Armed with the text of a model bilateral investment treaty (BIT) that bars any enterprise from a treaty partner country from seeking relief on tax disputes under the treaty, India has fast-tracked the process of replacing several existing accords with fresh BITs and clinching such deals with countries outside India’s current treaty framework.
While the Cabinet note has already been circulated for a BIT with Cambodia, new treaties with countries with which India has strong economic ties will follow, it is understood.
However, talks with the US could take a bit long to come about. This is because the US is not one among India’s existing Bilateral Investment Promotion and Protection Agreement (BIPA) partners and the BITs have no defined foundation to stand on.
People privy to the early talks with Washington in this connection have observed that the US has demanded that its companies be given the right to seek international arbitration rather than seek remedy through local courts in case of disputes, something which goes against the grain of India’s BIT text and so, it is not inclined to accept.
India has over 80 BIPAs with its trading partners. Sources said the US has also redefined its investment protection accords with major partners and so aligning these norms with India’s BIT would be necessary.
