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Source<\/strong>: The post India\u2019s BIT framework <\/strong>has been created, based on the article \u201cWhy India needs a forward-looking approach to Bilateral Investment Treaties\u201d<\/strong> published in Indian Express<\/strong> on 10th February 2024.<\/p>\n UPSC Syllabus Topic:<\/strong> GS paper 2 \u2013 International Relations – Bilateral, regional and global groupings and agreements involving India<\/p>\n News: <\/strong>Finance Minister Nirmala Sitharaman announced plans to negotiate new Bilateral Investment Treaties (BITs) to increase foreign investment. India\u2019s BIT Framework<\/strong><\/p>\n This is important because India’s previous bilateral treaties have been decreasing, especially after the 2016 Model BIT, which changed how India deals with foreign investments.<\/p>\n India began making BITs in the mid-1990s<\/strong> to protect and encourage foreign investments. The first treaty was signed with the UK in 1994.<\/p>\n By 2015, <\/strong>India faced 17 BIT claims, including high-profile disputes<\/strong> like the Cairn Energy Plc case, leading to substantial awards against the Indian government. This scenario prompted a reevaluation of the 1993 BIT model.<\/p>\n In response, India adopted the 2016 Model BIT<\/strong> and terminated 68 of its 74 treaties, seeking renegotiation based on this revised model.<\/p>\n This new model was stricter and required foreign investors to first exhaust all local remedies before international arbitration could be pursued.<\/p>\n Significant decrease in FDI equity inflows. A 24% decline was registered during April-September 2023.<\/p>\n Total FDI contracted by15.5%.<\/p>\n <\/p>\nEvolution of India\u2019s BIT framework <\/strong><\/h2>\n
What were The Impacts of 2016 Model BIT on Investments? <\/strong><\/h2>\n
Read More UPSC Topics-<\/strong><\/h2>\n