Bilateral Investment Treaties - BITs
Q. What do Bilateral Investment Treaties primarily do?- Published on 04 May 16a. Protect investments made by an investor
b. Gives permission to a nation for investment in host nation
c. Gives permission to a nation to dictate host nations economic policy
d. None of the above
ANSWER: Protect investments made by an investor
- BITs protect investments made by an investor of one country into another by regulating the host nation’s treatment of the investment.
- In Budget, a proposal which has gone unnoticed, Union Finance Minister Arun Jaitley mooted the idea of a Centre-State investment agreement to be signed between the Centre and various State governments to ensure effective implementation of BITs or bilateral investment treaties.
- This will ensure fulfilment of the obligations of the State government under these treaties. States which opt to sign these Agreements will be seen as more attractive destinations by foreign investors.
- It is believed that the Centre will not make it mandatory for States to sign the agreement, but if any State chooses not to, this will be informed to India’s BIT partner.
