Israel is currently Vietnam’s third-largest trading partner in West Asia.

Despite results falling short of initial expectations, bilateral trade in 2024 still reached approximately USD 3.25 billion, with Vietnam’s exports accounting for nearly USD 800 million.

For 2025, total trade is estimated to surpass USD 3.75 billion, while Vietnam’s exports are projected to reach USD 850–880 million, marking an increase of more than 10% compared with 2024.

Vietnam has increasingly become an attractive destination for Israeli investors, businesses, traders, buyers, and tourists. Many Israeli partners are showing strong interest in the Vietnamese market, frequently traveling to Vietnam to seek suppliers, business partners, and opportunities to shift investment projects to Vietnam.

Israel is now Vietnam’s third-largest trade partner, fourth-largest export market, and second-largest import market in West Asia. Meanwhile, Vietnam is one of Israel’s most important trading partners in Southeast Asia.

ENTERPRISES STILL LACK MARKET INFORMATION

Speaking at the seminar “Prospects from VIFTA: Solutions for Effective Utilization” on 4 December 2025, experts agreed that Vietnam has substantial opportunities to develop the Middle Eastern market.

Nguyễn Thị Lan Phương, Deputy Head of the WTO and Trade Negotiations Division (Department of Multilateral Trade Policy, Ministry of Industry and Trade), noted that Israel committed to eliminating tariffs on 66.3% of tariff lines immediately upon VIFTA’s entry into force, and an additional 26.4% after a 3-5-7 or 10-year schedule. In total, tariff liberalization for Israeli tariff lines will reach 92.7% by the end of the roadmap.

Conversely, upon the agreement's entry into force, Vietnam liberalized over 30% of its tariff lines, and will eliminate another 51.6% over 3-5-7 years—bringing Vietnam’s overall tariff liberalization rate to 85.7%.

Israel offers preferential liberalization for many strong Vietnamese export items—including leather-footwear, textiles, electronics, machinery, and equipment—many of which already exceed USD 1 million in export value.

Highlighting the uniqueness of VIFTA compared with other FTAs, Lê Thái Hòa, Trade Counsellor at the Vietnam Trade Office in Israel, noted that Israel has signed 16 bilateral and multilateral FTAs with around 48 partners, including the EU, EFTA, Mercosur, the US, Türkiye, Canada, Colombia, Mexico, the UK, South Korea, the UAE, and Vietnam.

Israel is also negotiating FTAs with the Eurasian Economic Union, India, China, and Japan. Although Israel actively pursues trade liberalization through FTAs, it still maintains tight market protection, especially in agriculture. Its negotiation approach is flexible yet cautious and firm to safeguard core interests.

Đỗ Thị Thúy Hương, Vice Chairwoman of the Vietnam Supporting Industries Association and Executive Member of the Vietnam Electronic Industries Association (VEIA), stressed that VIFTA opens major opportunities for Vietnamese enterprises—particularly in electronics—in export expansion, technology access, and supply-chain linkages. However, several challenges remain:

1. High technical and quality standards.
   The Israeli market imposes stringent technical regulations and quality standards, especially for electronics. SMEs may struggle to comply immediately.

2. Rules of Origin (ROO) and C/O procedures.
   To benefit from tariff preferences, firms must meet ROO requirements and handle complex certification procedures—still unfamiliar and costly for many.

3. Insufficient depth of Vietnam’s domestic supply chains.
   Supporting industries cannot yet supply electronic components that meet advanced supply-chain requirements. High logistics costs, delivery timelines, customs procedures, and payment-licensing issues further hinder trade.

4. Limited access to specialized market intelligence.
   SMEs have difficulty reaching detailed, sector-specific information about Israeli markets, customers, and standards.

ENTERPRISES MUST BE PROACTIVE

To better utilize VIFTA, Ms. Phương stressed that enterprises—being the direct beneficiaries—must take the lead in turning the agreement’s advantages into real gains. Businesses should actively study VIFTA provisions, which are publicly available on the Ministry of Industry and Trade’s portals, including the Government FTA Portal (fta.gov.vn).

VEIA’s representative, Ms. Hương, encouraged businesses to proactively raise their concerns—either through sector associations or directly with government agencies—to help shape strategies during implementation.

Ms. Phương added that the Government is already reviewing legislation to implement VIFTA and developing multiple programs and initiatives to support businesses, especially SMEs.

“If businesses do not voice their difficulties, these cannot be incorporated into the programs and initiatives. Enterprise feedback is a crucial input for the Government to translate into domestic regulations and effective support policies,” Ms. Hương emphasized.

Sharing the same view, Phan Minh Thông, CEO of Phúc Sinh Corporation, noted that the geographical distance between Vietnam and Israel—and the tendency of Vietnamese firms to wait for buyers rather than proactively approaching the market—creates barriers. To overcome this, enterprises should actively attend trade fairs and international exhibitions where Israeli buyers are present.

The Ministry of Industry and Trade and the Embassy also organize business tours and trade-promotion missions, which play an important role in connecting firms from both sides.

Additionally, Mr. Hòa highlighted that Israel’s religious and ethnic diversity means that Jewish businesses often require Kosher certification, while Arab businesses tend to require Halal certification for certain products.

Therefore, firms must comply with Israel’s newly adopted import standards—aligned with EU and US standards under the principle: “What is good for the EU and the US is good for Israel.” Compliance with Kosher and Halal certifications is equally essential.

Mr. Hòa also urged enterprises to invest seriously in the Israeli market: conduct market studies, attend trade fairs, exhibitions, and trade-promotion events held in Israel, meet partners directly, and identify opportunities for cooperation—thereby boosting exports to this highly potential market.