Active negotiations on with over dozen countries for finalising BIT: Official

Mint

06-07-2025

New Delhi, Jul 6 (PTI) India is actively negotiating bilateral investment treaties (BITs) with over a dozen countries, including Saudi Arabia, Qatar, Israel, Oman, European Union, Switzerland, Russia, and Australia, a government official said.
Besides these nations, talks are underway with Tajikistan, Cambodia, Uruguay, Maldives, Switzerland, and Kuwait.
These investment treaties help in protecting and promoting investments in each other's countries.
With India approaching to become the third-largest economy and a hub for global manufacturing, the government is taking a series of measures to further improve its investment regime that encourages investors.
"It is expected that in the next 3-6 months, BIT with some of these countries will be finalised and announced," the official added.
The government in the last Budget has announced revamping the current model Bilateral Investment Treaty to make it more investor-friendly and attract foreign players.
The country signed BITs with two countries in 2024. Last year, the Centre announced implementation of these treaties with the UAE and Uzbekistan.
Unlike a chapter related to investment promotion or facilitation in free trade agreements recently concluded, the investment protection element under a BIT provides a wide range of obligations and commitments bestowed upon foreign investors, which are expansive in nature.
In a BIT, the provision of mandatory exhaustion of local legal remedies for a period of five years before resorting to international arbitration is beneficial for both the investor and the state involved in a dispute.
India's approach of requiring local remedies aligns with its stance to protect taxpayer money and avoid prolonged and costly legal battles, while simultaneously providing arbitration as an alternate dispute resolution mechanism to investors.
Recently, India reduced the time period of local remedy to three years under the India-UAE BIT 2024.
"India remains committed to negotiating agreements that safeguard its economic interests while balancing investor confidence and domestic policy space," another official said.
There is an ambitious effort of reconstructing India's BIT network to pre-2015 levels on renewed terms and consistent negotiations with a wide range of partners, with balance of interests between investors and the host state.
At the same time, India has committed to well-recognised international standards of protection and beyond to afford a stable investment protection framework for foreign investors.
Commenting on BITs, Rumki Majumdar, Economist, Deloitte India, said these pacts will offer the country a unique advantage by enabling India to craft highly customised partnerships based on mutual strengths.
"Unlike multilateral frameworks, which often require compromises to suit a broad group of nations, bilateral treaties will allow India for case-by-case negotiation, ensuring that the terms reflect the specific economic complementarities between itself and its partner countries," she said.
Majumdar added that India should focus on BITs as not just legal instruments, they must be strategic economic enablers, helping India jointly unlock higher value from its comparative and competitive advantages.
According to the Economic Survey 2024-25, India must "pull out all the stops" and improve tax certainty and stability to attract more foreign direct investments into the country.
FDI inflows into India crossed the USD 1 trillion milestone in the April 2000-March 2025 period, firmly establishing the country's reputation as a safe and key investment destination globally.
Last fiscal year, it stood at USD 81 billion.
About 25 per cent of the FDI came through the Mauritius route. It was followed by Singapore (24 per cent), the US (10 per cent), the Netherlands (7 per cent), Japan (6 per cent), the UK (5 per cent), the UAE (3 per cent) and Cayman Islands, Germany and Cyprus accounted for 2 per cent each.
The key sectors attracting the maximum of these inflows include the services segment, computer software and hardware, telecommunications, trading, construction development, automobile, chemicals, and pharmaceuticals.