As India and Israel push to elevate their strategic partnership—alongside renewed momentum on a long-pending free trade agreement—State Bank of India is positioning itself at the centre of the next phase of bilateral commerce.
“In view of India’s significant trade flows from/to its partner countries and growing interest among the global trading community to trade in the Indian rupee, it has been envisaged by our banking regulators, i.e. Reserve Bank of India, to permit Indian banks to facilitate settlement of exports and imports of their respective corporate clientele in INR. Israel has been identified as one of the partner countries under this mechanism,” CEO of SBI Israel, V Manivannan, told PTI.
“SBI Tel Aviv has all the requisite approvals in place to facilitate these transactions,” Manivannan told PTI, adding that Israeli exporters and importers using the system will be able to make and receive payments directly in rupees against goods and services traded with Indian counterparties.
The Tel Aviv branch has stepped up outreach in recent months, holding meetings and webinars with the Israel–India Chamber of Commerce to familiarise companies with rupee-based trade settlement. Major Israeli defence firms, already key players in India’s procurement ecosystem, have also been part of these discussions.
Beyond trade finance, SBI is also eyeing a growing remittance opportunity. With more than 40,000 Indian workers recently joining Israel’s labour force, particularly in construction and agriculture, the bank is working to streamline rupee remittances to India. The Tel Aviv branch is facilitating the opening of NRI accounts and exploring tie-ups with fintech firms and local banks to make transfers smoother and cheaper.
SBI opened its Israel branch in 2007 and has maintained full-scale operations despite the pandemic and prolonged regional conflict.Located in the Diamond Exchange in Ramat Gan, next to Tel Aviv, the branch caters to local corporates with trade finance, bank guarantees for India-linked projects and business banking services. Globally, SBI operates in 29 countries with 241 overseas points of presence.
“As cooperation between India and Israel is on the rise, the branch is already acting as a bridge to facilitate activities. With SBI’s vast global network (across all time zones and correspondent relationships across the globe), support from SBI Treasury and connect with India, presents a unique capability and outreach for local corporates dealing with India or any other part of the world,” the SBI CEO noted.
The push for rupee trade comes at a time when both countries are making efforts towards realising the full potential of economic collaboration. External Affairs Minister S Jaishankar visited Israel in December following the visit of Minister of Commerce and Industry Piyush Goyal in November. Israeli Prime Minister Benjamin Netanyahu also spoke to his Indian counterpart Narendra Modi last month, and the two leaders “agreed to meet very soon”.
Israeli Minister of Tourism Haim Katz, Minister of Economy and Industry Nir Barkat, Minister of Agriculture and Food Security Avi Dichter, and Finance Minister Bezalel Smotrich visited India during 2025 as the strategic partners build-up momentum to sign a Free Trade Agreement.
The two countries signed a Bilateral Investment Treaty (BIT) during Smotrich’s visit to India, and a term of reference for an FTA was signed during Goyal’s visit to Israel.
As talks on an FTA gather pace, SBI is betting that settling trade in rupees can become both a practical enabler and a symbol of the next stage in India–Israel economic ties. (With inputs from PTI)