India’s Proposed New Bilateral Investment Treaty (BIT) Framework [Prelims Bits]

02 Sep 2026

Tags: Prelims   Economic and Social Development

Source: The Hindu

Context: India is considering a re-modelling of its BIT framework, including a narrowly defined qualified Most-Favoured-Nation (MFN) provision to balance investor protection with India’s regulatory interests.

• Qualified MFN: May give foreign investors specified additional benefits available under India’s other treaties, but does not permit broad claims based on third-country treaties.
• MFN rule: India’s 2015 Model BIT removed the earlier open-ended MFN approach.
• Investor–State Dispute Settlement (ISDS): Proposed domestic litigation window may be reduced from 5 years → 1 year.
• Post-BIT protection: Proposed to increase from 5 years → 10 years after treaty termination/expiry.
• Definition of investment: Proposed to expand to include portfolio investments and other financial assets.
• Third-party litigation funding: Proposed to be prohibited.
• Fair and Equitable Treatment (FET): The open-ended FET standard of the earlier framework will not be restored.
• MFN principle: Generally requires a country to accord investors/trading partners treatment no less favourable than that given to comparable investors/partners from another country. A qualified MFN limits this obligation to specifically defined circumstances.