India-UAE Investment Treaty: A Shift Towards Openness

India has relaxed conditions in its bilateral investment treaty with UAE, including portfolio investments and reducing the period for exhausting local remedies from five to three years. The move could attract more investments but may increase arbitration risks, affecting India's regulatory sovereignty.

India has eased certain conditions in its bilateral investment treaty with the UAE, potentially attracting more Arab investments, but at the cost of internal regulatory control, according to economic think tank GTRI.

The India-UAE Bilateral Investment Treaty, effective from August 31, enables investors to seek arbitration within three years instead of five, increasing exposure to international dispute resolutions.

This approach, while broadening investment avenues by including portfolio investments, may lead to more arbitration cases, challenging India's regulatory moves, and prompting other countries to seek similar terms in future treaties.

(With inputs from agencies.)