Addressing the inaugural session of the 'Raisina Dialogue' here, Netanyahu hailed India as Israel's "natural friend and partner", drawing a wide smile from Prime Minister Narendra Modi, who was in the audience.
Netanyahu said closer ties between democracies was essential to secure the common future of humanity at a time "our way of life and the quest for modernity and innovation" are being challenged.
The Israeli PM will travel to Gujarat tomorrow with Modi, who is the only Indian Prime Minister till date to have visited Israel.
"One of the ways to overcome such a challenge is to strengthen the relation between our two great denmocracies. The alliances of democracies is important to secure our common future," Netanyahu said, addressing the inaugural session of the three-day conference where a range of geopolitical issues will be discussed.
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Considering India's large Muslim population, New Delhi has always walked a tightrope in striking a balance between deepening its ties with Israel while trying not to upset its equation with Palestine, which shares a fractious history with the Jewish state.
Netanyahu began his 16-minute speech by identifying military strength, economic prowess and political power as the prerequisites for the development of a nation, factors which he said were behind the Jewish nation's rise from the "ashes".
"The weak don't survive, the strong survive. You make peace, alliances with the strong. You are able to maintain peace by being strong," he said.
Netanyahu, who arrived in New Delhi on a six-day visit on January 14, said Modi's July, 2017 visit to Israel "broke ground". "You were the first leader of India to come to Israel in 3,000 years. It will not take long for your next visit, I know that."
Netanyahu said the democratic values of India and Israel ensure that people have the ability to think as they want, speak as they want, believe in what they want.
"We have a special relationship. We are naturally sympathetic to India. When I was walking the streets of Agra, somebody said we are so happy that you are friends with our prime minister. He said we are friends," Netanyahu said.
Foreign Secretary S Jaishankar, former President of Afghanistan Hamid Karzai, union ministers VK Singh, Jayant Sinha and Congress MP Shashi Tharoor were present at the event, organised jointly by the Observer Research Foundation and Ministry of External Affairs.
Netayahu said he found "astounding" the fact that under Modi, India has climbed nearly 42 spots in the ease of doing business rankings even as he stressed on the need to cut red tape to encourage businesses.
He said to defend a nation, one needs a strong military, which in turn requires a lot of money. The money, he said, comes from a strong economy.
"Defence costs a great deal of money. The money comes from the second source of power, economic power...the third power is political power, which means the ability to make political alliances and relationships with many other countries," he said.
The theme of the dialogue this year is 'Managing Disruptive Transitions: Ideas, Institutions and Idioms'. The event has an impressive line up of more than 150 speakers and over 550 delegates.