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India is remodelling its Bilateral Investment Treaties (BITs) framework around three key principles: a minimum two-year local remedy window before international arbitration, no Most Favoured Nation (MFN) clause, and exclusion of tax-related provisions.

The Union Budget 2025-26 had announced a revamp of the existing 2016 BIT model to make it more investor-friendly. The new model is still being finalised, with the government considering tailoring terms country-by-country.

What’s in Today’s Article?

• What Is a BIT and Why Does It Matter?
• India's BIT History: From 1993 to 2016
• The Three Pillars of the New Model
• The Ongoing Debate
• Where Things Stand?

What Is a BIT and Why Does It Matter?

• A Bilateral Investment Treaty (BIT) is an agreement between two countries to promote and protect investments made by investors of each country in the other's territory.
• It gives foreign investors certain guarantees — against arbitrary treatment, expropriation without compensation, and denial of justice.
• When disputes arise, BITs typically allow investors to take the host country to international arbitration.
• BITs are crucial for attracting Foreign Direct Investment (FDI). They signal to investors that the host country offers a stable, rules-based environment for investment.

India's BIT History: From 1993 to 2016

• India signed BITs with 83 countries based on its 1993 model (amended in 2003). Of these, 74 were ratified.
• The 1993 model allowed foreign investors to go directly to international arbitration without exhausting domestic remedies first.
• A turning point came when global companies like Vodafone and Cairn Energy filed international arbitration cases against India in tax disputes — and won.
• These cases exposed India to significant financial liability and raised concerns about regulatory sovereignty. India responded by overhauling its BIT framework.
• The 2016 BIT model introduced a major change: foreign investors must now exhaust all domestic remedies before initiating international arbitration.
• Of the 74 ratified BITs, India issued termination notices to 68 countries and asked them to renegotiate on the basis of the 2016 model.

The Three Pillars of the New Model

• Two-Year Local Remedy Window
  • The most debated feature of the 2016 model was the requirement to exhaust local remedies for five years before accessing international arbitration. Critics called this excessive and investor-unfriendly.
  • The new model proposes reducing this to a minimum of two years. For some countries, even a one-year cooling window is being considered during ongoing negotiations. The India-UAE BIT had already reduced this to three years.
  • The government's rationale is clear: India must protect its parliamentary sovereignty and judicial authority.
  • International arbitration — where India has limited representation and faces discretionary decisions — should be a last resort, not the first recourse.
• No Most Favoured Nation (MFN) Clause
  • The MFN clause in investment treaties requires a country to extend to the treaty partner whatever favourable treatment it gives to any third country.
  • If India signs a more liberal BIT with Country B, Country A can use the MFN clause to claim the same benefits.
  • Removing MFN gives India flexibility to negotiate different terms with different countries based on the nature of bilateral engagement — without being locked into automatic extension of better terms across all treaties.
• Taxation Kept Outside BITs
  • Tax disputes — like the Vodafone and Cairn cases — triggered India's BIT crisis in the first place.
  • The new model explicitly excludes tax-related provisions from BITs, insulating domestic tax policy from investor-state arbitration.
  • Finance Minister Nirmala Sitharaman reinforced this in February 2025, stating that BITs should be negotiated separately from Free Trade Agreements, by specialists with expertise in taxation and policy.

The Ongoing Debate

• Critics: The Local Remedy Window Is Still Too Long
  • The experts argued that the "most damaging provision" in India's BIT was the five-year local remedy requirement.
  • Even the proposed two-year window, he argued, is far above global norms.
  • They cited Indonesia's model — which scrapped its old BITs in 2014 and restarted with a 12-month cooling period, a three-judge panel, and a presiding judge agreed upon by both parties who cannot be a national of either country.
• Government's Defence
  • Chief Economic Adviser V Anantha Nageswaran responded that academic research shows weak or no relationship between individual BIT signings and FDI inflows.
  • What matters is the cumulative stock of treaties — which signals an overall regime of investor protection.
  • He acknowledged that the investment climate needs continuous improvement and that the BIT revision is still incomplete.
• Global Trend: Moving Away from ISDS
  • Many countries are moving away from Investor-State Dispute Settlement (ISDS) — the traditional model where investors can directly sue host governments in international tribunals.
  • Australia and the UAE, for example, have shifted to State-to-State Dispute Settlement (SSDS) in their bilateral investment treaty, where disputes are resolved between governments rather than between investors and states.

