The Centre is finalising a revised Model Bilateral Investment Treaty (BIT) for the Cabinet’s consideration soon. This revision is expected to shorten the timeframe for investors to exhaust domestic legal remedies before initiating international arbitration to resolve disputes, Economic Affairs Secretary Anuradha Thakur said on Friday.
The review seeks to balance stronger investor protection with India’s sovereign interests while reflecting evolving global investment practices and the growing international footprint of Indian companies, she said, speaking at the NCAER India Policy Forum 2026.
The revised BIT framework will also serve as a flexible basis for future negotiations, allowing India to tailor provisions based on the strategic importance of the partner country and the nature of the bilateral investment relationship.
“We’ve already reduced the period (for local remedies) to three years in our agreement with the UAE. The five-year requirement was introduced in the 2015 Model BIT, largely in response to a large number of investor-state disputes India was facing at the time,” she said.
FE reported recently that the domestic remedy timeframe may even be reduced to two years depending on the bilateral negotiations.
“The Model BIT is currently under review. We’re examining not only this (reduction in time frame) clause but many others, taking into account our negotiation experience and evolving international practice,” she said. The government is considering one approach: identifying only the essential red lines and providing greater flexibility elsewhere, the secretary said. “At the same time, we also have to think about Indian investors investing abroad. As India’s outward investment grows, our own companies will increasingly require treaty protection in foreign jurisdictions,” she said.
On FDI, Thakur said gross inflows have been increasing and reached an all-time high last year. “Is that sufficient? Certainly not. A country like India needs much more investment, and we’re actively working on policies to attract it,” she said.
Gross FDI inflows rose 17.3% to $94.5 billion in FY26 from $80.6 billion a year ago. Similarly, net FDI inflows rose nearly eight times to $7.7 billion in FY26 from around $1 billion the previous year.
TOPICSInvestThis article was first uploaded on August seven, twenty twenty-six, at thirty-five minutes past nine in the night. © The Indian Express (P) Ltd