Smotrich in Delhi: India, Israel clear grounds for FTA with bilateral investment treaty

India and Israel on Monday signed a bilateral investment agreement (BIA). Union Finance Minister Nirmala Sitharaman and Israeli Finance Minister Bezalel Smotrich signed the agreement at a ceremony in New Delhi.

“The Government of India and Government of the State of Israel sign Bilateral Investment Agreement (BIT) in New Delhi, today. Union Minister for Finance and Corporate Affairs Smt N Sitharaman and Finance Minister of Israel HE Mr Bezalel Smotrich sign the BIT,” said the Ministry of Finance in a statement on X.

The new agreement supports the promotion of reciprocal investments between the parties, ensuring certainty and protection for investors, and will contribute to expanding trade and investment between the two countries, said the Israeli Ministry of Finance in a statement.

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👉 The Government of India and Government of the State of Israel sign Bilateral Investment Agreement #BIT in New Delhi, today

👉 Union Minister for Finance and Corporate Affairs Smt. @nsitharaman and Finance Minister of Israel H.E. Mr. Bezalel Smotrich sign the #BIT… pic.twitter.com/uzKQplWj6H

— Ministry of Finance (@FinMinIndia) September 8, 2025

India and Israel are also negotiating a free trade agreement (FTA). Now that the bilateral investment agreement has been signed, the FTA is expected to be the next major target to achieve.

Between 2000 and 2025, India received around $337.77 million foreign direct investment (FDI) from Israel and the bilateral investment agreement is considered improvement in increasing both inbound and outbound investments.

“Israel is the first OECD member state to sign an agreement under India’s new investment treaty model. The agreement follows intensive work over recent months between the Chief Economist’s teams at Israel’s Ministry of Finance and their counterparts in India’s Ministry of Finance,” the Israeli statement said.

In their meeting, Smotrich and Sitharaman “emphasised the profound economic relations between the two countries, which are based on shared strategic interests, as well as their commitment to advancing economic cooperation in the fields of innovation, infrastructure development, financial regulation, and trade in digital services and it was also agreed to cooperate within the framework of regional development banks, the statement further said.

India and Israel have also agreed to jointly examine the establishment of a bilateral financial protocol between the governments, which would provide improved financing conditions for Israeli exporters, the statement read.