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Doing Business Abroad
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Legal Aspects:
Bilateral Investment Promotion and Protection Agreement (BIPA)
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With the opening up of the economies world over, each country has been trying to attract foreign capital through liberalised investment policies. In such a scenario, all investors are seeking those investment destinations which provide most protective, hospitable and profitable climate for their investments . Hence, many countries have entered into bilateral investment treaties or agreements which not only encourage capital flows into their own countries but also provide safe business environment for their own investors abroad.

Bilateral Investment Promotion and Protection Agreement (BIPA) is one such bilateral treaty which is defined as an agreement between two countries (or States) for the reciprocal encouragement, promotion and protection of investments in each other's territories by the companies based in either country (or State). The purpose of these agreements is to create such conditions which are favourable for fostering greater investments by the investors of one country in the territory of the other country. Such agreements are beneficial for both the countries because they stimulate their business initiatives and thus enhance their prosperity.

Generally, these bilateral agreements have, by and large, standard elements and provide a legal basis for enforcing the rights of the investors in the countries involved. They give assurance to the investors that their foreign investments will be guaranteed fair and equitable treatment, full and constant legal security and dispute resolution through international mechanism.

With liberalisation of the foreign investment policy of India, the Government undertook negotiations with a number of countries and entered into Bilateral Investment Promotion & Protection Agreements (BIPAs) with them. This was done with a view to provide predictable investment climate to foreign investments in India as well as to protect Indian investments abroad. The Government of India has, so far, signed BIPAs with 68 countries out of which 53 BIPAs have already come into force and the remaining agreements are in the process of being enforced. In addition, agreements have also been finalised and/ or being negotiated with a number of other countries.

List of countries with which Bilateral Investment Promotion and Protection Agreements are in force(as on 28th September 2007) (ranked in alphabetical order)

S.No. Country Date of ratification/ enforcement  
1 Argentina 12th August 2002
2 Armenia 30th May 2006
3 Australia 4th May 2000
4 Austria 1st March 2001
5 Belarus 23rd November 2003
6 Belgium 8th January 2001
7 Bulgaria 23rd September 1999
8 Croatia 19th January 2002
9 Cyprus 12th January, 2004
10 CzechRepublic 6th February 1998
11 Denmark 28th August 1996
12 Egypt 22nd November 2000
13 Finland 9th April 2003
14 France 17th May 2000
15 Germany 13th July 1998
16 Hungary 2nd January 2006
17 Indonesia 22nd January,2004
18 Israel 18th February 1997
19 Italy 26th March 1998
20 Kazakhstan 26th July 2001
21 Kuwait 28th June 2003
22 KyrgyzRepublic 12th May 2000
23 Lao PDR 5th January 2003
24 Malaysia 12th April 1997
25 Mauritius 20th June 2000
26 Mongolia 29th April 2002
27 Morocco 22nd February 2001
28 Netherlands 1st December 1996
29 Oman 13th October 2000
30 Philippines 29th January 2001
31 Poland 31st December 1997
32 Portugal 19th July 2002
33 Qatar 15th December 1999
34 Romania 9th December 1999
35 Russian Federation 5th August 1996
36 South Korea 7th May 1996
37 Spain 16th October 1998
38 Sri Lanka 13th February 1998
39 Sweden 1st April 2001
40 Switzerland 16th February 2000
41 Taiwan # 25th February 2005
42 Tajikistan 14th November 2003
43 Thailand 13th July 2001
44 Turkmenistan 27th February 2006
45 Ukraine 12th August 2003
46 United Kingdom 6th January 1995
47 USA * 16th April 1998
48 Uzbekistan 28th July 2000
49 Vietnam 1st December 1999
50 Yemen 10th February 2004
51 Slovak Republic 16th June 2007
52 China 1st August 2007
53 Trinidad & Tobago 7th September 2007
Source: Ministry of Finance

* Investment Incentive Agreement

# A Unilateral Declaration issued by Government of India to give effect to the Agreement signed between India-Taipei Association, Taipei and Taipei Economic & Cultural Centre, New Delhi

List of countries with whom India has signed Bilateral Investment Promotion and Protection Agreements (BIPA), but not yet in force ( as on 28 th September 2007 )

