Benjamin Netanyahu’s failure to secure a parliamentary majority has put more than his political future in question. For India, the uncertainty concerns a strategic partnership that has expanded rapidly under his leadership, from missile systems and drones to artificial intelligence, cybersecurity, agriculture and trade.
Netanyahu’s Likud-led bloc won 53 seats in Israel’s 120-member Knesset, falling eight short of the 61 needed to form a government. The opposition alliance led by former military chief Gadi Eisenkot secured 48 seats, while Arab-led parties won a record 19.
The numbers leave Netanyahu without a clear route to power. An Eisenkot-led coalition could command 67 seats with Arab-party support, but Naftali Bennett and Avigdor Liberman have ruled out relying on those parties. A unity government would require compromises that both Likud and the opposition have resisted. If negotiations fail, Israel could face another election.
The political uncertainty comes as India and Israel seek to turn a close diplomatic relationship into a broader industrial and technology partnership. Prime Minister Narendra Modi’s February 2026 visit elevated ties to a “Special Strategic Partnership for Peace, Innovation and Prosperity”. The two countries had signed a defense cooperation memorandum in November 2025.
A Netanyahu departure would not automatically reverse these agreements. But it would test whether the partnership can retain momentum without the personal relationship between the two prime ministers that has helped drive it.
Defense deals move beyond weapons purchases
Defense remains the central pillar of India-Israel cooperation. India uses Israeli technology in air defense, surveillance, drones and precision weapons. The focus is increasingly shifting toward joint development, production in India and technology transfers.
The November 2025 defense memorandum provides a framework for expanding cooperation. The February 2026 partnership upgrade added emerging technologies, including artificial intelligence and cybersecurity, to the agenda.
For India, the priority is not simply to continue buying Israeli equipment. It is to secure access to technology and expand domestic manufacturing. A new government in Jerusalem will determine how quickly existing commitments translate into projects, production agreements and technology-sharing arrangements.
The leadership transition could also affect the political environment surrounding defense exports and approvals. India will want continuity in ongoing programs and clarity on future cooperation, regardless of who leads the next Israeli government.
Trade and investment face a political transition
Bilateral merchandise trade reached $3.93 billion in fiscal year 2025-26, according to the figures cited in the earlier official brief. The relationship also includes Indian investment in Israeli infrastructure and a proposed free-trade agreement.
India and Israel signed the terms of reference for FTA negotiations in November 2025. Talks cover goods, services, rules of origin, intellectual property, customs procedures and trade facilitation. The agreement remains under negotiation, leaving its conclusion and implementation to the next phase of political engagement.
The two governments also signed a bilateral investment agreement in September 2025, intended to provide greater protection and predictability for investors. Indian investment in Israel includes the Adani-led consortium’s $1.18 billion acquisition of Haifa Port in 2022.
These arrangements give the relationship an economic base beyond government-to-government defense purchases. But the pace of negotiations and implementation will depend on the priorities of the incoming administration, if Netanyahu fails to form one.
50,000 Indian workers are part of the equation
The stakes extend to Indian nationals working in Israel. The February 2026 bilateral brief put the Indian community there at more than 42,000, including construction and agricultural workers, caregivers, diamond traders, technology professionals and students.
During Modi’s visit, the two countries agreed to facilitate the arrival of up to 50,000 additional Indian workers over five years. Implementation protocols cover construction, caregiving, manufacturing, commerce and services, and restaurants.
The agreement also calls for worker safety, security and legal protections. Its implementation will be a significant measure of whether a new Israeli government intends to maintain the labor partnership established under Netanyahu.
Iran could complicate India’s Israel policy
A change of government may not produce a major shift in Israel’s approach to Iran. Eisenkot, a former Israel Defense Forces chief, takes a hard line on Tehran and Hamas and opposes Palestinian statehood. His differences with Netanyahu center more on domestic governance and coalition politics.
Any renewed Israel-Iran confrontation would have direct consequences for India. Gulf energy infrastructure, shipping lanes and oil prices could come under pressure, affecting an economy dependent on imported fuel and trade through the region.
India also has longstanding ties with Iran and major interests across the Gulf, including the safety of its large expatriate population. A deeper relationship with Israel therefore cannot come at the expense of its wider regional engagement.
The India-Middle East-Europe Economic Corridor and the I2U2 grouping also depend on regional stability. Escalation between Israel and Iran could disrupt the diplomatic and commercial environment required for both initiatives.
The Gaza issue adds another complication. Neither Netanyahu nor Eisenkot has abandoned the demand that Hamas be disarmed, and the election has produced no new consensus on Palestinian statehood. A new administration could alter Israel’s diplomatic engagement with Europe and Washington, but a coalition dependent on difficult political compromises may have limited room for major policy concessions.
India’s immediate concern is whether the next Israeli government will honor and advance the agreements already signed. Defense cooperation, trade negotiations, investment protections and the 50,000-worker target offer concrete measures of continuity.
Netanyahu may or may not return with a coalition. The commitments made with India, however, will pass to whoever governs Israel next.