Treaty to calibrate Investor-State Dispute Settlement
Minister for Finance and Corporate Affairs Nirmala Sitharaman and Minister of Foreign Affairs of the Kyrgyz Republic Zheenbek Kulubaev Moldokanovich have sign the Protocol and exchange the Instrument of Ratification of Bilateral Investment Treaty (BIT) in New Delhi on 5 June, upgrading a previous pact.
The Bilateral Investment Treaty (BIT) signed on 14th June 2019, in Bishkek, between the Indian and Kyrgyz Governments entered into force with effect from 5 June 2025, replacing the earlier agreement enforced on 12 May 2000, ensuring continuity in the protection of investments between the two nations, the Finance Ministry said on 5 June https://www.commerce.gov.in/.
The India-Kyrgyz BIT marks a significant milestone in strengthening bilateral economic relations and fostering a secure and predictable investment environment https://www.investindia.gov.in/.
The BIT aims to promote and protect interests of investors of either country in the territory of the other country.
The BIT seeks to define the core elements of the Treatment of Investment, as found in customary international law. Besides, this the BIT ensures a balanced framework through provisions on national treatment, expropriation and transfers https://fieo.org/.
Most Favored Nation (MFN) obligation has in the past allowed investors to selectively “import” favourable substantive provisions from other treaties concluded by the Host State. The MFN clause is accordingly removed in the BIT.
The BIT contains two types of exceptions: general exceptions and security exceptions. The attempt is to carve out a policy space for the State. The general exceptions include, among others, the protection of environment, ensuring public health and safety, and protecting public morals and public order http://finmin.gov.in.
The BIT has calibrated Investor-State Dispute Settlement mechanism with mandatory exhaustion of local remedies, thereby providing investors alternate dispute resolution mechanism.
The BIT balances the investor rights with the sovereign regulatory powers of both countries, and reflects a shared commitment to create a resilient and transparent investment climate. It is expected to further encourage cross-border investments and deepen economic cooperation between India and Kyrgyzstan. Fiinews.com
