India-UK FTA Wrapped Up But BIT Talks Continue

A key part of India's trade deal with the UK — the Bilateral Investment Treaty — is yet to be closed, even as the free trade agreement and double contribution convention agreement are signed and sealed.

Negotiations with the UK were taking place on three separate tracks in a parallel fashion. Earlier, there were plans to conclude all three together, but certain outstanding issues in the BIT are yet to be resolved, according to sources. NDTV Profit had earlier reported that issues that may need some more discussions included sunset clause.

Even in PM Modi's announcement of conclusion of talks for the free trade agreement and social security pact yesterday, mentions of the BIT were missing.

Such treaties are deals between two countries that aim to promote and protect investments made by investors from one country in the other's geography.

In the India-UK context, BITs are also important given the history of international arbitration disputes that the Indian government has lost to foreign companies such as Cairn Energy, Vodafone and Devas Mauritius. The business interests of these companies were protected due to such treaties, after India slapped retrospective tax demands.