The Indian government published a draft of its model bilateral investment treaty (BIT) for public comment on March 24, 2015. By April 11, the deadline for submission, 185 comments were posted on the government’s online forum. The new text is set to replace the country’s 1993 model Bilateral Investment Promotion and Protection Agreement (BIPA) and results from an inter-ministerial review process started in mid-2012.
India’s new model includes obligations on foreign investors and investments and on their home state aimed at ensuring that investment contributes to inclusive growth and sustainable development. Investors and investments that breach obligations regarding corruption, disclosures and taxation do not benefit from the treaty benefits—and are subject to counterclaims by the host state. While retaining investor–state dispute settlement provisions, the model requires a foreign investor to exhaust administrative and judicial remedies before initiating arbitration against the host state.
Increasingly concerned with investor–state arbitration, India is reported to be considering renegotiating or exiting its BITs (currently, 83 signed, 72 in force). Although the country does not have an investment treaty with the United States, sporadic negotiations are reported to be occurring since 2008. The completion of India’s new model has motivated a new round of talks, as indicated in March 2015 by U.S. Assistant Secretary of State Nisha Desai Biswal.