India and Israel have signed a bilateral investment agreement aimed at expanding trade and financial cooperation, even as Tel Aviv faces growing political isolation over its genocide in Gaza.
The deal was inked in New Delhi during the three-day visit of Israel’s far-right Finance Minister Bezalel Smotrich, who met his Indian counterpart Nirmala Sitharaman.
It marks the first bilateral investment pact India has signed with a member of the Organization for Economic Cooperation and Development (OECD), according to an Israeli government statement.
India’s Finance Ministry described the deal as a "historic milestone" that will foster cooperation in fintech, infrastructure, financial regulation and digital payments.
Sitharaman also emphasised collaboration in "cybersecurity, defence, innovation and high-technology."
Smotrich, sanctioned by several Western governments for his links to illegal West Bank settlements, called the agreement "an important strategic step for our joint vision."
"The agreement reached today between Israel and India reflects our economic growth, innovation and mutual prosperity," he wrote on X.
"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."
Bilateral trade between the two countries reached $3.9 billion in 2024, with mutual investments worth around $800 million.
Defence and security cooperation remain the backbone of ties, with India serving as Israel’s largest weapons buyer.
Deepening ties amid Gaza genocide
The signing comes as Israel faces a genocide case at the International Court of Justice and war crimes charges at the International Criminal Court over its genocide in Gaza, which has killed more than 64,500 Palestinians since October 2023.
Despite this, India has moved closer to Israel under Prime Minister Narendra Modi’s Hindu nationalist government.
New Delhi was one of the first capitals to condemn the October 7 surprise blitz on Israel as "an act of terror" and has since cracked down on pro-Palestinian demonstrations while permitting pro-Israel rallies.
Although India still officially supports a two-state solution, it has abstained from several UN resolutions critical of Israel, including a 2024 General Assembly vote calling for an "immediate, unconditional and permanent" ceasefire in Gaza.
Israel, meanwhile, has expanded educational links with India, where Indians constitute the largest group of foreign students in the country.
Broader regional context
The pact was signed against the backdrop of shifting geopolitical alignments.
India has declined to condemn Israeli strikes on Iran and has resisted joining some multilateral statements critical of Tel Aviv.
However, after US President Donald Trump imposed 50 percent tariffs on Indian goods late last month, New Delhi signed a Shanghai Cooperation Organisation (SCO) declaration that condemned US-Israeli bombing of Iran.
India has also sought to ease tensions with China, its longtime rival, with Chinese President Xi Jinping telling Modi on the sidelines of the SCO summit in Tianjin that Beijing and New Delhi "should be partners, not rivals."
Smotrich’s warm reception in New Delhi highlighted Modi’s determination to strengthen ties with Israel despite international outrage.
For critics, the agreement underscores how India’s government is prioritizing economic and strategic cooperation with Israel while much of the world demands accountability for its genocide in Gaza.
