India, Israel to sign bilateral investment treaty this week

India and Israel are expected to sign a Bilateral Investment Treaty (BIT) during the upcoming visit of Israel's Finance Minister Bezalel Smotrich this week, which would prepare a common ground for a free trade agreement (FTA) to boost trade between the two countries, sources here told PTI.

Smotrich will be on a three-day visit to India between September 8 and 10, during which he is expected to meet his counterpart Nirmala Sitharaman, Commerce and Industry Minister Piyush Goyal, and Minister of Housing and Urban Affairs Manohar Lal Khattar.

Besides Delhi, the Israeli finance minister will also visit 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," sources here said.

"Both the countries have been negotiating a draft bilateral investment treaty and have concluded the negotiations. The finance ministers are expected to sign the BIT during the visit," they said.

The BIT between the two countries assures appropriate protection to Israeli investors in India and Indian investors in Israel, in light of relevant international precedents and practices.

It is likely to increase the comfort level and boost the confidence of investors by assuring a minimum standard of treatment and non-discrimination, while providing for an independent forum for dispute settlement through arbitration.

The BIT also provides for protection to investments from expropriation, transparency, transfers and compensation for losses, sources said.

Israel has signed BITs with over 15 countries since 2000, including 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 to India by any Israeli minister this year.

Minister of Tourism Haim Katz, Minister of Economy and Industry Nir Barkat and Minister of Agriculture and Food Security Avi Dichter have visited India earlier this year.

India and Israel are strategic partners and bilateral trade between the two countries is close to USD 4 billion annually.

Cumulative investment from India to Israel during 2000-2025 was USD 443 million and Israel's contribution to India's foreign direct investment (FDI) during April 2000 – March 2025 was USD 334.2 million.

Israel excels in high-tech innovation, while India offers unmatched scale and market potential, making them natural partners for growth and collaboration.

Smotrich is also expected to visit India's global financial services centre GIFT IFSC in Gandhinagar.

The International Financial Services Centre (IFSC) provides world-class infrastructure and services for financial institutions operating in areas such as banking, insurance, capital markets, and funds management, offering a state-of-the-art infrastructure, a liberal tax regime, financial incentives, and a strong regulatory and legal environment.

India and Israel also hold strong potential for collaboration in the fintech sector, driven by complementary strengths - India's large-scale digital infrastructure and financial inclusion platforms like UPI, and Israel's global leadership in cybersecurity, blockchain, and payment technologies.

This cooperation could not only enhance financial innovation but also promote secure, inclusive, and scalable fintech ecosystems in both countries, sources said.

As active members of institutions like the World Bank and the Asian Development Bank, both countries can co-finance Multilateral Development Bank (MDB) backed projects or support joint initiatives in third countries, particularly the global south.