Reforms In India's Model Bilateral Investment Treaty (BIT): Balancing Foreign Investor Protection And State Sovereignty
Saba Saif
ABSTRACT
India's 2015 Model Bilateral Investment Treaty marked a significant recalibration of the country's investment policy by narrowing substantive protections, conditioning investor-State dispute settlement, and expressly preserving regulatory space. The model emerged against the background of a growing global debate over the effect of investment treaties on governmental policy choices and India's experience with investor-State disputes. This paper examines whether the Model BIT strikes an appropriate balance between protecting foreign investors and preserving State sovereignty. It evaluates the treatment of fair and equitable treatment, expropriation, national treatment, performance requirements, taxation, compulsory licensing, general exceptions and investor-State dispute settlement. The paper argues that the Model BIT's emphasis on regulatory autonomy is justified but that some provisions are drafted so restrictively or ambiguously that they may reduce the treaty's capacity to provide meaningful protection and attract long-term investment. It proposes a calibrated reform model based on clearer substantive standards, stronger procedural safeguards, carefully framed public-interest exceptions, proportionality-sensitive expropriation rules, and a more accessible but disciplined dispute-settlement mechanism. The objective should be neither maximum investor protection nor maximum State discretion, but predictable regulatory sovereignty combined with credible legal protection.
Keywords: Bilateral Investment Treaty; Foreign Investor Protection; State Sovereignty; Fair and Equitable Treatment; Investor-State Dispute Settlement; Regulatory Autonomy.
