India-UAE Bilateral Investment Treaty Reduces Legal Hurdles for Investors

India has revised the Bilateral Investment Treaty with the UAE, cutting the local remedies exhaustion period for investors from five to three years. The treaty now includes portfolio investments, broadening the scope. It aims to boost bilateral investments, enhancing investor protection and providing an independent forum for dispute resolution.

The new Bilateral Investment Treaty (BIT) between India and the United Arab Emirates, effective from August 31, reduces the period for local remedies exhaustion from five to three years for UAE investors. The treaty broadens the investment scope by including portfolio investments, diverging from India's previous Model BIT framework.

This revamped treaty, enforced after the expiration of the previous 2013 agreement, aims to enhance investor protection with features like no denial of justice or arbitrary treatment. It assures investors a dependable forum for dispute settlement through arbitration, encouraging increased bilateral investments.

According to the Global Trade Research Initiative, this shift could heighten India's exposure to disputes over financial instruments. The India-UAE BIT includes protection against expropriation and emphasizes a balance between investor protection and the state's regulatory rights.

(With inputs from agencies.)