India asks trade partners to sign new BIT pact

Nudging trade partners to re- negotiate investment protection agreements, India today said it would get difficult for the country to extend complete protection after April 1 to foreign inflows originating from those nations.
India has asked 83 countries with which it has investment protection pacts to re-negotiate those agreements on the basis of the new draft text of bilateral investment treaty (BIT) by April 1, 2017.
The old pacts have been largely negotiated on the basis of the Indian Model BIT of 1993. The Union Cabinet in December 2015 approved the revised model text for the BIT to enhance protection of foreign investors in India as well as Indian investments abroad.

Commerce and Industry Minister Nirmala Sitharaman said all the countries with which India has investment protection agreement, including European Union, were advised well in advance to re-negotiate those pacts on the basis of the new draft text of BIT.
She said one year time was given for re-negotiation of the treaty and India has circulated the draft also.
On what will happen in absence of the new agreement, the minister said, "There will be hiatus...Between the old one (agreement) and the new one whenever that comes into place, there will be a gap which will remain for the investors, a period without getting any cover...".

After April 1 this year, all the investments protection agreements which India has signed based on the old BIT model text would become infructuous. The revised model text will replace the existing text.

She further said that India was sitting ready for re-negotiations and was waiting for 12 months.
"... In advance, we told (the countries including EU) that this is the draft copy, look at it, come back and negotiate," she told reporters.
European Commission (EC) has raised concerns over negotiations for a fresh BIT.
In December 2015, the Cabinet approved the revised model text for the BIT with a view to enhancing protection of foreign investors in India as well as Indian investments abroad, but taxation matters would remain out of its ambit.

She also said that it would be difficult to extend the April 1 deadline for India.
"If the treaty expires before April 1 or afterwords, it still means that the new draft treaty that we have put to circulation is the one which we want to be effective from April 1. There is no confusion about it," she said.
Elaborating the issue with regard to EU, with which India is negotiating a comprehensive free trade agreement, the minister said: "Irrespective of what happens to the trade (FTA) negotiations, investment agreement has to be negotiated from April 1, onwards or else any existing previous agreement either with individual country or with collective will all expire".

Without treaty, she added that there will be a "shade of protection" given.
"...It won't be as if completely nothing will exist. There will be something but it won't be similar," she added.