Indian SMEs Look to Tap Into Israel’s Economy
Article by David Parks
Israels sound market economy has grown at a steady pace in the past few decades. In addition, Israel has benefited from its openness to foreign trade and investment, which account for nearly half of its gross domestic product (GDP). With the aim to enhance trade relations with Israel, a large number of Indian SMEs are turning towards this Middle East country. Most Indian SMEs are aiming to tap Israels burgeoning yet untapped market.
Despite the lack of natural resources, Israel has successfully developed its agricultural as well as industrial sectors in the last 20 years. Moreover, the government has formulated a number of trade policies to provide an impetus to the main sectors in the country. As a result of these concerted efforts, the Israeli economy grew at 4.2% in 2008.[1] In addition, foreign investments have played a key role in bolstering the economy and supporting the major industries.
Indo-Israeli trade relations
Since 1992, India has become a major trade partner of Israel. It is one of the chief exporters of diamonds, rubber, plastic products, base metals, transport equipment and textiles to Israel. Alternately, Israels export basket to India comprises machinery, chemical products and medical equipment. Significantly, the bilateral trade between India and Israel stood at ,012.50 million at the end of 2008.
Although diamonds have dominated bilateral trade between India and Israel, analysts opine that there are several other potential areas of growth that can be explored by the Indian SMEs in Israel. Infrastructure, real estate and financial services are ranked as the most critical areas of mutual cooperation and growth.
For trade and investment
While a number of Indian firms have invested in sectors like pharmaceuticals, tyre manufacturing and digital marketing in Israel, there are many other unexplored avenues where the Indian firms can pump funds and earn a higher return on investment. These include sectors like agro industry, biotechnology, floriculture, telecommunications, chemicals and computer software.
Indian firms can also collaborate and forge trade alliances with their Israeli collaborators to set up research and development (R&D) facilities in Israel. Industry Experts believe that by entering into strategic alliances with the Israeli SMEs, Indian SMEs can gain from their technical know-how and adopt modern manufacturing practices to drive their business.
Collaboration holds the key
To facilitate bilateral economic relations between the two countries, an Indo-Israeli Joint Council was formed in 1993. In addition, the India-Israel Joint Work Programme of S&T cooperation for 2003-04 was signed in 2002 to promote collaboration in the field of genomics.
Furthermore, the India-Israel Initiative for Industrial R&D (IRD), a bilateral framework to provide financial assistance for joint R&D ventures between Indian and Israeli companies has been created to benefit SMEs of both countries.
With the governments of both countries taking steps to promote bilateral trade ties, opportunities for growth are abundant in Israel for Indian SMEs.
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About the Author
David Parks is a well known author and has written articles on B2B Products, B2B Portal, Trade Leads, suppliers, Manufactures and many other subjects.
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