India and Israel formalized a Bilateral Investment Treaty (BIT) in New Delhi on Monday, aimed at strengthening financial and economic cooperation between the two nations. The agreement was signed by India’s Finance Minister, Nirmala Sitharaman, and her Israeli counterpart, Bezalel Smotrich.
“A new Bilateral Investment Agreement, signed by Israel’s Minister of Finance Bezalel Smotrich and India’s Finance Minister Nirmala Sitharaman, will facilitate reciprocal investments between investors from both countries,” Israel’s Ministry of Finance said.
The BIT follows remarks made in February by Reuven Azar, Israel’s Ambassador to India, who emphasized that India and Israel have the potential to strengthen the supply chains through geopolitical cooperation and strategic approaches to stay competitive on the global stage.
Although most details of the treaty have yet to be disclosed, the agreement appears to focus on strengthening collaboration in high-tech manufacturing and research and development while laying the foundation for a deeper Israel-India partnership. The investment pact is also expected to boost overall investments in sectors where both countries share complementary strengths.
Israel is the first member of the Organisation for Economic Co-operation and Development (OECD) to sign an investment agreement under India’s revised model treaty framework. The BIA replaces the previous treaty signed in 1996, which was terminated in 2017 as part of India’s broader reform of its investment treaty policy.
As reported by PTI, the treaty is structured to protect investors from both countries, aligning with international standards and best practices. It ensures equal treatment, prohibits discrimination, and provides access to independent arbitration for resolving disputes. Additional provisions include safeguards against expropriation, regulatory transparency, seamless transfer of funds, and compensation for any potential losses.
Bezalel Smotrich is currently on a three-day official visit to India from September 8 to 10, during which he is scheduled to hold meetings with Indian Commerce and Industry Minister Piyush Goyal and Housing and Urban Affairs Minister Manohar Lal Khattar. He also invited Nirmala Sitharaman to make a reciprocal visit to Israel and mentioned that Israel’s Finance Ministry is exploring the possibility of setting up a representative office in India to strengthen institutional and market connections.
India and Israel have an annual bilateral trade volume of around $4 billion. Between April 2000 and April 2025, India’s total overseas direct investment (ODI) in Israel stood at $443 million, while Israel’s foreign direct investment (FDI) in India amounted to $334.2 million.
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