Bilateral Investment Treaty Model To Be Reviewed, Made More Business Friendly

New Delhi, Apr 8 (KNN) The Prime Minister's Office (PMO) has instructed the commerce ministry to scrutinise the existing model text of the bilateral investment treaty (BIT) and propose modifications to enhance the ease of doing business in India, according to sources familiar with the matter.

This exercise holds significance as only seven countries have accepted the current model text treaty, while most developed nations have raised concerns regarding specific provisions, such as the resolution of disputes, reported News18.

Bilateral investment treaties play a crucial role in safeguarding and promoting investments between signatory countries.

Their importance is underscored by India's recent losses in international arbitration cases involving British telecom giant Vodafone and Cairn Energy plc of the UK, stemming from the retrospective levy of taxes.

Sources reveal that the commerce ministry will convene an internal discussion on Monday, inviting experts and lawyers to deliberate on the model text of the treaty.

"There will be a presentation during the meeting," they said, adding, "We are having an internal discussion on the issue. The PMO is looking into it and has asked the commerce ministry to provide a third-party perspective on the model text."

Although bilateral investment treaties traditionally fall under the purview of the finance ministry, the commerce ministry will strive to solicit third-party views and suggest potential ways forward for higher authorities' consideration.

Investment facilitation is a critical chapter in the ongoing free trade agreement negotiations led by the commerce ministry. Notably, the bilateral investment treaty has emerged as a key sticking point in the free trade agreement and BIT negotiations between India and the UK.

Recently, on March 10, India and the European Free Trade Association (EFTA) signed a free trade agreement, under which New Delhi secured an investment commitment of USD 100 billion over 15 years from the grouping.

(KNN Bureau)