Where Things Stand?

• Since the 2016 model, India has signed new BITs with Belarus, Kyrgyz Republic, Brazil (as an Investment Cooperation and Facilitation Treaty), UAE, and Uzbekistan.
• A Bilateral Investment Agreement has also been signed with Taiwan (through the India Taipei Association).
• The new model being developed is expected to be country-specific and flexible — with terms calibrated to the nature of each bilateral relationship — rather than a single rigid template applied universally.

Context:

• The India-Oman Comprehensive Economic Partnership Agreement (CEPA) came into force on June 1, 2026.
• Bilateral trade between India and Oman has already grown from $8.94 billion in FY2023-24 to $11.18 billion in FY2025-26, reflecting deepening economic complementarities even before the CEPA came into effect.
• In this context, this article highlights that the CEPA agreement is far more than a trade deal — it is a modern framework that builds on one of the world's oldest bilateral relationships and opens a strategic gateway for India into the Gulf, the Indian Ocean, and East Africa.

India's Expanding Trade Architecture

• The Oman CEPA does not stand alone. It is part of India's deliberate strategy of deepening trade ties through comprehensive agreements.
• India has recently concluded or is pursuing CEPAs with the UAE, Australia, EFTA, UK, New Zealand, and the EU.
• Oman is the latest addition — and a strategically important one, given its location at the crossroads of the Gulf and the Indian Ocean.
• Before this agreement, only 15.33% of India's exports entered Oman at zero duty under the Most Favoured Nation (MFN) regime.
• The CEPA changes this dramatically: Oman now offers duty-free access on 98.08% of its tariff lines, covering 99.38% of India's exports by value.
• This is a sweeping competitiveness boost for Indian exporters.

Sector-by-Sector Benefits

• Textiles and Apparel
  • India already holds a dominant position — 43% of Oman's woven apparel imports and 31% of knitted apparel imports.
  • The existing 5% tariff is now eliminated. This directly strengthens India's competitiveness against China, the other major supplier in this market.
• Chemicals
  • India supplies nearly 39% of Oman's inorganic chemical imports. Tariff-free access will amplify this already strong position further.
• Engineering Goods
  • This is perhaps the biggest opportunity. Oman imports over $3.7 billion in mechanical machinery and $3.3 billion in automotives annually.
  • India's current market share is just 5% and 2% respectively — indicating enormous headroom for growth.
  • The CEPA's preferential access can help Indian engineering exports penetrate Oman's infrastructure, construction, and industrial sectors.
• Pharmaceuticals
  • India holds around 10% market share in Oman's pharmaceutical market.
  • Here, the benefit is not tariff reduction but regulatory facilitation — products approved by leading international regulators will receive fast-tracked approvals, reducing compliance costs and accelerating market entry.
• Food and Agriculture
  • Duty-free access has been granted for products like meat, eggs, honey, butter, and processed foods.
  • However, sensitive sectors — dairy, cereals, edible oils, and key agricultural commodities — have been kept outside tariff concessions, protecting domestic producers.

Trade Facilitation: Cutting Red Tape

• Beyond tariffs, the CEPA introduces important procedural reforms:
  • Oman will accept certificates from India's Export Inspection Council (EIC), eliminating duplicative testing.
  • India's NPOP organic certification and halal certification systems are now recognised.
  • Dedicated provisions on Sanitary and Phytosanitary (SPS) measures and Technical Barriers to Trade (TBT) will improve regulatory transparency.
  • Fast-track customs clearance for perishables will reduce costs and improve efficiency for time-sensitive exports.

