Govt's New Bilateral Investment Treaty Template to Get Cabinet Nod Soon: FM

New Delhi, Oct 5 (KNN) Finance Minister Nirmala Sitharaman on Monday said the government has finalised a new template for bilateral investment treaties (BITs) and expects Cabinet approval shortly, with the framework aimed at making investment protection more investor-friendly.

The template, prepared over the past one-and-a-half years, seeks to address shortcomings in the 2016 model and provide stronger protection to investors from both countries, Sitharaman said at the Munich Security Conference, PTI reported.

India Continues Investment Treaty Negotiations

Sitharaman said India has continued negotiating investment protection agreements while the new template is being finalised.

The latest agreement with Saudi Arabia goes beyond the 2016 framework and incorporates provisions focused on protecting investors from both countries. Similar agreements have been concluded with the UAE, Oman and some Central Asian countries.

“We have a new template which will be approved shortly. But in the meanwhile, we've not halted the process,” she said.

Negotiations are also underway with Canada and Russia, among other countries. Sitharaman said India could conclude agreements with at least three more countries by December, with the Canada negotiations potentially concluding by December or early next year.

New Framework To Reflect Changing Investment Needs

The 2016 model BIT replaced India's earlier framework and became the basis for subsequent investment treaty negotiations.

BITs seek to promote and protect investments between two countries and can allow foreign investors to take disputes with sovereign governments to arbitration under specified conditions.

With India's outward direct investment (ODI) increasing, the government also needs to ensure adequate protection for Indian companies investing overseas, Sitharaman said.

Under the current framework, a foreign investor must generally pursue domestic remedies for five years before initiating treaty-based arbitration against India, a provision the new template is expected to address as part of its broader investor-protection framework.

(KNN Bureau)