VIFTA Boosts Vietnamese Exports to Israel Amid Strong Trade Momentum

Nearly two years since the Vietnam-Israel Free Trade Agreement (VIFTA) took effect, trade relations between the two nations are demonstrating strong, positive momentum. Beyond tariff reductions, the agreement is fostering stronger business connections and investment cooperation, establishing Israel as a key emerging market for Vietnamese goods in the Middle East. Le Thai Hoa, Vietnam’s Commercial Counselor in Israel, highlighted VIFTA as a powerful catalyst for bilateral cooperation. "An increasing number of Israeli businesspeople and investors are interested in the Vietnamese market," Mr. Hoa stated. "They actively visit Vietnam to survey the market, attend trade promotion events, and connect with local suppliers." This growing engagement allows domestic Vietnamese enterprises to leverage VIFTA commitments more effectively. It also serves to diversify export markets, reduce reliance on traditional trade hubs, and enhance resilience against global economic shifts. Vietnamese seafood currently accounts for approximately 11% to 13% of Israel’s total seafood imports, indicating significant potential for market share expansion. Early results reflect the agreement’s success: in the first half of 2026, bilateral trade reached approximately $1.93 billion, a 5.5% year-on-year increase. Vietnamese exports surged by 35.7% to about $555 million. If current growth holds, bilateral trade could approach $4 billion by the end of 2026, with Vietnam’s exports to Israel exceeding $1 billion for the first time. Investment ties are also expanding. Israel maintains 46 active investment projects in Vietnam totaling around $156 million, focusing on high-tech agriculture, energy, and processing industries. Vietnamese companies have invested approximately $78.25 million in Israel, including ventures in high-tech battery technology. The Vietnamese and Israeli economies exhibit strong complementarity. Many products where Vietnam holds a competitive edge are goods that Israel needs to import to meet domestic consumer and production demands. While Israel is a moderately sized market, it features rapid consumption cycles, strong financial solvency, and a highly professional business culture. "Israeli importers are serious, highly solvent, and prefer buying directly from manufacturers rather than through brokers," Mr. Hoa observed. "They prioritize processed, value-added products with complete packaging ready for distribution." This aligns with Vietnam’s strategy to increase the value of its exports. Many local companies are now investing in deep processing, improved packaging, and brand building, moving away from simply shipping raw materials. In the first half of 2026, several sectors showed strong growth in Israel. Seafood remained a standout performer, generating about $40 million—a 30% increase over the previous year. Telephones, components, cashew nuts, and processed agricultural goods also maintained steady growth. Israel is also Vietnam’s largest tuna export market in the Middle East. Following a dip in 2025, tuna exports rebounded sharply, reaching nearly $10 million in the first quarter of 2026 alone—a 33% year-on-year increase. To translate tariff preferences into concrete export contracts, businesses must proactively meet market requirements, including rules of origin, technical standards, and targeted customer outreach. Mr. Hoa advises companies to stay updated on import policies, technical standards, and market demands, while actively participating in trade promotion events. "Strengthening market guidance, providing timely updates on new import regulations, and organizing business delegation trips are essential," he emphasized. Maintaining close, continuous relationships with key Israeli importers and major buyers remains the foundation for long-term success and deeper economic integration in the region. Source: Cong Thuong Newspaper