Why India and Israel still need an economic deal - opinion

India and Israel have built a strategic partnership that extends from defense and security to agriculture, innovation, and advanced technologies. Indian Prime Minister Narendra Modi's visit to Israel in February 2026, during which the two countries elevated their relationship to a Special Strategic Partnership, reflected the depth of those ties. Yet the economic relationship has not developed at the same pace.The two countries traded approximately $3.93 billion in goods in the 2025-26 financial year, and negotiations over a free trade agreement (FTA) remain unfinished. This raises a question that deserves more attention: Why has a relationship built on such strong political and strategic foundations struggled to produce a comprehensive trade agreement?Part of the answer may lie in the different economic priorities of the two countries. For Israel, the attraction of an agreement is clear: improved access to one of the world's largest and fastest-growing major economies. India, however, has its own priorities. Its trade negotiations are shaped not only by the promise of greater market access, but also by the need to attract investment, ensure technology transfers for its own capabilities, and bolster domestic manufacturing.The challenge, therefore, is not simply to translate strategic goodwill into a trade agreement. It is to identify an economic bargain that serves both countries.This challenge deserves particular attention as India expands its network of trade…