New Delhi: India and Israel are moving closer to a free trade agreement (FTA), with both sides preparing for the next round of discussions in January. Officials close to the development say teams from both countries will meet early in the New Year to take forward negotiations that formally began in November.

At that time, India and Israel signed the Terms of Reference, beginning the official start of talks on the proposed FTA. The focus of the agreement is to expand trade flows and encourage greater investment between the two economies.

According to officials, the January meetings will centre on the overall structure of the India-Israel FTA and the plan that will guide negotiations. Israeli trade representatives are expected to travel to India for these discussions.

The engagement comes as recent trade data points to a slowdown in bilateral commerce. During 2024-25, India’s exports to Israel fell by 52 per cent to $2.14 billion, compared with $4.52 billion in 2023-24. Imports from Israel also declined in the last financial year, dropping 26.2 per cent to $1.48 billion. Taken together, total bilateral trade between the two countries stood at $3.62 billion.

Despite the recent dip, India is Israel’s second-largest trading partner in Asia. Trade between the two countries has traditionally been dominated by diamonds, petroleum products and chemicals. Over the years, the basket has widened, with growing exchanges in electronic machinery, high-tech products, communication systems and medical equipment.

When it comes to exports, India sends a wide range of goods to Israel. These include pearls and precious stones, automotive diesel, chemical and mineral products, machinery and electrical equipment, plastics, textiles and garments, base metals, transport equipment and agricultural produce.

Israel’s exports to India also span major sectors. Major items include pearls and precious stones, chemical and mineral products, including fertilisers, machinery and electrical equipment, petroleum oils, defence-related equipment and machinery and transport equipment.

With both sides looking to strengthen economic ties and reverse the recent fall in trade, the upcoming FTA talks are being closely watched as a potential turning point in the India-Israel economic relationship.

Pakistan’s liquid foreign exchange reserves saw a modest increase in the final week of 2025, with the State Bank of Pakistan (SBP) reporting a $13 million rise in its holdings.

As of December 26, 2025, the SBP’s foreign currency reserves stood at $15.915 billion, up from $15.902 billion in the previous week. Net reserves held by commercial banks dipped slightly to $5.097 billion, resulting in total liquid foreign reserves of $21.012 billion.

This brings the country’s import cover to an estimated 3.2 months, providing a stable buffer amid ongoing external payments and debt obligations, according to AKD Securities.

Over the past three years from 2023 to 2025, the SBP’s reserves have shown a profound transformation, moving from the brink of crisis to a position of notable recovery and stability. In early 2023, the reserves plummeted to critically low levels, dipping below $3 billion in February, barely enough to cover a few weeks of imports, amid high debt repayments, stalled external financing, and severe balance-of-payments pressures that brought the country perilously close to sovereign default. This nadir reflected years of structural challenges, including elevated import bills and restricted inflows, with import cover falling below one month at its worst.

The turning point came in mid-2023 with the approval of a nine-month, $3 billion Stand-By Arrangement from the IMF in July, supplemented by bilateral support from allies like Saudi Arabia, the UAE, and China, alongside improved remittances and export performance. The reserves began a gradual climb, reaching around $4.5 billion by June 2023 and approximately $8-9 billion by year-end, steadily improving import cover and easing immediate liquidity risks.

Meanwhile, gold prices in Pakistan edged lower on Thursday, tracking losses in the global bullion market. In the domestic market, the price of gold per tola fell by Rs2,400 to settle at Rs454,562.

The Reserve Bank of India has flagged emerging structural pressures in the insurance sector, warning that premium growth is increasingly being driven by high-cost, distribution-led strategies rather than improvements in operating efficiency, even as the sector remains stable in the near term, according to its latest Financial Stability Report.“While posing no near-term systemic risks, the surface-level stability masks emerging structural pressures that could weigh on medium-term sustainability and coverage expansion,” the RBI said in the report.“A primary pressure is the persistence of a high expense structure, particularly the acquisition costs. Premium growth has been increasingly driven by high-cost distribution-led strategies rather than operating efficiency,” the central bank noted.In the life insurance segment, the RBI said frontloaded acquisition costs have limited the extent to which scale efficiencies are passed on to policyholders. It added that the expected benefits from digitisation have not yet fully materialised.“From a financial stability perspective, continuously elevated expenses could weaken profitability buffers and amplify cyclical vulnerabilities,” the report said.The RBI said a reorientation towards cost rationalisation, better alignment of intermediary incentives with policy persistency and value, and wider adoption of technology-enabled low-cost distribution models are essential to improve the sector’s long-term resilience.Supported by regulatory initiatives such as the risk-based capital framework, enhanced disclosures and strengthened market conduct standards, a sustained moderation in expense intensity would improve consumer value and help the sector transition from a ‘high-cost, low-inclusion’ model to an ‘affordable-cost, broad inclusion and high quality’ equilibrium, it added.According to the report, total premium income rose to Rs 11.9 lakh crore in 2024-25 from Rs 8.3 lakh crore in 2020-21, reflecting continued expansion of the insurance market.“However, total insurance premium masks a significant growth moderation, as the growth rates for both life and non-life sectors have slowed sharply,” the RBI said.At a sectoral level, the life insurance segment continues to exhibit high concentration risk, while the non-life sector has seen a structural shift, with health insurance emerging as the leading segment. Product concentration across both segments indicates limited diversification, the report noted.Total assets under management of the insurance sector stood at Rs 74.4 lakh crore as on March 31, 2025, with life insurers accounting for 91 per cent of total investments, underscoring the sector’s growing role as a major institutional investor.The RBI also highlighted a divergence in cost efficiency between public and private insurers.“Public life insurers show a strong focus on expense management and potentially lower acquisition costs underlined by a flat commission structure despite growing premiums. In contrast, private life insurers show a steep increase in commission pay-outs, particularly surging from 2022-23 onwards, indicating business acquisition at higher marginal cost,” it said.In the non-life segment, public insurers maintain a stable but high expense base, with commission costs remaining low and flat. Private non-life insurers, however, show a sharper escalation in commission expenses, pointing to a high-cost distribution-led growth strategy that could impact underwriting margins, the RBI said.The report also noted that insurance density rose steadily from $78 in 2020-21 to $97 in 2024-25, indicating higher per-capita spending on insurance. At the same time, a decline in insurance penetration suggests that GDP growth has outpaced the rise in premiums.