Discuss the key departures of India's 2015 Model Bilateral Investment Treaty from its predecessor. To what extent has it achieved its stated objectives?

Broadly worded protections in India's 1993 Model BIT (amended 2003) exposed the state to a wave of investor claims, prompting the Union Cabinet to approve a new Model Text for the Indian BIT in December 2015 [1]. It marked a decisive tilt from investor protection toward the sovereign right to regulate — an objective achieved only partially.

Key departures from the predecessor

• Enterprise-based definition of investment replaces the earlier expansive asset-based definition, excluding portfolio holdings and speculative claims [1].
• ISDS recast: investors must exhaust local remedies before commencing international arbitration, reversing the earlier direct-access model [1].
• Remedy narrowed: tribunals may award monetary compensation alone, not injunctive relief against sovereign measures [1].
• Policy carve-outs: taxation, government procurement, subsidies, compulsory licences and national security are excluded to preserve regulatory authority [1].
• Standards diluted: the open-ended fair-and-equitable-treatment and MFN clauses give way to a narrower, due-process-based non-discrimination guarantee [1].

Extent of achievement — substantial on defence, weak on attraction

Objectives met:

• It became the template for resetting legacy obligations — India terminated old BITs with 77 countries, leaving only six legacy agreements in force [2].
• Litigation exposure narrowed: of 37 notices of dispute, only one ended in India actually paying an arbitral award [2].
• It has yielded working treaties, notably the India–UAE BIT, in force since 2024 [4].

Objectives unmet:

• Only four new BITs/investment agreements were signed post-2015 despite negotiations with 37 partners — a pace the Parliamentary Standing Committee found inadequate [2].
• Capital-exporting partners read the text as excessively state-protective, leaving a protection vacuum after termination.
• Government itself conceded the gap: Budget 2025-26 announced the model would be revamped and made more investor-friendly in the spirit of 'first develop India' [3].

The 2015 model succeeded in shielding regulatory sovereignty but under-delivered on treaty coverage. A recalibrated model — pairing preserved policy space with faster, pre-arbitration dispute settlement and domestic arbitration capacity [2] — can restore investor confidence without surrendering the right to regulate.