India's Model Bilateral Investment Treaty (BIT) Review

India's Model Bilateral Investment Treaty (BIT) Review: Protecting Indian Overseas Investments While Attracting Global Capital

(Based on Article in Indian Express dated 8th August 2026)

Introduction

India is undertaking a comprehensive review of its Model Bilateral Investment Treaty (Model BIT) to align its investment policy with the changing realities of the global economy. Traditionally, India's BITs focused primarily on protecting foreign investors investing in India. However, with Indian companies increasingly investing abroad, the Government is now seeking to ensure that India's overseas investors also receive adequate legal protection in foreign jurisdictions.

The revised Model BIT, expected to be considered by the Union Cabinet, seeks to strike a careful balance between protecting national regulatory space, encouraging foreign investment, safeguarding Indian outward investments, and strengthening India's position in global investment negotiations. The discussion below is based on official Government statements, Ministry of Finance publications, Department of Economic Affairs (DEA) documents, Government press releases and publicly available policy documents.

I. Background and Historical Evolution

Bilateral Investment Treaties (BITs)

A Bilateral Investment Treaty is an international agreement between two countries that establishes legally binding rules for promoting and protecting investments made by investors of one country in the territory of the other.

Typical protections include: