What Does the Ratification of the India-Kyrgyzstan Bilateral Investment Treaty Mean?

New Delhi, June 5 (NationPress) Finance Minister Nirmala Sitharaman and Zheenbek Kulubaev Moldokanovich, the Foreign Affairs Minister of the Kyrgyz Republic, officially signed the protocol and exchanged the ratification instruments for the India-Kyrgyzstan Bilateral Investment Treaty (BIT) on Thursday.

The BIT, which was initially signed on June 14, 2019, in Bishkek, becomes effective on June 5, 2025. This agreement supersedes the previous treaty established on May 12, 2000, ensuring ongoing protection for investments between both nations, as stated in an official release.

The India-Kyrgyz BIT is a pivotal step towards enhancing economic ties and creating a secure and predictable environment for investments. It aims to safeguard the interests of investors from both nations within each other’s territories.

Key provisions of the treaty include a comprehensive definition of assets, incorporating an indicative inclusion list and a specific exclusion list, clarifying the nature of investments, including capital commitment, profit expectations, and risk assumptions, all of which are vital for the development of the host nation.

It deliberately excludes issues related to local governance, government procurement, taxation, and services rendered under governmental authority, ensuring the government retains adequate policy flexibility in these areas.

The BIT defines essential elements regarding the Treatment of Investment, adhering to international norms. Furthermore, it strikes a balance between investor rights and the regulatory powers of both countries through provisions on national treatment, expropriation, and transfer regulations.

Historically, the Most Favored Nation (MFN) clause allowed investors to selectively adopt favorable terms from other treaties; however, this clause has been omitted in the new BIT.

The treaty includes general and security exceptions to maintain a policy space for the government, covering areas such as environmental protection, public health and safety, and the maintenance of public morals and order.

Additionally, the BIT establishes a structured Investor-State Dispute Settlement mechanism that mandates the exhaustion of local remedies, providing investors with a reliable alternative dispute resolution method.

This BIT is designed to equilibrate investor rights with the sovereign regulatory capacities of both countries, showcasing a mutual commitment to fostering a robust and transparent investment environment.

It is anticipated to further stimulate cross-border investments and enhance economic collaboration between India and Kyrgyzstan, as noted in the official statement.