New bilateral investment treaty framework to get Cabinet approval soon: Nirmala Sitharaman

Finance Minister Nirmala Sitharaman on Monday said the governments new framework for bilateral investment treaties is soon expected to get the Cabinet approval reported news agency PTIThe new framework aims to provide greater protection to investors from both sides while addressing the shortcomings in the model approved in 2016 she said adding that the template is being formulated over the last oneandahalf yearsThe 2016 model bilateral investment treaty had become the basis for Indias subsequent investment treaty negotiations after replacing an earlier frameworkIndia continues negotiations on investment protection agreementsHowever Sitharaman said India has pushed with negotiations on investment protection agreements even as the new template is being finalisedShe said Indias latest agreement with Saudi Arabia goes beyond the 2016 framework and incorporates elements that are more sharply focused on protecting the interests of investors from both countries and added similarly India has also concluded agreements with the UAE Oman and some Central Asian countriesWe have a new template which will be approved shortly But in the meanwhile weve not halted the process We are negotiating with countries with a lot more of those elements which are in the new template she saidThe minister said India is currently negotiating with several countries including Canada and Russia on bilateral investment protection agreementsIf things go well by December we should be concluding agreements with at least three more countries she saidShe added that negotiations with Canada could be concluded by December or early next year if they progress as expectedWhat is a bilateral investment treatyA bilateral investment treaty is an agreement between two countries to promote and protect investments made by their investors in the others territory Under investment protection treaties investors can take a sovereign government to arbitration as per PTIUnder the present framework a foreign investor has to wait for five years before initiating a treatybased arbitration against India Which means if a dispute arises the foreign investor should first pursue domestic remedies for five years before bringing a claim under the agreementIn the last few years there has been growing demand to lower this fiveyear periodBesides with Outward Direct Investment ODI from India increasing there is a need to ensure that domestic investors and companies investing abroad also get adequate protectionSitharaman said the earlier framework does not adequately serve Indias interests and therefore a new template is being formulatedWith inputs from PTI