India and Israel Sign Bilateral Investment Agreement to Boost Economic Ties
India and Israel have signed a new Bilateral Investment Agreement (BIA) in New Delhi to promote and protect reciprocal investments. The pact, signed by Finance Minister Nirmala Sitharaman and her Israeli counterpart Bezalel Smotrich, replaces an earlier 1996 agreement. It aims to provide greater certainty for investors and expand trade, which is currently valued at $800 million. The agreement ensures fair treatment, safeguards against expropriation, and provides a mechanism for dispute resolution, strengthening economic cooperation between the two nations.
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The new agreement introduces stronger investor protections, an independent arbitration mechanism for dispute resolution, and updated standards for fair treatment and transparency. It reflects modern international norms and provides greater certainty for investors compared to the 1996 agreement, which lacked many of these detailed provisions.
Sectors identified for enhanced collaboration include cyber security, defence, fintech innovation, infrastructure development, high-technology, and digital payments. Previous agreements have also emphasized agriculture, water, and space technology, all of which are likely to benefit from deeper investment ties.
This is the first investment treaty India has signed with an OECD country under its new framework, marking a milestone in bilateral relations. It signals a commitment to deeper economic cooperation, increased investor confidence, and could pave the way for a potential free trade agreement in the future.
As of April 2025, total bilateral investments stand at around $800 million. India’s direct investment in Israel is about $443 million, and Israel’s FDI in India is $334.2 million. The new agreement is expected to increase these figures by fostering greater investor confidence and facilitating business interactions.