One of the largest tech business delegations from India to ever arrive in Israel is scheduled to arrive next week. Some 30 Indian companies, large and small, plan to have booths at the India Pavilion at the Tel Aviv MIXiii 2014 conference, the largest tech event to be held in Israel this year.
Those companies represent the leading edge of Indian tech business interest in Israel, according to Vani Rao, deputy chief of mission in the Embassy of India. “Israel and India already do a lot of business in several areas, including agriculture and diamonds, with the latter accounting for about half the current $5 billion in trade between our countries,” Rao said in an interview. “Interest in Israel from the information technology sector has been increasing in recent years as well, with Indian companies seeking to partner with Israeli start-up and veteran companies on development projects.”
Not included in that $5 billion figure is defense trade between Israel and India, Rao noted. Although most Israelis are aware of the defense, agriculture and diamond aspects of trade between the two countries, many are unaware that there is actually a booming, if quiet, IT connection between them already.
“Many of Israel’s IT largest companies, such as Ceragon, Truphatek, CheckPoint, Magic Software, Ness Technologies and others have operations in India,” said Rao. “Amdocs, which provides communication and back office services for companies around the world, has about 1,000 employees at its office in Pune.” Teva and a number of biotech companies have substantial Indian operations. Several large Indian firms, including Infosys and Tata, were already working with Israeli start-ups, she said.
Despite all that, Rao admits that the business relationship in IT between Israel and India has been somewhat low key until now. That, however, is about to change, as India is ready for a lot more help from, and joint projects with, Israeli start-ups and established companies that have the advanced tech that the country needs to continue growing. “Demand for high technology and electronic component products in India is projected to increase to $400 billion by 2020, but based on current trends, we will only be able to produce $150 billion worth of those needs,” said Rao.
Instead of importing those components, the Indian government intends to ensure that the local economy can produce them, said Rao. That’s where Israel comes in. “Israel has a lot of great technology that can contribute to closing this shortfall, and obviously this is a business opportunity for Israeli companies as well.” More Indians in the IT business are becoming aware of Israel’s tech advances, and if they were not flocking to the country for deals before, Rao said, it was more out of ignorance than a resistance to working with Israel, or fear of upsetting the Arab countries.
MIXiii is the right place for the Indian companies and regional government development organizations in the delegation to go for tech deals. Sponsored by the IATI (Israel Advanced Technology Industry), the two-day event will cover the gamut of Israeli tech, with exhibits and lectures from executives in industries such as high-tech, biomed and cleantech. Thousands of visitors, including investors, vendors and potential customers, will be attending, IATA said.
The India Pavilion represents the largest single Indian presence at an Israeli event yet. It is coordinated by the Embassy of India, Confederation of Indian Industry and the Global Innovation and Technology Alliance (GITA). Their participation is being sponsored by India’s Departments of IT & Electronics; Telecommunication; Science and Technology; Small, Micro and Medium Enterprises; and the state governments of Karnataka, Kerala, Maharashtra and Gujarat.
With India set to increase its outreach efforts to Israeli start-ups, the country enters an already crowded field. According to a recent Economy Ministry report, Israel will for the first time export more to East Asian countries than it will to the US, with much of that trade with China.
But India doesn’t foresee a competition developing between itself and China. “There’s enough business to go around for everyone, believe me,” Rao said. “India’s needs are also different from China’s, as we are concentrating on developing infrastructure and core technologies,” while China may in some respects be beyond that point, she added.
While Rao diplomatically offered a “no comment” on the question of whether India was a “safer” investment venue for Israeli companies than China — after all, India, unlike China, is a democracy — she did say that “India’s virtues speak for themselves.” She noted that India has “had elections and smooth changes of governments for over 50 years, we have an independent judiciary that subscribes to all international conventions on patents, we have a free and fair press, and we communicate in English. Most importantly, our peoples and countries have a lot in common, and this would definitely make for successful business endeavors.”