Union Cabinet approved Signing and ratification of Bilateral Investment Treaty (BIT) with United Arab Emirates (UAE) | Current Affairs | Vision IAS
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ESC
  • Treaty is aimed to improve confidence of investors to increase foreign investments and Overseas Direct Investment (ODI) opportunities in India.
    • Existing Bilateral Investment Protection Agreement with UAE will expire in September 2024.
  • BIT is a reciprocal agreement for according protection to investments by nationals and companies of one State in another State.

 

  • Significances of BIT with UAE
    • Growth and employment generation through increased investments in key sectors such as real estate, renewable energy, etc.
      • UAE emerged as 4th largest investor in India in FY23.
    • Mutual protection to investments in India and the UAE.

 

  • India and BITs
    • Post 1991 economic reforms and up to 2015, India signed BITs with 83 countries, negotiated based on Model BIT text of 1993.
    • Union Cabinet adopted new Model BIT text in 2015, due to increase in international arbitration cases under existing BITs.
      • Notices of Termination of BITs based on 1993 Model were issued to 77 countries (till Sep 2021).
    • Model text 2015 is used for (re)negotiations of BITs and investment chapters of FTAs/ Economic Partnership Agreements.

 

Key Provisions of Model BIT, 2015

  • "Enterprise" based definition of investment
  • National Treatment: Similar treatment as domestic investors.
  • Corporate Social Responsibility (CSR): Voluntarily incorporate internationally recognized standards of CSR.
  • Settlement of Disputes: Exhaust local remedies before commencing international arbitration.
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