S.No. Country Date of signing of Agreement  
1 Turkey 17th September 1998
2 Zimbabwe 10th February 1999
3 Ghana 5th August 2002
4 Yugoslavia 31st January 2003
5 Djibouti 19th May 2003
6 Sudan 22nd October 2003
7 Bahrain 13th January 2004
8 Saudi Arabia 25th January 2006
9 Bosnia & Herzegovina 12th September, 2006
10 Jordan 1st December 2006
11 Hellenic Republic (Greece) 26st April 2007
12 Mexico 21st May 2007
13 Libya 26th May 2007
14 Iceland 29th June 2007
15 Ethiopia 5th July 2007
Source: Ministry of Finance

List of countries with whom negotiations on Bilateral Investment Promotion and Protection Agreements (BIPA) are underway

S.No. Country S.No. Country
1 Algeria 17 Lebanon
2 Azerbaijan 18 Lithuania
3 Brazil 19 Malta
4 Canada 20 Myanmar
5 Colombia 21 Nepal
6 Cuba 22 Nigeria
7 El. Salvador 23 Norway
8 Georgia 24 Peru
9 Ghana 25 Seychelles
10 Guyana 26 Slovenia
11 Iran 27 South Africa
12 Iraq 28 Syria
13 Jamaica 29 Tanzania
14 Japan 30 Tunisia
15 Kenya 31 UAE
16 Latvia 32 Venezuela
Source: Ministry of Finance

The important features of the Bilateral Investment Promotion and Protection Agreements (BIPAs) signed by India are:-

  • The agreements apply to all investments made by the investors of each contracting party in the territory of the other contracting party in accordance with their laws and regulations.


  • Under the agreement, investment has been defined to include every kind of asset established or acquired together with changes in the form of such investments in accordance with the national laws of the contracting parties. In particular, it includes the following :-

    • Movable and immovable property as well as other rights such as mortgages, liens or pledges;


    • Shares in the stocks and debentures of a company and any other similar forms of participation in a company;


    • Rights to money or to any performance under the contract having a financial value;


    • Intellectual property rights, goodwill, technical processes and know how in accordance with the relevant laws of the respective contracting party;


    • Business concessions conferred by law or under contract, including concessions to search for and extract oil and other minerals.




  • Investments and returns of the investors of each contracting party shall at all times be accorded fair and equitable treatment in the territory of the other contracting party.


  • The agreements guarantee that the investments from the contracting parties shall receive treatment atleast as favourable as the treatment which the host country grants to investments by nationals and companies from any third State.


  • Each contracting party shall permit all funds of an investor of the other contracting party related to an investment in its territory to be freely transferred, without unreasonable delay and on a non-discriminatory basis. Such funds may include: -

    • Capital and additional capital amounts used to maintain and increase investments;


    • Net operating profits including dividends and interests in proportion to their share-holdings;


    • Repayments of any loan including interest thereon, relating to the investment;


    • Payment of royalties and service fees relating to the investment;


    • Proceeds from sales of their shares;


    • Proceeds received by investors in case of sale or partial sale or liquidation;


    • The earnings of citizens/nationals of one contracting party who work in connection with the investments in the territory of the other contracting party.

    All such transfers shall be permitted in the currency of the original investment at the current exchange rate prevailing in the market on the date of transfer.



  • The agreement contains elaborate provisions for resolution of disputes between the investor and a contracting party as well as between the contracting parties. In the former case, flexibility is provided for settlement of disputes either under the domestic laws or under international arbitration. In the latter case, if the dispute relates to interpretation or application of the agreement, it shall, as far as possible, be settled through negotiations. If it is not settled within 6 months from the time the dispute arose, it shall be submitted to an Arbitral Tribunal. The decision of the tribunal shall be binding on both the contracting parties.


  • The agreement shall initially be valid for a period of ten years and thereafter continue indefinitely unless either of the contracting parties give a written notice of its intention to terminate the agreement. The agreement shall stand terminated one year from the date of receipt of such a written notice. In the event of termination of the agreement, investments made prior to the termination will continue to enjoy the provisions of the agreement for a further period of 15 years.

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