India-UAE BIT Enforced: A New Era in Investment Protection

India and the UAE have initiated a bilateral investment treaty enforced on August 31, 2024. This treaty aims to protect investments by ensuring transparency and fair treatment, replacing an expired agreement. It showcases provisions for dispute settlement and allows state regulatory space, boosting investor confidence and bilateral investments.

The bilateral investment treaty (BIT) between India and the UAE is now officially in force as of August 31, 2024, according to the Indian finance ministry's announcement on Monday. Signed on February 13 this year, this treaty replaces the previous Bilateral Investment Promotion and Protection Agreement (BIPPA) which expired on September 12, 2023.

This treaty is more streamlined, requiring UAE investors to exhaust domestic remedies for three years before initiating arbitration, a reduction from the former five-year period. Key attributes also include asset-based investment definitions, investment treatments to prevent justice denial and arbitrary discrimination, along with measures for taxation and local government authority.

The BIT aims to foster transparency, protection from expropriation, and compensation for losses. The treaty expects to uplift investor confidence and pave the way for increased bilateral investments. UAE ranks as the seventh largest foreign investor in India, marking significant FDI and India-UAE trade relations.

(With inputs from agencies.)