India has moved closer to a revamped framework for bilateral investment treaties, with the Finance Ministry completing its review of the Model BIT and sending the draft to the Cabinet Secretariat for approval, according to a senior government official.
The revised framework is intended to provide a standard template for India’s negotiations with other countries on investment protection agreements. Government sources said India is also looking to finalise around four to five BITs under the new framework after negotiations were expedited.
Editorial Insight
Key Highlights
Important points readers should notice.
Issue/Event: Revised Model Bilateral Investment Treaty sent for Cabinet approval.
Location: New Delhi / India.
Authority/Organisation: Ministry of Finance and Department of Economic Affairs.
Action Taken: Finance Ministry completed its review and sent the draft framework to the Cabinet Secretariat.
Impact: Around four to five bilateral investment treaties are expected to be pursued or finalised under the updated framework.
A Bilateral Investment Treaty is an agreement between two countries that establishes rules and protections for investments made by companies and investors from one country in the territory of the other.
The proposed revision comes after the government announced in the Union Budget for 2025-26 that India’s existing Model BIT would be reviewed and made more investor-friendly to encourage sustained foreign investment. The existing framework dates from the 2015-16 period.
The Department of Economic Affairs’ Investment Division is responsible for negotiating India’s bilateral investment treaties and handling related international investment framework issues.
Editorial Analysis
Why This Matters
BITs can provide greater clarity on the treatment and protection of cross-border investments. They also establish rules for handling certain investment disputes between foreign investors and governments. For India, the revised framework comes at a time when the government is seeking to attract sustained foreign investment while retaining regulatory and policy space. The framework is also relevant for Indian companies investing overseas because BITs can provide treaty-based protections for qualifying investments in partner countries. The Department of Economic Affairs identifies negotiation of BITs and management of related disputes as part of its investment mandate.
