Andhra Pradesh has become the first Indian state to sign a collaboratory agreement with Israel in the IT sector to promote innovative business ideas by assisting small and medium scale enterprises with financial grants right from the inception phase to its marketing.

"This is in light of the large technical talent pool the state of Andhra Pradesh enjoys. We are very confident and hopeful that the collaboration will be a significant contributory factor in accelerating already in process promotional activities undertaken by the state government," Andhra Pradesh Minister for Information Technology Ponnala Lakshmaiah told PTI.

"The intended collaboration between our state and Israel is in tune with their agreements with about more than 20 countries for supporting innovative ideas in the sector," Lakshmaih added.

The Andhra Minister is in Israel on a five-day visit to explore opportunities for collaboration and participated in a conference organised by High Tech Industry Association (HTIA) of Israel.

In various presentations in Israel, Lakshmaiah highlighted how India has emerged as the world's fastest growing economy and the various steps taken by his state government to develop the IT sector.

Calling upon the Israeli hi-tech industry to partner with Andhra Pradesh, the minister said that his state accounts for nearly 15 per cent of India's USD 46.3 billion of IT exports, which comprise nearly 49 per cent of Andhra's exports.

He also highlighted various infrastructural advantages of investing in the state and policies shaped to attract FDIs in the IT sector.

The MoU was signed on the sidelines of the HTIA's annual conference, "Israel: A Nation of Business Innovation" in the presence of India's Minister of State for Communications and Information Technology, Sachin Pilot.

Committing to closer cooperation through work programmes and specific projects, the two sides have agreed to lead member delegations to each other's annual events to explore and organise joint events.

One yearly India-Israel Flagship event will be organised, both in India and Israel, on a rotational basis, CII Executive Director (Technology) Anjan das told PTI.

The parties will also look to assist companies in identifying local partners to do joint product development for both domestic and global markets, Das said.

"We will look at joining other eco-system partners to leverage on these opportunities," he said.

A CII press release said, "The parties will work to construct a systematic collaboration of placing innovations produced in Israel to Indian Companies, so that India shall be First Technology Adopter and Adapter, later working on a framework for joint marketing of the product".

The two bodies will also look to bring Investors and entrepreneurs from their countries closer together, by sharing investment opportunities and creating an information framework that would allow opportunities to be shared, the statement said.

CII and HTIA have also agreed to work together to promote cross border M&A, both for Indian companies to acquire Israeli companies and vice versa.

They will work with investment banks and consulting firms to generate cross-border M&A guidelines.