Bilateral investment treaties : A comparative analysis of India and China

Abstract

A bilateral investment treaty (BIT) is an agreement establishing the terms and conditions for private investment by nationals and companies of one state in another state. The world's first BIT was signed on November 25, 1959 between Pakistan and Germany. There are currently more than 2500 BITs in force, involving most countries in the world1 . It was in the mid 90s that the BITs were initiated by the Government of India. Though it is difficult to quantify the benefits of BITs, these agreements invariably result in increased investments inflows; encourage transfer of technology and modern management skills. A look at various BITs to which India is a party makes it clear that each BIT is quite different from the other in its own way, although there are many commonalities across them. These commonalities are in the form of specific rights. The basic premise is that the government will not put the investors and their investments to risks which are either unreasonable or inappropriate. Aim of the project: To review the literature on bilateral investment treaties and gain an understanding of the following questions – why these are signed, how are they expected to help, what do they involve, what are the trends around the world and how are they enforced. * Then, I would examine some of the investment agreements that have been signed and are in place for some years now (for India). Specifically, I would try to see if the agreements fulfilled their original purpose; did they stimulate trade flows and strengthen the relations. * The next step will be to look up India's engagement with other countries through the various investment treaties and compare them along the following lines –What are the objectives of such agreements, what are the economic, strategic and geopolitical interests involved, * Finally, a look at the Chinese model of investment treaties and try to find their reasons for success