Israel India | Business Guide | 2017

028 > General Content > Going forward Israel-India > Business Guide > 2017 The Road to $20 Billion Setting into Motion Faster Growth in Bilateral Trade Tomer Tzur I ndia 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 https://www.bcgperspectives.com