New Delhi (India-Israel) : In a landmark step to strengthen economic cooperation, the Government of India and the Government of the State of Israel signed a Bilateral Investment Agreement (BIA) on 8th September 2025, in New Delhi. The agreement was signed by Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman and Israel’s Finance Minister H.E. Mr. Bezalel Smotrich in the presence of senior officials from both governments.
Key Provisions Boosting Investor Confidence
The BIA is designed to provide enhanced security and protection for investors from both countries, thereby facilitating the growth of trade and bilateral investments. It establishes a minimum standard of treatment and includes an independent dispute resolution mechanism via arbitration. The agreement also contains provisions to safeguard investors against expropriation, ensure transparency in regulatory practices, and enable smooth transfer and compensation for any losses. Crucially, the treaty balances investor protection with the sovereign regulatory rights of each state, preserving sufficient policy space for governance.
Expected Impact on Bilateral Trade and Investment
This Agreement marks a historic milestone in India-Israel relations and is expected to boost the bilateral investments which currently stand at approximately USD 800 million. The pact aims to provide a robust and resilient investment environment, facilitating easier and safer private sector investments. Smt. Nirmala Sitharaman highlighted that increased business interactions enabled by this treaty will unlock new investment opportunities and mutual benefits for both nations.
Commitment to Economic Cooperation Across Sectors
Both Ministers underscored their shared commitment to deepen cooperation in critical sectors such as fintech innovation, infrastructure development, financial regulation, and digital payment connectivity. The Israeli Finance Minister emphasized the need for collaboration in cybersecurity, defense, innovation, and high-technology industries. The agreement strengthens the pathway towards a free trade agreement (FTA) and paves the way for expanded economic relations.
Diplomatic and Strategic Significance
The signing of the BIA comes amid global challenges, including heightened security concerns in the region, and reflects the close civilizational and strategic ties between India and Israel. Both nations expressed solidarity on challenges like terrorism and reaffirmed their commitment to shared democratic values and economic progress. Mr. Smotrich extended an invitation to Minister Sitharaman for a visit to Israel to further foster economic and diplomatic engagement.
Conclusion
The India-Israel Bilateral Investment Agreement signifies a major step towards deepening bilateral economic partnership, providing a secure framework for investors, and fostering innovation-led growth. This historic deal enhances the foundation for future collaborations and reinforces the strategic partnership between two rapidly growing economies.
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Source: PIB
