Earlier this week, India signed a historic investment pact with Israel.
The deal, known as the Bilateral Investment Agreement (BIA), is meant to bolster investor confidence and provide smoother business transactions between the two countries.
At the signing ceremony in Delhi on 8 September, Israel’s Finance Minister Bezalel Smotrich said the pact would “open new doors for both Israeli and Indian investors, strengthen Israeli exports, and provide businesses on both sides with certainty and tools to develop in the world’s fastest-growing markets”.
“India is a growing economic power, and cooperation is a tremendous opportunity for Israel.”
In a statement, the Indian government said the agreement reflected “both nations’ shared commitment towards enhancing economic cooperation and creating a more robust and resilient investment environment.”
To put it simply, it is a pact that ties India and Israel’s economies for the long run.
New MEE newsletter: Jerusalem Dispatch
Sign up to get the latest insights and analysis on
Israel-Palestine, alongside Turkey Unpacked and other MEE newsletters
Not only is it the first deal of its kind between India and a “western” country, or a member of the Organisation for Economic Co-operation and Development (OECD), it also sets in motion the possibility of a free trade agreement between the two countries.
Of course, this deal is about money and economic security.
And it does appear that a significant goal of this deal is to protect Adani’s investments in Haifa Port, as well as an attempt to keep the India Middle East Corridor (IMEC) – an economic corridor linking India to western markets – alive.
The IMEC corridor, underwritten by the US and envisaged as a trade route to counter China’s Belt and Road Initiative (BRI), has been marred with obstacles since Israel’s genocide in Gaza began.
But given the timing of the pact between India and Israel, this is also very much about politics, diplomacy and the projection of strength and trust.
It is also a vehicle for the ongoing project of facilitating wide economic integration between India and Israel with the Middle East.
Investment during a genocide
Since October 2023, Israel has killed, injured or maimed an estimated 200,000 people in Gaza.
An entire population, close to two million people, are living in famine, created entirely by a blockade and siege by the Israeli government.
Haifa Port, Gautam Adani and Israel’s plan for the Middle East
Read More »
In response to the scenes from Gaza, millions of people around the world have mobilised on the streets.
Several governments have taken Israel to the International Court of Justice (ICJ) with the charge of genocide.
Others have signed an arms embargo. Colombia, for instance, has resolved to halt coal exports to Israel.
Hundreds of civilians are currently on boats carrying aid, food and medicines to Gaza in the hope of breaking the siege.
By hosting Israel’s finance minister, Smotrich, one of the most powerful portfolios in any government, and signing an economic pact at this point, New Delhi didn’t merely signal support for Israel, but promised to tether its economic and political destiny to it.
That it is Smotrich, an Israeli leader currently banned from five western countries for inciting violence against Palestinians in the occupied West Bank, and whose arrest warrant has already been prepared for at the International Criminal Court in The Hague, makes India’s action even more abominable.
Follow Middle East Eye’s live coverage of Israel’s genocide in Gaza
With Israel facing growing isolation in Europe, India has effectively stepped up to offer security and an economic buffer. It underscores India’s growing relationship with Israel over the past decade and during the course of this genocide.
There has been no slowing in the economic and cultural ties between the two countries, with India filling in labour shortages following the revocation of Palestinian work permits, universities signing memorandums of understanding (MOUs) and new exchanges, and the Indian mainstream media continuously providing cover for the genocide.
‘National interest’
For more than a decade, India has been the largest buyer of Israeli weapons, and the genocide has not altered the course of this relationship.
Moreover, over the past two years, the two countries have signed deals in water technology, cybersecurity, and agriculture – sectors in which Israel has built entire industries on the back of its occupation of Palestinians.
As of 2024, trade between India and Israel amounted to around $4bn annually.
Over the past two years, Indian companies have sent combat drones, rockets and explosives to help replenish the Israeli military’s supplies during the genocide
Mutual investments account for an estimated $800m, with the bulk of trade consolidated around military spending.
India has sent gems, jewellery, chemicals and engineering goods to Israel, and Israel has sent weapons, fertilisers and machinery to India.
But India is increasingly co-producing Israeli weapons in factories across the country. Since October 2023, Indian companies have also sent combat drones, rockets and explosives to help replenish the Israeli military’s supplies in its genocide.
In late 2024, Middle East Eye found that the AI weapons system used by Israeli ground forces in Gaza was jointly manufactured by an Indian and Israeli company.
In response to criticism over continued military ties, the Indian foreign ministry described arms deals as contingent on the “national interest”.
“The issue of India’s exports, including India’s exports of anything which directly or indirectly has any military implications, is guided by our national interest and by our commitments to various regimes,” Subrahmanyam Jaishankar, India’s external affairs minister, said at the time.
“Where Israel is concerned, it is a country with which we have a strong record of cooperation in national security. It is also a country that has stood by us at different moments when our national security was under threat,” Jaishankar added.
On the warrants issued by the International Criminal Court (ICC) for Israeli Prime Minister Benjamin Netanyahu and former Defence Minister Yoav Gallant, Jaishankar added that, given India was not a signatory to the ICC, it would not take a formal position.
The investment protection agreement (BIT), then, is part of creating a more stable environment that would help economic agreements be more effective.
And it all adds up.
Shared ideologies
As states underwritten by the supremacist ideologies of Zionism and Hindutva, both India and Israel are driving an exclusionary and expansionist agenda.
It is evident in the Israeli-only settlements in the occupied West Bank and the effort to build Hindu-only settlements in Indian-occupied Kashmir.
And in so-called legal interventions like Israel’s Law of Return or its Nation State Law and India’s Citizenship Amendment Act (CAA), which make citizenship contingent on religion.
India’s attack on Pakistan is a declaration of Israel-style expansionism
Read More »
The authoritarian agenda is also manifest in the vast overreach of both surveillance states, the arbitrary use of counter-terror laws on dissidents and in the violence of each country’s armed forces against ordinary people.
In Kashmir, the Indian state has cast a wide net of CCTV cameras, local informants and house visits to journalists and activists to induce a climate of silence over the valley.
And, as has become the norm, it is evident in attempts to exert demographic change by disenfranchising people, bulldozing their homes, and targeting their religious sites.
Both India and Israel see these tactics as progress in building ethnonationalist states.
With this treaty, that bond is further institutionalised.
It communicates to investors and financiers: India has no problem with dealing with a state conducting a genocide.
By signing this pact, India expresses kinship with Israel’s future.
For Hindu nationalists, the deal with Israel is a significant milestone.
But for those around the world who care about human rights, democracy, and justice, what they have effectively witnessed is the so-called long-time leader of the global south choosing trade, weapons and supremacist ideology over the lives of Palestinians.
For the rest of the world, it signals that for some, oppression is not just lucrative, and in the case of Israel’s genocide in Gaza, it is worth preserving.
The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Eye.
