Overview of investment treaty programme
1. What are the key features of the investment treaties to which this country is a party?
India
The first ever BIT (referred to as Bilateral Investment Protection Agreement in India) entered into by India was with the United Kingdom in 1994. With the opening-up of Indian markets to foreign investment in 1991, India entered into a series of BITs (mostly with capital exporting countries) with the expectation that they would increase investors’ confidence and lead to higher foreign investment. By 2015, India had signed 83 BITs (of which 74 were in force) and several other investment chapters in international investment agreements (IIA).
The BIT regime in India gained attention in 2010 with the settlement of first-ever treaty claim launched against India[1] and in 2011, when India received its first adverse award in White Industries v Republic of India[2] under the India–Australia BIT. This opened a floodgate of BIT cases against India. By 2015, there were about 17 known BIT claims, all of which were contested by India.[3] With increased national concern around the surge of BIT arbitrations filed against India, there was a call for curtailment of investor-state dispute settlement (ISDS). Between 2012 and 2016, India revisited its BIT regime, which led to two main outcomes. The first was the adoption of a new model BIT in December 2015 (Model BIT) with the twin objects of affording ‘appropriate protection to foreign investors in India … while maintaining a balance between investor’s rights and the government’s obligations’;[4] and the second was (i) termination of the old BITs, where initial duration had concluded, or (ii) issuance of joint interpretative notes/statements (JIS) for renegotiation on basis of the Model BIT, where the BIT’s initial term was valid.
Since 2016, India has terminated 77 BITs, the most recent being the Latvia BIT; entered into several ‘new-generation BITs’, including Belarus, Brazil,[5] Taiwan[6] and Kyrgyzstan BITs all largely based on the Model BIT. Most recently, India has also entered into Comprehensive Economic Partnership Agreement (CEPA) with the UAE on 1 May 2022 and India–Australia Economic Cooperation and Trade Agreement (ECTA) with Australia on 29 December 2022. The negotiations of other BITs/IIAs are at various stages with 37 countries or blocks.
BITs that are in force
| BIT Contracting party | Substantive protections | Procedural rights | ||||||
|---|---|---|---|---|---|---|---|---|
| Fair and Equitable Treatment (FET) | Expropriation | Protection and Security | Most-favoured-nation (MFN) | Umbrella clause | Cooling-off period | Local courts | Arbitration | |
|
Bangladesh (7 July 2011) |
Yes |
Yes |
No |
Yes |
No |
Six months |
Yes |
Yes |
|
Belarus (5 March 2020) |
No |
Yes |
Yes |
No |
No |
Six months |
Yes |
Yes |
|
Colombia (2 July 2012) |
Yes |
Yes |
Yes |
Yes |
No |
Six months |
Yes |
Yes |
|
Libya (25 March 2009)[7] |
Yes |
Yes |
No |
Yes |
No |
Six months |
Yes |
Yes |
|
Lithuania (1 December 2011) |
Yes |
Yes |
Yes |
Yes |
No |
Six months |
Yes |
Yes |
|
Philippines (29 January 2001) |
Yes |
Yes |
No |
Yes |
No |
Six months |
Yes |
Yes |
|
Senegal (17 October 2009) |
Yes |
Yes |
Yes |
Yes |
No |
Six months |
Yes |
Yes |
|
Taiwan (14 February 2019 |
No |
Yes |
Yes |
No |
No |
Six months |
Yes |
Yes |
|
United Arab Emirates (21 August 2014) |
Yes |
Yes |
Yes |
Yes[8] |
No |
Six months |
Yes |
Yes |
BITs and MITs that are signed but not in force:
| BIT contracting party or MIT | Substantive protections | Procedural rights | ||||||
|---|---|---|---|---|---|---|---|---|
| FET | Expropriation | Protection and security | MFN | Umbrella clause | Cooling-off period | Local courts | Arbitration | |
|
Brazil (not in force) |
No |
Yes[9] |
No |
No |
No |
No |
No |
Yes |
|
Kyrgyzstan Republic (not in force) |
No |
Yes |
Yes |
No |
No |
6 months |
Yes |
Yes |
BITs that are terminated
Between 2016 and 2021, India terminated BITs with 76 countries,[10]with Latvia as the most recent one. Note that these treaties remain relevant as the investments made before termination of these treaties remain protected under the sunset/survival provisions in the respective treaties (which is typically 10 to 15 years).
Free Trade Agreements (FTAs), Preferential Treatment Agreements (PTA) and investment chapters in international agreements (signed /entered in):
| FTAs | Substantive protections | Procedural rights | ||||||
|---|---|---|---|---|---|---|---|---|
| Fair and Equitable Treatment (FET) | Expropriation | Protection and security | Most-favoured-nation (MFN) | Umbrella clause | Cooling-off period | Local courts | Arbitration | |
|
Afghanistan–India PTA (13 May 2003) |
Yes |
No |
No |
No |
No |
No |
No |
Yes |
|
Agreement on SAARC Preferential Treatment Trading Agreement (7 December 1995) |
No |
No |
No |
No |
No |
No |
No |
No |
|
ASEAN–India Investment Agreement (1 July 2015) |
Yes |
Yes |
Yes |
No |
No |
180 days |
Yes |
Yes |
|
Asia-Pacific Trade Agreement (17 June 1976) |
No |
No |
No |
Yes |
No |
No |
No |
No |
|
Indo-Bhutan Agreement on Trade Commerce and Transit (29 July 2017) |
No |
No |
No |
No |
No |
No |
No |
No |
|
Australia-India ECTA (29 December 2022) |
No |
No |
No |
No |
No |
No |
No |
No |
|
BIMSTEC Framework Agreement (30 June 2004) |
No |
No |
No |
No |
No |
No |
No |
No |
|
Chile–India (20 January 2005) |
No |
No |
No |
No |
No |
No |
No |
No |
|
European Union Cooperation Agreement (1 August 1994) |
No |
No |
No |
Yes |
No |
No |
No |
No |
|
Gulf Co-operation Council Framework Agreement (not in force) |
No |
No |
No |
No |
No |
No |
No |
No |
|
Japan CEPA (1 August 2011) |
Yes |
Yes |
Yes |
Yes |
No |
6 months |
Yes |
Yes |
|
Korea CEPA (1 January 2010) |
Yes |
Yes |
Yes |
No |
No |
6 months |
Yes |
Yes |
|
Malaysia Comprehensive Economic Cooperation Agreement (CECA) (1 July 2011) |
Yes |
Yes |
Yes |
Yes |
No |
180 days |
Yes |
Yes |
|
Mauritius CECPA (1 April 2021) |
No |
No |
No |
No |
No |
No |
No |
No |
|
MERCOSUR Framework Agreement (1 June 2009) |
No |
No |
No |
No |
No |
No |
No |
No |
|
Indo-Nepal Treaty of Trade – 27 November 2009) |
No |
No |
No |
No |
No |
No |
No |
No |
|
Singapore CECA (1 August 2005) |
No |
Yes |
No |
No[11] |
No |
6 months |
Yes |
Yes |
|
South Asian FTA (1 January 2006) |
No |
No |
No |
No |
No |
No |
No |
No |
|
Thailand FTA (not in force) |
No |
No |
No |
No |
No |
No |
No |
No |
|
United Arab Emirates CEPA (1 May 2022) |
No |
No |
Yes |
Yes |
No |
Yes |
No |
Yes |
Answer contributed by Sanjeev K Kapoor, Kartikey Mahajan, Jatan Rodrigues, Prerna Jain and Aayushi Singh
Khaitan & Co