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Quick takes:
Macro & Regulation: Indian Prime Minister Narendra Modi landed in Israel today to sign sweeping economic and defense pacts, addressed the Knesset; Finance Minister Bezalel Smotrich signed a midnight decree raising the personal import tax exemption to $130; The Chief Economist projects Israel’s tax burden will spike to 32.8% of GDP in 2025
Aviation: El Al reports a 24.7% drop in net profit for 2025 as foreign carriers return to Ben Gurion Airport.
Tech: AI data-verification startup Nimble secured a $47 million Series B.
Macro & Regulation
Indian Prime Minister Narendra Modi arrived in Israel today for his first state visit since 2017. Modi and Prime Minister Benjamin Netanyahu are set to sign sweeping economic, diplomatic, and defense agreements, culminating in Modi’s emotional address to the Knesset today and an innovation summit at the Waldorf Astoria in Jerusalem tomorrow.
In an emotional address to the Knesset, the Indian Prime Minister expressed unwavering support for Israel. In his remarks, Modi sharply condemned the October 7th massacre, and emphasized the strategic partnership between the nations in security and economic spheres.
Netanyahu is explicitly framing the tightening Israel-India axis as a foundational piece of a broader regional alliance against shared radical adversaries. The diplomatic push arrives as the Pentagon deploys significant naval assets, including aircraft carriers, to the Mediterranean and the coast of Iran.
Finance Minister Bezalel Smotrich signed a midnight decree raising the tax exemption on personal imports from $75 to $130 per day. The regulatory move bypasses the Knesset, which last night rejected his broader proposal to raise the daily tax-free threshold to $150. Smotrich framed the decree as a direct assault on local monopolies and a necessary step to bring down the cost of living for Israeli consumers.
The Chief Economist’s State Revenue Report for 2024 reveals Israel’s tax burden reached ₪620.5 billion, representing 30.9% of GDP. Despite the massive figure, Israel currently ranks 28th out of 38 OECD countries, sitting 3.2 percentage points below the OECD average. The local tax structure remains heavily skewed toward regressive indirect taxes (like VAT and property taxes), which comprise 38.9% of total tax revenue compared to the OECD average of 33.7%.
Looking ahead, the tax burden is projected to surge to 32.8% of GDP in 2025. This jump is largely driven by a recovery in corporate tax collection and wartime legislative changes, which alone will add over 1% of GDP to the national tax burden to finance ongoing military and recovery efforts.
Our take: The projected leap to a 32.8% tax burden signals a heavy fiscal pivot to cover war debts. While Israel historically enjoyed a lower tax burden than its OECD peers, the heavy reliance on indirect taxes means this fiscal squeeze will disproportionately impact middle- and lower-income households, potentially dampening domestic consumption.
Aviation
El Al (TASE:ELAL) released its full-year 2025 financial results, demonstrating top-line resilience but a significant bottom-line contraction. The national carrier posted $3.47 billion in revenue, a slight 1.3% increase year-over-year. However, net profit plunged 24.7% to $410.3 million, and operating profit dropped 28.8% to $550.5 million. EBITDA also fell 14.8% to $947.4 million.
The profit squeeze stems from multiple headwinds. A strong shekel drove ancillary operating expenses up 16.7% to $855.0 million. Geopolitics also took a toll: the June 2025 Operation ‘Am KeLavi’ forced airspace closures and flight cancellations, wiping an estimated $100 million from pre-tax profits. Meanwhile, the return of foreign airlines to Israel eroded El Al‘s market share at Ben Gurion Airport by 21.3%, bringing it down to 37%.
Despite the turbulence, passenger volume grew 5.2% to 6.78 million, and the airline maintained a highly efficient 93.8% load factor across its active fleet of 47 aircraft. Jet fuel costs actually decreased by 2.6% to $584.7 million due to lower global market prices, providing a slight cushion to operating expenses.
Technology
Nimble closed a $47 million Series B led by Norwest, with backing from Databricks Ventures and existing investors. This brings the AI data-verification startup’s total funding to $75 million. Founded in 2021, the firm tackles a critical bottleneck in enterprise AI: hallucination and failure due to outdated or unverified data scraping. Nimble utilizes automated AI agents to extract and authenticate web data in real time, partnering directly with tech giants like Microsoft and Databricks. The capital will be used to expand its Israeli R&D center and scale operations in New York. The platform currently serves massive enterprise clients including Uber, Coca-Cola, and Tripadvisor.
Our take: As GenAI shifts from experimental chatbots to high-stakes enterprise applications, data reliability is the new gold standard. Nimble is well-positioned to capitalize on the ‘picks and shovels’ phase of the AI boom, where clean, verifiable data is a non-negotiable prerequisite for corporate adoption.
TASE snapshot for Wednesday, Feb. 25, 2026
TA-35 Index (TASE:TA35): 🔴 -0.15%
TA-90 (TASE:TA90): 🔴 -0.73%
TA-125 (TASE:TA125): 🔴 -0.32%
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