BS EDIT: A New Model: Rethinking India’s Investment Treaty

By Business StandardPublished On Feb 4, 2025

Why It Matters

• India to revamp its Bilateral Investment Treaty (BIT)

• Aims to boost FDI & ease UK/EU trade deals

• Key to long-term economic growth

Issues with the 2016 BIT

• 75 BITs terminated (2016-2021)

• Protects govt more than investors

• Slow arbitration process deters FDI

What’s Missing?

• No ‘Most Favoured Nation’ clause

• Excludes portfolio investment

• Investors must wait 5 years for arbitration

Impact on India

• Slows FDI growth

• Legal delays frustrate investors

• Indian firms face similar hurdles abroad

Global Best Practices

UAE, Brazil BITs omit 5-year clause

UAE model includes portfolio investment

India must align with investor-friendly terms

The Road Ahead

• Move from control to facilitation

• Adopt flexible, global norms

• A modern BIT can unlock India’s FDI potential