BITs should capture national interest in relation to regulatory powers: Nirmala Sitharaman
Finance Minister Nirmala Sitharaman has said that going forward the bilateral investment treaties (BITs) should capture national interest in relation to regulatory powers and serve as a guide to arbitrators in resolving disputes. She said issues related to BIT are unique to the sovereign and hence BIT should be negotiated stand-alone rather than as a part of FTA agreement.
Stating that arbitrators have often ignored the judicial decisions of the host country, the minister said an investment treaty must not only provide better regulatory powers to the nations but must also serve as guidance to arbitrators to restore faith in arbitration. Presently, India is negotiating this treaty with the UK, Saudi Arabia, Qatar, and the European Union (EU).
The government in Budget 2025-26 had announced revamping the current model BIT to make it more investor-friendly and attract foreign players. The Budget had said to encourage sustained foreign investment and in the spirit of 'first develop India', the current model BIT will be revamped and made more investor-friendly. The announcement assumes significance as only a few countries have accepted the existing model tax treaty, and most of the developed nations have expressed their reservations on the tax with regard to provisions like resolution of disputes. Sitharaman said ‘BIT and its ramifications are very important for the sovereignty of the country, therefore it's important for us to have a stand-alone BIT with specialists who deal with taxation laws, as well as policy experts.’
