Israel Launches $460 Million Aid Package to Support High-Tech and Export Sectors Amid Shekel Strength

The Israeli Ministry of Finance announced a new aid package totaling approximately 1.6 billion shekels (around $460 million) aimed at bolstering the high-tech and export industries, which have faced significant challenges due to the sharp appreciation of the shekel against the dollar in recent months. The program, developed in collaboration with industry leaders, seeks to support struggling factories, prevent production line closures, and maintain competitiveness.

Finance Minister Bezalel Smotrich endorsed recommendations from a special team addressing the high-tech sector's difficulties caused by the currency shift. The plan includes nearly 1 billion shekels allocated for rapid grants to startups and growth-stage companies, covering up to half of qualifying expenses such as investments in essential machinery. Additionally, a government interministerial committee will conduct a thorough review of the sector's global competitiveness and consider structural reforms ahead of the 2027 state budget.

For the industrial sector, the package provides 175 million shekels for advanced machinery and equipment grants, 25 million shekels to support exporters through the Export Institute, and 10 million shekels for professional training programs linked to high-productivity jobs. The accelerated depreciation tax benefit for export-oriented industrial companies will also be expanded, valued at about 360 million shekels.

Despite exporters’ strong demand to pay taxes in dollars to mitigate currency risks, the Finance Ministry has yet to approve this measure, with ongoing discussions suggesting only partial relief for some large companies. Smotrich emphasized the government's swift response and called on the Bank of Israel to engage with the challenge, highlighting Israel's economic growth potential.

Dror Bin, CEO of the Innovation Authority, stressed the high-tech sector's critical role, contributing 18.3% of GDP and 58% of exports, and noted that the funding would help startups and mid-sized companies adapt to market changes. Abraham Novogratzky, president of the Manufacturers Association, welcomed the plan as a vital step in a multi-year strategy to ensure economic competitiveness but urged continued long-term planning to address the industry's deeper challenges.