The bilateral investment treaty (BIT) signed between India and U.A.E. in February this year has come into effect from August 31, 2024, says the finance ministry. The new treaty allows a continuity of investment protection for investors in both countries.
The finance ministry says the new treaty will protect investors of both countries as the earlier bilateral investment promotion and protection agreement (BIPPA) between the two countries expired on September 12, 2024.
U.A.E. is the seventh largest with a share of 3% in the total foreign direct investment (FDI) received in India, with a cumulative investment of around $19 billion from April 2000 to June 2024.
India also makes 5% of its total overseas direct investments in the U.A.E. at $15.26 billion from April 2000 to August 2024. “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,” says a finance ministry statement.
The treaty will allow increased bilateral investments. “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.”
India-U.A.E. BIT 2024 Features:
Closed asset-based definition of investment with coverage of portfolio investment
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
Scope carve out for measures such as those related to taxation, local government, government procurement, subsidies or grants and compulsory licence
Investor-state dispute settlement (ISDS) through arbitration with mandatory exhaustion of local remedies for 3 years
General and security exceptions
Right to regulate for state
No investor claim in case investments are involved with corruption, fraud, round-tripping, etc
Provision on national treatment
The treaty provides for protection to investments from expropriation and provides for transparency, transfers and compensation for losses.
India’s exports during April-August 2024 stood at $328.86 billion, up 5.35%. Total imports were at $375.33 billion, a 7.20% growth, in the same period. Merchandise exports were at $34.71 billion as compared to $38.28 billion a year ago. Merchandise imports were $64.36 billion, up from $62.30 billion in the year-ago period.
In services, the estimated value of exports was $30.69 billion compared to $28.71 billion in August 2023. Services imports for August 2024 were $15.70 billion vs $15.09 billion in August 2023. While the merchandise trade deficit in April-August 2024 was $116.64 billion, up from $99.16 billion in April-August 2023, the services trade surplus was $70.18 billion as compared to $61.22 billion in the year-ago period.
