Israel to strengthen commercial ties with India and China

State of Israel to invest NIS 100 million in aid to Israeli companies operating in the markets of India and China

Joint Press Release – Ministry of Finance and Ministry of Industry, Trade and Labor

The joint Ministry of Finance and Ministry of Industry, Trade and Labor committee for increasing exports to East Asia, headed by the Director General of the Ministry of Finance, Mr. Haim Shani, has formulated a dedicated plan for strengthening trade ties with China and India and allocating a government budget for the purpose. China and India are Israel’s two largest export destinations in the Orient. Last year, both countries recorded an impressive growth in exports (with a 100% increase in the volume of Israeli exports to China).

With the establishment of diplomatic relations in 1992, overall trade between China and Israel amounted to a mere USD 50 million. In 2001, the overall trade figure crossed the USD 1 billion barrier, and this year overall trade between China and Israel has already amounted to approximately USD 7 billion.

The volume of trade between Israel and India, non-including diamonds, amounted to approximately USD 3 billion in 2009, of which USD 1.8 billion were exports and approximately USD 1.2 billion imports.

The prime minister has instructed the Ministry of Industry, Trade and Labor and the Ministry of Finance to examine ways of increasing exports to East Asia. Accordingly, the Ministry of Industry, Trade and Labor and the Ministry of Finance are now launching a three-year plan, with a total budget of approximately NIS 100 million, to help realize the inherent commercial potential of the markets in China and India.

The purpose of the plan is to increase the number of Israeli exporters operating in the markets of China and India, to diversify the composition of Israeli exports and to create sustainable growth channels that will strengthen Israeli industry and enhance its robustness vis-à-vis the challenges that it faces in the years ahead.

Israel’s foreign trade policy includes the definition of China and India as destination countries in Israel’s foreign trade policies, inter alia due to their accelerated economic growth, which embodies tremendous opportunities for the Israeli economy and constitutes a vast potential for Israeli companies. In order to take advantage of this potential, Israeli companies make a long-term managerial commitment that is supported by many resources on the part of the company.

Over the past few months, the Ministry of Industry, Trade and Labor has consulted extensively with representatives from the industry in order to put together the plan so that it will bridge the principal difficulties and failures for companies operating in these markets.

The plan is intended for small and medium-sized companies with proven excellence and innovativeness in their spheres of operations. These are companies with a high potential to constitute a spearhead for Israeli industry in India and India. The plan includes two main components:

  1. Assistance in financing the establishment of marketing representative offices by Israeli companies in India and China.
  2. Participating in financing the installation of Israeli systems and/or solutions in order to prove the companies’ capabilities in the target market.

Mr. Sharon Kedmi, Director General of the Ministry of Industry, Trade and Labor, commented on the new plan: "The new plan will provide small and medium-sized companies with tools and economic support enabling them to increase Israel’s export activity to markets in Eastern Asia and will undoubtedly strengthen trade ties with these markets."

The Director General of the Ministry of Finance, Mr. Haim Shani added: "The plan presented today is the first of a series of steps to support increased trade with China and India, based on a strategic economic perception of their importance on the global economic map. As part of the subsequent steps, we will emphasize Israel’s competitive advantages in the areas of innovativeness, higher education and entrepreneurship."

During the coming month, the director general of the Ministry of Industry, Trade and Labor will publish a Director General’s Directive regulating the launch and implementation of the plan, which is expected to lead to an increase in the number of companies operating in China and India, and to increase the companies’ penetration of these markets.

The Ministry of Industry, Trade and Labor attaches great importance to bolstering the systems that are in place for assisting Israeli industry in these markets. These efforts include expanding the network of commercial attaches, signing R&D agreements, the Shavit Program that was operated by the Export Institute and included a dedicated NIS 30 million budget.

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