India, Israel likely to sign bilateral investment treaty next week

India and Israel are likely to sign a bilateral investment treaty during the upcoming visit of Israeli Finance Minister Bezalel Smotrich this week, while laying the groundwork for a free trade agreement (FTA) to boost trade between the two countries, according to sources.

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

Besides, 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 prepare common ground for some of the key agreements, including bilateral investment treaty (BIT) and free trade agreement (FTA),” sources told PTI in Jerusalem.

“Both countries have been negotiating a draft bilateral investment treaty (BIT) and have concluded the negotiations. The Finance Ministers are expected to sign the BIT during the visit.” The BIT between the two countries assures appropriate protection to Israeli and Indian investors, in light of relevant international precedents and practices.

It is likely to enhance 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.

Israel has signed BITs with over 15 countries since 2000, including the UAE, Japan, the 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,” one of the sources said.

This is the fourth visit by any Israeli Minister to India this year.

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

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

Cumulative ODI from India to Israel during the period April 2000 to April 2025 was $443 million, and Israel’s direct FDI into India during the period April 2000 – March 2025 was $334.2 million.

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.