Business Standard

What good are BITs?

Payouts on account of BITs are like insurance payments that undergird foreign investment

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Illustration: Ajay Mohanty

Ajay Shah
Many of us in India are irritated when the country's state agencies lose cases, and large penalties have to be paid on account of Bilateral Investment Treaties (BITs). But from India's viewpoint, it is efficient to enter into BITs. As India is at an early stage of development, foreign investors face a certain risk of expropriation, and BITs give them protection when such situations arise. We should view penalties paid on account of BITs as the occasional insurance-like payments that help energise large-scale foreign investment into India. It would be useful for the Indian state to harness lost BIT cases
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

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