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Israel is turning to markets in the Arabian Peninsula and India to boost trade as the government seeks to increase exports from $150 billion to almost $1 trillion over the next 15 years, according to Economy and Industry Minister Nir Barkat.
The government has identified Dubai, the Middle East's center for trade, finance and tourism, as a hub for the expansion, Barkat said in an interview in the city last week. About 600 Israeli companies have started working in the United Arab Emirates since the two countries established diplomatic relations as part of the US-brokered Abraham Accords in 2020, he said.
Many have set up UAE subsidiaries and are "very successfully" selling their goods and services in the region, Barkat said. That includes in Saudi Arabia, with which Israel has no formal ties, according to the minister. He declined to give further details, and a spokesperson for Saudi Arabia's Ministry of Investment didn't respond to a request for comment.
The strategy could help revive an Israeli economy feeling the strain after more than 18 months of war against Hamas in Gaza. The plan could also ease uncertainty over US tariffs, with negotiations in progress over Israel's terms.
"This puts us in a totally different position in the global marketplace and also in terms of the stability and strength of the government and the state of Israel," Barkat said.
So-called cluster managers have been assigned to sectors including desert and climate, defense and homeland security, hi-tech as well as life sciences and health to match Israeli companies with opportunities on the ground, Barkat said. The goal is to increase the presence in the "Dubai hub" and take advantage of an Israeli tech industry that has some 10,000 startups, he added.
• Trump's Goals
Integration between Israel and Arab countries is a priority for US President Donald Trump, who wants the Abraham Accords to be extended to include Saudi Arabia and others. That vision has been challenged by the ongoing war between Israel and Hamas, which has made rapprochement with the Jewish state more difficult.
Saudi Arabia appeared to be on the cusp of normalizing ties with Israel alongside a defense and economic cooperation deal with the US before Hamas militants attacked Israel in October 2023, killing about 1,200 people. The subsequent conflict - which has killed more than 52,000 Palestinians in Gaza to date, according to Hamas-run health authorities - derailed that plan. Hamas is designated a terrorist organization by the US and many other countries.
Trump is set to visit Riyadh as part of a tour of Gulf states scheduled for next month.
There has been incremental progress when it comes to Israel-Saudi business and investment collaboration, according to one American Jewish entrepreneur, speaking on condition of anonymity, who worked on helping Israeli companies enter the UAE market for years before the Abraham Accords.
He's now moved to Riyadh and is hoping to do the same in the lead up to a possible establishment of ties.
Some Americans with connections to Israel are open about their activities in Saudi Arabia. Flow, a startup launched by billionaire Adam Neumann, who co-founded WeWork, opened a 238-apartment compound in Riyadh in September. Isaac ‘Yitz' Applbaum, founder and general partner at MizMaa Ventures, which invests in Israeli tech startups, has established a family office in Riyadh to invest in Saudi companies.
"I see enormous opportunities when normalization comes with Saudis and Israelis leveraging each others' strengths," Applbaum said in an interview. "Saudi Arabia is the epicenter of the region, it has the vision, capital and population and Israel has innovation and experience."
Saudi Arabia's de facto ruler, Crown Prince Mohammed bin Salman, has said the Palestinians must get a state of their own before he'll normalize ties with Israel. He's also said an end to wars and regional peace are crucial for advancing his multi-trillion-dollar plan to transform his country's economy. Tensions between Israel and Iran, which sponsors Hamas, remain obstacles for that vision.
No Arab state wants to openly align with Israel while the war in Gaza is ongoing. United Nations officials accuse Israel of waging a war "without any limits" and of using humanitarian aid as "a weapon of war" by blocking assistance to the territory.
Barkat said this "military and civil pressure" is necessary to achieve Israel's twin goals: free Israeli hostages and destroy Hamas. He said while Israel cares about how it's viewed by Arab neighbors, the priority remains keeping its people safe.
"We won't apologize," Barkat said.