Tag: business

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India Investing in Israel, Israel Updating India

India and Israel have been courting each other for nearly twelve years now, and in recent years the relationship has blossomed into a full-blown love affair. The two biggest investment firms in India are already smitten with the small, technology-based country, and now the third conglomerate is getting in on the fun. Aditya Birla has dispatched representatives to assess the current situation in Israel as a precursor for some major investments into the development of several lucky startups, and Israel is welcoming the idea with open arms.

Aditya Birla Scopes Out The Scene

The Group Executive President of Corporate Strategy and Business Development, Dev Bhattacharya, came to Israel in February with the explicit instructions to scout out the prospects. Along with several directors of various branches of Aditya Birla, Bhattacharya reviewed close to 500 startups across Israel that covered the spectrum of the technology industry. After the initial assessment, Aditya Birla will bring a select few of the chosen companies over to India to pitch their concepts to the board of investors. The lucky winners will receive a fund that will allow these companies to continue researching and developing their concepts.

The companies reviewed covered a wide range of industries including cybersecurity, water tech, financial technology, new media, and cleantech. Aditya Birla already has their hand in most industries across India, so the spread is in keeping with their current domestic practices. The company currently stands at approximately $41 million.

Previous Investments

Infosys made headlines when they bought out Panaya, a major database management service in Israel that is based on the cloud, for $200 million. This was a worthwhile investment that helped Infosys advance their service offerings and expand their reach. Tata is another smart Indian company that jumped on the Israel bandwagon early on. They have already invested in the Tel Aviv University’s Technology Innovation Momentum Fund, and Tata is looking towards their groundbreaking discoveries in several fields including pharmaceuticals, healthcare, cleantech, and software development.

According to Shlomo Nimrodi, Ramot’s CEO, “Tata is a huge company, worth $100 billion at least, but they have made a strategic decision to significantly expand that worth in the coming years, and the best way for them to do that is via innovation.” So it seems that Israeli innovations are the up and coming trends for developing economies.

A Win-Win Situation

The partnership is being viewed as a positive move for both sides of the arrangement. The Israeli startups are excited to be getting the funding to fuel further development of some concepts and technologies could very well change the face of the world. The Indian investors are also thrilled to be the recipients of these new technologies and are anxious to see what this undervalued resource of the Middle East will produce in the future. With this deal in the bag, the world can expect to see more Indian-Israel relations cropping up in the coming years.

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Israel Moves Beyond Europe by Signing China Agreements

While Israel continues to be vilified around the world, most recently by the U.N. Human Rights Council (which puts on the same circus every year at its month-long session, when it singles out only Israel for condemnation), Israel continues to build and strengthen diplomatic and trade relationships.

The second annual meeting of the Israel-China Committee for Cooperation in Innovation was held on Tuesday at the Foreign Ministry in Jerusalem, hosting an 80-member Chinese delegation, led by Chinese Vice Premier Liu Yandong, and including three ministers, nine deputy ministers and 14 university heads. Israel and China signed 13 bilateral agreements, one of them a 10-year multi-visit visa that will facilitate business and tourist travel between Israel and China. The only other countries that China has such an arrangement with are the U.S. and Canada, which shows just how highly China values its cooperation with Israel.

Furthermore, a delegation of that magnitude, both in size and seniority, clearly shows that China considers Israel to be an important partner and that all the condemnations mean very little once you are outside the U.N. building in Geneva. Those who realize that it is in their own interest to cultivate relations with Israel look past the ritual denunciations and relate to Israel on a bilateral basis.

One important outcome of Tuesday’s meeting, which can hardly be overestimated, is that Beijing has shown interest in beginning free trade negotiations with Israel. Such an agreement could potentially double bilateral trade from $8 billion to $16 billion.

“I was delighted to hear today from Vice Premier Liu that China is prepared to begin free trade agreement negotiations with Israel,” Prime Minister Benjamin Netanyahu told reporters at a joint press conference. “This is a momentous development and we are ready to do so right away.”

The closer trade ties Israel cultivates with countries such as China and India, with whom Israel also enjoys very good relations, the less Israel will have to rely on trade with the European Union with its cognitive war, boycotts and deeply anti-Israeli sentiments. However, the European Union is still Israel’s primary trade partner, with trade in 2014 amounting to over $30 billion.

When it comes to the EU, the problem is not just the anti-Israel sentiment. The EU is caught in an economic downward spiral, which is only going to worsen in light of the current migrant crisis and problems with Islamic terrorism — problems that, as the recent attacks in Brussels clearly demonstrated, the continent is ill equipped to deal with. This means that with time, the European Union will very likely become a much less interesting partner.

Also, very importantly, the highly anticipated increase in flights between China and Israel will commence next month, as China’s Hainan Airlines begin operating three weekly flights between Beijing and Tel Aviv. Israel’s El Al Airlines already operates three weekly flights on the same route. There is a huge untapped market for tourism in China, with Chinese travel abroad booming. One can find Chinese tourists in even the smallest European outpost, but Israel has so far not tapped the potential of Chinese globetrotters.

“To say that not much has been done to bring Chinese tourists to Israel is not true. It would be more correct to say that almost nothing has been done,” Tourism Minister Yariv Levin said last July.

According to a report in Haaretz, in 2014 about 32,000 Chinese nationals visited Israel, up 29% from 2013. The upward trend continued in 2015. During the first five months of 2015, 18,700 Chinese tourists visited Israel, a 35% increase over the same period in 2014. However, considering the existence of 107 million Chinese tourists, Israel is benefiting from a very small piece of the pie. This is now likely to change dramatically with the new visa agreement and the increased flights from Beijing.

More than ever, Israelis should start learning Chinese in order to facilitate the growth in both trade and tourism that these new agreements in tourism and trade are likely to bring. There is much to be said for moving beyond Europe.

(Originally published on Israel Hayom)