India-Kyrgyzstan Bilateral Investment Treaty Comes into Force
New Delhi : In a major step towards strengthening economic ties between India and Kyrgyzstan, the Bilateral Investment Treaty (BIT) signed in 2019 officially came into force today. Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman, and the Minister of Foreign Affairs of the Kyrgyz Republic, Mr. Zheenbek Kulubaev Moldokanovich, signed the Protocol and exchanged the Instrument of Ratification in New Delhi.
The treaty, originally signed on 14 June 2019 in Bishkek, replaces the previous agreement which had been in effect since 12 May 2000. The updated BIT aims to ensure continued protection and promotion of investments between the two countries, while aligning with modern global investment standards and India’s current policy framework.
Key Features of the India-Kyrgyz BIT:
Promotion of Sustainable Development: The preamble of the BIT emphasizes sustainable and inclusive growth.
Modern Definition of Investment: The treaty provides a precise, enterprise-based definition of assets, including a list of inclusions and exclusions that specify the characteristics of legitimate investments.
Policy Space for Governments: The agreement excludes critical matters such as local governance, government procurement, taxation, public services, and compulsory licensing, enabling both nations to retain regulatory autonomy.
Balanced Treatment Framework: Core elements of investment treatment, such as national treatment and protection against expropriation, are clearly defined based on customary international law.
Removal of MFN Clause: In a significant move, the BIT excludes the Most Favoured Nation (MFN) clause to prevent the misuse of favourable terms from other treaties.
Safeguards and Exceptions: The BIT includes general and security exceptions to protect public health, safety, morals, and environmental interests.
Investor-State Dispute Settlement (ISDS): A structured mechanism with a requirement to first exhaust local remedies has been included, balancing investor rights with judicial sovereignty.
This BIT is expected to foster a stable and transparent investment environment, enhancing investor confidence and encouraging cross-border investments between the two nations.
The full text of the India-Kyrgyz BIT is available on the Department of Economic Affairs website.
