Indian bilateral investment treaties need to strike a balance between foreign investor interests and those of the state.

Published: June 19, 2019

The GDP growth rate of India is at a five-year low while even the domestic consumption is falling. There is an apparent plunge in the business confidence index with the unemployment rate at a 45 year high. The whole picture is further pushed to doom as India�s former Chief Economic Adviser Arvind Subramanian has stated that the current GDP figure of India are overestimated.
The global supply chains are readjusting due to the trade war between US and China due to which there is an obvious contraction in FDI inflows. Most of these supply chains have shifted base to South Asian nations like Indonesia, Vietnam, Taiwan and Indonesia. India is not the first option for many firms for a number of reasons like poor infrastructure, rigid land and labour laws and a worsening crisis of the banks. There is also a lack of many economic reforms. It is said that the fall in FDI inflows recently despite Indian government�s initiatives to project it as the preferred investment destination and improved rankings of ease of doing business, are primarily due to its termination of many bilateral investment treaties with more than 60 countries which has projected its image as a country which does not respect international law. In addition, it�s a newly-adopted Model BIT in 2016 gives more priority to state interests over its protection to foreign investment.
India should adopt progressive capitalism. Indian BITs should also balance the interests of the foreign investor and also of the state.

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