India and the US are set to take their negotiations on the Bilateral Investment Treaty (BIT) to the next stage as the high-level officials from the two countries on Tuesday start discussions on the fine-print of the pact.
The two countries are trying to iron out all pending points in the pact as they are planning to sign a framework pact during Prime Minister Narendra Modi’s visit to the US next month.
A high-level delegation from the US will be meeting Finance Ministry officials on Tuesday in an effort to take the talks forward and reach a conclusion before a new government takes over in the US, a top official, involved in the talks, told BusinessLine.
Talks on a high-standard BIT, which seeks to safeguard the investors on both sides, started in 2008. With Modi visiting Washington for the fourth time in two years, the US industry is vigorously pushing for the pact to go through.
“There is now a common thinking on both sides that the agreement can be signed while all the outstanding issues can be sorted out as we progress,” the official said.
According to the official, the US is ready to address some of the concerns even though it has reservations on the government’s draft BIT model. The US is believed to have asked the Indian government to replicate the investment chapters it has signed with Japan and Korea under the individual trade pacts.
US had taken up this issue during the recent visit by Finance Minister Arun Jaitley and Foreign Secretary S Jaishankar.
“As of now, there are no sticking points for either of the two nations. It will be a clause by clause negotiation on the overall framework,” said another official.
The Finance Ministry and the Department of Commerce under the Ministry of Commerce and Industry are understood to have finalised India’s position on the treaty.
“There has not been much progress especially after India adopted the new model BIT in 2015. There are very many differences between the US 2012 model BIT and the Indian 2015 model BIT … US might be more interested in using the text of the investment chapter of India’s CECAs with Korea etc as the basis to negotiate in place of the new Indian model BIT,” said Prabhash Ranjan, Assistant Professor, South Asian University, who was also part of the committee that drafted the 260th report of law commission on the Draft Indian model BIT.
In December 2015, India revised its old BIT model text of 1993 by adding more stringent provisions and strict riders for achieving smoother Investor State Dispute Settlement.