The 2016 Indian Model BIT

This chapter studies India’s 2016 Model BIT, which the Indian government claims aims to balance investment protection with the state’s right to regulate. The chapter shows that barring some of the provisions like full protection and security and monetary transfer provisions, the Model BIT has not succeeded in reconciling the interests of foreign investors with the state’s right to regulate. The Model BIT contains a narrow definition of investment; an extremely narrow FET-type provision; excludes MFN clause and taxation measures from the purview of the BIT. Furthermore, the expropriation provision in the Model BIT blurs the line between lawful and unlawful expropriation; and provides a complicated and sequential ISDS making it extremely difficult for a foreign investor to make effective use of it. Furthermore, although the attempt of the Model BIT is to reduce arbitral discretion, many provisions still remain undefined and vague, thereby continuing to grant significant discretion to ISDS arbitral tribunals.