India and Israel on 5 July launched a five-year technology fund, reminiscent of a fund that boosted the Jewish state's ties with US over four decades, and agreed to holds talks for an investment protection treaty in a bid to boost trade and business ties.

A joint statement, issued during Prime Minister Narendra Modi's unprecedented visit to Israel, identified start-ups as among areas for boosting bilateral ties.

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The two nations agreed to put $4 million a year for five years into the Israel India Innovation Initiative Fund, or I4F, said the statement issued after Modi's talks with his Israeli counterpart, Benjamin Netanyahu.

The MoU, between the Indian Department of Science and Technology and the National Authority for Technological Innovation of Israel, "will play a seminal role in enabling Indian and Israeli enterprises to undertake joint R&D projects leading to development of innovative technologies and products that have potential for commercial application," it said.

Besides getting Israeli technology firms to invest in India, the fund aims to spur Indian firms to open development centres in the Jewish state and invest in their technology ecosystem.

Modi and Netanyahu "underlined the need to boost bilateral cooperation in innovation and entrepreneurship and called for greater collaboration in the field of start-ups," it said.

The Israel-US Binational Industrial Research and Development Fund, the model for I4F, has invested in almost 1,000 projects since 1977, helping generate $10 billion in indirect and direct revenue.

"The two prime ministers agreed that negotiations would be conducted on an agreement for the protection of investments in order to encourage bilateral investments from both sides," the joint statement said.

Indo-Israel trade has grown from about $200 million in 1992, when they established diplomatic ties, to nearly $4.2 billion last year.

"The two prime ministers noted the importance of realising the full potential of bilateral trade and investment. They tasked the India-Israel CEO forum to come up with early recommendations in this regard," the statement said.

Recognising the importance of facilitating movement of business-person, India and Israel underlined their expectation that the granting of multiple entry visas to business people for up to five years will encourage greater economic and commercial exchanges.