India is examining its bilateral investment treaty model to enhance its appeal to foreign investors, with potential reforms including easing dispute resolution timelines and strengthening macroeconomic stability, as the country aims to position itself as a resilient and attractive investment destination.
India is reviewing its bilateral investment treaty model in an effort to make the country more attractive to foreign capital, even as global uncertainty continues to rattle markets, according to Anuradha Thakur, the Economic Affairs Secretary. Speaking at a recent event, Thakur said the government was examining the “red flags” in the current framework and looking at what more it could offer investors, while consultations with industry remain under way. Business Today reported that one possible change under consideration is easing the five-year period foreign investors must wait before taking disputes to international arbitration after first pursuing remedies in Indian courts.
The review comes as New Delhi seeks to project India as a steady destination for money at a time of geopolitical strain, especially in West Asia. Thakur said capital was not chasing returns alone but also stability, predictability and resilience, arguing that a sound macroeconomic and public finance framework is now central to the investment case. Her remarks also echoed a broader policy shift that has already seen India loosen some cross-border investment rules this year, including reforms to external commercial borrowing and changes to foreign direct investment norms for countries sharing a land border with India.
Those changes are part of a wider effort to smooth the path for foreign money into sectors such as manufacturing, deep technology and startups. Baker McKenzie said the 2026 borrowing reforms marked the biggest relaxation in a decade, while India Briefing reported that revised land-border rules introduced clearer beneficial ownership standards and a faster approval process in selected cases. At the same time, the government has retained tighter scrutiny over sensitive investments, particularly where control or majority ownership is involved.
Thakur also pointed to signs that private investment is beginning to recover. She said project execution has picked up and project stalling is at its lowest level in 10 years, while CMIE data showed private-sector project announcements averaging almost ₹34.8 lakh crore between 2024 and 2026, accounting for 71% of all new investment announcements. She added that central government capital expenditure has risen sharply since FY15, reaching ₹10.7 lakh crore in FY26 and budgeted at ₹12 lakh crore for the current fiscal year, which she said has helped crowd in private spending. She also highlighted India’s relatively low private-sector share of research and development, saying it stands at about 41%, compared with 75% to 79% in some advanced economies.
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