India Plans UPI Launch in Israel; Free Trade Agreement Under Discussion

India and Israel have agreed to upgrade their bilateral relationship to a special strategic partnership after talks between Prime Minister Narendra Modi and Israeli Prime Minister Benjamin Netanyahu, as per recent reports. 

The decision was accompanied by a set of agreements covering trade, digital systems, agriculture, defence, and technology as the visit focused on expanding cooperation into newer sectors while reinforcing existing ties. 

Digital Payments Agreement 

An agreement was reached to enable the use of India’s Unified Payments Interface (UPI) in Israel through collaboration between NPCI International and Israel’s payments operator, MASAV. 

The arrangement is to support cross-border transactions and improve payment connectivity between the two countries. Authorities are also examining the feasibility of linking fast payment systems to facilitate remittances and business payments. 

Trade Pact Discussions 

Both sides confirmed their intention to conclude a free trade agreement. The first round of negotiations concluded on February 26, 2026. 

Reports suggest that Bilateral merchandise trade between India and Israel stood at $3.62 billion in FY 2024-25. Israel also agreed to allow 50,000 additional Indian workers over the next 5 years, mainly in manufacturing roles. 

Cooperation Across Sectors 

During the visit, 16 agreements and 11 announcements were made. These covered areas such as artificial intelligence, geophysical exploration, fisheries, and maritime heritage. 

The 2 countries also agreed to expand collaboration in civil nuclear energy and space. A declaration on emerging technologies including AI, quantum systems, and critical minerals was also issued. 

Defence and Regional Issues 

Defence cooperation remains a central area of engagement, with plans to expand joint development and production of military equipment. India also expressed support for ongoing peace efforts, noting that stability in West Asia is linked to its security considerations. 

Read More: International UPI Transactions Near Double in FY26, Cross 1 Million Mark! 

Conclusion 

The discussions led to agreements on digital payments, trade negotiations, defence cooperation, and technology partnerships, with the UPI rollout and proposed FTA among the immediate developments. 

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