India and Israel to Finalise Bilateral Investment Treaty During Finance Minister's Visit This Week

India and Israel are set to sign a Bilateral Investment Treaty (BIT) during the visit of Israel's Finance Minister, Bezalel Smotrich. This treaty aims to lay the groundwork for a potential free trade agreement (FTA), enhancing trade relations between the two nations. Smotrich's visit, scheduled from September 8 to 10, includes meetings with key Indian ministers such as Nirmala Sitharaman and Piyush Goyal.

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The BIT is designed to offer protection to investors from both countries, ensuring fair treatment and non-discrimination. It also provides a platform for dispute resolution through arbitration. This treaty is expected to boost investor confidence by safeguarding investments against expropriation and ensuring transparency and compensation for losses.

Strengthening Economic Ties

The visit aims to deepen economic and financial connections between India and Israel. Smotrich will also visit Mumbai and the GIFT City in Gandhinagar. The focus is on preparing agreements like the BIT and FTA, which are crucial for enhancing bilateral trade. Both nations have concluded negotiations on the BIT, which is expected to be signed during this visit.

Israel has established BITs with over 15 countries since 2000, including nations like the UAE, Japan, and South Africa. The treaty with India reflects a shared commitment to strengthening economic cooperation and creating a resilient investment environment. This move is anticipated to increase bilateral investments, benefiting businesses in both countries.

Exploring New Opportunities

This year marks the fourth visit by an Israeli minister to India. Previous visits included those by Minister of Tourism Haim Katz and Minister of Economy Nir Barkat. The strategic partnership between India and Israel sees annual bilateral trade nearing USD 4 billion. From 2000 to 2025, India's investments in Israel totalled USD 443 million, while Israel's FDI in India was USD 334.2 million.

Israel excels in high-tech innovation, while India offers vast market potential, making them ideal partners for growth. Smotrich's itinerary includes a visit to the GIFT IFSC in Gandhinagar, known for its world-class infrastructure supporting financial institutions in banking, insurance, capital markets, and funds management.

Fintech Collaboration Potential

India and Israel see strong potential for collaboration in fintech due to their complementary strengths. India's digital infrastructure and financial inclusion platforms like UPI align well with Israel's expertise in cybersecurity and payment technologies. This partnership could foster secure and scalable fintech ecosystems in both countries.

Both nations are active members of global institutions like the World Bank and Asian Development Bank. They can co-finance Multilateral Development Bank-backed projects or support joint initiatives in third countries, particularly in the global south.

The BIT signing signifies a significant step towards enhancing economic cooperation between India and Israel. By providing a robust framework for investment protection, it aims to foster increased bilateral investments that will benefit both economies.

With inputs from PTI