Press Release: Veritas Press C.I.C.
Author: Kamran Faqir
Article Date Published: 15 Sept 2025 at 12:43 GMT
Category: South Asia | India | India-Israel Investment
Source(s): Veritas Press C.I.C. | Multi News Agencies
INDIA-ISRAEL – When Finance Minister Bezalel Smotrich arrived in New Delhi on 8 September 2025 and India signed a Bilateral Investment Agreement (BIA) with Israel, the headlines celebrated a “historic milestone”, “stronger investor protections”, and expansion into fintech, defence, regulation, and trade. But beneath the economic rhetoric lies a more troubling reality: an increasingly visible partnership in which India, critics say, is not just doing business with Israel, it is enabling, normalising, and becoming complicit in its campaign in Gaza.
This investigative feature unpacks what the pact really means, the legal and moral objections, the recent judicial responses, and how this economic tie binds India into Israel’s war, not apart from it.
What The Treaty Does, And What Its Timing Signifies:
The India-Israel BIA marks a formal guarantee: protections for investors from both countries, smoother arbitration, certainty, and legal recourse. India’s Ministry of Finance called it “historic,” pointing to gains in fintech innovation, infrastructure, digital payments, and investor confidence.
The deal comes as bilateral trade reached nearly USD 4 billion in 2024, with mutual investments of around USD 800 million. It follows months of negotiation over an Investment Protection Agreement, which Smotrich earlier in July 2025 described as part of India’s growing importance to Israel as a trade and strategic partner.
But many analysts note that the signing’s timing is not just about economics:
- Israel is facing global condemnation over its military campaign in Gaza, including accusations of genocide, mass starvation, and destruction of civilian infrastructure.
- India, by contrast, is increasingly seen as one of the few large democracies that has not broken off ties, imposed arms export restrictions, or strongly condemned Israel in recent forums (UN, ICJ, etc.).
Thus, the pact is not neutral. It sends a message: India is continuing, and even institutionalising, its alignment with Israel despite the cost, moral, diplomatic, and human.
India’s Exports, Arms Trade & Legal Challenges:
One of the strongest criticisms of India’s posture has come from civil society, NGOs, and legal activists, who argue that India is not merely trading with Israel but supplying it with materials used in the conflict, potentially contributing to war crimes or genocide.
The Records & Reports:
- Business & Human Rights Resource Centre reports that companies such as Adani‑Elbit Advanced Systems India Ltd. (AEAS), Munitions India Ltd. (MIL), and Premier Explosives Ltd. (PEL) have continued to supply arms to Israel even as the Gaza war continues.
- The same report highlights that such supplies persist amid widespread calls for a ceasefire and adherence to international agreements.
The Supreme Court Case:
- On 4 September 2024, retired public servants, academics, and activists filed a Public Interest Litigation (PIL) in the Supreme Court of India, seeking to cancel existing licences and halt new ones for Indian firms exporting arms and military equipment to Israel, arguing these exports violate India’s obligations under the Genocide Convention, the Constitution (Articles 14, 21, and 51(c)) and international humanitarian law. Petitioners included Ashok Kumar Sharma, Jean Drèze, Harsh Mander, Nikhil Dey, among others.
- On 9 September 2024, the Supreme Court dismissed the plea. The bench led by Chief Justice D.Y. Chandrachud held that foreign policy and defence exports are the prerogatives of the Union Government under Articles 162 and 253 of the Indian Constitution. Courts cannot direct the government to cancel export licences; that is the domain of policy, not judicial intervention.
- The Court further noted that Indian firms may have binding contracts that cannot be abruptly cancelled without risk of legal or financial liability.
Government Responses:
- Advocate Prashant Bhushan, representing petitioners, argued that since India has ratified the Genocide Convention, it has obligations not to supply military weapons to a state engaged in genocide.
