UPSC Prelims Practice Questions — A BIT of a reset, with a wider debate
Q1. Negotiations, inter-ministerial coordination and conclusion of India's Bilateral Investment Treaties, as well as the investment chapter of agreements such as the India–EU Broad-based Trade and Investment Agreement, are handled by which one of the following?
- A. The Foreign Trade Policy Division of the Department of Commerce, Ministry of Commerce and Industry
- B. The Legal and Treaties Division of the Ministry of External Affairs, Government of India
- C. The Investment Division of the Department of Economic Affairs, Ministry of Finance
- D. The Foreign Investment Facilitation wing of the Department for Promotion of Industry and Internal Trade
Q2. With reference to the difference between India's earlier Model Bilateral Investment Treaty framework and the Model Text approved in 2015, consider the following statements:
1. The bilateral investment treaties India had signed with 83 countries up to 2015 were concluded on the 1993 Model BIT template.
2. The 2015 Model Text replaced the asset-based definition of investment with an enterprise-based definition.
3. The 2015 Model Text empowers an arbitral tribunal to order restitution of property in addition to awarding monetary compensation.
Which of the statements given above is/are correct?
- The bilateral investment treaties India had signed with 83 countries up to 2015 were concluded on the 1993 Model BIT template.
- The 2015 Model Text replaced the asset-based definition of investment with an enterprise-based definition.
- The 2015 Model Text empowers an arbitral tribunal to order restitution of property in addition to awarding monetary compensation.
- A. 1 and 3 only
- B. 2 and 3 only
- C. 1 and 2 only
- D. 1, 2 and 3
Q3. With reference to the Constitution of India, Article 253 provides for which one of the following?
- A. The obligation of the State to endeavour to foster respect for international law and treaty obligations in the dealings of organised peoples with one another
- B. The power of Parliament to make any law for the whole or any part of the territory of India for implementing any treaty, agreement or convention with any other country
- C. The power of the President to refer a question of law of public importance arising out of a treaty to the Supreme Court for its advisory opinion
- D. The extension of the executive power of the Union to the exercise of rights, authority and jurisdiction exercisable by virtue of any treaty or agreement
Q4. As recorded by the Standing Committee on External Affairs, India's bilateral investment treaty practice after the adoption of the revised Model Text has been dominated by which one of the following outcomes?
- A. Renegotiation of 58 existing treaties through joint interpretative statements, with no terminations
- B. Conversion of 37 existing treaties into investment chapters of comprehensive economic agreements
- C. Suspension of 83 existing treaties pending their ratification by both Houses of Parliament
- D. Termination of 77 older treaties, with only four new agreements signed
Q5. The official announcement that the current Model Bilateral Investment Treaty would be revamped 'to encourage sustained foreign investment' was made in which one of the following?
- A. The Union Budget 2025-26 speech of the Union Finance Minister
- B. The Economic Survey 2024-25 tabled in Parliament ahead of the Union Budget
- C. The Union Cabinet's approval for the India–United Arab Emirates Bilateral Investment Treaty, February 2024
- D. The Standing Committee on External Affairs report on India and Bilateral Investment Treaties, 2021
Q6. With reference to the ongoing revision of India's Model Bilateral Investment Treaty, consider the following statements:
1. The Budget 2025-26 speech recorded that Bilateral Investment Treaties had been signed with two countries during 2024.
2. The revamp of the model treaty was announced as being in the spirit of 'first develop India'.
3. Under the Constitution, every Bilateral Investment Treaty signed by India must necessarily be ratified by both Houses of Parliament before it can enter into force.
4. The Model Text that the present exercise seeks to replace was approved by the Union Cabinet in December 2015.
Which of the statements given above is/are correct?
- The Budget 2025-26 speech recorded that Bilateral Investment Treaties had been signed with two countries during 2024.
- The revamp of the model treaty was announced as being in the spirit of 'first develop India'.
- Under the Constitution, every Bilateral Investment Treaty signed by India must necessarily be ratified by both Houses of Parliament before it can enter into force.
- The Model Text that the present exercise seeks to replace was approved by the Union Cabinet in December 2015.
- A. 1, 2 and 3
- B. 1, 2 and 4
- C. 2, 3 and 4
- D. 1 and 4 only
Q7. In which year was the first arbitral award under a bilateral investment treaty rendered against India, in the claim brought by White Industries?
- A. 2003
- B. 2011
- C. 2015
- D. 2016
Q8. On what legal basis did the claimant succeed in the White Industries arbitration against India?
- A. The national treatment clause of the India–Kuwait treaty, used to import the full protection and security standard from the India–Australia treaty
- B. The fair and equitable treatment clause of the India–Australia treaty, read along with the denial-of-benefits provision of the India–Kuwait treaty
- C. The expropriation clause of the India–Australia treaty, read along with the umbrella clause of the India–Mauritius treaty
- D. The most-favoured-nation clause of the India–Australia treaty, used to import the 'effective means' standard from the India–Kuwait treaty
Q9. With reference to the investment treaties India has concluded since the adoption of the 2015 Model Text, consider the following statements:
1. The India–United Arab Emirates Bilateral Investment Treaty was signed in February 2024 and entered into force in August 2024.
2. India and Uzbekistan signed a Bilateral Investment Treaty at Tashkent in September 2024.
3. The India–Kyrgyz Republic Bilateral Investment Treaty retains the most-favoured-nation clause in its entirety.
4. India's Bilateral Investment Agreement with Israel was signed at Tel Aviv by the Foreign Ministers of the two countries.
Which of the statements given above is/are NOT correct?
- The India–United Arab Emirates Bilateral Investment Treaty was signed in February 2024 and entered into force in August 2024.
- India and Uzbekistan signed a Bilateral Investment Treaty at Tashkent in September 2024.
- The India–Kyrgyz Republic Bilateral Investment Treaty retains the most-favoured-nation clause in its entirety.
- India's Bilateral Investment Agreement with Israel was signed at Tel Aviv by the Foreign Ministers of the two countries.
- A. 1 and 3
- B. 2 and 4
- C. 3 and 4
- D. 4 only
Q10. While the negotiation of India's investment treaties rests with the Department of Economic Affairs, the treaty signature and ratification formalities and the maintenance of the official Indian Treaties Database rest with which one of the following?
- A. The Ministry of External Affairs, through its Legal and Treaties Division
- B. The Legislative Department of the Ministry of Law and Justice
- C. The Department for Promotion of Industry and Internal Trade
- D. The Department of Commerce, Ministry of Commerce and Industry
Q11. Under the Investor-State Dispute Settlement provision of the India–United Arab Emirates Bilateral Investment Treaty, an aggrieved investor must first pursue the claim for three years before which of the following, prior to commencing international arbitration?
- A. The Permanent Court of Arbitration at The Hague, under its investor-State rules
- B. The domestic courts, administrative bodies and tribunals of the host State
- C. The International Centre for Settlement of Investment Disputes of the World Bank
- D. A joint committee of the two Governments constituted under the treaty itself
Q12. Consider the following negotiations: the India–European Union Broad-based Trade and Investment Agreement; the India–Thailand Comprehensive Economic Cooperation Agreement; the India–ASEAN Investment Agreement; and the India–Australia Comprehensive Economic Cooperation Agreement. In how many of these does the investment chapter fall within the mandate of the Investment Division of the Department of Economic Affairs?
- A. Only one
- B. Only two
- C. Only three
- D. All four