FM calls for a new model for bilateral investment treaties

Finance minister Nirmala Sitharaman said on Saturday that the country needs a new model for bilateral investment treaties (BITs), saying the 2016 template is "inadequate" for meeting countries' requirements and that investment treaties should be kept separate from future free trade agreements.

- Rajeev Jayaswal

NEW DELHI:

Speaking at the inauguration of the first postgraduate certificate course on international commercial and investment treaty arbitration, Sitharaman emphasised that including BITs within free trade agreements (FTAs) often reduces them to "a negotiating card," compromising their fundamental purpose.

"Issues related to BIT are so unique to the sovereign that we think BIT should be negotiated as a standalone negotiation rather than make it as a part of an FTA agreement," said the finance minister, who mentioned an overhaul was in the works while presenting the Union Budget on February 1.

The announcement comes at a crucial time as India negotiates FTAs with major economies, including the United Kingdom and European Union, which favour comprehensive agreements encompassing both trade and investment deals simultaneously.