India reviewing bilateral investment treaty model, official says

India is reviewing its model bilateral investment treaty to attract more foreign capital, with the cabinet set to decide on changes soon, a senior finance ministry official said.

(Adds details in paragraph 2-8) By Nikunj Ohri

NEW DELHI, ​Aug 7 - India is reviewing ​its model bilateral investment treaty and ‌the country's ​cabinet will decide on changes soon, a senior finance ministry official said on Friday, as the Asian nation ‌seeks to attract more foreign capital from partner nations. The review comes as India negotiates new bilateral investment pacts with developed nations such as the United Kingdom, where progress towards ‌an agreement has been slow in part due to some provisions in the ‌nation's treaty framework.

For instance, the nation's 2016 bilateral investment treaty framework requires foreign investors to exhaust domestic legal remedies for five years before seeking 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," Anuradha Thakur, India's economic affairs secretary, said at an event in New ​Delhi.

"It is work in progress. Consultations are on," she said. Indian industry ⁠bodies have also been lobbying for faster dispute resolution for investors and easier working conditions for foreign firms ⁠to ​help the country compete for global capital.

India has received lower net foreign direct investment in recent years versus other Asian nations, at $7.7 billion in the year ⁠ended March 2026, compared to $20.2 billion for Vietnam and $24.2 billion for Indonesia in ⁠2024. In the last ⁠couple of years, India secured bilateral investment treaties with Israel and the United Arab Emirates, while talks with other nations continue.