Both Indian & Israeli companies believe in personal relationships
Natasha Zangin, Counsellor, Head of Economic and Commercial Mission, Embassy of Israel in India, emphasizes on the importance that Israel attaches to its bilateral relationship with India. Further, she talks about the key drivers of the startup ecosystem in Israel, and the exciting technology collaborations that can catalyse Indo-Israel economic cooperation going forward.
IBT: How do you see India-Israel trade ties having evolved in the recent past and what are the major drivers for bilateral relations?
Natasha Zangin: Since the establishment of diplomatic relations between the two nations in 1992, bilateral trade and economic relations have progressed pretty rapidly. We had around US$ 200 million worth of merchandise trade in 1992. It has diversified and reached close to US$ 4 billion in 2020. India is a focus country for our government, being Israel’s third largest trade partner in Asia and the seventh largest globally.
So we see India as a partner country in that sense and hope to take those relations to their fullest potential. Both countries can increase their bilateral trade significantly and have much more to explore vis-à-vis their economic relations. Israel has three different economic missions in India, making it the third largest country in terms of economic missions around the world after the US and China. This is only one example to illustrate the high significance that the Israeli government sees in its economic relations we have with India.
IBT: What is your perspective on how technology collaboration with Israel can evolve post-COVID?
Natasha Zangin: I think that COVID-19, along with its obvious disadvantages, has brought many advantages when it comes to high tech solutions. It has possibly pushed global progress on these solutions ahead by at least 10-15 years. Everything has moved to virtual/digital platforms, from having meetings to controlling your irrigation systems from your mobile phones. As online presence increased, this has also led to a rise in the number of cyber attacks. This situation, of course, requires different kinds of cyber solutions to protect your online data, privacy and infrastructure.
A lot of such cutting edge technologies haven’t been used up until now or not that frequently. But due to the circumstances, we have started using them, because not everyone is willing to step into a hospital or a clinic right now. I think this is a time when we can cooperate on that front to implement those solutions and bring them to citizens.
Israel’s strength is in its technical solutions. We wouldn’t consider ourselves as a industrial country, when you compare it even to India or other nations worldwide. In Israel, you have more than few 100 companies providing a wide range of cyber solutions, making it the second largest ecosystem in the world or health tech diagnostics. For pregnant women, they can monitor the heart rate of the baby and the movement, so you don’t need to constantly go to the doctor and undergo an ultrasound. Based on your physical stats, they can predict if you need to go to the doctor.
IBT: How has Israeli investment in India trended, which sectors do they consider most lucrative and what are the focus areas for the future?
Natasha Zangin: As an Economic mission, we focus on economic cooperation between both nations. We don’t specifically focus on FDI coming from Israel to India, but I’m aware that from April 2000 to September 2020, inflows from Israel to India were reported at around US$ 205 million. For 2019-20, I think it was around US$ 31 million. Both nations, of course, are interested in increasing that number.
In Israel, we have over 300 R&D centers. At least a half of them are multinational companies coming from abroad to scout for new technologies. In 2018, Israel was ranked the first country worldwide in terms of how much the government invests in R&D from its own GDP at nearly 5%. The second was South Korea. And I think there are plenty of opportunities in that front. Technology is going to restructure the way how we do business.
IBT: Which sectors do Israeli companies find lucrative for technology collaboration with Indian companies?
Natasha Zangin: In the beginning, bilateral trade between Israel in India was mainly dominated by diamonds and chemicals. But in recent years, to our content, we witness increasing trade in areas such as electronic machinery, high tech products, communication systems, medical and dental equipment. So, while we started with more traditional sectors like water, agriculture and chemicals, we now see more and more tech companies exploring India for economic cooperation. And they’re providing solutions for health tech, medical devices fintech, cyber and HLS smart cities, clean tech, and energy, hydrogen storage, solar energy, etc. Israel also has a very booming ecosystem for smart mobility solutions. We are not manufacturing cars, but we’re manufacturing the tech solutions to support smart cars that will hopefully enter the market in upcoming years.
IBT: What kinds of mechanisms are the two governments working on or have implemented to enhance engagement between companies from both sides?
Natasha Zangin: First of all, as I mentioned, only in India, we have three different economic missions, with the sole purpose to enhance cooperation & trade between both countries. We help Israeli companies looking into India as a potential market, or even if they’re operating here through joint ventures, local subsidiaries or distributors. On the other hand, if it’s Indian companies who regularly approach us for tech scouting, we can go into a very deep process of scouting, based on the most prominent needs of a specific local company. It could be specific seeds for their plantations, specific irrigation systems, or precise agricultural technological solutions, like platforms predicting weather, providing inputs on usage of pesticides, how you need to fertilize your plantations, etc. So it really depends on the needs of the company.
