India may junk 2016 model for bilateral investment treaties with UK, EU

livemint.com:

NEW DELHI : India may no longer stick to the template for bilateral investment treaties (BIT) that it adopted after terminating most of these treaties in 2016, a senior official aware of the development said. The change in the approach comes at a time when India is negotiating investment treaties alongside free trade agreements with some top trading partners, including the UK and EU, that are looking for stronger investment protection while objecting to the 2016 model BIT.

“It can’t be the same model as 2016. A long time has passed since then and there are lots of changes that have happened in between and so what countries want in the BITs has also changed," the official said, adding that the new model as and when decided, will need the approval of Cabinet.

Another official had told Mint that in cases involving partners with whom India has diverse ties, including economic and strategic, there the ‘one-size-fits-all’ approach of the 2016 BITs model may not be suitable and “there can be tweaks to suit some partners". The first official further said that with the shifts in the geopolitical landscape along with FTAs that were being renegotiated for better terms with partner countries, the BIT is bound to be quite different from the model proposed in 2016.

The government annulled BITs which were based on old model texts framed back in 1993 after receiving adverse judgments in multi-billion dollar investor-state disputes in international courts. To prevent this, the model BIT included “exhaustion of local remedies" as a clause which in effect emphasized state rights over investor rights.

However, the number of BITs India signed after 2016 declined. Economists said that it also has impacted the pace of foreign direct