Negotiating BITs with trade partners to boost FDI: FM Sitharaman
Negotiating BITs with trade partners to boost FDI: FM Sitharaman The Indian Express
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India Negotiating Bilateral Investment Treaties to Boost Foreign Direct Investments
With new Bilateral Investment Treaties (BITs) drying up after India adopted the model BIT in 2016, Finance Minister Nirmala Sitharaman during her Interim Budget speech said that India is negotiating BITs with trade partners to boost the inflow of foreign direct investments (FDI).
Importance of BITs in Achieving Sustainable Development Goals (SDGs)
- BIT negotiations are crucial for India’s economic integration with western nations such as the United Kingdom (UK) and the European Union.
- These negotiations aim to improve India’s ease of enforcing contracts, which has been a hindrance to FDI inflows.
“For encouraging sustained foreign investment, we are negotiating bilateral investment treaties with our foreign partners, in the spirit of ‘first develop India’. The FDI inflow during 2014-23 was $596 billion marking a golden era. That is twice the inflow during 2005-14,” Sitharaman said.
The decline in BITs was due to trade partners’ opposition to India’s insistence on favoring the ‘exhaustion of local remedies’ clause in the model BIT. This clause emphasizes resolving investment-related legal disputes locally before resorting to international arbitration. However, trade partners have complained about the delay in dispute resolution.
India’s ranking of 163 out of 190 countries in ease of enforcing contracts, as per the World Bank’s ‘Ease of Doing Business 2020’ report, highlights the need for improvement in this area.
India’s Approach to BITs
- Before 2015, India had BITs with 83 countries or regions.
- India suspended BITs with 68 countries/regions and requested renegotiation based on the model 2016 BIT.
- Currently, six BITs are still in force.
The suspension of BITs was triggered by several high-profile defeats in investor-state disputes.
Impact on Foreign Direct Investment (FDI)
Foreign direct investment (FDI) equity inflows in India declined by 24% to $20.48 billion in April-September 2023, according to government data. The total FDI, including equity inflows, reinvested earnings, and other capital, contracted by 15.5% to $32.9 billion during the period under review.
DPIIT Secretary Rajesh Kumar Singh emphasized that despite these temporary setbacks, India’s strong growth and improving infrastructure will ensure that long-term investment flows into the country remain unaffected.
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 percent gross domestic product growth per annum in the least developed countries | Indicator: FDI inflow during 2014-23 was $596 billion, marking a golden era |
| 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: India ranked 163 out of 190 countries in ease of enforcing contracts, taking 1,445 days and 31 per cent of the claim value for dispute resolution |
| SDG 17: Partnerships for the Goals | Target 17.17: Encourage and promote effective public, public-private, and civil society partnerships, building on the experience and resourcing strategies of partnerships | Indicator: Negotiating bilateral investment treaties with foreign partners to boost FDI inflows |
1. Which SDGs are addressed or connected to the issues highlighted in the article?
SDG 8: Decent Work and Economic Growth
The article discusses the need for India to boost foreign direct investments (FDI) and improve ease of enforcing contracts to attract more investments. This aligns with SDG 8, which aims to promote sustained economic growth, full and productive employment, and decent work for all.
SDG 16: Peace, Justice, and Strong Institutions
The article highlights India’s ranking in ease of enforcing contracts, indicating a need for improvements in the legal system and access to justice. This relates to SDG 16, which focuses on promoting peaceful and inclusive societies, providing access to justice for all, and building effective, accountable, and inclusive institutions at all levels.
SDG 17: Partnerships for the Goals
The article mentions India’s negotiations of bilateral investment treaties (BITs) with trade partners to boost FDI inflows. This demonstrates a focus on partnerships and collaboration to achieve economic growth and development, aligning with SDG 17.
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 percent gross domestic product growth per annum in the least developed countries
The article mentions that India experienced a golden era of FDI inflows during 2014-23, indicating sustained economic growth. This aligns with Target 8.1 of SDG 8.
Target 16.3: Promote the rule of law at the national and international levels and ensure equal access to justice for all
The article highlights India’s low ranking in ease of enforcing contracts and the need for improvement in resolving investment-related legal disputes. This relates to Target 16.3 of SDG 16, which aims to promote the rule of law and ensure equal access to justice.
Target 17.17: Encourage and promote effective public, public-private, and civil society partnerships, building on the experience and resourcing strategies of partnerships
The article mentions India’s negotiations of BITs with trade partners to boost FDI inflows, indicating a focus on partnerships and collaborations. This aligns with Target 17.17 of SDG 17, which emphasizes the importance of effective partnerships for achieving sustainable development.
3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?
The article provides indicators that can be used to measure progress towards the identified targets:
– Indicator: FDI inflow during 2014-23 was $596 billion, marking a golden era.
This indicator reflects progress towards Target 8.1 of SDG 8, as it demonstrates sustained economic growth and FDI inflows.
– Indicator: India ranked 163 out of 190 countries in ease of enforcing contracts, taking 1,445 days and 31 per cent of the claim value for dispute resolution.
This indicator reflects progress towards Target 16.3 of SDG 16, as it highlights the need for improvements in the rule of law and access to justice.
– Indicator: Negotiating bilateral investment treaties with foreign partners to boost FDI inflows.
This indicator reflects progress towards Target 17.17 of SDG 17, as it demonstrates efforts to promote effective partnerships and collaborations for economic growth.
4. 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 percent gross domestic product growth per annum in the least developed countries | Indicator: FDI inflow during 2014-23 was $596 billion, marking a golden era |
| 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: India ranked 163 out of 190 countries in ease of enforcing contracts, taking 1,445 days and 31 per cent of the claim value for dispute resolution |
| SDG 17: Partnerships for the Goals | Target 17.17: Encourage and promote effective public, public-private, and civil society partnerships, building on the experience and resourcing strategies of partnerships | Indicator: Negotiating bilateral investment treaties with foreign partners to boost FDI inflows |
Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.
Source: indianexpress.com
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