Mint Quick Edit | India-Israel ties: A deal is a deal

4 months ago 7

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This year, the Centre reformed its treaty model to make it more investor-friendly. (PIB Photo gallery)

Summary

India’s bilateral investment pact with Israel follows a rebalance of New Delhi’s approach to such deals. Tel Aviv may have been particularly keen on forging closer ties, but so long as it’s win-win, it suits us.

India and Israel have signed a bilateral investment agreement aimed at stepping up mutual flows, complete with a shield for investors, assurance of fair treatment on both sides and an independent dispute resolution mechanism (via arbitration).

In the Indian government’s words, the pact “carefully balances investor protection with the state’s regulatory rights, preserving sufficient policy space for sovereign governance." In recent years, India’s stance on such treaties had tilted that scale too far into its sovereignty zone for the comfort of global investors.

This year, the Centre reformed its treaty model to make it more investor-friendly. The latest deal, with hopes pinned on fintech innovation and broader tech gains, is an example of its new approach. India’s relations with Israel have held firm amid the Gaza War, which has injured its ties with many other nations.

While this context may have whetted Tel Aviv’s appetite for a pact, so long as it serves both sides well, it’s welcome. India is in talks with others too. Should they fructify, it’ll help attract more inflows of foreign direct investment (FDI) to counter an upswell of outflows. After a weak 2024-25, our net FDI story needs to look up.

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