"India Revises 2015 Model Bilateral Investment Treaty Amid Consultation Debate"
Bilateral Investment Treaty (BIT)
an agreement between two states setting legal protections and dispute rules for cross-border private investment
Model BIT
a government's standard template used as the starting position in bilateral investment treaty negotiations
A Bilateral Investment Treaty (BIT) is an agreement between two countries that sets out the terms and conditions for private investment by nationals and companies of one country in the other. BITs typically guarantee protections such as fair and equitable treatment, protection against expropriation without compensation, and access to international arbitration when a host state breaches its obligations. India signed a large number of BITs from the 1990s onward as part of its post-liberalisation economic opening.
The turning point came when several foreign investors initiated arbitration proceedings against India, claiming treaty breaches. These cases, arising from disputes in sectors such as telecommunications and energy, exposed India to significant financial liability and raised questions about the design of its treaty commitments. In response, India launched a comprehensive review of its BIT framework. The two main outcomes of this review were the unilateral termination of most existing BITs and the adoption of a new Model BIT in 2015, which was intended to serve as the template for all future negotiations.
The Law Commission of India (LCI), in its 260th Report, studied the draft 2015 Model BIT and made recommendations for improvement. A public comment process was held in March 2015 before the final version was adopted in December 2015. However, not all of the LCI's recommendations were incorporated into the final text.
A model BIT is not itself a binding treaty. It is a template, a government's preferred starting position, that it uses when negotiating actual bilateral agreements with partner countries. The design of a model BIT therefore signals how a country balances two competing objectives: investment protection (giving foreign investors legal certainty and remedies) and the state's right to regulate (preserving policy space to legislate in the public interest on matters such as health, environment, and taxation).
The 2015 Indian Model BIT tilted heavily toward preserving regulatory space. Key features included a narrow definition of investment, a requirement that investors exhaust local remedies before accessing international arbitration, and limited substantive protections compared to international norms. While these features were designed to protect India from frivolous arbitration claims, they also created uncertainty for capital-exporting countries about the legal protection their investors would actually receive in India. …
With reference to the Indian Parliament, consider the following statements:
1.A bill pending in the Lok Sabha lapses on its dissolution.
2.A bill passed by the Lok Sabha and pending in the Rajya Sabha lapses on the dissolution of the Lok Sabha.
3.A bill in regard to which the President of India notified his/her intention to summon the Houses to a joint sitting lapses on the dissolution of the Lok Sabha.
Which of the statements given above is/are correct?
With reference to the Parliament of India, consider the following statements:
1.Prorogation of a House by the President of India does not require the advice of the Council of Ministers.
2.Prorogation of a House is generally done after the House is adjourned sine die but there is no bar to the President of India proroguing the House which is in session.
3.Dissolution of the Lok Sabha is done by the President of India who, save in exceptional circumstances, does so on the advice of the Council of Ministers.
Which of the statements given above is/are correct?
With reference to India's treaty-making power under the Constitution, consider the following statements:
1.The executive's power to negotiate and conclude international treaties derives from Article 73, which extends executive power to all matters on which Parliament can legislate.
2.India's Constitution mandates that all international treaties must be ratified by Parliament before they come into force.
3.In the United Kingdom and Australia, negotiated treaty texts are mandatorily placed before Parliament before ratification.
Which of the statements given above is/are correct?
Consider the following statements regarding India's Model Bilateral Investment Treaty (BIT) of 2015:
1.It was adopted after India unilaterally terminated most of its existing BITs following adverse investor-state arbitration awards.
2.It made access to Investor-State Dispute Settlement (ISDS) more restrictive by requiring investors to exhaust local remedies before accessing international arbitration.
3.The Law Commission of India's 260th Report recommended changes to the draft, all of which were incorporated into the final text.
4.India concluded a large number of new BITs based on the 2015 model in the decade following its adoption.
Which of the statements given above are correct?
Consider the following statements about the Law Commission of India's role in the 2015 Model BIT process:
1.The Law Commission assembled a team of experts to study the draft 2015 Model BIT after India circulated it for public comment in March 2015.
2.The Law Commission's recommendations on the draft model BIT were contained in its 260th Report.
3.All of the Law Commission's recommended changes were reflected in the final Model BIT adopted in December 2015.
Which of the statements given above is/are correct?
The term 'democratic deficit', as used in the context of international economic treaty-making, refers to which of the following?
Match the following countries with the practice they have adopted in relation to model Bilateral Investment Treaty (BIT) consultation or ratification:
Country — Practice
1.Norway — (a) Mandatorily places negotiated treaty text before Parliament before ratification
2.Colombia — (b) Held two rounds of public consultations on an updated model BIT draft
3.United Kingdom — (c) Released its model BIT for public consultation
Select the correct matching using the codes below:
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