India's Revamped Model Bilateral Investment Treaty (BIT)

Gist Following an announcement in the Union Budget 2025-26 , India is comprehensively revamping its 2015 Model Bilateral Investment Treaty BIT to create a more investor-friendly framework. The upcoming revision marks a shift from a highly defensive, protectionist stance—adopted after high-profile arbitration losses—to a pragmatic approach informed by recent bilateral negotiations. For a civil services aspirant, this development is crucial as it dictates how India balances attracting Foreign Direct Investment FDI with protecting its sovereign right to regulate in the public interest. Background A Model BIT is a standardized template that a country uses as a starting point for negotiating bilateral investment agreements with other nations. India's current template, the 2015 Model BIT , was framed defensively following the White Industries Australia Limited vs Republic of India 2011 award, where India faced significant backlash from an Investor-State Dispute Settlement ISDS tribunal. To prevent further arbitration losses, the 2015 model mandated a narrow definition of 'investment' and required foreign investors to exhaust domestic judicial and administrative remedies for at least five years before initiating international arbitration. The newly proposed revamp, currently…