Indian IT in Israel, Israeli tech in India: How India and Israel became partners in innovation

Israeli company Tower Semiconductor is part of the international semiconductor consortium ISMC that in May 2022 announced a $3 billion investment to set up a chip-making plant in Karnataka - this is India’s first semiconductor fabrication unit. (Representational image by Pok Rie via Pexels)

When Dov Frohman, one of Intel’s earliest employees, decided to leave Silicon Valley and return to his adopted home in 1974, he probably set Israel’s semiconductor industry in motion. Frohman is credited with the invention of EPROM, erasable programmable read only memory, and helped Intel establish its first chip design centre outside the US in Haifa, Israel.

Intel is still one of the dominant players in Israel’s semiconductor industry that employs more than 20,000 people. Aside from Haifa, Intel’s other major chip production plant is in Kiryat Gat, that’s a 30-minute drive from the Gaza border that has been deeply impacted by the escalating Israel-Hamas conflict. Israel may have some vital cues for India as we aim to become a global semiconductor hub. There have been reports that the Indian cabinet is likely to approve a Rs 25,000 crore scheme for semiconductor manufacturing in the country.

In 1992, India established diplomatic relations with Israel, and in 1993, the two countries signed an S&T (science and technology) agreement. The two countries have increased co-operation during the last decade. In 2017, an MoU for establishing India-Israel Industrial R&D and Innovation Fund (i4F) was signed by the Department of Science and Technology, India and the National Authority for Technological Innovation, Israel. Each side committed $20 million over five years to enable Indian and Israel enterprises to undertake joint R&D projects.

According to numbers from the Indian embassy in Israel, Israel’s FDI into India (between April 2000 and March 2023) was USD 284.96 million. These constitute over 300 investments from Israel in the high-tech domain, agriculture and water. The embassy adds that there is preference in sectors such as renewable energy, water technologies and homeland security. India and Israel are also part of the I2U2 group that also includes the United Arab Emirates and the United States. In September 2023, the group announced a new joint space venture which aims to create a unique space-based tool for policymakers, institutions, and entrepreneurs.

The Indian IT industry has a limited but significant presence in Israel focused on areas like R&D and innovation partnerships:

· Tata Consultancy Services (TCS) has announced that it is working in Israel’s public sector on several key digital transformation initiatives, including Project Nimbus, that aims to migrate Israeli ministries and authorities’ operations and data to a safe and secure cloud environment.

· In May 2023 TCS and Jaguar Land Rover announced the launch of JLR’s Open Innovation program in Tel Aviv. This program intends to foster disruptive mobility innovation and strengthen relationships between JLR and Israeli start-ups, scale-ups, corporate entities, investors, and academia as part of JLR’s Reimagine strategy.

· In 2019 Tech Mahindra Ltd announced a collaboration with Atidot, an Israel-based InsurTech company that offers predictive analytics, artificial intelligence and machine learning tools for life insurance and annuity companies. Tech Mahindra has also tied up with Israel-based defence electronics firm ELTA systems.

· HCL Technologies is engaged in software development with over 100 employees in Israel while Infosys has over 200 employees based in Israel.

Neolync: according to the company, Neolync is building the world’s first intentionally integrated product creation platform supporting the seamless development of electronic products from conception to completion. The company set up its first manufacturing facility in Tirupati in 2019 and produced its first smartphone in 2021, the same year that Reliance Industries made an investment in the company to boost 5G initiatives.

Rivulis: in 2022, Rivulis, a global leader in the micro irrigation sector, announced its acquisition of Indian irrigation major Jain. Rivulis has 24 large-scale manufacturing sites in 15 countries and 3,000 employees in 35 countries, three R&D centres and multiple Irrigation Project Design Centres around the globe.

Tower Semiconductor: this Israeli company is part of the international semiconductor consortium ISMC that announced a $3 billion investment to set up a chip-making plant in Karnataka in May 2022. ISMC is a joint venture between Abu Dhabi-based Next Orbit Ventures and Israel's Tower Semiconductor. Meanwhile, US chip giant Intel has announced plans to acquire Tower. This is India’s first semiconductor fabrication unit that is expected to generate in excess of 1,500 direct jobs and 10,000 indirect jobs.

ThinkCyber: this Tel Aviv-based cybersecurity training and solutions company announced an investment of USD 10 million in India over a three-year period to train students and corporates in India to create 4,000 ‘cyberologists’ with its proprietary tools and training programs.

Coralogix: according to Statista India, more than 1.3 million cyberattacks were reported across India in 2022, a significant increase compared to 2019 when the country saw 394,500 attacks. In 2022, Coralogix, an Israel-based technology company, launched a cyber security venture in India focused on securing cloud-native companies against the rise of cyber threats.

Cymulate: one of Israel’s leaders in cybersecurity, the firm has established a legal entity in India. The company provides advanced cybersecurity innovation for governments and local businesses.

Onebeat: this Israeli retail tech start-up helps retailers and major brands like American Eagle and Toys R Us use AI and big data tools. The company has announced that it will expand India operations by working with Indian retail majors like Metro Shoes and Tanishq.