New Delhi: With the bilateral trade between India and Israel set to touch $2 billion in 2004, minister for commerce and industry, Kamal Nath has proposed that a $5-billion target be set for the coming three years. In the meanwhile, India and Israel have also agreed to set up a joint study group to formulate a comprehensive economic partnership

Nath, announced this at an interactive meeting organised by FICCI on Wednesday with the visiting Israeli business delegation led by the vice prime minister and minister of industry, trade, labour and communications of Israel, Ehud Olmert.

Going by the present trends, it should be possible to achieve the target of $5 billion as in 2004 Indo-Israeli trade was all set to cross the $2-billion mark comfortably, Nath said. Even though diamond continues to be the most important item, the basket of products for trade between the two countries was expanding.

"We expect this positive trend to continue, as India expands its range of its goods and as its appetite for high-tech product grows," Nath said. The minister noted that India was Israel's second largest partner in Asia, after Hong Kong, and ninth largest globally.

Referring to the diamond trade between India and Israel, Nath said that the creative and successful leveraging of mutual strengths witnessed in the diamond trade between the two countries should be replicated in other sectors. He invited Israeli investors to participate in the development of infrastructure and the telecom sector, which offered vast opportunities for investments and collaborations.

Earlier, he met the Israeli minister for bilateral talks. In his address, Olmert said, "We offer a genuine, open-hearted and transparent invitation to Indian businessmen for forging joint ventures and collaborative agreements."

Since the establishment of diplomatic relations with Israel in 1992, Israel has become one of the most important destinations for Indian export products. The bilateral trade has grown by over six times crossing $1,273 million in 2002. Major items of exports to Israel include gems and jewellery, cotton textiles, drugs, pharmaceuticals and fine chemicals, inorganic / organic agro chemicals, computer software and telecom equipment, while major items of imports from Israel include pearls, precious / semi-precious stones, electronic goods, fertilisers and computer software in physical form.

Diamonds constituted about 65 per cent of India's exports to Israel in 2002. Areas of significant growth in India's exports were prepared foodstuffs (173 per cent), rubber and plastics (145 per cent), diamonds (88 per cent), machinery (85 per cent), transport equipment (78 per cent) and chemicals (32 per cent).

Israeli exports to India, in turn, grew by 31 per cent from $473.5 million in 2001 to $619.8 million in 2002. Israeli exports, excluding diamonds, increased by over 7 per cent. Principal items exported by Israel were diamonds ($400 million), machinery ($98 million), chemical products ($69 million) and optical, medical and other equipment ($21 million).

For most of 2003, bilateral trade had increased by 26.9 per cent, from $ 1,142.6 million in 2002 to $1450 million with India's exports to Israel increasing by 34.6 per cent, from $598.6 million to $806 million. India's non-diamond exports increased by almost 16.3 cent, and the trade surplus with Israel was over $162 million.

India's share in Israel's two-way trade world-wide grew to 2.4 per cent in 2003 as compared to 2 per cent in 2002.