Realising the potential of the India-UK-Israel trade triangle

Realising the potential of the India-UK-Israel trade triangle
Realising the potential of the India-UK-Israel trade triangle

Technology offers new and improved ways to bolster trilateral trade relations between the three nations.

Highlights:

  • Despite strong bilateral ties between India, Israel and the UK, opportunities for trilateral trade have not been fully realised.

  • The UK Israel Tech Hub has generated 175 tech partnerships between UK and Israeli companies, worth an estimated $103 million.

  • The UK India Tech Hub was launched to support start-ups and entrepreneurs post the success of its UK-Israel counterpart.

  • As post-Brexit UK is looking for new ways to invest and trade with international markets, Israel and India together offer endless possibilities.

The strength of Israel's bilateral relationships with both the UK and India is well-known. From a friendship based on shared values, the UK-Israel trading relationship has grown rapidly in recent years, most notably in the technology sector. India-Israel ties have also developed since diplomatic relations were officially established in 1992, with deep cooperation on a strategic and trading level between the two countries, yet the opportunities for trilateral trade have not been fully realised. Since 2011, the amount of Israeli investment in the UK increased substantially following the establishment of a UK government scheme called the UK Israel Tech Hub, the first such hub in the world. The Tech Hub has generated 175 tech partnerships between UK and Israeli companies, worth an estimated $103 million (£85 million), which has helped boost the UK economy by an estimated $973 million (£800 million).

London has become a preferred location for expanding Israeli companies as a result of the prospects to raise capital, bringing hundreds of jobs for UK workers. Israeli companies have invested millions in south Wales, my home country, another attractive destination for business. The Tech Hub has also supported job growth in Israel by building a better skilled digital workforce.

Historically, the UK has been a favoured destination for global capital and last year, inward foreign direct investment reached record levels; a strong indicator that Britain's departure from the European Union sends a signal around the world that it is open and ready for trading in all corners of the globe. The Department of International Trade welcomed the news that the greatest growth from any country in the UK's foreign direct investment came from Indian investors, rising 321 per cent to $9.7 billion (£8 billion). Yet regulations in India have, in the past, restricted foreign investment, which is key to job creation and growth. Reports that the Indian Finance Ministry is considering ways to encourage foreign investors are welcome after foreign investment sank to a decade's low last year. The liberalisation of foreign direct investment rules is essential to attracting global players.

In April 2019, the UK India Tech Hub was launched in London to support start-ups and entrepreneurs - modelled on the successful UK-Israel equivalent. This is an important step in accelerating trade between the UK and India, developing the Indian tech ecosystem and facilitating sustainable economic growth and development. It is enormously significant that the UK chose to open its second hub in India, highlighting the growing synergy between the two countries.

Post-Brexit global Britain is more outward-looking than ever before. We want to invest and trade with international markets in new ways, and the untapped potential offered by Hyderabad, Mumbai and Delhi has for too long been overlooked. With Israel brought into the mix, the possibilities are endless. Israel's experience as the 'Start-up Nation' can assist with tackling obstacles India faces in facilitating innovation, and India's diverse economy presents great opportunities for investors and entrepreneurs alike. There is much to learn from the UK's approach to attracting foreign investment, and the three countries working together will serve all partners in a multitude of ways.

Stephen Crabb is the Conservative Party MP for Preseli Pembrokeshire in the UK.

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