Lessons India can learn from Israel

In May 2017, last month, Prime Minister Narendra Modi completed three years in office. During this period, he has travelled extensively, and apart from seeking to consolidate ties with the US, Russia and China, he has also given high priority to the Middle East, while successfully de-hyphenating India’s ties with Gulf Cooperation Countries (GCC) and Israel. The PM has already visited UAE (August 2015), Saudi Arabia (April 2016) and Qatar (June 2016).

Strategic and economic ties with GCC countries have witnessed a significant improvement. Simultaneously, ties with Israel have also blossomed under the leadership of Modi, while the foundations were laid previous governments, the bilateral relationship has come out of the closet.

If one were to look at defense cooperation between both countries, Israel today happens to be the third largest supplier of arms to India. A number of important deals have also been finalized recently, they include the purchase of Spike anti-tank missiles for the Indian army and Barak-8 air defense missiles for the Indian navy. During the PM’s visit defence cooperation is likely to be high on the agenda.

There is absolutely no doubt, that defence cooperation is the key driver of the bilateral relationship. Yet, there is a lot which India can learn from Israel in two areas; IT and Agriculture given the challenges India is facing in both areas.

Challenges India is facing in the IT Sector

Developed countries like the US and Australia are becoming increasingly insular, and averse to immigration. US President Trump and Australian PM Turnbull both have revised business visa rules to restrict the entry of skilled workers from other countries. Indians were the biggest beneficiaries of H-1B visa program (in 2014, 70 percent of H1-b visas approved were of Indians). Consequently, the Indian IT sector is facing challenging times, and there have been a significant number of lay offs recently.

Given all the above developments, it is time for India to think out of the box. In this context, India would do well to emulate the Israeli success in ‘Start ups’ .

Israel is home to 6000 startups, and also continuously growing at the rate 1300 per year. According Ditza Froim, Minister Counsellor, an Israeli diplomat at the Embassy of Israel, “It has attracted per capita, over twice as much venture capital investment as the US and 30 times more than all the members of the European Union combined.”

The Indian PM, Narendra Modi in his Independence Day Speech from Red Fort stated, “In the coming days, start-ups will be promoted in every corner of the country. Start-up India, Stand-up India.”

The Indian Startup sector has grown by leaps and bounds, and it’s ecosystem has matured over the past few years. According to a Nasscom report of 2016, ‘India harbors 4750+ start-ups, 140+ incubators/accelerators, and is expected to witness 80+ M&As this year’.

A large chunk of the FDI received is stakes in start ups. Strong examples of the same are Alibaba’s 40% stake in Paytm’s e-commerce business. Others having a stake in Indian companies include; SoftBank in Paytm ($1.8 billion in 2017), Ctrip’s ($180 million stake in Make my trip in 2017), Beijing Miteno Communication Technology ($900 million share in 2016) in Media.net

But innovation is sorely missing from the Indian Startup terrain. Wharton professor David Roberts argues that in the name of innovation, “e-commerce companies , disruptive in nature, upending entire industries with a radical new way to do business” rather than creating new sector to generate employment. Indian startups can learn from the Israeli startups in regards to innovation, which are creating altogether new different industries, cybersecurity being one of them. According to Avi Simhon, the economic adviser to Israeli Prime Minister Binyamin Netanyahu, Israeli private sector spent 4.2% of GDP on R&D in 2015. Fourteen out of every 1,000 people employed in Israel, are doing R&D work, compared to the OECD average of 8 people.

India has a lot to learn from Israel, not just in IT and innovation, but agriculture as well. Loan waivers can be a temporary solution, but in the long run government needs to make its agriculture more economically viable and profitable.

India and Israel signed the Agreement for Agricultural Cooperation in 2006. Which lead to the evolution of Indo-Israeli Agriculture Project (IIAP). Under the IIAP, Israel has already set up around 26 centres of excellence in 10 states including Bihar, Gujarat, Karnataka, Punjab, Uttar Pradesh, Tamil Nadu and West Bengal. The Israeli Ambassador to India, Daniel Carmon has met with a number of Chief Ministers including the Chief Minister of Uttar Pradesh and Punjab to take cooperation forward. Israeli Ambassador to India Daniel Carmon met with the Punjab Chief Minister and invited him to visit in September 2017. It would be pertinent to mention that WATEC Israel, an international exhibition (which showcases latest technologies in water and environment) will be held in Tel Aviv from September 12-14 and the Ambassador invited the Punjab CM to co-incide his visit with the expo.

It would be pertinent to point out, that farmers are already reporting successes in places such as Haryana, where Israeli farm technology has helped farmers in about 500 acres to switch to vegetables and floriculture.

There is an opportunity in every adversity, and India has opportunities to learn from the Israeli experience in the area of Information Technology and Agriculture. Both India and ‘Bharat’ can benefit from Israel’s success.