Diamond trade, farm on Modi’s Israel agenda
The diamond trade and investments in agriculture and irrigation may turn out to be bigger talking points for India than defence during Prime Minister Narendra Modi’s visit to Israel.
The three-day visit starting Wednesday is the first by an Indian Prime Minister to Israel and is widely expected to hinge on defence cooperation owing to India’s position as the largest purchaser of Israeli arms and technology.
However, India will also push to increase trade and investments with the nation that have remained static in spite of greater connections between the private sectors in both countries in recent years.
Talks were expected to focus on how to join hands in the lucrative diamond polishing and processing trade, an official said.
Bilateral trade stood at $5.02 billion in 2016-17, rising 2.3 per cent after four consecutive years of fall. This involves $3.06 billion of exports and $1.96 billion of imports. Of this, raw nonindustrial diamonds figure significantly, contributing more than $1 billion to both imports and exports. While India is the world’s largest exporter of polished diamonds, sending out more than 75 per cent of the global supply, Israel is the second largest. Israel, for long the top exporter of diamonds to the US, the world's largest buyer, has recently been overtaken by India.
“Israel has high costs that are prompting firms to send small raw diamonds to India for processing,” said Praveen Shankar Pandya, chairman of the Gems and Jewellery Export Promotion Council. In the absence of a policy on job work, the country was losing out on these contracts, which were moving to China and Vietnam, he added. Israel relies heavily on diamond exports, which make up nearly 24 per cent of its exports by value.
Better sourcing norms for phosphates, crucial to the energy sector, is also being sought by India, which receives more than 20 per cent of the mineral from Israel.
A joint business council had been set up, which was looking at expanding the scope of bilateral trade, said Pankaj Patel, president of the Federation of Indian Chambers of Commerce & Industry. Nearly all industries were covered as part of the discussions, but irrigation, agriculture, pharmaceuticals, healthcare, infrastructure and IT-enabled sectors were the focus, he added.
Israel has investments of $122 million in India. “The figures are relatively small owing to the companies mostly being mid-sized. Yet the footprint is magnified because the projects are specialised and based on technology,” an official said.
These involve projects in drip irrigation and solar energy in Rajasthan, farming in Madhya Pradesh and Telangana and waste management in Agra. Diplomatic sources said Israeli companies in these sectors were seeking Indian partners.
Indian companies are interested in teaming up with Israeli counterparts for research and development.