India and Israel Sign Bilateral Investment Treaty to Promote Investment

Strategic Insights -

The Indian and Israeli governments signed a bilateral investment treaty (BIT) in a bid to boost investments between the two nations. The pact was signed between Indian Finance Minister Nirmala Sitharaman and her Israeli counterpart Bezalel Smotrich. This development is a significant step in strengthening economic ties between the two countries, which have seen rapid growth since establishing diplomatic relations in 1992. India has emerged as Israel's second-largest trading partner in Asia, with bilateral trade expanding from USD 200 million in 1992 to over USD 10 billion in 2022-23.

Key Takeaways:

  • The bilateral investment treaty (BIT) aims to promote investments between India and Israel, with the signing of the pact marked as a significant step in strengthening economic ties between the two nations.
  • India-Israel bilateral trade and economic ties have progressed rapidly since establishing diplomatic relations in 1992, with India emerging as Israel's second-largest trading partner in Asia.
  • The bilateral merchandise trade is dominated mainly by diamonds, petroleum products, and chemicals, but recent years have witnessed an increase in trade in areas such as electronic machinery and high-tech products.
  • Cumulative Overseas Direct Investment (ODI) from India to Israel from April 2000 to April 2024 was around USD 396 million, with Indian companies marking their presence in Israel through mergers and acquisitions and the opening of branch offices.
  • In the period from April 2000 to March 2024, the direct FDI from Israel to India was around USD 314.87 million, with a notable example being the acquisition of the Haifa Port Company Ltd by Adani Ports and Special Economic Zone Ltd in 2022.
  • India's exports to Israel reached around USD 8.45 billion in FY 2022-23, while Israel's exports to India stood at around USD 2 million in FY 2023-24.
  • In FY 2022-23, the bilateral trade was USD 10.77 billion (excluding defense), with Indian exports at around USD 8.45 billion.

Statistics:

  • USD 200 million (comprising primarily of diamonds) was the merchandise trade volume between India and Israel in 1992.
  • USD 10.77 billion (excluding defense) was the bilateral trade volume in FY 2022-23.
  • USD 8.45 billion was the value of Indian exports to Israel in FY 2022-23.
  • USD 2.0 billion was the value of Israel's exports to India in FY 2023-24.
  • USD 396 million was the cumulative Overseas Direct Investment (ODI) from India to Israel from April 2000 to April 2024.
  • USD 314.87 million was the direct FDI from Israel to India from April 2000 to March 2024.
  • USD 1.18 billion was the investment made by Adani Ports and Special Economic Zone Ltd in acquiring the Haifa Port Company Ltd in 2022.

Sources:

  • Indian Ministry of Finance (Exact quote and date not provided in the original text)
  • India Blooms (Exact date not provided in the original text)