Israel Becomes First OECD Country To Sign Bilateral Investment Agreement With India

Posted 09 Sep 2025

2 min read

Article Summary

Israel signs first bilateral investment agreement with India, boosting investments, enhancing cooperation in trade, technology, defense, and regional partnerships, fostering stronger economic and strategic ties.

The previous Bilateral Investment Treaty (BIT) signed between India and Israel in 1996 got terminated in 2017.

Key Features of India-Israel BIT

Boost to Investment: Increased bilateral investments, which presently stands at a total of USD 800 million.
Investor Protection: Balances investor protection with the State’s regulatory rights by ensuring a minimum standard of treatment.
Dispute Resolution: Facilitating growth of trade and investments with dispute resolution mechanism through arbitration.

Evolving co-operation between India-Israel

Economic: Bilateral trade was USD 6.53 billion (excluding defense) with India's exports surplus in FY 2023-24.
Regional co-operation: I2U2 Partnership’s first summit held in 2022, with India, Israel, UAE, and US participation.
Innovation & Science Technology: E.g., India-Israel Industrial R&D and Innovation Fund (I4F) for 5 years (2023–27).
Defence: Co-developed the Barak-8 missile system, regular port calls in Haifa, etc.
Other: Cultural Exchange Programme, cooperation in health and medicine, MoUs on agriculture and water resource management, etc.

Bilateral Investment Treaty (BIT)

About: A BIT is a reciprocal legal agreement concluded between two sovereign States for the promotion and protection of investments by investors in each other’s territories.
International Law: BITs come within Art. 38 (1) (a) Statute of the International Court of Justice as primary sources of obligations under public international law.
India approved the new Model BIT text in 2015, which replaced Indian Model BIT (1993).
Recent BITs: Uzbekistan (2024), UAE (2024), Kyrgyzstan (2025), etc.