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Recently India and Israel signed a Bilateral Investment Agreement (BIA) in New Delhi. This fresh bilateral investment treaty replaces an earlier BIT from 1996 that was terminated in 2017.
Israel is the first OECD country to adopt India’s new investment treaty model.

Key summary of agreement

• The BIA is characterized as a historic milestone, boosting economic cooperation and providing a stable investment environment while balancing investor protection with the sovereign rights of both states.

• The BIA aims to increase bilateral investments, which currently stand at about USD 800 million, providing greater legal certainty and protection for investors.
• Safeguards against expropriation, transparency, fair compensation for losses, smooth transfer of returns, and an independent arbitration mechanism for dispute resolution.
• The agreement supports cooperation and growth in sectors such as cybersecurity, defense technologies, fintech and digital payments, innovation, infrastructure, and high technology.
• India is Israel's second-largest trade partner in Asia, with bilateral trade reaching around USD 3.9-5 billion in recent years, including trade in defense, diamonds, and technology.

This agreement paves the way for stronger India-Israel economic ties and may support future negotiations on a free trade agreement (FTA).

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