July 6, 2017

During a visit to Israel by Indian Prime Minister Narendra Modi, the two countries announced the launch of the Israel India Innovation Initiative Fund (I4F) – an investment vehicle designed to focus on mutually beneficial investments in sectors ranging from agriculture to water to space.

Under the terms of the fund, each country has agreed to commit $4 million per year for five years, for a total corpus of $40 million.

Overall, seven MOUs were signed by the two countries, which upon observation, are likely strategic collaborators. Modi is actively seeking technologies that can foster India’s push toward modernization and facilitate its reach into global markets, while Israel could greatly benefit from deeper access to India’s massive market of 1.3 billion people for its tech exports.

Israel and India began a diplomatic relationship in 1992, at which time trade between the two countries was valued at around $200 million, according to data from the Economic Ministry of Israel. Today, trade between Israel and India is valued at $4.2 billion, and a report issued by Accenture and Nasscom states that there is the potential for investments between the two countries to result in up to $25 billion in sales by 2025, reports Live Mint.

The I’s Have It

Both Israel and India bring a need to the table that can prove beneficial to the other. Israel’s deep expertise as a leader in agtech innovation can help India advance its Make in India initiative, while India has provided Israeli agtech startups with a ‘field trial market’ for lack of a better term.

At this year’s GAI AgTech Week 2017 conference Israel was highlighted as a global leader in the advancement of agtech development.

Currently there are more than 400 agtech startups in Israel, noted Eitan Elkin, director of marketing with Start-up Nation Central. With a population of 8.2 million, that translates to one agtech startup for every 1,300 people

The country is ranked second out of 138 countries (outranked only by Switzerland) by the World Economic Forum’s Innovation Ranking, due in great part to a combination of distinct factors discussed during the Spotlight – Israel panel:

Land: The semi-arid nature of Israel’s landscape and the constraints placed on its agricultural sector drive a need for innovation around categories such as irrigation and greenhouse production.

In addition, the density of the country’s geography creates a closely-knit network of companies.

People: Israel’s history of being a country built by immigration has led to an open, entrepreneurial culture where the goal is innovation; while the influx of people of vastly different economic backgrounds has led to a multidisciplinary approach to problem solving. The cross-field aspect of the country’s expertise – from military, to gaming, to pharma adds a depth to the pool of experience that can be pulled from for R&D initiatives.

Infrastructure:  The Israeli government has supports in place, while academic research is widespread. Meanwhile, the country’s military teaches its young people how to build, problem-solve, and meet failure with the understanding that knowledge has been gained.

This environment has led to an investor landscape conducive to all investors from generalists, to focused agtech, impact, global, and corporate investors.

In India, opportunities for agtech are in the offing, as 70 percent of the country is expected to have broadband coverage by 2020, according to the Scott Strand, with Dalberg Global Development Advisors, who spoke at GAI AgTech Week 2017.

Targeted markets for agtech development include India, Nigeria, Kenya, Indonesia, South Africa and Argentina. Despite the difficulty in capturing value in these markets, there are largely untapped opportunities through the spread of connectivity and the emergence of more aggregators, which give the power of numbers to poor farmers.

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.