Archive · 8 Aug 2026
India Set to Revise BIT Framework to Attract Foreign Capital
India is a big country that wants companies from other countries to come and build businesses here.
Money that foreign companies bring in is called foreign direct investment, or FDI.
Lately, the amount of this money coming to India has dropped a lot.
India has special agreements called investment treaties that protect foreign investors.
However, the current rules are very strict: an unhappy investor had to try Indian courts for five years before going to an international court.
That made it hard for India to sign many new agreements.
So India is writing new, friendlier rules that could shorten the waiting time to two years.
The government hopes the new rules will attract more foreign money and help India's economy grow.
The new rules also need to protect Indian companies that invest in other countries.
India also wants to use these rules to make new agreements with the United Kingdom and the European Union.
India is overhauling its model Bilateral Investment Treaty (BIT) framework to attract more foreign capital amid a slowdown in foreign direct investment (FDI) inflows.
Department of Economic Affairs Secretary Anuradha Thakur said the review is nearing completion and the revised framework may soon be placed before the Union Cabinet for approval.
Reserve Bank of India data show average annual net FDI inflows fell from about $40 billion between FY20 and FY22 to $7.65 billion in FY26.
The 2015 model BIT requires foreign investors to exhaust domestic legal remedies for up to five years before international arbitration, a period officials say could be cut to two years.
The revised framework aims to balance investor protection with India's regulatory interests and support investment treaty talks with the UK and the European Union.
- Who
- Department of Economic Affairs Secretary Anuradha Thakur, Indian government officials, and trade policy expert Ajay Srivastava of the Global Trade Research Initiative.
- What
- India is revising its model Bilateral Investment Treaty framework to attract more foreign capital and ease investor concerns.
- When
- The review is nearing completion, with the revised framework expected to go before the Union Cabinet soon; data are cited through FY26.
- Where
- India.
- Why
- A sharp slowdown in net FDI inflows, from about $40 billion annually between FY20 and FY22 to $7.65 billion in FY26, has made attracting overseas capital a greater policy priority.
- Framework under review
- Model Bilateral Investment Treaty (BIT)
- Status
- Review nearing completion; Union Cabinet approval expected soon
- Net FDI average FY20-FY22
- About $40 billion annually (RBI data)
- Net FDI in FY26
- $7.65 billion (RBI data)
- Current domestic litigation period
- Up to five years
- Proposed domestic litigation period
- Potentially two years
- Existing BIT introduced
- 2015
- Treaty negotiation targets
- UK and European Union