MAINS Current Affairs includes PM Visit to Israel & India Secures Preferential Access to Two-Thirds of Global Trade Through FTAs

International

1. PM Visit to Israel

Context

The Prime Minister paid an official visit to Israel, becoming the first Indian PM to address the Israeli Parliament (Knesset).

The visit marked a major upgrade in bilateral relations.

Major Outcomes of the Visit

1. Bilateral Ties Upgraded

• Relationship elevated to Special Strategic Partnership (highest level).

2. Science & Technology Diplomacy

• Joint Commission on S&T upgraded to Ministerial level.
• Launch of a Critical & Emerging Technologies Initiative led by National Security Advisors.

3. Agriculture & Mobility

• 20 Joint Fellowships in agricultural research.
• Quota of 50,000 Indian workers in Israel over next 5 years.

4. Economic & Technology Pacts

• Signing of 17 agreements in:
  • AI
  • Cybersecurity
  • Innovation & R&D
  • Startups
  • Defence co-development

5. Defence Cooperation Expansion

• Moving from procurement → joint development & joint production under Technology Transfer (ToT)
• Enhanced defence partnership amid regional tensions.

6. Geoeconomic Corridors

• Discussion on:
  • India–Middle East–Europe Economic Corridor (IMEC)
  • I2U2 (India–Israel–UAE–USA)

Significance of the Visit

1. Strategic Partnership Consolidation

• The highest upgrade in ties strengthens trust, defence cooperation, and technology exchange.

2. Emerging Tech Leadership

• Deep cooperation in:
• AI
• Quantum technologies
• Cybersecurity
• Digital innovation
• Supports Atmanirbhar Bharat and Israel’s global innovation leadership.

3. Defence & Security

• Moves toward co-production & technology transfer.
• Enhances India’s capability in surveillance, missile systems, and drones.

4. Economic Engagement

• Progress on FTA negotiations.
• Launch of Financial Dialogue.
• Talks to link UPI with Israel’s payment systems.

5. Regional Geopolitics

• Visit timed amid Middle East tensions involving Iran.
• Signals India’s role as a stabilising actor with strategic autonomy.

India–Israel: Key Bilateral Highlights

Historic Background

• India recognised Israel in 1950.
• Full diplomatic relations established in 1992.
• Strategic partnership in 2017, now Special Strategic Partnership (2026).

Defence & Security

• Israel among India’s top-third defence suppliers.
  Key technologies:
• AWACS
• UAVs
• Missiles
• Surveillance systems

Trade & Investment

• India: Israel’s 2nd largest Asian trading partner.
• Trade (excluding defence):
  • 2023–24: USD 6.53 bn
  • 2024–25: USD 3.75 bn

• FDI (2000–2024): USD 334 million
• 300+ Israeli investments in India (agriculture, water, tech).

Agriculture & Water Management

• 1993: First agriculture cooperation agreement
• 2006 onwards: 3-year Comprehensive Work Plans
• Indo-Israeli Centers of Excellence (CoE): horticulture, irrigation, drip systems.

S&T & Innovation

• 1993 S&T Cooperation Agreement
• I4F Fund: USD 40 million joint innovation fund
• Cutting-edge cooperation in biotech, AI, environment.

Multilateral Cooperation

• I2U2 (India–Israel–UAE–USA)
  • Food parks
  • Space-based climate tools
  • Clean energy projects

Significance for India

1. Defence & Security Advantage

Reliable source for:

• High-end defence tech
• Drones
• Missile systems
• Cybersecurity tools

Supports Make in India & Self-Reliance.

2. Agricultural & Water Solutions

Israel’s expertise in:

• Drip irrigation
• Wastewater recycling
• Precision agriculture
  Directly benefits India’s water-stressed regions.

3. Geopolitical Leverage

• Fits with India’s Act West Policy.
• Balances ties across Middle East (UAE, Saudi, Iran, Israel).

Way Ahead

• The visit is seen as a milestone, pushing India–Israel ties into a multi-dimensional, tech-driven, defence-rich, future-focused partnership.

Both countries aim to:

• Expand co-production in defence
• Deepen digital & emerging tech collaboration
• Strengthen economic linkages
• Advance IMEC & I2U2 projects

ECONOMY

2. India Secures Preferential Access to Two-Thirds of Global Trade Through FTAs

Context

The Commerce & Industry Minister announced that India now enjoys preferential market access to nearly 2/3rd of global trade due to an expanded network of free trade agreements (FTAs).

What Are FTAs?

FTAs are agreements between countries to:

• Reduce/eliminate tariffs
• Ease non-tariff barriers
• Facilitate trade in goods + services
• Enhance investment, mobility of professionals, and regulatory cooperation

Types of Indian Trade Agreements

• CECA / CEPA – Comprehensive (goods + services + investment + IP)
• ECTA – Economic Cooperation & Trade Agreement
• TEPA – Trade & Economic Partnership Agreement
• CETA – Comprehensive Economic & Trade Agreement

India now has preferential access with 38 high-income economies, covering ~70% of global GDP & trade flows.

Major FTAs Signed (Recent)

1. India–UAE CEPA (2022)

• Zero-duty access on 99% tariff lines
• Boosts services + mobility

2. India–Australia ECTA (2022)

• Eliminates tariffs on all Indian & Australian exports
• Key for minerals, pharma, textiles

3. India–EFTA TEPA (2024, effective 2025)

• With Switzerland, Norway, Iceland, Liechtenstein
• High investment commitments from EFTA into India

4. India–UK CETA (2025)

• Duty-free access for 99% of India’s exports

5. India–Oman CEPA (2025)

• Oman offers zero duty on 98.08% tariff lines
• Covers 38% of Indian exports

6. India–EU FTA (2026)

• Covers 97% of EU tariff lines (~99.5% trade value)
• India eliminates tariffs on 4% tariff lines
• EU represents ~33% of global trade

FTAs Under Negotiation

• GCC (Saudi, UAE, Oman, Qatar, Kuwait, Bahrain) – Negotiations launched Feb 2026
• Israel – First round completed
• Chile – ToR signed 2025
• Canada – Talks revived

Significance of India’s Expanding FTA Network

1. Export Growth

• Greater price competitiveness
• Access to large consumer markets

2. Global Value Chain (GVC) Integration

• Lower input costs
• Easier sourcing of raw materials + re-exporting
• Boost to electronics, automobiles, textiles

3. Boost to MSMEs

Key labour-intensive exports gain:

• Textiles
• Leather
• Engineering goods
• Handicrafts
• Processed foods

4. More Foreign Direct Investment (FDI)

• Predictable market access
• India becoming a base for exporting to FTA partners

Concerns Associated with FTAs

1. Trade Imbalances

Past examples:

• ASEAN FTA (2010) → India’s deficit widened significantly

2. Domestic Industry Vulnerability

Sensitive sectors:

• Dairy
• Automobiles
• Electronics
• Steel
• Agriculture

3. Need for Domestic Reforms

For FTAs to work, Indian firms need:

• Better logistics
• Lower supply-chain costs
• Stronger standards + compliance systems

Way Ahead

India’s FTA strategy reflects a shift from protectionism to integration.

By securing access to large markets, India aims to:

• Become an export-led economy
• Build resilient supply chains
• Achieve the target of USD 1 trillion exports

But success requires:

• Strong domestic industry competitiveness
• Regulatory and infrastructure reforms
• Skill and technology upgradation

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