India Eyes New Bilateral Investment Treaties With EU, Saudi Arabia, Switzerland, Oman, Maldives
· Free Press Journal
India is looking to accelerate negotiations on a new generation of bilateral investment treaties (BITs), with agreements involving the European Union, Saudi Arabia, Switzerland, Oman and the Maldives expected to be finalised within the next two to three months, Financial Express reported.
The proposed treaties are expected to provide foreign investors greater flexibility, particularly by reducing the time they must spend pursuing remedies through Indian courts before approaching international arbitration.
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Alongside the ongoing negotiations, the Union Cabinet is expected to consider the proposed BIT 4.0 framework. The new model seeks to strike a better balance between protecting India’s sovereign interests and providing greater certainty to foreign investors.
Unlike the 2015 Model BIT, the new approach would allow India to customise provisions depending on the strategic importance of a partner country and the nature of its investment relationship with India.
One of the key changes concerns the domestic-remedy requirement. India had earlier required investors to pursue local legal remedies for five years before initiating international arbitration. The government has now moved towards a three-year starting point in negotiations, while the period could potentially fall to two years depending on the country concerned.
India has already reduced the requirement to three years for investments from the UAE and Israel.
Focus shifts to attracting foreign investment
The proposed overhaul comes as India seeks to increase foreign investment, particularly in infrastructure and other capital-intensive sectors. Gross FDI inflows increased 17.3% to $94.5 billion in FY26 from $80.6 billion a year earlier. However, net FDI inflows remained relatively modest at $7.7 billion.
The government’s rethink follows difficulties associated with the restrictive 2015 BIT framework. That model was introduced after high-profile disputes involving companies such as Vodafone and Cairn over retrospective taxation. India subsequently terminated several older investment treaties.
Under the new framework, taxation-related disputes will continue to remain outside the scope of BITs. However, the government plans to retain only essential safeguards while providing greater negotiating flexibility on other provisions.