India Steps Up Bilateral Investment Treaty Push as New Framework Nears Approval

India is moving to expand its network of Bilateral Investment Treaties, or BITs, as the government works on a revised investment-protection framework designed to support foreign investment while preserving regulatory space for the country.

Union Finance and Corporate Affairs Minister Nirmala Sitharaman participated in the Munich Leaders Meeting in New Delhi on October 5, 2026, where investment partnerships, trade relations and the changing global economic environment formed part of the wider discussion. The Finance Ministry has separately been advancing economic and investment engagement with countries including Canada, Saudi Arabia and other major partners.

India Is Revising Its Bilateral Investment Treaty Model

The government has already confirmed that it is working on a revised model for bilateral investment treaties.

In the Union Budget 2025-26, the Finance Minister announced that India’s existing BIT framework would be revamped to make it more investor-friendly while supporting sustained foreign investment. The move marked an acknowledgement that the investment treaty architecture needed to evolve with changing global capital flows and India’s expanding role as both a destination and source of investment.

India has been negotiating investment agreements with foreign partners for several years, with the broader objective of creating greater predictability for investors while ensuring that treaty obligations do not unduly restrict legitimate domestic regulation.

Canada Has Re-Emerged as an Important Investment Partner

Canada has become one of the countries where bilateral economic engagement has regained momentum.

During Finance Minister Nirmala Sitharaman’s official visit to Canada in August 2026, the two sides launched their inaugural Economic and Financial Dialogue. Discussions covered macroeconomic developments, financial-sector cooperation, bilateral investment opportunities and the broader economic relationship.

The two countries have also been discussing cooperation in areas such as energy, critical minerals, technology, innovation and resilient supply chains.

A modern investment-protection framework could provide greater certainty for businesses operating across both markets and strengthen the financial pillar of the relationship.

Saudi Arabia Shows the Importance of Investment Protection

India’s economic engagement with Saudi Arabia has also become increasingly investment-driven.

The two countries have been working through the High-Level Task Force on Investment, which has examined projects across energy, petrochemicals, infrastructure, technology, manufacturing and other sectors. Both sides have previously expressed their intention to complete negotiations on a bilateral investment treaty.

Saudi Arabia has also committed substantial investment interest in India, making a modern and predictable investment-protection framework increasingly important as large projects move forward.

Why Bilateral Investment Treaties Matter

BITs establish rules governing how investments made by companies and individuals from one country are treated in another.

Such agreements typically address issues including fair treatment, protection against unlawful expropriation, transfer of investment-related funds and mechanisms for resolving disputes.

For investors, they can reduce uncertainty associated with large long-term commitments. For governments, carefully structured treaties can encourage investment while retaining the ability to regulate in areas such as public health, taxation, environmental protection and national security.

This balance has been central to India’s approach to reforming its investment treaty framework.

Global Trade Is Becoming More Bilateral

India’s renewed focus on investment treaties comes as international trade and investment relationships become increasingly shaped by bilateral and regional agreements.

Supply-chain resilience, strategic technologies, energy security and geopolitical risk are now influencing investment decisions alongside traditional considerations such as market size and labour costs.

For India, this makes bilateral investment agreements an increasingly important complement to free trade agreements, economic dialogues and strategic partnerships.

Investment Protection Could Support India’s Manufacturing Ambitions

A modern BIT network could also support India’s wider objective of attracting long-term capital into manufacturing, infrastructure, energy, technology and other priority sectors.

Foreign investment increasingly involves projects with long gestation periods and substantial capital commitments. Predictable legal and investment frameworks can therefore influence decisions on where companies establish manufacturing plants, research centres and regional operations.

India’s growing domestic market and expanding manufacturing base provide a strong economic foundation, while updated investment agreements can add another layer of confidence for international investors.

India’s Investment Diplomacy Is Entering a New Phase

The government’s decision to revise its bilateral investment treaty framework reflects a broader change in India’s economic engagement with major partners.

Rather than relying only on conventional trade agreements, India is increasingly combining investment protection, financial dialogue, strategic economic cooperation and sector-specific partnerships.

With negotiations and economic dialogues progressing across several countries, the next generation of BITs could become an important component of India’s efforts to attract productive capital while building deeper economic relationships with major global partners.

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References

• Press Information Bureau, Ministry of Finance, Government of India, Union Finance Minister Nirmala Sitharaman participates in the Munich Leaders Meeting, October 5, 2026.
• Press Information Bureau, Ministry of Finance, Government of India, Union Budget 2025-26: Current Model BIT to Be Revamped and Made More Investor-Friendly, February 1, 2025.
• Press Information Bureau, Ministry of Finance, Government of India, Union Finance Minister’s Official Visit to Canada and the United States, August 24, 2026.
• Press Information Bureau, Government of India, official releases on the India-Saudi Arabia High-Level Task Force on Investment and bilateral investment cooperation.

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