Promising industries

Signed on July 25, 2023, after seven years and 12 rounds of negotiations, VIFTA covers 15 chapters with annexes on trade in goods, services and investment, rules of origin, TBT, SPS, customs, trade remedies, government procurement, and legal-institutional matters.

The pact sets high liberalization levels: Israel commits to 92.7% of tariff lines, Vietnam 85.8%. Both sides expect bilateral trade to soon reach $3 billion and rise further.

The agreement is not only expected to boost goods trade but also strengthen cooperation in investment, services, digital transformation, and technology.

Vietnam aims to expand exports of its key goods to Israel while gaining access to other Middle East, North Africa, and Southern Europe markets. Israel, meanwhile, can leverage Vietnam’s 100-million-strong market and access ASEAN and Asia-Pacific economies via Vietnam’s 17 FTAs.

Science and technology are highlighted as a long-term driver. “Israel is seen as a startup and innovation success story, offering many technological skills Vietnam can learn from", said a Ministry of Industry and Trade (MoIT) official.

Seafood is another potential export. VASEP Secretary-General Truong Dinh Hoe noted Israel’s high purchasing power makes it a promising market despite its current small share. Likewise, consumer goods and agriculture particularly fruits like dragon fruit, durian, lychee, and longan are seen as advantageous, according to the Vietnam Fruit and Vegetables Association.

Market awareness for effective implementation

Despite Middle East conflicts, Vietnam-Israel trade reached $1.565 billion in the first five months of 2025, up 44.6% year-on-year, with exports steady at $354 million. In the first half, trade hit $1.825 billion, up 31.2%, including $425 million in exports.

Trade could reach $3.7 billion in 2025, with exports approaching $900 million.

Trade Counselor Le Thai Hoa said Israel’s disrupted imports have spurred demand for food, consumer goods, and building materials areas where Vietnam can step in. However, risks from geopolitical instability, including Red Sea shipping routes, must be considered.

Vietnamese tuna exports to Israel have recently declined due to escalating regional conflict, highlighting vulnerability.

Trade Counselor Le Thai Hoa advised exporters to seize current demand but carefully monitor risks, secure cargo insurance, and diversify shipping routes.

In the first six months of 2025, two-way trade between Vietnam and Israel reached USD 1.825 billion, an estimated increase of 31.2% compared to the same period last year, with exports to Israel rising to USD 425 million.

For the full year 2025, if no unexpected instabilities arise in the market, two-way trade could reach nearly USD 3.7 billion (an estimated increase of 13.95% compared to the previous year), with exports to Israel estimated at approximately USD 900 million (an estimated increase of 13.21% compared to 2024).