India and Israel Sign Investment Pact Amid Deepening Strategic Ties:

New Delhi, Sept 9, 2025 — In a major move to deepen economic and strategic ties, India and Israel have signed a bilateral investment agreement aimed at boosting mutual trade and investment. The agreement was signed in New Delhi by Israel’s far-right Finance Minister Bezalel Smotrich and India’s Minister of Corporate Affairs, Nirmala Sitharaman. The pact, described as a “historic milestone” by India’s Ministry of Finance, is expected to enhance cooperation in sectors like fintech, cybersecurity, defence, infrastructure, innovation, and digital payments. “This agreement will open new opportunities for investors in both countries, strengthen Israeli exports, and provide businesses with the certainty and tools to grow in one of the world’s largest and fastest-growing markets,” Smotrich said on X (formerly Twitter). Sitharaman emphasized the need for greater collaboration in emerging technologies and national security sectors. “India and Israel are natural partners in innovation, defence, and cybersecurity,” she noted. A Controversial Visit Smotrich’s visit has drawn criticism due to his links with illegal Israeli settlements in the occupied West Bank. He has been sanctioned by several Western nations, yet India rolled out the red carpet—a sign of the deepening ties under Prime Minister Narendra Modi’s Hindu nationalist government. The timing of the agreement is also noteworthy. It comes amid growing international condemnation of Israel’s war on Gaza, which has reportedly claimed over 64,000 Palestinian lives since October 2023. Despite global outrage, India has refrained from strongly criticizing Israel, abstaining from multiple UN resolutions calling for a ceasefire. Strategic and Military Interests India is Israel’s largest weapons buyer, and defence cooperation remains the backbone of bilateral trade, which stood at $3.9 billion in 2024. Current mutual investments are valued at around $800 million, with expectations that the new agreement will significantly increase those figures. The deal also paves the way for increased mobility between the two countries. Israeli construction firms have sought to bring in up to 100,000 Indian workers to replace Palestinian laborers whose permits were revoked after the Gaza conflict began. Moreover, Indians now form the largest group of foreign students in Israel, highlighting growing people-to-people ties. Political Shifts India’s foreign policy towards Israel has notably shifted in recent years. Once a staunch supporter of the Palestinian cause, India has increasingly aligned with Israel on global platforms. After the October 7 Hamas-led attack on Israel, New Delhi was among the first to condemn the assault as an act of terror. However, India continues to officially support the two-state solution. Still, authorities have cracked down on pro-Palestine demonstrations domestically, in some cases even criminalizing them—while pro-Israel rallies have been permitted. India has also refrained from condemning Israeli strikes on Iran, though it recently signed a Shanghai Cooperation Organisation (SCO) declaration criticizing US-Israeli actions in the region, following trade tensions with the United States. Looking Ahead As New Delhi rebalances its foreign policy, the India-Israel partnership appears poised for further expansion—especially in defence, technology, and strategic investments—despite ongoing regional controversies and global criticism.

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