Bilateral Investment Treaty India-UAE
Source: PIB
GS II: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests
Overview
- News in Brief
- Bilateral Investment Treaty (BIT)
Why in the News?
The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, today has given its approval for signing and ratification of Bilateral Investment Treaty between the Government of the Republic of India and the Government of the United Arab Emirates.
News in Brief
- The Treaty is expected to improve the confidence of the investors.
- Especially large investors, increasing Foreign Investments and Overseas Direct Investment (ODI) opportunities.
- This may have a positive impact on employment generation.
- The approval is expected to increase investments in India.
- It is likely to help in realizing the goal of Atmanirbhar Bharat by encouraging domestic manufacturing, reducing import dependence, increasing exports etc.
About the Bilateral Investment Treaty (BIT)
- The rules and conditions for private investment by citizens and businesses of one state in another are outlined in an agreement between the two nations.
- It is a component of the United Nations Conference on Trade and Development’s International Investment Agreements (IIAs) (UNCTAD).
- It is anticipated to boost chances for foreign direct investment and investments, boost investor confidence, and positively affect the creation of jobs.
- These treaties are designed to protect foreign investments and promote economic cooperation between the signatory countries.
How Does Bilateral Investment Treaty Work?
- Investment Protection
- BITs typically include provisions that protect foreign investors from discriminatory treatment and unfair or arbitrary actions by the host government.
- These protections may include guarantees of fair and equitable treatment, protection against expropriation without adequate compensation, and provisions for the free transfer of funds related to investments.
- Dispute Resolution
- BITs often include mechanisms for the settlement of investment disputes between investors and the host government.
- This may involve procedures for negotiation, mediation, or arbitration, providing investors with a means to seek redress if they believe their rights under the treaty have been violated.
- Promotion of Investment
- BITs can also serve as a signal to investors that the signatory countries are committed to creating a favorable investment climate.
- By providing legal certainty and protection for investments, these treaties can help attract foreign investment and stimulate economic growth.
- Strengthening Economic Relations
- BITs can contribute to closer economic ties between the signatory countries by providing a framework for cooperation and investment.
- They can also help facilitate technology transfer, knowledge sharing, and other forms of economic exchange.
- Negotiation and Scope
- The terms of BITs are negotiated between the two countries involved, and the scope of the treaty can vary depending on the priorities and interests of the parties.
- Some BITs may focus primarily on investment protection, while others may include additional provisions related to environmental or labor standards, intellectual property rights, or other issues.
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