Israeli concerns of Indian IT influx stall free trade talks

Perception that Israel, with a smaller economy, would gain more from FTA also queers pitch

- Shashank Mattoo & Ravi Dutta Mishra

Free trade talks between India and Israel have hit the skids over the movement of Indian IT professionals and the perception that Israel would stand to gain more from the mismatch in the size of the two economies, two people privy to the negotiations said.

The first disagreement stemmed from a cap on the movement of Indian IT professionals in Israel due to the country's low labour absorption capacity. The issue assumed significance as the negotiations were largely centred around the services sector, with most goods trade having already been liberalized.

"The problem is the size difference. India expects Israel to allow Indian IT workers to work in Israel. Israel cannot allow too many because of its internal unemployment issues. Israel just gave India an allowance of 42,000 workers-34,000 for construction and 8,000 caregivers," said one of the persons cited above.

This person said both the minister of economy and foreign affairs of Israel visited India recently and "the FTA (free trade agreement) is still a matter to discuss".