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.

Smotrich will be on a three-day visit to India next week between September 8 and 10, during which he will meet Indian 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 here.

"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.

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 USD 4 billion annually.

Cumulative ODI from India to Israel during the period April 2000 to April 2025 was USD 443 million, and Israel's direct FDI into India during the period 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 scheduled to visit GIFT IFSC in Gandhinagar.

It is India’s first International Financial Services Centre (IFSC) located in the GIFT City to provide world-class infrastructure and services for financial institutions operating in areas like banking, insurance, capital markets, funds management and other financial products, services or institutions.

Financial institutions enjoy certain benefits for setting up operations in GIFT IFSC, including a state-of-the-art infrastructure at par with other leading global financial centres, 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.