India–Israel Bilateral Investment Agreement 2025

In September 2025, India and Israel signed a Bilateral Investment Agreement ( BIA ) in New Delhi in order to promote trade and investor confidence. The agreement between Finance Ministers Nirmala Sitharaman and Bezalel Smotrich is aimed at improving investor protection, transparency, and arbitration institutions to resolve disputes. Already having bilateral investments of USD 800 million, the agreement will enhance the capital flows substantially particularly in cybersecurity, defence, fintech and digital payments. The agreement notes the mutual democratic principles and economic strength of both countries.

Key Points for RAS Mains

Background and Context

• The signature date was September 2025, New Delhi.
• Representatives Nirmala Sitharaman (India) and Bezalel Smotrich (Israel) are its signatories.
• Represents an attempt to boost economic relations with other partners and already existing collaboration in the domain of defence, agriculture, and technological aspects.

Objectives of the Agreement

• Increase bilateral investments to above USD 800 million.
• Give investors legal certainty and confidence.
• Safeguards: against expropriation, reasonable compensation of losses.
• Make sure that there are clear rules and capital/returns transfer.
• Create autonomous arbitration to resolve disputes.
• Key focus
  • Cybersecurity and cyber defence.

• The defence technologies and innovation.
• Fintech and digital payments.
• Advanced technology and infrastructure.

Strategic Importance

• Emboldens common democratic and economic principles.
• Increases the economic strength amidst the insecurity in the region.
• Encourages technology based partnership in key areas.
• Promotes more business-to-business (B2B).

India India-Israel BIA (2025) vs. Other More recent Investment treaties.

Bilateral Investment Agreement India Israel (2025).

• Signed: September 2025, New Delhi.
• The signatories are Nirmala Sitharaman (India), Bezalel Smotrich (Israel).
• Investment Volume: approx. USD 800 million (base, anticipated to increase).
• Key Features:
  • Investor insurance (anti-expropriation, fair compensation).
  • Pure arbitration system.
  • Clear rules and unrestrained flow of capital.
  • Specific areas of focus are cybersecurity, defence, fintech, digital payments, and innovation.
  • Strategic Significance: Strengthens tech-based partnership, strengthens democratic and security-based partnership.

India UAE Comprehensive Economic Partnership Agreement (CEPA, 2022).

• Signed: February 2022, Abu Dhabi.
• Investment Volume: 5-year target of USD 100 billion investment and the USD 50 billion trade.
• Key Features:
  • Cut/elimination of tariff on 80 per cent goods.
  • Services, and in particular fintech, startups, and energy liberalisation.
  • Investor protection clauses were designed to conform with UAE as the 3 rd partner of India in terms of trade.
  • Strategic Significance: Strategic influence of West Asia, diaspora welfare, energy security.

India EU Investment and Trade Negotiations (In Progress, 2022-present)

• Framework: India-EU Trade and Investment Agreement (TEPA) negotiations.
• Volume of Investment: EU because India ranks 2 nd largest trading partner with FDI stock of about USD 100 billion.
• The main issues that are negotiable:
  • Labour, climate, digital sustainable development clauses.
  • Strict investor-state dispute settlement (ISDS).
  • Digital trade, clean energy, pharmaceuticals market access.
  • Strategic Significance: Strengthens the connection of India to Europe, in a counterbalance of China, high-tech and green finance investments.

Comparative Insights

Conclusion

The India-Israel Bilateral Investment Agreement (2025) marks the beginning of the more profound economic relationship, and guarantees the confidence of investors and provides a clear and robust investment system. The agreement is in line with the objectives of both countries to enhance security and economic prosperity by prioritising technology, defence and digital innovation. In the case of UPSC, it is a worthy example of how bilateral agreements can merge economic, technological, and strategic goals to promote global partnerships of India.