BILATERAL INVESTMENT TREATIES – HAS INDIA TAKEN IT A ‘BIT’ TOO FAR?

Abstract Why do countries exchange sovereignty for business through investment treaties? Is there no other way? Past experience with such treaties have some advocating re-negotiation and rationalization of existing regimes, or even moving away from such regimes altogether, especially in developing countries like ours. This would involve an economic analysis, a reconsideration of treaty language and the resulting balance between international and domestic law, aimed at harmonizing restrictions on sovereignty with economic policy. This Article seeks to explore, some of the means to this end. The fulcrum of this article is India’s new Model BIT. At first blush, it seems reactionary, protectionist and possibly, that we’ve taken it a bit too far. It does not seem either balanced or tempered and reflects India’s focus on exclusion of liability and its eagerness to regulate. Whilst one cannot criticize this draft from the standpoint of strict legal protection, it may fail on its economic (de)merits. In this light, the author compares the new Model to its predecessor and India’s concluded treaties. The author also considers the approach of other countries in trying to find a middle ground between the current regime, which potentially exposes India to huge risks, and the proposed regime, which will protect India from BIT exposure, possibly by preventing investment in the first place.