Exim Bank has signed a memorandum of understanding (MoU) with Bank Hapoalim, Bank Leumi and Israel Discount Bank for setting up lines of credit to finance trade flows. The trade finance institution has hinted at picking up equity in Indo-Israeli joint ventures.

Indo-Israeli trade, which was $200 million in 1992-93, around the time diplomatic relations between the two countries were established, have increased five-fold to $1 billion in 1999-2000. Bilateral trade has grown 42 per cent till date during the current financial year.

"We have entered into MoUs with Israeli banks for opening lines of credit to finance investment and trade flows. The MoU with Bank Hapoalim will enable funding import of high technology items from Israel," Exim Bank managing director YB Desai said.

Desai led an Exim Bank delegation to Israel this month for exploring opportunities for developing financial ties to improve bilateral trade. Besides the three banks, Exim Bank also signed an MoU with Israel Export Institute, the apex industry body of the country for mutual inter-change of information on business possibilities.

"No limit has been set as of now for the the lines of credit with the banks," Desai said.

Israeli Foreign Trade Risk Insurance Corporation, the export credit risk insurance agency of Israel has hinted at providing guarantee directly to Exim Bank for providing rupee loans to Indian companies for import of machinary and technology. "The guarantee will enable Exim Bank to provide an option of currencies to companies importing technology from Israel," Desai said.

Exim Bank has come out with an occasional paper titled "Israel and India: A study of trade and investment potential" which elucidates the bilateral trade. The study was released on Wednesday by Israel's consul general in Mumbai Don Segev-Steinberg. According to the study, rough diamonds/gems and jewellery still account for 70 per cent of the bilateral trade. Indian imports consist of machinery, telecom and medical equipment and digital printing technology. Exports items include pharma products, drugs chemicals, cotton yarns and fabrics.