CONCEPT – BILATERAL INVESTMENT TREATIES - BITs

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 CONCEPT – BILATERAL INVESTMENT TREATIES - BITs

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• A bilateral investment treaty (BIT) is an agreement establishing the terms and conditions for private investment by nationals and companies of one state in another state. This type of investment is called foreign direct investment. BITs are established through trade pacts.
• 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.

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