A case in point is agriculture. Israel is a major exporter of fresh produce and a world-leader in agricultural technologies, even though the geography of the country is not naturally conducive to agriculture. Only 20% of the land area in Israel is naturally arable. Currently agriculture represented about 2.3% total GDP and 0.9% of the labour force in Israel is employed in agriculture. The country is a well-established leader in water management, desalination and recycling techniques, and has set a template for reusing wastewater for irrigation. It treats 80% of its domestic wastewater, which is recycled for agricultural use and constitutes nearly 50% of the total water used for agriculture. Drip irrigation, water soluble fertilizers, mulching, hybrid seeds in controlled greenhouses, etc are the norms in any agriculture field. Israel, therefore, sees huge potential of collaboration in Indian agriculture, considering that the latter is the world’s second largest producer of agri products.
Another scheme is the i4F fund, which is assisting Israeli companies and Indian companies going for a joint R&D process across sectors. They can get funds for their R&D projects, which may bring them to a final product or solution that can be put in the market. This is led by GITA in India and by Israeli Innovation Authority in Israel.
IBT: Israel is well known for being home to the second largest tech startup ecosystem in the world. What makes it an attractive destination for startups?
Natasha Zangin: I’ve been asked this question a lot and I think it’s a mixture of reasons. Firstly, as I mentioned, the Israeli government is investing heavily in R&D at close to 5% of our GDP. The second reason is that Israel is indeed a very young country, and we don’t have a very long developed business culture. The positive side of that is that we still haven’t developed a very structured system or rules to be followed. So there is a lot of freedom to experiment and you don’t need to follow a specific path.
Youngsters are encouraged to study. But once they’re out of college or university, it’s not the first priority for you to go and get a job and stay there till the rest of your life. It’s actually very common in Israel to change jobs every two to five years. And I think it’s very, it’s well accepted and even encouraged in Israel to make mistakes.
So if you fail with your first startup, it is not frowned upon. Instead, it’s seen as an opportunity to learn and do better next time. Also Israelis are not attuned to following hierarchy. It sometimes can be, in a good sense, a chaotic environment where if you disagree with your superior or your boss, it’s completely normal to say it out loud. And I think this brainstorming at the end of the day brings the best ideas. Then you are able to follow up with the one that is most suitable. Also, there are a lot of army tech units where people are getting their education at a very young age, and those are the most cutting edge technologies. Once they’re out of the army, they have the most updated knowledge on how these things work. And this is being implemented to the civil market.
IBT: What do you think about the people-to-people engagement between India and Israel? And what is the perception of Israelis regarding the Indian economy and people, as well as doing business in India?
Natasha Zangin: I think Israelis try to stay updated as much as they can. India is a fast growing country, expected to be the third largest buy 2030 according to some surveys. So it’s an inevitable economic force that no one should or wants to ignore. I think India has amazing opportunities for development ahead. And I think Israelis are excited with Indian market and economy and are thrilled to cooperate commercially with Indian companies. Some of the major ones are Glassbox Digital, OpenLegacy, PayKey, Facetrom, Paygilant, Matific, Beecardia and Seetree.
The way of doing business, on the other hand, might be a bit different between the two countries. I think in India, it’s a longer process, whereas in Israel, it’s very fast and the system, because it’s a ecosystem of startups, and very low bureaucracy, so things are moving very fast. So, I think that would be the difference in terms of expectations. Israelis come here typically expecting to find a partner within one round of touring, whereas I believe Indians are more interested in setting long term acquaintances before signing any deals. But I think we already have a good amount of companies from both sides cooperating, having good communication and good economic cooperation. At the end of the day, both Israeli companies as well as Indian companies, from what I’ve seen so far, believe in personal relations and to trust your partner and to have good communication. They tend to look at it as a person first rather than a business partner. And personal relationships are important.
IBT: Israel and India are looking to sign a bilateral trade agreement. What is the progress on that front and expected closure?
Natasha Zangin: I am not privy to the talks, but trade negotiations usually take time, and there are sensitive issues brought out. Each country has to make sure that its expectations are met. The fact that we are having negotiations emphasizes the importance that the two countries have in the relationship. We want to see it translate into a trade agreement. Hopefully it will be signed in the near future and lay grounds for continuous stable trade between the two countries, be it areas like technology transfers, protecting investments, etc.
Ms Natasha Zangin has joined the Ministry of Economy and Industry of Israel in 2017 and has worked in the Trade policy and Trade Agreements department, focusing on trade in services and investments. She has been involved in Israel’s trade agreements negotiations with multiple countries including India, Vietnam, China, etc. Prior to joining the Ministry, Ms. Natasha worked in the private hi-tech sector leading analytics teams in Israel and Europe. Natasha holds Degree in Accounting and International Relations, diverse experiences in Israel Tax Authority, Mobile services and in Marketing & Advertising.