- The government counsel, and ultimately the Court, countered that evaluation of “national interest,” foreign affairs, contract obligations, and diplomatic relations is outside the Court’s domain. The judicial bench emphasised that its role is not to dictate foreign policy.
How The Investment Treaty Deepens The Complicity:
The treaty should be understood not in isolation but as part of a cluster of actions and policies that cumulatively tie India into Israel’s conduct in Gaza.
Shielding Via Contracts, Treaties, And Investment Guarantees:
- By enhancing legal protections and investment security, the treaty reduces political risk for Israeli and Indian investors. It can also provide indirect protection for firms whose products are used by the Israeli military, mitigating reputational and financial risks associated with war‑time supply chains.
- The BIA + IPA structure may potentially safeguard firms (and by extension, states) from adverse consequences arising from human rights litigation, scrutiny, or regulatory action, if the treaty language does not explicitly exclude investment used in human rights violations. (So far, no public indication suggests strong carve-outs for human rights in this treaty.)
Normalisation & Symbolic Support:
- India’s welcoming of Smotrich, who has been sanctioned by some Western nations over his links to Israeli settlements and whose political positions are considered far‑right, signals symbolic support. Critics argue this normalises policies that are widely condemned internationally.
- The investment pact comes amid ongoing global outcry, calls for arms embargoes, UN investigations, and ICJ provisional orders. India’s decision to move ahead with formalised economic support at this moment is interpreted by human rights organisations as a refusal to distance itself.
Legal, Moral & International Implications:
The critics of India’s policy argue that its actions may amount to complicity under international law.
Key points:
- Genocide Convention obligations: As a party, India is required to prevent and punish genocide. Supplying arms to a state accused of genocide, especially after ICJ provisional orders and credible reports, may run contrary to those obligations.
- Risk of legal liabilities: While Indian courts have refused to intervene thus far, international bodies (and other states) may pursue legal or treaty-based challenges. India’s actions could harm its credibility in human rights forums and weaken its moral claims.
- Constitutional implications: Petitioners argue that India’s Constitution (Articles 14, 21) and fundamental rights extend to non-citizens and require protection of life and due process. The Supreme Court, however, has so far held that foreign policy is outside judicial review in these contexts.
- Diplomatic fallout: By aligning with Israel economically and militarily during a period when many nations are distancing, India risks diplomatic costs: criticism in multilateral forums, strained relations with some Arab states, backlash from civil society and diaspora communities inside and outside India.
Voices From The Ground:
- Prashant Bhushan, Advocate:
“India is bound by international treaties and its own constitution. By supplying arms now, it is enabling atrocities against civilians.”
- Business & Human Rights NGOs:
These groups have documented ongoing arms exports from Indian firms, and are asking for transparency around licences, end‐use, and whether India has conducted “risk assessments” regarding whether exported arms will be used in violation of international law. - Supreme Court Bench (CJI Chandrachud, Justices Pardiwala & Misra):
Emphasised that matters of foreign policy lie with the Union Government, not the courts; that cancelling licences may breach contracts; and that courts cannot substitute their judgement for policy in diplomatic affairs. - Government’s Position:
India often frames its actions in terms of “national interest,” strategic relations, export control laws, and that all export decisions are guided by existing regulatory mechanisms and treaty obligations. It resists broader judicial oversight or conditional restrictions based on foreign court rulings.
Unanswered Questions & Investigative Gaps:
In reviewing the available reporting and legal documents, several issues remain opaque or under‑investigated:
- Exact nature and quantities of military‐related exports
- How many licences have been issued since October 2023 for Indian companies exporting arms, dual-use items, drones, AI systems, etc. to Israel?
- What are the public/private companies involved? How much revenue is tied to these exports?
- Contractual obligations and “end‑use” verification
- Under what terms do Indian firms contract with Israeli or foreign intermediaries? Are there clauses preventing misuse or misuse in ways that violate international humanitarian law?
- Are these contracts disclosed, or are they classified?
