India and Israel Sign Economic Deal Amid Gaza War Fallout

Picture Credit: The Times of Israel

India and Israel have signed what both sides describe as a landmark agreement to deepen economic ties, covering fintech, infrastructure, financial regulation, and digital payments.

Israel’s finance minister Bezalel Smotrich, sanctioned by several Western governments for his links to illegal West Bank settlements, hailed the pact as “an important strategic step for our joint vision.” He said the agreement would strengthen Israeli exports, attract new investment, and provide “certainty and tools to grow in one of the world’s fastest-growing markets”. India’s Ministry of Finance called the deal a “historic milestone,” highlighting its potential to boost cooperation in innovation and connectivity.

Bilateral trade between the two countries stood at $3.9 billion in 2024, with mutual investments around $800 million. Much of this relationship is driven by defence, with New Delhi as Israel’s largest weapons buyer. An Al Jazeera investigation last year revealed Indian firms sold Israel rockets and explosives during its Gaza campaign.

The timing of the deal underscores New Delhi’s growing alignment with Tel Aviv despite global outrage over Israel’s war in Gaza, which has killed more than 64,000 Palestinians since October 2023, according to Gaza health authorities. India was quick to condemn Hamas’s October 7 attack as terrorism, while simultaneously abstaining from several UN resolutions critical of Israel.

Domestically, Indian authorities have cracked down on pro-Palestine protests, while permitting pro-Israel rallies. At the same time, Israeli firms have sought to bring in as many as 100,000 Indian workers to replace Palestinians barred from entering Israel after the war began.

The agreement comes against a backdrop of shifting geopolitical ties: New Delhi recently signed an SCO declaration condemning U.S.-Israeli strikes on Iran, even as it mends relations with China. For India, balancing strategic partnerships with Israel, the U.S., and China is becoming increasingly complex in a volatile regional environment.