India and Israel officially signed a Bilateral Investment Treaty (BIT) on Monday, marking a significant breakthrough in their economic relationship and setting the stage for deeper strategic cooperation. The agreement was formalized by India’s Finance Minister Nirmala Sitharaman and her Israeli counterpart Bezalel Smotrich, in a ceremony attended by senior officials from both countries. Finance Minister Smotrich emphasized that Indian firms can now invest in Israel with greater assurance, citing the treaty’s role in building a more secure and transparent investment environment for both sides.
According to a joint finance ministry statement, current bilateral investments stand at approximately $800 million, underscoring the potential for significant growth under the new investment framework. The BIT is expected to not only bolster cross-border investments but also lay the groundwork for a prospective Free Trade Agreement (FTA), further expanding economic integration.
This landmark development culminates months of negotiations aimed at protecting investors from both nations, ensuring fair treatment, and fostering a resilient investment climate. In July, Israel’s Finance Ministry had noted ongoing discussions toward finalizing such an investment protection pact, highlighting India as “a true friend of Israel” and recognizing the immense possibilities for enhanced cooperation in defense exports, infrastructure, and technology.
For India, the BIT represents a continuation of its strategic push to diversify and strengthen its network of customized investment treaties—eschewing one-size-fits-all models in favor of agreements tailored to national interests . Beyond financial safeguards, the treaty signals a mutual commitment to growth in key areas, from high-tech innovation to infrastructure and defense collaboration.
