New India-UAE bilateral treaty to ensure continuity of investment protection: Centre

New Delhi, Oct 7: The enforcement of the new Bilateral Investment Treaty (BIT) between India and the United Arab Emirates will give continuity of investment protection to people from both the countries, the government said on Monday. The earlier Bilateral Investment Promotion and Protection Agreement (BIPPA) between India and the UAE expired on September 12.

The UAE is the seventh largest with a share of 3 per cent in the total foreign direct investment (FDI) received in India, with cumulative investment of approximately $19 billion from April 2000 to June 2024. India also made 5 per cent of its total overseas direct investments in the UAE to the tune of $15.26 billion from the April 2000 August 2024 period.

According to the Ministry of Finance, the ‘India–UAE BIT 2024’ is expected to increase the comfort level and boost the confidence of the investors by assuring minimum standard of treatment and non-discrimination while providing for an independent forum for dispute settlement by arbitration. “However, while providing investor and investment protection, balance has been maintained with regard to State’s right to regulate and, thereby, provides adequate policy space,” the minister added.

Some of the key features of India-UAE BIT 2024 are closed asset based definition of investment with coverage of portfolio investment and treatment of investment with obligation for no denial of justice, no fundamental breach of due process, no targeted discrimination and no manifestly abusive or arbitrary treatment.

Among other features are Investor-State Dispute Settlement (ISDS) through arbitration with mandatory exhaustion of local remedies for three years and no investor claim in case investments are involved with corruption, fraud, round-tripping, etc. The government said that the signing and enforcement of the BIT reflects both nations' shared commitment towards enhancing economic cooperation and creating a more robust and resilient investment environment.

Meanwhile, the bilateral trade between India and the UAE is on track to surpass the $100 billion target well before 2030, underscored by a notable 12.7 per cent year-on-year increase. The UAE remains India's third-largest trading partner and second largest export destination (FY2022-23), according to a latest report by Primus Partners.