Landmark India-Israel bilateral investment pact comes into force

New Delhi: The landmark India-Israel bilateral investment agreement (BIA), which was signed on September 8, 2025, came into force on Saturday.

The trade pact is a significant step towards strengthening bilateral economic relations and ensuring a secure and predictable investment climate.

“The BIA is robust in protection of Investment and Investor with respect to their investments while being flexible enough to retain sovereign policy space in line with legitimate public policy objectives, reflecting the modern principles and evolving jurisprudence of international investment law,” according to a Finance Ministry statement.

The trade agreement is expected to contribute to increased cross-border investment activity and further deepen the economic partnership between India and Israel.

On September 8, 2025, India and Israel signed a BIT in New Delhi, in the presence of Finance Minister Nirmala Sitharaman and Israel’s Finance Minister Bezalel Smotrich.

The agreement is expected to boost investments, provide greater certainty and protection for investors, facilitate the growth of trade and mutual investments by ensuring a minimum standard of treatment, and an independent dispute resolution mechanism through arbitration, according to an official statement.

The agreement also includes provisions to safeguard investments against expropriation, ensure transparency, and enable smooth transfers and compensation for losses. At the same time, it carefully balances investor protection with the State’s regulatory rights, preserving sufficient policy space for sovereign governance.

The agreement is expected to pave the way for increased bilateral investments between the two countries, which presently stands at a total of $800 million, thereby benefiting businesses and economies in both countries.

FM Sitharaman said that both sides should have more business interaction to explore opportunities of investments, to gain benefit from the agreement. The Israeli Finance Minister spoke about the strong common background of the two countries achieving high economic growth despite security challenges.

Both the ministers emphasised their commitment to advancing economic cooperation in the fields of fintech innovation, infrastructure development, financial regulation, and digital payment connectivity.

IANS