Services and Professional Mobility

• This is where the CEPA breaks new ground. Bilateral services trade stood at $863 million in 2024, with India enjoying a surplus of nearly $447 million.
• Yet India's share in Oman's global services imports is just over 5% — indicating substantial untapped potential.
• Oman has made binding commitments for Indian professionals in accounting, engineering, IT, healthcare, education, and consulting.
• Quotas for intra-corporate transferees have been raised, enabling greater movement of Indian specialists.
• Provisions for AYUSH and traditional medicine create additional opportunities in the Gulf's growing wellness sector.

Oman's Strategic Location: A Gateway, Not Just a Market

• The editorial's most important insight is geographical. Oman is not just a destination market — it is a logistics and strategic hub.
• Its ports at Sohar, Duqm, and Salalah are emerging as major industrial and shipping hubs connecting the Gulf, Indian Ocean, and East African economies.
• For Indian businesses, the CEPA makes Oman a potential launchpad into the wider GCC region and East Africa — markets far larger than Oman itself.
• This strategic dimension elevates the agreement well beyond bilateral trade.
• The benefits will reach across India's industrial geography — textile clusters in Tamil Nadu, gems and jewellery in Gujarat, engineering hubs in Maharashtra and Punjab, pharma manufacturers in Telangana, and seafood exporters in Andhra Pradesh and Kerala.

Conclusion

• The Oman CEPA is history meeting opportunity — an ancient maritime partnership reimagined for the 21st century.
• Its true worth will be measured not in its text, but in how boldly Indian businesses choose to walk through the door it has opened.

About Bascanichthys chepakakiensis:

• It is a new species of snake eel discovered in Kakinada fishing harbour in Andhra Pradesh.
• The specific name, chepakakiensis, is a combination of two words from the regional Telugu language: chepa, which means "fish," and "kaki, a shortened nickname for Kakinada.
• It is the only second time a species of this snake-eel genus has been described from Indian waters.
• Features of Bascanichthys chepakakiensis:
  • It has a distinct bicoloured body.
  • It has a noticeably shorter snout, a different tooth arrangement in its jaws, and fewer vertebrae before its anal fin.
  • It also possesses incredibly tiny, flap-like pectoral fins that are barely visible.

What are Snake eels?

• Snake eels are members of the family Ophichthidae, and are named for their snake-like appearance
• Habitat: These eels mainly live in sandy areas in shallow seas, however some live in depths to 800m.
• Distribution: They are found in both tropical and temperate waters in oceans around the world.
• The snake eel uses its tail to burrow backward into the sea bottom, creating a protective burrow.

About Indonesia:

• Location: It is an archipelagic nation located off the Southeast Asian mainland in the Pacific and Indian Oceans.
• Bordering countries: It is bordered by Malaysia, Papua New Guinea, and Timor-Leste.
• Maritime Border: It is surrounded by the Indian Ocean in the south; by the Pacific Ocean (South China Sea) in the north.
• Capital City:
• Geographical Features of Indonesia:
  • Terrain: The major Indonesian islands are characterized by densely forested volcanic mountains in the interior that slope downward to coastal plains covered by thick alluvial swamps. 
  • Climate: The climate of Indonesia is almost everywhere equatorial, ie hot, humid and rainy throughout the year
  • Rivers: Main Rivers are Kapuas, Barito, Musi, and Digul.
  • Highest Peak: Puncak Jaya
  • Natural Resources: It is dominated by natural gas and crude petroleum. Other major mineral exports include coal, nickel, bauxite, gold, tin, and copper.

