New Delhi: Finance Minister Nirmala Sitharaman and the Kyrgyz Republic’s Minister of Foreign Affairs Zheenbek Kulubaev Moldokanovich signed the protocol and exchanged the instrument of ratification of the India-Kyrgyzstan Bilateral Investment Treaty (BIT) here on Thursday.
The Bilateral Investment Treaty (BIT) signed on June 14, 2019, in Bishkek, between the Government of India and the Government of the Kyrgyz Republic, enters into force with effect from 5th June 2025. This new BIT replaces the earlier agreement enforced on 12th May 2000, ensuring continuity in the protection of investments between the two nations, according to an official statement.
The India-Kyrgyz BIT marks a significant milestone in strengthening bilateral economic relations and fostering a secure and predictable investment environment. The BIT aims to promote and protect the interests of investors of either country in the territory of the other country.
The key features of the treaty include an enterprise-based definition of assets with an indicative inclusion list and a specific exclusion list of assets which also clarifies the characteristics of investments such as commitment of capital, the expectation of gain or profit, the assumption of risk and have significance for the development of the host state.
It excludes matters relating to local government, government procurement, taxation, services supplied in the exercise of governmental authority, compulsory licenses, in order to retain sufficient policy space with the Government in such matters
The BIT seeks to define the core elements of the Treatment of Investment, as found in customary international law. Besides, the BIT ensures a balanced framework through provisions on national treatment, expropriation and transfers.
The Most Favored Nation (MFN) obligation 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 the environment, ensuring public health and safety, and protecting public morals and public order.
The BIT also has a calibrated Investor-State Dispute Settlement mechanism with mandatory exhaustion of local remedies, thereby providing investors with an alternative 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, the statement added.
(IANS)
