India and Israel investment agreement takes effect

A bilateral investment agreement between India and Israel entered into force on July 4, 2026, establishing a new legal framework designed to protect cross-border investments and deepen economic ties. The agreement, which was signed on September 8, 2025, replaces a 1996 treaty and is India's first such pact with a member of the Organisation for Economic Co-operation and Development (OECD).

Officials stated the pact aims to create a more secure and predictable investment climate. It is expected to encourage increased investment activity between the two nations, which stood at approximately $800 million prior to the agreement's implementation. From April 2000 through March 2026, India received $371.35 million in foreign direct investment from Israel.

A key provision reduces the time investors must seek remedies in domestic courts before pursuing international arbitration. Under the new terms, Israeli investors must attempt to resolve disputes in India's legal system for three years, a reduction from the standard five-year period found in India's other recent treaties. The agreement also explicitly covers portfolio investments, such as stocks and bonds, a departure from India's 2015...