A new bilateral agreement on the promotion and protection of mutual investments between India and Israel has entered into force. The document signed between the two parties on September 8, 2025 replaces the previous investment treaty that had been in effect since 1996.
The new agreement is based on India's updated Bilateral Investment Treaty (BIT) model adopted in recent years. Israel is the first country to sign an investment agreement with India under this model.
Under the document, investors from both countries will enjoy broader legal protections when operating in the other party's territory. Foreign investors will have rights equal to those of domestic investors, and investments will be protected within the legislative framework.
The agreement also establishes new rules regarding the expropriation of property by the state. Specifically, a government may expropriate property only in the public interest and in accordance with the law. In such cases, fair and timely compensation to the investor is required.
The agreement grants investors the right to freely transfer their earned income, dividends and other financial assets to their home country. At the same time, in the event of a serious financial or economic crisis, states may impose temporary restrictions on capital movements.
The mechanism for resolving investment disputes has also been updated. Under the agreement, an investor must first apply to the courts of the country where the dispute arose. If the issue remains unresolved within a specified period, recourse to international arbitration mechanisms will be available.
The agreement does not limit itself to protecting investors' rights — it also defines their obligations. Investors must comply with the laws of the country in which they operate, fulfil their tax obligations, refrain from corruption and bribery, and adhere to principles of transparent business conduct.
According to experts, the new investment agreement will contribute to the further expansion of economic cooperation between India and Israel, an increase in mutual investment flows, and the formation of a more stable legal environment for investors.