About e-Jagriti Platform:

• It is a flagship initiative by the Department of Consumer Affairs, Ministry of Consumer Affairs, Food & Public Distribution.
• It was launched on 1 January 2025.
• It is aimed at strengthening the consumer dispute redressal system across the country.
• Features of e-Jagriti Platform:
  • Global Accessibility: NRIs and citizens can file and manage cases from any location, with secure end-to-end encryption and role-based permissions.
  • Inclusivity: Features like multilingual interfaces and accessibility tools make it user-friendly for diverse demographics.
  • Integrated Platforms: It has unified four legacy applications Online Case Monitoring System (OCMS), e-Daakhil, NCDRC CMS and CONFONET into a single AI-enabled, paperless platform. 
  • AI-Powered smart search: It has case filing, online fee payment, case monitoring modules for seamless disposal of cases by all the Commissions, has Smart search facility on archived consumer complaints / cases / judgements using AI technology for metadata and keyword creation, and Voice-to-text conversion of judgements, case history and other details using AI / ML technology.
  • It enabled consumers to file complaints, track case statuses, and access judgments online.
  • The platform played a vital role in digitizing consumer commissions and empowering citizens by providing easy access to legal remedies.
  • It provides simple, fast and a more cost-effective consumer disputes redressal software solution at all levels.

About Pyroprocessing:

• It is a way to change a solid material physically or chemically using high temperature.
• It is a dry process and very energy-intensive. Three sectors that use it most are cement-making, metallurgy, and nuclear power.
• Applications of Pyroprocessing:
• Cement Making:
  • This sector uses pyroprocessing the most and it involves
  • First, finely ground limestone, clay and iron — the raw materials — are fed into a rotary kiln.
  • As the temperature increases to 900° C, the limestone loses its carbon dioxide, and at around 1,450° C, the mix partly melts to form marble-sized nodules called clinker.
  • The clinker is then ground to produce cement.
• Metallurgy Sector:
  • Pyroprocessing is used to extract metals from their ores in multiple stages.
  • For example, sulphide ores are heated in air, or roasted, to convert them into metal oxides, like zinc sulphide.
  • Smelting melts an ore to separate the metal from waste impurities called slag.
• Nuclear industry:
  • It uses pyroprocessing to reprocess spent nuclear fuel.
  • First, used nuclear fuel is broken up into pieces and placed in a salt bath — usually a mixture of lithium and potassium chlorides at 500° C or more.
  • Then, an electric current is passed through the salt bath, causing different elements to become separated depending on their electrochemical properties.
  • Operators then recover the elements of interest in separate streams.

About Land Port Management System:

• It is a state-of-the-art digital platform designed to integrate operations across Land Ports into a unified system.
• Features of Land Port Management System:
  • Real time information: It enables secure, real-time exchange of logistics and regulatory information, bringing land ports at par with digital systems operational at airports and seaports.
  • Inclusion and Coordination: LPMS will facilitate seamless coordination among various stakeholders, including government agencies and private operators,
  • Digitization: The system introduces end-to-end digital workflows for cargo and passenger processing, including slot booking, payments, tracking, and single-window clearances.
  • Integration with Platforms: It is fully integrated with key national platforms such as ICEGATE, ULIP, and the motor vehicle ecosystem.
  • LPMS will enable interoperable, efficient, and transparent border management.
• Significance: It reduces delays and enhancing operational efficiency.

Key Facts about Land Ports Authority of India (LPAI)

• It is a statutory body under the Department of Border Management, Ministry of Home Affairs.
• It is responsible for developing and managing land ports to facilitate trade, connectivity, and regional cooperation.
• Currently, LPAI operates 15 land ports across India’s international borders:
  • India-Pakistan Border (2): Attari (Punjab) and Dera Baba Nanak (Punjab)
  • India–Nepal Border (3): Rupaidiha (Uttar Pradesh), Raxaul (Bihar) and Jogbani (Bihar)
  • India–Bhutan Border (1): Darranga (Assam)
  • India–Bangladesh Border (8) : Petrapole (West Bengal), Dawki (Meghalaya), Sutarkandi, Golakganj and Mankachar (Assam), Agartala, Srimantapur and Sabroom (Tripura)
  • India–Myanmar Border (1): Moreh (Manipur)

