IAS Gyan

Daily News Analysis


3rd February, 2024 International Relations


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Picture Courtesy: https://indiashippingnews.com/cabinet-approves-bit-between-india-and-u-a-e/

Context: The economic ties between India and the UAE are set to be strengthened with the signing of a Bilateral Investment Treaty, unlocking investment potential.


  • A Bilateral Investment Treaty (BIT) is an agreement between two countries that aims to promote and protect investments made by nationals of one country in the territory of the other.
  • It provides a legal framework for investors, ensuring fair and equitable treatment, and protection from discrimination and expropriation.

Key provisions of the India-UAE BIT

  • National Treatment and Most-Favored-Nation (MFN) Treatment: Both countries agree to grant investments from the other country treatment no less favorable than that given to their own investors or investors from any other country, whichever is more favorable.
  • Fair and Equitable Treatment: Investors from each country will be accorded fair and equitable treatment, including protection from arbitrary and discriminatory measures.
  • Transparency: Both countries agree to publish their laws and regulations related to investments in a timely manner.
  • Dispute Settlement: The BIT provides for mechanisms for settling investment disputes, including arbitration.

Benefits of the India-UAE BIT

  • Increased investment: The BIT is expected to boost investment flows between India and the UAE, particularly in sectors such as infrastructure, energy, and manufacturing.
  • Reduced investment risk: The BIT provides investors with greater certainty and predictability, which can help to reduce investment risk.
  • Job creation: Increased investment can lead to job creation in both countries.
  • Economic growth: The BIT can contribute to economic growth in both India and the UAE.
  • Encouraging domestic manufacturing: Increased investment in India could lead to the creation of new manufacturing units and jobs in the country.
  • Promoting technology transfer: The BIT could facilitate the transfer of technology from the UAE to India, which could help to improve India's manufacturing capabilities.
  • Boosting exports: Increased investment in India could lead to increased exports of Indian goods and services.


  • The India-UAE BIT is a significant agreement that is expected to have a positive impact on bilateral economic relations. By providing greater certainty and protection to investors, the BIT is expected to increase investment flows, create jobs, and promote economic growth in both countries. The BIT is also expected to support the Atmanirbhar Bharat initiative by promoting self-reliance and reducing India's dependence on imports.

Must Read Articles:

INDIA UAE RELATIONS: https://www.iasgyan.in/daily-current-affairs/india-uae-relations#:~:text=In%20FY%202021%2D22%2C%20the,in%20effect%20May%201%2C%202022.

INDIA UAE COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT: https://www.iasgyan.in/daily-current-affairs/india-uae-comprehensive-economic-partnership-agreement


Q. While energy remains a key pillar of India-UAE trade, both countries aim to diversify their economies. How can the BIT be used to encourage investment in non-energy sectors like technology, healthcare, and infrastructure? What are the challenges and opportunities in achieving this diversification?