Israel - India Business Guide | 2025

Over the past few years, bilateral relations between the two nations have flourished, particularly in technology and innovation. Key areas of cooperation include artificial intelligence (AI), digital transformation, smart manufacturing, and cybersecurity. A significant milestone in this partnership was the announcement of a US$ 10 billion semiconductor project in Maharashtra, India, through a collaboration between Israel’s Tower Semiconductor and India’s Adani Group. This initiative aligns with India’s ambition to become a global chip manufacturing hub and showcases the potential for further technological synergies between the two nations. Beyond semiconductors, Israeli startups are increasingly engaging with the Indian market across various domains, from fintech and agritech to healthcare and clean energy. Such collaborations not only enhance technological exchange but also create new investment opportunities, positioning both nations as key players in the evolving global tech landscape. Innovation Amidst Adversity: Startups Leading the Way Israeli startups have historically thrived under pressure, and the past year has been no exception. In response to the security crisis, companies specializing in defense technology, AI-driven surveillance, and cybersecurity have seen increased demand for their solutions. For instance, Israeli drone manufacturer Xtend secured major contracts with both Israel’s defense ministry and the U.S. government, underscoring the strategic importance of homegrown technological advancements. Moreover, medical technology startups have expanded their efforts, with Israeli firms at the forefront of digital health solutions, telemedicine, and AI-powered diagnostics. These innovations are not only enhancing domestic healthcare resilience but are also finding applications in global markets, strengthening Israel’s reputation as a leader in health-tech solutions. Additionally, green technology and sustainable energy solutions have gained traction. With the increasing global push toward sustainability, Israeli cleantech companies are developing groundbreaking solutions in areas such as water conservation, alternative energy, and carbon reduction technologies. The emphasis on sustainability aligns with international climate goals and ensures that Israeli innovation remains relevant in a rapidly changing world. Furthermore, while some startups faced short-term operational disruptions, many have successfully pivoted to address emerging global needs. The ability of Israeli entrepreneurs to rapidly adapt and innovate continues to be a defining feature of the country’s high-tech ecosystem. Policy Recommendations: Ensuring Continued Growth To sustain its high-tech momentum, Israel must implement proactive policies that address both immediate and long-term challenges. Key recommendations from the Israel Innovation Authority include: ●● Reducing business uncertainties: Enhancing regulatory stability and minimizing bureaucratic hurdles to encourage foreign and domestic investments. ●● Government-backed investments: Introducing counter-cyclical funding measures to support startups and emerging technologies during economic downturns. ●● Workforce development: Expanding training programs to bridge skill gaps and ensure a steady supply of talent for the evolving tech landscape. ●● Strengthening international alliances: Deepening partnerships with strategic markets, such as India, to unlock new opportunities for Israeli companies. ●● Enhancing research and development incentives: Providing tax benefits and grants to encourage companies to invest more in cutting-edge R&D, ensuring long-term growth and global competitiveness. Conclusion: A Resilient Future for Israeli High-Tech Despite facing one of themost challenging years in its history, the Israeli high-tech sector has not only endured but has also demonstrated remarkable adaptability and strength. Investment levels remain stable, employment continues to grow, and international collaborations are expanding—particularly with India, which offers immense opportunities for mutual growth. Looking ahead, Israel’s ability to sustain its technological leadership will depend on its capacity to navigate global challenges, foster innovation, and reinforce strategic partnerships. As the country continues to rebuild and strengthen its economy, the high-tech sector stands as a beacon of resilience, proving once again why Israel remains a powerhouse of innovation on the world stage. By focusing on sustainability, digital health, cybersecurity, and next- generation semiconductors, Israeli tech companies are well-positioned to lead in the coming decade, ensuring that the nation’s reputation as a high-tech powerhouse remains unshaken. Source: Israel Innovation Authority 45