India is reviewing its model bilateral investment treaty as the government seeks to make the country more attractive to foreign investors and advance investment agreements with major trading partners.
Economic Affairs Secretary Anuradha Thakur said on Friday that consultations on potential changes are underway and that the Union Cabinet is expected to decide on revisions to the framework.
The review comes as India negotiates bilateral investment treaties with developed economies, including the United Kingdom. Progress on an India-UK investment agreement has been slow partly because of provisions contained in India’s existing treaty framework.
One significant provision in India’s 2016 model bilateral investment treaty requires foreign investors to pursue domestic legal remedies for five years before turning to international arbitration to resolve disputes.
“We are looking at what are red flags and we have a negative list. We will set that aside and see what is the maximum we can put out there,” Thakur said at an event in New Delhi.
“It is work in progress. Consultations are on,” she added.
Indian industry groups have also pushed the government to introduce faster mechanisms for resolving investment disputes and improve operating conditions for foreign companies as India competes with other Asian economies for global capital.
The push comes amid concerns over India’s recent foreign direct investment performance. Net FDI stood at $7.7 billion in the year ending March 2026. By comparison, Vietnam received $20.2 billion and Indonesia $24.2 billion in 2024.
Revising the model treaty could give New Delhi greater flexibility when negotiating investment protection agreements while addressing concerns raised by prospective investors over dispute-resolution procedures.
India has secured bilateral investment treaties with countries including the United Arab Emirates and Israel in recent years, while negotiations with other countries remain underway.
The latest review signals an effort by New Delhi to balance protections for the government’s regulatory authority with its broader goal of attracting greater levels of long-term foreign investment.