- Treaty language and human rights carve-outs
- Does the BIA or IPA include explicit provisions excluding investment used in human rights abuses or genocide?
- What recourse do Indian or Israeli citizens, NGOs have under the treaty if they allege misuse?
- Risk of Investor‑State Dispute Settlement (ISDS)
- Would Indian (or Israeli) firms be able to sue governments under the treaty if new laws/regulations restrict their operations because of human rights concerns?
- Public awareness and parliamentary oversight
- Has Parliament been duly informed or held sessions to debate the treaty’s implications beyond trade (questions raised but vague answers given)?
- What role do oversight bodies (defence, trade) play in licensing?
Conclusion: A Pact Signed in Gaza’s Shadow.
India’s new investment treaty with Israel is not a neutral piece of economic housekeeping. It is a political declaration, signed in the shadow of bombed-out hospitals and mass graves, that India is prepared to look away from Gaza’s devastation and stand shoulder to shoulder with one of the world’s most isolated regimes.
By rolling out the red carpet for Bezalel Smotrich, a minister shunned abroad for his far-right extremism, New Delhi has chosen symbolism over silence. It has signalled not only friendship but endorsement, normalising a government accused of starvation sieges and systemic destruction. For critics, the message is unmistakable: India has become one of the few democracies willing to give Israel diplomatic cover and economic lifelines while others debate sanctions and embargoes.
This is why the pact cannot be read as a dry ledger of investment flows. It cements a partnership that reaches into weapons factories, regulatory shields, and investor guarantees structures that critics argue will help insulate both governments from scrutiny at precisely the moment when accountability is demanded. It is commerce weaponised as politics, and politics dressed up as mere trade.
The outrage is not abstract. Civil society has raised alarms, petitioners have gone to the Supreme Court, NGOs have tracked the export licences, yet the questions remain unanswered. How many weapons are still flowing? Who profits from these deals? Why does Parliament remain in the dark? And at what point does “national interest” become indistinguishable from complicity in atrocity?
Another deeper question also emerges: is this treaty merely about fintech and investment, or is it part of a broader strategic design to align two ethno-nationalist projects, Zionism and Hindutva, in a common front against Muslim nations, and especially Pakistan? This suspicion is not without precedent. India has long relied on Israeli surveillance drones, counterinsurgency training, and cyber-intelligence systems in Kashmir. Israel, in turn, has marketed its weapons as “battle-tested” on Palestinians before exporting them to India for deployment against its own Muslim population. The synergy is clear: two states presenting themselves as embattled democracies, justifying repression as counterterrorism, and finding in each other a partner to project strength against Muslim-majority adversaries.
Seen in this light, the BIA is more than an economic treaty; it is the institutionalisation of an ideological and military axis. By embedding Israeli capital into Indian markets and securing Indian supply chains into Israel’s war economy, the pact symbolises not only solidarity but strategic convergence: Gaza, Kashmir, and Pakistan bound together in a framework of shared enemies and mutual impunity.
But this convergence carries costs beyond morality. It risks destabilising South Asia and the Middle East alike. Arab states that still view Palestine as a red line may reassess their relations with New Delhi. Pakistan, already suspicious of India-Israel intelligence sharing, will interpret the pact as another step in an anti-Muslim alliance. And at a time when global opinion is turning against Israel, India could find itself increasingly isolated, its “historic” treaty remembered not for investment flows but for aligning the world’s largest democracy with the politics of siege, starvation, and settler-colonialism.
History offers parallels. Just as Cold War alliances were often forged in the name of “security” but ended up fuelling proxy wars, or as colonial-era compacts masked exploitation as “trade,” the India-Israel treaty risks being remembered as a moment when economics was used to hardwire ideology into diplomacy. ‘It marks a turning point where Zionism and Hindutva ideologies meet, where commerce becomes the shield of occupation, and where India’s pursuit of power may come at the price of both justice and regional stability.‘
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