NEW DELHI: India is looking at a situation where it may not have a bilateral investment treaty with a large number of countries including those in the European Union (EU) on 1 April 2017. Commerce and Industry Minister Nirmala Sitharaman recently said India would unilaterally terminate all such existing treaties on 31 March, having given one year’s time to countries to renegotiate the treaties based on the model Bilateral Investment Treaty (BIT) passed by the cabinet.
Sitharaman said India has written to all the countries with which it has investment treaties to come forward and negotiate based on the draft BIT. “It is up to the member Country to approach us. We have already given one year time for renegotiation,” Sitharaman said.
India brought out a new model BIT in December 2015, intending to replace its existing Bilateral Investment Promotion and Protection Agreements (BIPAs) and future investment treaties, after being dragged into international arbitration by foreign investors who sued for discrimination citing commitments made by India to other countries in bilateral treaties.
The model BIT approved by the cabinet excludes matters relating to taxation. Controversial clauses such as most favoured nation (MFN) have been dropped while the scope of national treatment, and fair and equitable treatment clauses, has been considerably narrowed down.
India has served termination notices to as many as 57 countries, including European Nations with whom the initial term of the treaty has either expired or will expire soon. India wants to sign investment agreements bilaterally with individual EU member countries based on its model BIT though the EU is opposed to the idea.