A new model: Revamping BIT calls for a fresh approach to boost FDI

With India facing consequences such as having its foreign assets seized as a result, government has essentially been defensive, including terminating BITs with some 75 countries between 2016 and 2021

Union Finance Minister Nirmala Sitharaman’s announcement that the government would revamp the model bilateral investment treaty (BIT) has the potential to reverse India’s discouraging foreign direct investment (FDI) climate. The move is seen as a prelude to easing the path towards signing long-pending free-trade agreements with the United Kingdom (UK) and the European Union (EU). But a thorough re-examination of the model BIT agreement that India announced in 2016 would require a fundamental reorientation in approach. The post-Budget commentary from senior officials of the finance ministry suggests that the government is open to adjustment. It is in India’s interests to