Investment Liberalisation in Trade Agreements: Filling a Gap in India’s Approach

The disciplines on investment liberalisation and investment protection have developed separately and parallelly. While investment liberalisation seeks to reduce entry and regulatory barriers to cross-border investments, investment protection seeks to provide various substantive and procedural protections against arbitrary and misguided state policies. Although it is possible to combine investment liberalisation and protection (referred to as an “integrated approach”), several countries including India have sensitives in adopting a single and composite framework for addressing this issue (referred to as the “non-integrated approach”). The chapter examines the various approaches taken in trade and investment treaties across a reasonable time frame spanning almost three decades. The chapter also looks at the pros and cons of an integrated as well as a non-integrated approach based on past treaty practice and country sensitivities. Through this assessment, the chapter seeks to identify the types of disciplines that are required to design treaties or treaty provisions that effectively address concerns related to investment liberalisation and protection. Finally, the chapter sets forth a few suggestions on how India can consider incorporating such provisions in its BIT 2.0, especially while addressing investment liberalisation and protection holistically.