India, Israel ink bilateral treaty to promote, protect investments

The agreement was signed by Union finance minister Nirmala Sitharaman and Israeli finance minister Bezalel Smotrich, the finance ministry said in a post on X. “Bilateral Investment Treaty btw Israel & India just signed!,” added Ambassador of Israel to India Reuven Azar, also on X.

- Rajeev Jayaswal

“Agreement is expected to provide greater certainty and protection for investors, facilitating growth of trade and mutual investments by ensuring a minimum standard of treatment, and an independent dispute resolution mechanism through arbitration,” the Indian finance ministry said in a statement. Agreement also includes provisions to safeguard investments against expropriation, ensure transparency, and enable smooth transfers and compensation for losses, it added.

The two countries have been negotiating a BIT for several months. According to a Hindustan Times report on October 14, 2024, the treaty was aimed at boosting economic ties as companies from both sides were keen to forge alliances in sectors such as agriculture, water, energy, infrastructure, innovation, technology, cybersecurity and space.

The new agreement will replace an earlier BIT that was signed between India and Israel on January 29, 1996 after full bilateral diplomatic relations between the two nations were established in 1992.

Bilateral investment treaties are mutually agreed legal instruments between two countries for fair and equitable treatment of foreign investments on a par with domestic firms. Using the model treaty of 1993, India had signed pacts with 83 countries till 2015 and 74 of these were enforced. New Delhi, however, revised the model BIT in 2015. After the revised text of 2015, the government terminated most of the investment treaties with 77 countries and started renegotiating them.