India doesn't plan huge changes to dispute resolution with foreign companies, source says
INDA•India plans to keep requiring foreign companies to pursue local remedies before international arbitration, though the five-year waiting period may be shortened to two years. The government will also keep taxation disputes outside investment treaties.
1. Dispute rules under review
India is not planning major changes to how disputes with foreign businesses are resolved, a source with direct knowledge of the government's review of bilateral investment treaties said. A second government source said the five-year period before international arbitration may be shortened to two years, while the requirement to pursue local remedies will remain.
2. Taxation remains excluded
The government will keep taxation disputes outside investment treaties and will not compromise on its sovereign right to tax, the first source said. The cabinet is expected to decide on changes soon.
3. Treaty precedents
India has signed a treaty with the United Arab Emirates in 2024 and implemented one with Israel this year that allow international arbitration after three years instead of the usual five. Analysts said investor sentiment was likely to be hurt by the planned approach.
