India Revives Model BIT Overhaul After Decade of Stalled Talks

India has begun work on revising its Model Bilateral Investment Treaty (BIT), nearly a decade after the current revised model was approved in 2016. The development, reported by The Hindu, marks a significant policy review aimed at updating the framework that governs India's investment treaties with other nations. The 2016 Model BIT was itself a major departure from earlier treaties, shifting toward greater regulatory sovereignty and requiring foreign investors to exhaust local remedies before international arbitration.

The 2016 model was introduced after India terminated over 60 older BITs in the wake of high-profile investor disputes, including the Vodafone and Cairn Energy cases. It sought to balance investor protection with the state's right to regulate, but critics argued it offered insufficient protections, making it harder for India to negotiate new treaties. Since then, India has signed only a handful of BITs, including with Brazil and Belarus, while negotiations with major partners like the EU and the US remain stalled. The government has not yet released specific details of the proposed revisions or a timeline.

The revision comes amid a global reassessment of investment treaties, with several countries rethinking ISDS provisions and climate-related carve-outs. A revised Indian model could affect ongoing negotiations, existing treaty interpretations, and future dispute outcomes. Stakeholders, including foreign investors and legal experts, will be watching closely for signals on whether India will soften its stance on arbitration or maintain its regulatory-first approach. The next steps likely involve inter-ministerial consultations before any new draft is finalized.