India is an attractive destination for foreign investment (among the top 10 investment-importing countries) and is increasingly growing as an outward investor (among the top 20 investment-exporting countries).[1] Since its economy opened up, India has been a willing participant in the international investment treaty regime. It signed its first bilateral investment treaty in 1994[2] and has been relatively active in signing bilateral investment treaties (BIT).
Like most older generation BITs, these treaties were negotiated to promote foreign investment and, in line with the existing BIT models, had mechanisms for investment protection and dispute resolution, including investor-state arbitration. These mechanisms allowed foreign investors to seek recourse to international arbitration where disputes arose. While India has largely benefited from foreign investments, it has also faced challenges in navigating the complexities inherent in the investment treaty regime manifested through the investor-state dispute settlement (ISDS) system.
India has been sued 26 times, surpassed by only 11 other countries.[3] Of these, India has lost five times while winning two times, with the rest of the disputes settled, discontinued, or pending.[4] These negative experiences, which have been a major headache for most host states, especially in the developing world, have inflicted financial burdens, including threats to sovereign assets abroad, but also provide India with an opportunity to relook its policies as an emerging economy that wants to be counted as a
— source madhyam.org.in | Tathagata Choudhury | Aug 17, 2023