India and Israel have inked a bilateral investment treaty (BIT) which would help promote investments between the two countries. Confirming this in a post on X, the Union Finance Ministry said on Monday that the pact was signed by Finance Minister Nirmala Sitharaman and her Israeli counterpart Bezalel Smotrich.
During April 2000 and June 2025, India has received US $337.77 million foreign direct investment (FDI) from Israel. The signing of the pact assumes importance, considering that the two countries are also negotiating a free trade agreement.
Smotrich is in India till September 10, during which he is also scheduled to meet Commerce and Industry Minister Piyush Goyal and Minister of Housing and Urban Affairs Manohar Lal Khattar. His itinerary also includes stops in Mumbai and the GIFT City in Gandhinagar.
“The aim of this visit is to deepen Israel’s economic and financial ties with India through bilateral meetings and to prepare common ground for some of the key agreements, including bilateral investment treaty and FTA,” a source said.
The bilateral investment treaty seeks to provide protection to Israeli investors in India and Indian investors in Israel in line with international precedents. It is designed to enhance investor confidence by assuring a minimum standard of treatment and non-discrimination, while offering arbitration as an independent forum for dispute resolution. The BIT also covers safeguards against expropriation, transparency in operations, freedom of transfers and compensation for losses.
Israel has signed more than 15 BITs since 2000, including agreements with the UAE, Japan, Philippines, Thailand, and South Africa. “BIT reflects both nations’ shared commitment towards enhancing economic cooperation and creating a more robust and resilient investment environment. The BIT is expected to pave the way for increased bilateral investments, benefiting businesses and economies in both countries,” a source said.
This is the fourth visit by an Israeli minister to India this year. Tourism Minister Haim Katz, Economy and Industry Minister Nir Barkat and Agriculture and Food Security Minister Avi Dichter have all visited earlier in 2025.
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India and Israel are strategic partners, with bilateral trade close to USD 4 billion annually. Between 2000 and 2025, cumulative investment from India to Israel reached USD 443 million, while Israel contributed USD 334.2 million in foreign direct investment into India during April 2000 – March 2025.
Israel’s expertise in high-tech innovation, combined with India’s scale and market potential, positions the two nations as natural partners for growth.
Smotrich is also expected to visit the International Financial Services Centre (IFSC) in GIFT City, Gandhinagar. The IFSC provides world-class infrastructure for financial institutions in banking, insurance, capital markets, and fund management, supported by a liberal tax regime, incentives, and a strong regulatory framework.
Fintech is expected to be a major area of collaboration, leveraging India’s digital infrastructure and financial inclusion platforms such as UPI alongside Israel’s strengths in cybersecurity, blockchain, and payment technologies. According to officials, such cooperation could drive secure and inclusive fintech ecosystems in both nations.
As members of multilateral institutions such as the World Bank and Asian Development Bank, India and Israel could also co-finance projects backed by multilateral development banks or jointly support initiatives in third countries, particularly in the global south.
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