About Bhakra Dam:

• It is a concrete gravity dam across the Sutlej River.
• It is located at a gorge near the upstream Bhakra village in the Bilaspur district of Himachal Pradesh.
• It is near the border between Punjab and Himachal Pradesh.
• It is the highest straight gravity dam in the world, with a height of about 207.26 meters.
• It is Asia’s second tallest dam, next to the Tehri Dam.
• History:
  • The Bhakra Dam is one of the earliest river valley development schemes undertaken by India after independence.
  • The construction of this dam started in 1948, when Jawahar Lal Nehru, the first prime minister of India, poured the first bucket of concrete into the foundations of Bhakra.
  • The dam was completed by the end of 1963.
  • Bhakra Dam was described as the ‘New Temple of Resurgent India’ by Jawaharlal Nehru.
  • Operation and maintenance of the Bhakra dam is done by the Bhakra Beas Management Board (BBMB).
• The dam created the massive Gobind Sagar reservoir and plays a crucial role in irrigation, flood control, and hydroelectric power generation for Punjab, Haryana, Rajasthan, Himachal Pradesh, and Chandigarh.
  • In terms of storage of water, it is the second largest reservoir in India, the first being Indira Sagar Dam in Madhya Pradesh with a capacity of 12.22 billion cu m.
• Nangal Dam is another dam downstream of Bhakra Sometimes both the dams together are called the Bhakra-Nangal Dam, though they are two separate dams.
  • It serves as an auxiliary dam to channel the water released from Bhakra Dam to two powerhouses.
  • The installed capacity of Bhakra Right Bank Power House is 785 MW, and that of Bhakra Left Bank Power House is 630 MW.

About Barren Island:

• It is a volcanic island located in the Andaman Sea.
• It is the emergent summit of a volcano.
• It is a part of the Andaman and Nicobar Islands.
• It lies above the subduction zone of the India and Burmese plates.
• This island has a big crater of the volcano.
  • It is the only active volcano in South Asia. It is the only active volcano among the chain of islands from Myanmar to Sumatra.
  • It is a stratovolcano composed of lava, rock fragments, and volcanic ash.
  • It has erupted multiple times in recent history, with the most recent significant eruptions occurring in 2017.
• The volcanic zone is devoid of vegetation and covered in sharp basaltic rocks that cover nearly half its area.
• The island itself is extraordinarily remote and largely uninhabited.

About Kirthai-II Hydroelectric Project:

• It is a 930 MW hydropower project planned on the Chenab River in the Kishtwar district of Jammu and Kashmir.
• The project is being developed by Chenab Valley Power Projects.
• NHPC and Jammu and Kashmir State Power Development currently own the project having ownership stakes of 51% and 49%, respectively.
• It is a run-of-river project. The hydro reservoir capacity is planned to be 51.26 million cubic meters.

Key Facts about Chenab River:

• It is a tributary of the Indus River.
• Origin:
  • It is formed by the confluence of two streams, Chandra and Bhaga, in the Lahaul and Spiti Districts of Himachal Pradesh.
  • In its upper reaches, it is also known as the Chandrabhaga.
  • It flows through the Jammu and Kashmir union territory, Himachal Pradesh, and after receiving the Jhelum River near Trimmu, the Chenab empties into the Sutlej River.
• Major Tributaries:
  • Left Bank: Niru, Tawi, Neeru, and Liddrari
  • Right Bank: Ans, Bhut Nalla, Bichleri, Kalnai Marusudar, and Miyar Nalla.
• Major Dams on Chenab River: Salal (rockfill dam), Aalal (concrete dam), Baglihar, and Dul.