.
• Shift To Defence Co-Production: Move from buyer–seller model to joint R&D and co-owned defence IP in UAVs and electronic warfare. 
  • Use India’s manufacturing scale to export jointly produced defence systems to Africa and Southeast Asia.
• Implement Innovation And Labour Agreements: Fast-track UPI linkage to reduce remittance costs and boost business transactions. Operationalise the Cyber Centre of Excellence for capacity building and digital security.
• Diversify Trade And Technology Cooperation: Conclude the Free Trade Agreement to expand trade beyond diamonds and chemicals.
• Promote Israeli participation in India’s semiconductor ecosystem and green technologies.
• Strengthen Academic And People-Level Engagement: Expand university partnerships and joint research in AI, desalination, and arid agriculture.
  • Promote Track 1.5 and Track 2 diplomacy to sustain ties beyond geopolitical fluctuations.

Conclusion

The 2026 India–Israel agreements reflect a shift from sectoral cooperation to a comprehensive, future-oriented partnership. By integrating technology, sustainability, mobility, and cultural ties, the two nations are building a resilient framework that supports innovation-driven growth and strengthens their strategic alignment in an evolving global order.