The existing Indian Bilateral Investment Treaties (BITs) were largely negotiated on the basis of Model BIT text adopted in 1993, and as amended in 2003. The 1993 Model BIT text contained provisions which were susceptible to broad and ambiguous interpretations by arbitral tribunals. Further, significant changes have occurred globally regarding BITs, in general, and investor-state dispute resolution mechanism, in particular. Accordingly, India started the process for review and revision of the earlier Model BIT, and came out with a revised Model BIT version, in December, 2015. Discussion on commencing negotiations on Bilateral Investment Treaty (BIT) or investment agreement based on approved Model BIT text with Russia, USA and EU are ongoing.

BITs help to project India as an attractive Foreign Direct Investment (FDI) destination, as well as protect outbound Indian FDI, by increasing the comfort level and boosting the confidence of investors by assuring a minimum standard of treatment and non-discrimination.

This information was given by the Commerce and Industry Minister Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today.

Bilateral Investment Treaties: revised model aims to clarify investor protections and limit expansive investor state dispute exposure. India revised its earlier 1993 Model BIT with a new Model BIT in December 2015 to correct broadly interpretable provisions and to align investor state dispute resolution language with contemporary practice; negotiations to conclude BITs or investment agreements based on the revised text are ongoing. The revised model is intended to preserve baseline protections such as the minimum standard of treatment and non discrimination to attract and protect foreign direct investment while limiting exposure to expansive arbitral interpretations.