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Israel-India > Business Guide > 2017
The Road to $20 Billion
Setting into Motion Faster Growth in Bilateral Trade
Tomer Tzur
India and Israel have highly complementary
economies.The geo-political environment of
recent years is very positive,and the countries
share a resourceful,entrepreneurial spirit and
cultural similarities. India is transforming its
economy across sectors,and Israeli innovation
and technology is world-renowned.
Nevertheless, the historical trade between
the countries is disappointing.The total dollar
volume of trade has been stagnant, and is
dominated by "D&D" - Defense and Diamonds.
Total trade volume (not including defense)
during the last 10 years has been steady at
around $4B, with diamonds accounting for
~50%. Each country's share of the other's
trade falls far short relative to other trading
partners e.g. US, major European countries,
or China.
Key barriers that are holding
back trade
The Boston Consulting Group in collaboration
with the India-Israel Forum,TAU,Ananta Aspen
and CII,attempted to assess the root causes
of this situation and create a framework for
collaboration going forward. We started
by asking 100 relevant executives and
government officials what their aspirations
were for trade between the countries in 2020.
Their answer was a bold $20B!
We then tried to understand the key barriers
today that are holding back trade.The main
factor mentioned was "lack of awareness
of the opportunity", mentioned by 63% of
Israelis and 90% of Indians. Other barriers
mentioned were the "lack of a FTA","fear and
distrust", and "difficulty of doing business".
In terms of priority areas for collaboration,
participants identified IT and technology
(including Fintech, network technology),
Water and Agriculture,Medical technology,
Cyber-security, and Defense as significant
opportunity areas in which to focus.
We identified a number of simple enablers
that help facilitate bilateral trade. Focusing
on these can help bolster India-Israel trade
and collaboration in the future:
A framework for $20B India-Israel bilateral trade in 2020
Some initial thoughts...
Key enablers that
facilitate trade How can we overcome existing barriers?
Leverage
complementary
strengths
• Incense awareness about the opportunities in India e.g. Make in
India, Sagar-Mala, Financial Inclusion
• Develop a road map of high priority Israeli sectors e.g.
FinTech, AgTech
Build
transparency
trust
• Upgrade flow of information between India and Israel (e.g.Trade
info, Projects pipeline, Economic news)
• Increase trust among Israelis about doing business in India.
Enhance
Academic/
Cultural/ business
connections
• Continue Academic exchange and collaboration e.g. Science,
R&D exchanges
• Broader cultural connections e.g.Young business leaders’ visits,
Knowledge sharing,Topic specific conversations on both sides
Ease regulation
& provide
government
incentives
• Leverage the“political window”towards business friendly regulations
& approval of FTA.
• Increase frequency and reduce costs of travel.Simplify Visa process.
Prioritize
opportunities for
action
• Focus on solutions with highest scale and lowest friction, e.g.
FinTech (e.g. payments), Communication Technologies
(e.g. data compression)
• Encourage joint incubation and acceleration of young businesses.
The first priority should be awareness building.
I recently discussed the India opportunity
with an Israeli tech entrepreneur. I quoted
a few interesting facts about the Indian
market which is seeing immense growth.
India currently has – ~700M mobile users,
a ~$10B e-commerce market, and ~$300M
in mobile-commerce. The entrepreneur's
reaction was "my head is spinning right
now; India must be in our plan".
The opportunity for both countries is immense
and the time to act is now!
The author is a Partner and Managing Director
at the Boston Consulting Group, leads the
company's Tel Aviv office, and is a member of
the India-Israel Forum.You can find more great
insights at