India’s investment treaty practice is currently at a crossroads. After being enthusiastic about signing bilateral investment treaties (BITs) in the 1990s and 2000s, India has adopted a more cautious approach since foreign investors began suing the country in various investor-state dispute settlement (ISDS) forums. In 2015, India introduced a pro-state Model BIT as a new template for negotiating BITs. However, this model has seen limited success, leading India to deviate from it in its recent BIT with the United Arab Emirates (UAE). The India–UAE BIT indicates a softening of India’s position on certain core issues, such as ISDS, but also represents a hardening of its stance on other matters, particularly regarding the jurisdiction of ISDS tribunals in cases involving allegations of corruption against foreign investors. Furthermore, there is continuity on several issues, including the exclusion of the Most-Favoured-Nation (MFN) clause and taxation measures from the BIT’s purview. India needs to develop a balanced BIT template that reconciles investment protection with the state’s right to regulate, rather than maintaining an investment treaty practice that leans excessively toward pro-state interests. JEL Codes: F53, K33, F21
Prabhash Ranjan (Fri,) studied this question.