Archive · 1 Oct 2026
India-Saudi Investment Pact Cuts Arbitration Remedy Window to Two Years
India and Saudi Arabia agreed to a new investment protection pact.
It helps protect companies from each country when they invest in the other.
Investors must first use local courts for two years before seeking international arbitration.
This is shorter than the five-year period in India’s 2015 framework.
The agreement also promises fair treatment and allows investors to transfer funds.
At the same time, it says India can still make rules to protect the public interest.
India wants the pact to encourage more foreign investment.
Saudi Arabia has previously expressed interest in investing about $100 billion in India.
India approved a Bilateral Investment Promotion and Protection Agreement with Saudi Arabia on Wednesday.
The pact requires investors to pursue domestic legal remedies for two years before starting international arbitration.
The agreement includes protections covering investment treatment, non-discrimination, expropriation and free transfers.
India has shortened similar local-remedy requirements from five years to three years for investments from the United Arab Emirates and Israel.
The pact is intended to attract investment and support deeper economic cooperation, as Saudi Arabia has indicated plans to invest about $100 billion in India.
- Who
- The governments of India and Saudi Arabia, along with investors from both countries.
- What
- India approved a Bilateral Investment Promotion and Protection Agreement that sets a two-year domestic-remedy period before international arbitration.
- When
- The agreement was approved on Wednesday; the articles do not specify the date.
- Where
- The agreement applies to investments made in India and Saudi Arabia.
- Why
- To provide legal certainty, protect investors, attract capital and deepen economic cooperation between the two countries.
Investor Access
State Policy Space
Arbitration and regulation
Investor Access
Investors will have a faster route to the Investor-State Dispute Settlement mechanism because they need to exhaust domestic remedies for two years rather than five.
State Policy Space
The agreement is described as balancing investor protection with the state’s right to regulate in the public interest and preserving policy space for sovereign governance.
- Agreement
- Bilateral Investment Promotion and Protection Agreement between India and Saudi Arabia
- Local-remedy period
- Two years before investors can initiate international arbitration
- Previous Indian framework
- The 2015 framework required five years of domestic legal remedies
- Comparable recent changes
- The period was reduced to three years for investments from the United Arab Emirates and Israel
- Saudi investment interest
- Saudi Arabia has previously indicated an intention to invest about $100 billion in India
- Saudi sovereign wealth fund
- The Public Investment Fund has assets worth about $1.2 trillion, according to the article
- Investor protections
- The pact covers investment treatment, non-discrimination, expropriation and free transfers