India is set to revisit its bilateral investment treaty model as the government aims to draw in more foreign investments. A senior finance ministry official announced on Friday that the cabinet will soon discuss potential changes to this framework.
The push for a review comes as India is in talks with several developed countries, including the United Kingdom, to establish new investment agreements. However, progress has been slow, partly due to certain terms in the current treaty framework.
One key aspect of the 2016 treaty requires foreign investors to pursue domestic legal options for five years before they can seek international arbitration for disputes. Anuradha Thakur, the Secretary of Economic Affairs, highlighted that they are assessing areas of concern and are open to setting aside certain restrictions to enhance investment opportunities.
“This is a work in progress, and consultations are ongoing,” she added during an event in New Delhi.
Industry groups in India have been actively advocating for quicker dispute resolutions and more favorable conditions for foreign companies to enhance the country’s competitiveness in the global marketplace.
In recent years, India’s net foreign direct investment has lagged behind that of other Asian countries, attracting only $7.7 billion for the fiscal year ending March 2026. In contrast, Vietnam and Indonesia secured $20.2 billion and $24.2 billion, respectively, in 2024.
Despite these challenges, India has successfully signed bilateral investment treaties with Israel and the United Arab Emirates, with ongoing negotiations with other nations.
