India and Israel Forge Closer Economic Ties with New Investment Deal
NEW DELHI – India and Israel have signed a important investment agreement aimed at bolstering economic cooperation between the two nations, even as Israel faces international scrutiny over its actions in Gaza. The deal, announced this week, is expected to “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,” according to a statement released following the agreement.
India’s Ministry of Finance hailed the deal as a “historic milestone,” emphasizing its potential to foster collaboration in “fintech innovation, infrastructure development, financial regulation, and digital payment connectivity.”
Currently, bilateral trade between India and Israel stands at $3.9 billion (2024 figures), with mutual investments valued at approximately $800 million. However, a considerable portion of the trade centers on defense and security, with India being Israel’s largest purchaser of weapons.Recent investigations by Al Jazeera revealed that Indian firms also exported rockets and explosives to Israel during its ongoing war in Gaza.
The agreement coincides with a strengthening of ties between New delhi and Israel, despite growing international criticism of Israel’s military campaign in Gaza. India was among the first countries to express support for Israel following the October 7, 2023, attack by Hamas, condemning it as “an act of terror.”
This support has manifested in a domestic crackdown on pro-Palestine demonstrations, with some protests criminalized, while pro-Israel rallies have been permitted.while India continues to publicly support a two-state solution to the Israel-Palestine conflict, it has consistently abstained from United Nations resolutions critical of Israeli actions against palestinians, including a recent vote calling for a ceasefire in Gaza in 2024.
The deepening relationship extends beyond trade and political alignment. India is the largest source of foreign students in Israel, and Israeli construction companies are actively seeking to recruit up to 100,000 Indian workers to fill positions vacated by Palestinians following permit revocations after the start of the war in october 2023.
Recent geopolitical shifts are also influencing India’s foreign policy.New delhi has refrained from condemning Israel’s actions against iran and initially declined to support a condemnation of Israeli attacks within the Shanghai Cooperation Organisation (SCO). However, following the imposition of 50 percent tariffs on Indian goods by the United States last month, India signed an SCO declaration condemning the US-Israeli bombing of Iran.
Furthermore, India is actively working to improve relations with China, a move that represents a potential shift away from its previous alignment with the US as a counterweight to Beijing.Chinese President Xi Jinping recently stated to indian prime Minister modi that China and India “should be partners, not rivals,” during a meeting at the SCO summit in Tianjin.
