India wants to update its treaties with 47 countries in line with the current economic situation. After being dragged for international arbitration by many investors, it seeks to ensure local judicial remedies are exhausted before involving an arbitrator. Tax issues will be left out of the new pacts. On completion of 10 years, treaties will lapse.
India seeks to nullify existing bilateral investment agreements with 47 nations and sign new treaties with them. There are treaties which are deemed obsolete or irrelevant given the current economic scenario in India and across the world. A model draft for the same has been drawn up by the government, which will be tweaked according to each country.
The Narendra Modi-government wants to ensure it is mandatory for foreign investors to exhaust the local judicial process before taking cases to international arbitrators. It is also going to include a clause to ensure the treaty will lapse after a period of 10 years, paving way for a new treaty given the future economic conditions.
Recently signed treaties by the Indian government are expected to be revised later to include similar provisions. For instance, India recently inked a pact with the United Arab Emirates; the terms and conditions will continue.
India has been dragged to international arbitration panels by 17 countries in the last two years. Companies which have taken India to court include Germany’s Deutsche Telekom, Vodafone from the UK, Russian firm Sistema, Children’s Investment Fund and TCI Cyprus Holdings.
According to the Economic Times, the new treaties will exclude government procurement, taxation, subsidies, compulsory licenses and national security.