Indian Case Study and urge to draft a model BIT for Bangladesh
The economic reforms unleashed in 1991 brought about a major change in India’s approach towards protection of foreign investment. By entering into more than 80 BITs, out of which 72 were enforced in this phase, India has shown growing acceptance of international investment treaties as legal instruments for the protection of foreign investment. As part of the overall strategy of economic liberalisation, India started entering into BITs with the clear objective of attracting foreign investment.
It is true that foreign direct investment (FDI) flows to India have increased in parallel with India signing BITs. For example, FDI flows to India increased massively from USD 4,029 million in 2000-2001 to $ 55457 million in 2015-16.53.
The first BIT was signed with the United Kingdom (UK) in 1994. This BIT served as the template to negotiate further BITs and also inspired the Indian Model BIT of 2003. India, being subject to multiple ISDS challenge, forced to redraft model BIT in 2016 to accommodate both investor’s and state’s interest together.
The article recommends that Bangladesh should immediately revisit all BITs and other agreements having chapter on investment and conclude a model BIT for future. The country may follow India, Srilanka and some other developing countries in this regard. It is necessary to ensure security and predictability for foreign investors as well as to accommodate policy choices of the host state.