India has moved past its 2016 model of bilateral investment treaty (BIT) and has become significantly more advanced in negotiating investment protection agreements, according to Union Finance Minister Nirmala Sitharaman, who highlights that India now modifies the template as needed for bilateral agreements.

At the Manthan summit, Sitharaman stated that although India continued to align itself with the 2016 model, necessary changes were made openly and secured by complete Cabinet endorsement, allowing India to finalize investment agreements with the United Arab Emirates, Saudi Arabia, and possibly Oman.

The minister stated that BITs are no longer the key factor they used to be. She noted that numerous countries invested in India without requiring a BIT, while Indian companies were similarly investing overseas without any such agreement. Nations have thrived with incoming investments even in the absence of a BIT. Thus, I cannot hastily declare 'BITs with everyone', nor can I assert 'no BIT at all'. The world is significantly more dynamic nowadays.

Sitharaman stressed that India's history with previous treaty conflicts still shapes the government's stance. Cases where foreign investors resorted to treaty arbitration for tax issues, or circumvented the Indian judicial system despite available remedies from the Supreme Court, persisted as significant concerns.

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"Many of these factors can turn into deal-breakers," she mentioned.

Regarding whether India ought to reevaluate Press Note 3, which increased scrutiny on investments from nations sharing land borders with India, particularly from China, Sitharaman stated that the issues related to ultimate beneficial ownership were not exclusive to China but were relevant to all jurisdictions.

“I will be interested in the ultimate beneficial owner for numerous non-commercial reasons. It could refer to the type of money entering. I'm not specifically mentioning China. I have concerns about investment from these perspectives regardless," FM stated, noting that such funds must adhere to the Foreign Exchange Management Act (Fema) and Financial Action Task Force (FATF) regulations.

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"Even though it (foreign direct investment) occurs via the automatic route, you eventually begin to consider, as the shareholding rises, who is the investor? Will it be a single block that will support the company? Companies in distress, not due to individual issues but for reasons beyond our control, cannot be removed," she stated.

The minister also mentioned growing worries about overseas purchasers competing online for coffee plantations in Karnataka.

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"Perhaps everything is fine. However, these are distinctive Indian resources. We have many questions that require us to stop and reflect before progressing," she stated.