India may junk 2016 model for bilateral investment treaties with UK, EU
India may junk 2016 model for bilateral investment treaties with UK, EU | Mint Mint
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India Considers Changing Template for Bilateral Investment Treaties
NEW DELHI: India may no longer stick to the template for bilateral investment treaties (BIT) that it adopted after terminating most of these treaties in 2016, a senior official aware of the development said.
Change in Approach
The change in the approach comes at a time when India is negotiating investment treaties alongside free trade agreements with some top trading partners, including the UK and EU, that are looking for stronger investment protection while objecting to the 2016 model BIT.
New Model Needed
“It can’t be the same model as 2016. A long time has passed since then and there are lots of changes that have happened in between and so what countries want in the BITs has also changed,” the official said, adding that the new model as and when decided, will need the approval of Cabinet.
Another official had told Mint that in cases involving partners with whom India has diverse ties, including economic and strategic, there the ‘one-size-fits-all’ approach of the 2016 BITs model may not be suitable and “there can be tweaks to suit some partners”.
Geopolitical Landscape and FTAs
The first official further said that with the shifts in the geopolitical landscape along with FTAs that were being renegotiated for better terms with partner countries, the BIT is bound to be quite different from the model proposed in 2016.
Background on 2016 Model BIT
The government annulled BITs which were based on old model texts framed back in 1993 after receiving adverse judgments in multi-billion dollar investor-state disputes in international courts. To prevent this, the model BIT included “exhaustion of local remedies” as a clause which in effect emphasized state rights over investor rights.
Impact on Foreign Direct Investments
However, the number of BITs India signed after 2016 declined. Economists said that it also has impacted the pace of foreign direct investments.
Proposed Changes by EU and UK
Mint has earlier reported that the EU has proposed an investment court system to resolve investor-state disputes. The UK is also looking for a different mechanism to resolve investment-related disputes other than what is proposed in the model BIT.
Importance of Investment Protection
European commissioner for trade Valdis Dombrovskis told Mint that India’s ambition to become a manufacturing hub and integrate itself with the global value chains requires a lot of investment and for this investment to come, there also needs to be “proper investment protection” and a “proper mechanism to solve disputes as they arise”.
Impact on FDI Inflows
An Icrier working paper on the impact of BITs on FDI Inflows into India observed that the government has on many occasions voiced complete antipathy to any multilateral governance of international investment. According to a World Bank ‘Ease of Doing Business 2020’ report, India ranked 163 out of 190 countries in ease of enforcing contracts, and takes 1,445 days and 31% of the claim value for dispute resolution. Experts said that the delay hurts investor confidence and impacts FDI inflows. The Icrier report added, “The collective presence of an overall investor protection is positively and significantly linked to foreign investment flows.”
Government Response
Queries sent to the commerce and finance ministries remained unanswered till press time.
SDGs, Targets, and Indicators in the Article
1. Which SDGs are addressed or connected to the issues highlighted in the article?
- SDG 8: Decent Work and Economic Growth
- SDG 16: Peace, Justice, and Strong Institutions
- SDG 17: Partnerships for the Goals
The article discusses India’s approach to bilateral investment treaties (BITs) and the need for stronger investment protection. This relates to SDG 8, which focuses on promoting sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all. It also relates to SDG 16, which aims to promote peaceful and inclusive societies for sustainable development, provide access to justice for all, and build effective, accountable, and inclusive institutions at all levels. Additionally, SDG 17 emphasizes the importance of strengthening global partnerships to achieve the goals.
2. What specific targets under those SDGs can be identified based on the article’s content?
- Target 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7% GDP growth per annum in the least developed countries.
- Target 16.3: Promote the rule of law at the national and international levels and ensure equal access to justice for all.
- Target 17.16: Enhance the global partnership for sustainable development, complemented by multi-stakeholder partnerships that mobilize and share knowledge, expertise, technology, and financial resources.
The article highlights the need for stronger investment protection and the renegotiation of BITs to attract foreign direct investment (FDI) and promote economic growth. This aligns with Target 8.1, which aims to sustain per capita economic growth. The article also mentions the importance of resolving investment-related disputes through proper mechanisms, which relates to Target 16.3. Additionally, the article emphasizes the need for partnerships and negotiations with trading partners, reflecting Target 17.16.
3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?
- Indicator 8.1.1: Annual growth rate of real GDP per capita
- Indicator 16.3.1: Proportion of victims of violence in the previous 12 months who reported their victimization to competent authorities or other officially recognized mechanisms
- Indicator 17.16.1: Number of countries reporting progress in multi-stakeholder development effectiveness monitoring frameworks that support the achievement of the sustainable development goals
The article does not explicitly mention these indicators, but they can be used to measure progress towards the identified targets. Indicator 8.1.1 measures the annual growth rate of real GDP per capita, which reflects Target 8.1. Indicator 16.3.1 measures the proportion of victims of violence who report their victimization, which relates to Target 16.3. Indicator 17.16.1 measures the number of countries reporting progress in multi-stakeholder development effectiveness monitoring frameworks, which reflects Target 17.16.
Table: SDGs, Targets, and Indicators
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 8: Decent Work and Economic Growth | Target 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7% GDP growth per annum in the least developed countries. | Indicator 8.1.1: Annual growth rate of real GDP per capita |
| SDG 16: Peace, Justice, and Strong Institutions | Target 16.3: Promote the rule of law at the national and international levels and ensure equal access to justice for all. | Indicator 16.3.1: Proportion of victims of violence in the previous 12 months who reported their victimization to competent authorities or other officially recognized mechanisms |
| SDG 17: Partnerships for the Goals | Target 17.16: Enhance the global partnership for sustainable development, complemented by multi-stakeholder partnerships that mobilize and share knowledge, expertise, technology, and financial resources. | Indicator 17.16.1: Number of countries reporting progress in multi-stakeholder development effectiveness monitoring frameworks that support the achievement of the sustainable development goals |
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Source: livemint.com
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