India to keep tax out of bilateral financial investment treaty structure; Cabinet note prepared
By ET BureauLast Updated: Sep 26, 2026, 08:50:00 AM IST
Run-through
India will keep tax outside the structure of bilateral financial investment treaties, with a modified design BIT anticipated to be thought about by the Cabinet quickly. The Finance Ministry has actually distributed a note, while settlements with four-five nations are underway. Foreign financiers will likewise need to tire regional solutions before looking for arbitration.
India’s modified design BIT will leave out tax arrangements and need foreign financiers to tire regional solutions before starting treaty-based arbitration.
New Delhi: India will keep tax out of the ambit of bilateral financial investment treaties. The design text of the treaty is anticipated to be used up by the Cabinet quickly.
The financing ministry has actually flowed a note for the Cabinet’s factor to consider, an authorities stated, including that talks for bilateral financial investment treaties with four-five nations are underway. The existing Model BIT (bilateral financial investment treaty) was authorized by the Cabinet in 2015.
“No tax-related provisions will be part of the framework as we are not willing to give up our sovereign right to taxation,” the authorities stated, including that foreign financiers will likewise need to tire regional treatments before starting arbitration.
A bilateral financial investment treaty is a contract in between 2 nations to promote and secure financial investments made by their financiers in the other’s area. Under financial investment security treaties, financiers can take a sovereign federal government to arbitration.
The existing structure needs a foreign financier to await 5 years before starting a treaty-based arbitration versus India.
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