Question

Which of the following statements correctly reflect India's recent (2024) economic diplomacy and domestic investment facilitation reforms?

1) The India-Uzbekistan BIT allows unconditional access to international arbitration without exhausting local remedies.

2) The National Infrastructure Readiness Index (NIRI) solely ranks Smart Cities and excludes private investment indicators.

• A. Only 1
• B. Only 2
• C. 1 and 2 Both are correct
• D. Neither 1 nor 2 is correct

Answer 1

Answer:

D. Neither 1 nor 2 is correct

The statement that the India-Uzbekistan BIT allows unconditional access to international arbitration without exhausting local remedies is incorrect. Modern BITs, including those that India negotiates, generally incorporate provisions that require investors to attempt to resolve disputes through domestic legal channels before resorting to international arbitration. This is often referred to as the 'local remedies' rule. India has been a proponent of reforming its BITs to ensure greater balance between investor protection and the host state's right to regulate. The emphasis is typically on ensuring that domestic legal remedies are given a fair chance to address the investment dispute.