India and Israel have signed a landmark bilateral investment agreement that deepens financial and strategic cooperation between the two nations. The deal was finalized in New Delhi during the visit of Israel’s far-right Finance Minister Bezalel Smotrich, who met Indian Finance Minister Nirmala Sitharaman.
The agreement comes at a time when Israel faces international condemnation over its actions in Gaza, where more than 64,500 Palestinians have been killed since October 2023. Despite mounting global outrage and ongoing genocide proceedings at the International Court of Justice, India has chosen to expand ties with Tel Aviv.
A First-of-Its-Kind Investment Pact
This bilateral investment agreement marks the first such deal that India has signed with a member of the Organization for Economic Cooperation and Development (OECD). According to India’s Finance Ministry, the pact is a “historic milestone” that will open doors for collaboration in fintech, infrastructure, financial regulation, and digital payments.
Sitharaman also underlined the importance of cooperation in defence, cybersecurity, innovation, and high technology. For India, the agreement signals not only economic benefits but also a closer alignment with Israel in sectors vital to national security.
Smotrich, sanctioned by several Western countries for his ties to illegal West Bank settlements, hailed the deal as a “strategic step.” He described it as a reflection of both nations’ economic growth and innovation. He further emphasized that the pact would expand investment opportunities, enhance Israeli exports, and give businesses stability in one of the fastest-growing global markets.
Economic and Defence Ties Growing Stronger
Trade between India and Israel reached $3.9 billion in 2024, with mutual investments standing at nearly $800 million. Defence cooperation continues to anchor the relationship, as India remains Israel’s largest arms buyer.
Israel has also strengthened its educational partnerships with India. Indian students represent the largest foreign student community in Israel, reflecting deepening cultural and academic links alongside growing defence and economic ties.
Strengthening Relations Amid Gaza Genocide
The timing of the agreement is significant. Israel is currently facing genocide charges at the International Court of Justice and war crimes allegations at the International Criminal Court. Yet, under Prime Minister Narendra Modi’s Hindu nationalist government, India has drawn closer to Tel Aviv.
New Delhi was one of the first to condemn the October 7 attacks on Israel as terrorism. It has since permitted pro-Israel rallies while restricting pro-Palestinian demonstrations. Although India continues to support a two-state solution in principle, it abstained from several United Nations resolutions critical of Israel, including a General Assembly vote calling for an immediate and permanent ceasefire in Gaza.
Broader Regional and Global Context
The pact was signed against a backdrop of shifting regional and global alliances. India has avoided directly criticizing Israeli strikes on Iran and has resisted joining multilateral declarations against Tel Aviv. However, New Delhi recently backed a Shanghai Cooperation Organisation declaration condemning US-Israeli strikes on Iran after facing steep tariffs on its exports from Washington.
India has also sought to manage its tense relationship with China. During the Shanghai Cooperation Organisation summit in Tianjin, Chinese President Xi Jinping stressed to Modi that Beijing and New Delhi should act as “partners, not rivals.”
Conclusion
India’s decision to warmly host Smotrich and finalize an investment pact highlights New Delhi’s commitment to strengthening ties with Israel despite global outrage. For critics, the deal reflects India’s prioritization of economic and strategic cooperation over human rights concerns.
While much of the world pressures Israel to halt its military campaign in Gaza and face accountability for genocide, India is moving forward with deeper financial and defence integration with Tel Aviv.
