FM Nirmala Sitharaman calls on Swiss President, discusses BIT negotiations

Finance Minister Nirmala Sitharaman on Tuesday met Swiss President Guy Parmelin here and discussed issues of common interest between India and Switzerland, including taking forward negotiations on the Bilateral Investment Treaty (BIT).

The discussions focused on advancing the BIT negotiations, which will help enhance investment flows and deepen economic engagement, the finance ministry said in a post on X.

The meeting comes as India and Switzerland seek to strengthen bilateral economic ties and facilitate greater investment between the two countries.

“They held discussions on issues of common interest to both India and Switzerland, including taking forward negotiations on the Bilateral Investment Treaty which is mutually beneficial to both nations with a view to enhance investment flows and deepening economic engagement,” it said.

A Bilateral Investment Treaty is an agreement between the two countries to promote and protect investments made by their investors in the other’s territory. Under investment protection treaties, investors can take a sovereign government to arbitration.

With Outward Direct Investment (ODI) from India increasing, there is a need to ensure that domestic investors and companies investing abroad also get adequate protection.

The current 2016 framework requires a foreign investor to wait for five years before initiating a treaty-based arbitration against India.

This means that if a foreign investor has a dispute with India, it should first pursue domestic remedies for five years before bringing a claim under the agreement.

In the last few years, there has been growing opposition to this five-year period, with many seeking to reduce the duration.