Bilateral agreements

India must align its treaties with best global practices

Union Finance Minister Nirmala Sitharaman’s Interim Budget statement that the government was negotiating bilateral investment treaties (BITs) with several countries should be good news at a time when foreign direct investment (FDI) has been slowing. By setting out a reciprocal framework of investment rules, including the settlement of arbitration disputes, BITs protect the rights of both inbound and outbound investors. Ms Sitharaman went on to explain that the BITs were being negotiated in the spirit of “first develop India”, an alternative expansion of FDI. Experience suggests that this stance as a negotiating position could be a serious sticking point, since