India signs BIA with Israel

NEW DELHI: India has cut down the local remedies exhaustion period for Israeli investors to three years from the earlier five years under the Bilateral Investment Agreement (BIA) signed on Monday between the two countries. A similar provision was included in India’s investment pact with the UAE, which came into effect last year.

The India-Israel BIA, aimed at providing comfort to investors of both countries, also includes portfolio investments in a deviation from such treaties in the past. Local remedies exhaustion means that investors must first try to resolve their disputes using the legal system of the host country before they can take the matter to international arbitration.

Normally, India keeps a five-year period for this. An official said that the India-Israel BIA was signed on the lines of the India-UAE bilateral investment treaty. Israel is the first OECD (Organisation for Economic Co-operation and Development) member with which India has inked this agreement.

The pact includes provisions to safeguard investments against expropriation, ensure transparency, and enable smooth transfers and compensation for losses, the finance ministry said in a statement. At the same time, it carefully balances investor protection with the state’s regulatory rights, preserving sufficient policy space for sovereign governance.