India’s Bilateral Investment Treaties

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Op-Ed Commentary: Chris Devonshire-Ellis

Jul. 2 – Bilateral investment treaties (BITs) are an oft-ignored part of bilateral trade, commerce and investment between two countries, and have often been superseded by other, more detailed trade agreements such as double taxation agreements (DTAs). Nonetheless, for many countries, BIT agreements remain the only basis on which to mutually and legally recognize the protocols and parameters of bilateral investments, and particularly so in the case of many lesser developed countries. For such countries, BITs may be the only form of agreement in place with major trading powers such as India, China, and even the United States.

The purpose of a BIT between two countries is reciprocal encouragement, promotion and protection of investments in each other’s territories by companies based in either country. These treaties typically cover the following areas:

  • Scope and definition of investment;
  • Admission and establishment;
  • National treatment;
  • Most-favored-nation treatment;
  • Fair and equitable treatment;
  • Compensation in the event of expropriation or damage to the investment;
  • Guarantees of free transfers of funds; and
  • Dispute settlement mechanisms, both state-state and investor-state.

India has been entering into BITs with other countries for the past three decades, many of these with either its historical trading partners in Europe, or with countries with a large Indian Diaspora. India has nearly 40 BITs in place, and continues to use them in its bilateral relationships. For example, while the BIT signed between India and Germany was ratified back in 1995, others still continue to be put into position. The recent BIT agreement between India and Nepal was negotiated as recently as 2011.

India has the following BIT agreements in place:


  • Austria
  • Belgium & Luxembourg Economic Union
  • Bosnia
  • Croatia
  • Czech Republic
  • Denmark
  • France
  • Germany
  • Greece
  • Hungary
  • Italy
  • Netherlands
  • Portugal
  • Slovenia
  • Spain
  • Sweden
  • Switzerland
  • Turkey
  • United Kingdom

South and Central America

  • Argentina
  • Colombia
  • Mexico

Middle East

  • Oman


  • Egypt
  • Ghana
  • Mauritius
  • Morocco
  • Mozambique

Asia & Oceania

  • Australia
  • Indonesia
  • Kazakhstan
  • Nepal
  • South Korea
  • Sri Lanka
  • Thailand

The longevity of a BIT goes some way to explaining their usefulness, and investors into India from other countries should be aware of the contents of these documents. These documents may be downloaded in full, on a complimentary basis, from the Dezan Shira & Associates Online Resource Library.

While BIT agreements as a general rule of thumb may now be purely a matter of academic or historical interest, for some countries (such as Cambodia, which currently has zero DTAs in place) these treaties provide a useful mechanism for understanding the legal, tax and dispute resolution mechanisms for investors into the country. As such, BITs are a useful starting point to clarify legal and tax treatments under bilaterally agreed conditions and should be understood as a bilateral document of first resort when understanding the investment environment, and protection mechanisms that India offers its many trading partners. These tend to be of particular importance for understanding the rights of companies investing from or into emerging markets throughout Asia, Africa, Latin America and the Middle East.

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Chris Devonshire-Ellis is the founding partner of Dezan Shira & Associates. Established in 1992, the firm provides foreign direct investment advice into Asia on behalf of companies around the world, including SMEs from emerging markets within Africa, the Middle East, Latin America and emerging Asia. Please email for assistance or visit the firm’s website at for more information.

ASEAN Briefing contains details of double tax agreements, free trade agreements, and bilateral investment treaties between ASEAN, its members, and other countries around the world. ASEAN Briefing is a library source for researching tax and trade treaties, and is an essential guide for cross border tax planning. The site also includes news and treaty updates on ASEAN, China, India, the United States and Europe.