The Union Minister for Finance and Corporate Affairs of India, Nirmala Sitharaman, and the Minister of Foreign Affairs of the Kyrgyz Republic, Zheenbek Kulubaev, signed the Protocol and exchanged the Instrument of Ratification of the Bilateral Investment Treaty (BIT) between their two governments in New Delhi.
The BIT, originally signed on June 14, 2019, in Bishkek, officially enters into force June 5, 2025, replacing the previous agreement that had been in effect since May 12, 2000. This updated treaty is designed to ensure the continued protection of investments and foster a stable and predictable investment environment between India and Kyrgyzstan.
The new India-Kyrgyz BIT represents a key milestone in strengthening bilateral economic relations, promoting sustainable development, and encouraging cross-border investments. The treaty includes several important features aimed at balancing investor rights with the sovereign regulatory powers of both nations.
The preamble highlights a commitment to sustainable development. It provides an enterprise-based definition of assets with clear inclusion and exclusion lists, emphasizing characteristics such as capital commitment, risk assumption, and contribution to host state development.
Certain areas are excluded from the treaty’s scope, including local government matters, government procurement, taxation, services under governmental authority, and compulsory licenses, preserving policy space for both governments.
The treaty aligns with customary international law in defining the treatment of investments, incorporating provisions on national treatment, protection against expropriation, and the free transfer of funds. The Most Favored Nation (MFN) clause has been removed to prevent selective importing of favorable provisions from other treaties.
Two types of exceptions—general and security—are included, covering environmental protection, public health and safety, and public morals, safeguarding regulatory policy space. A calibrated Investor-State Dispute Settlement mechanism is established, requiring the exhaustion of local remedies before international arbitration, offering investors alternative dispute resolution options.
Follow Daryo's official Instagram and Twitter pages to keep current on world news.
Comments (0)