India will renegotiate existing bilateral investment treaties with other nations on the basis of the new model investment text that was cleared by the Cabinet in December last year, despite reservations by a few, commerce minister Nirmala Sitharaman said on Tuesday.
Her statement came amid concerns expressed by the EU recently on the fate of investment treaties between some of its members and India after the finance ministry had written to various countries, seeking a review of all such pacts within a year using the new investment text.
In a meeting with Sitharaman in Paris last week, EU trade commissioner Cecilia Malmström is learnt to have said individual members of the EU were not supposed to negotiate investment pacts with India, and any such negotiations should have to be between the European Commission (EC) and India.
However, Sitharaman said she told Malmstrom that India’s current FTA talks with the EU, which also includes the investment pillar, could address such concerns. And even within the the EC framework of law, there is a clause which enables individual member to negotiate and agree to changes in any agreement, Sitharaman told her EU counterpart.
Germany, Finland and Latvia (which is not strictly a part of the EU) have approached India on the way forward on such bilateral investment pacts. India had signed a total of 83 bilateral investment treaties (BITs) since 1994, including those with some of the EU members.
“Let them understand India will stick to the model investment treaty. The number of cases (or disputes) arising out of earlier investment treaties based on old text is shocking,” Sitharaman said.
According to the finance ministry, the text of the revised model BITs will be used for re-negotiation of existing BITs and negotiation of future BITs and investment chapters in Comprehensive Economic Cooperation Agreements/ Comprehensive Economic Partnership Agreements or Free Trade Agreements (FTAs).
The government had earlier said the new Indian Model BIT text will “provide appropriate protection to foreign investors in India and Indian investors in the foreign country, in the light of relevant international precedents and practices, while maintaining a balance between the investor’s rights and the Government obligations”.
Canada keen on pulses trade with India
After Myanmar, Canada is keen on helping India meet a domestic shortage of pulses, Sitharaman said. This means engagement with these nations may rise further to address the shortfall in pulses. India usually meets one-fifth of its demand through imports. Currently, it’s importing pulses from such countries, apart from Australia and Africa.