8 October 2024 : PIB Summary For UPSC

1. Bilateral Investment Treaty between India and the United Arab Emirates, comes into effect

(Source – https://pib.gov.in/PressReleseDetail.aspx?PRID=2062692&reg=3&lang=1 )

Context

The India-UAE Bilateral Investment Treaty (BIT), effective from August 31, 2024, replaces the expired BIPPA, ensuring investment protection and fostering economic cooperation. This treaty aims to enhance bilateral investments by boosting investor confidence and providing a clear dispute resolution framework.

Present Status:

• The Bilateral Investment Treaty (BIT) between India and the UAE was signed on February 13, 2024, in Abu Dhabi.
• The BIT came into effect on August 31, 2024, continuing investment protection after the expiration of the previous Bilateral Investment Promotion and Protection Agreement (BIPPA) on September 12, 2024.
• The UAE accounts for 3% of total Foreign Direct Investment (FDI) in India, with approximately $19 billion invested from April 2000 to June 2024.
• India has invested about $15.26 billion (5% of total Overseas Direct Investments) in the UAE from April 2000 to August 2024.

How This BIT Aims to Increase Bilateral Investments?

• The BIT aims to boost investor confidence by ensuring minimum standards of treatment and non-discrimination.
• It provides an independent forum for dispute resolution through arbitration while balancing the state’s regulatory rights.
• Key features include a closed asset-based definition of investment, obligations against denial of justice, and exceptions for taxation and local governance.
• The treaty protects investments from expropriation, emphasises transparency, and mandates the exhaustion of local remedies for three years in dispute cases.