India and Switzerland are Pursuing a Bilateral Investment Treaty

India and Switzerland are Pursuing a Bilateral Investment Treaty

Following the $100 billion investment pledge made in the India-EU Free Trade Association (EFTA) trade deal, Switzerland is now advocating for a new bilateral investment treaty (BIT) with India and a “red carpet” for investors from the four-nation bloc to reach the target.

During a bilateral meeting between the officials of the Indian and Swiss finance ministries earlier this year, the topic of the investment treaty- a sensitive area with most nations- was brought up, according to sources.

Most developed countries find the model treaty an intolerable step by the Indian government because they believe that it restricts foreign investors’ capacity to seek redress and that the Indian system moves very slowly to resolve disputes.

Not only does the UK seek changes to the model BIT as a part of the trade agreement, it is negotiating with India, but it also has concerns about it with Switzerland and the other three EFTA members.

This model agreement was implemented in response to a loss that the Indian government suffered in arbitration proceedings brought by foreign corporations and disputes arising from the Supreme Court’s 2G ruling, which nullified the telecom licenses issued by A Raja, the DMK’s nominee for telecom minister, during the UPA.

The Indian side is unlikely to make any concessions currently, even though both nations are “taking stock,” as it sees the big market and robust economic growth in the upcoming years as an alluring offer for foreign investors.

Every EFTA member will need to negotiate a different Bilateral Investment Treaty (BIT) with India.

Regarding the red carpet, the goal of the commitment over 15 years was to facilitate investments, which an EFTA desk will assist the European countries with.

According to insiders, Switzerland also made a separate case for concessions for participants in the financial industry, namely insurance companies, during the conference last month.

According to the sources, the Swiss side argued that relaxations would increase interest in India and aid in achieving the investment objectives.