India and Israel are poised to sign a Bilateral Investment Treaty (BIT) during Israeli Finance Minister Bezalel Smotrich’s three-day visit to India from September 8 to 10, sources confirmed to PTI. The visit, aimed at deepening financial and trade relations, will also lay the foundation for a Free Trade Agreement (FTA), potentially transforming the economic landscape for both nations.
Smotrich’s packed itinerary includes high-level meetings with Indian Finance Minister Nirmala Sitharaman, Commerce and Industry Minister Piyush Goyal, and Housing and Urban Affairs Minister Manohar Lal Khattar. Beyond New Delhi, the Israeli minister will visit Mumbai’s bustling financial hub and Gujarat’s GIFT City, India’s first International Financial Services Centre, to explore investment opportunities. “The aim is to strengthen Israel’s economic ties with India through bilateral engagements and pave the way for key agreements like the BIT and FTA,” sources revealed.
The BIT, finalized after rigorous negotiations, is expected to provide robust protections for investors from both countries, ensuring fair treatment, non-discrimination, and access to independent arbitration for dispute resolution. This agreement is seen as a critical step to boost investor confidence, particularly as bilateral trade between India and Israel nears $4 billion annually, with cumulative Indian investments in Israel at $443 million and Israeli FDI in India at $334.2 million from April 2000 to April 2025. Israel’s expertise in high-tech innovation complements India’s vast market potential, making the BIT a catalyst for growth in sectors like technology, agriculture, and defense.
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The groundwork for an FTA, which could further elevate trade, follows a February 2025 visit by over 100 Israeli companies to India, where they held 600+ business meetings with Indian counterparts. Sectors like cybersecurity, renewable energy, and digital health are expected to benefit significantly. Smotrich’s visit to GIFT City, with its world-class infrastructure and liberal tax regime, underscores India’s push to attract global financial institutions and foster cross-border investments.
This development comes amid India’s efforts to revamp its BIT framework to be more investor-friendly, as announced by Sitharaman in the 2025 Budget. The India-Israel BIT, modeled on international best practices, aims to create a resilient investment environment while aligning with India’s strategic interests. As both nations navigate complex global economic dynamics, this treaty could position them as key partners in innovation and growth, with the FTA discussions signaling even deeper collaboration on the horizon.
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