Context: The recent Vodafone case on retrospective taxation and The Permanent Court of Arbitration’s (PCA’s) displeasure over India’s failure to uphold its obligation under Bilateral Investment Treaty (BIT) exemplify how arbitrary exercise of sovereign powers could cost India dearly — and that sovereign commitments under international treaties must be honoured.
Significance of BITs:
Ramifications of Treaty Termination: An ensuing spate of BIT cases compelled India to terminate 58 BITs in 2017. The number stands at 69 today. This is mainly because of losses in those treaties to India.
Conclusion: India recognizes that realizing the vision of atmanirbharta heavily depends on foreign investment. Termination of BITs, however, is anything but a votive gift to investors.