Syllabus: GS2/ International Relations
In News
- India and the Republic of Uzbekistan signed a Bilateral Investment Treaty in Tashkent.
About
- The signing of the BIT reflects both nations’ shared commitment towards enhancing economic cooperation and creating a more robust and resilient investment environment.
- The BIT is expected to pave the way for increased bilateral investments, benefiting businesses and economies in both countries.
- It will increase the comfort level and boost the confidence of investors by assuring a minimum standard of treatment and non-discrimination, while providing for an independent forum for dispute settlement through arbitration.
Bilateral Investment Treaty (BIT)
- A BIT is a reciprocal agreement between two countries to provide protection to investments made by nationals and companies of one country in the other. It aims to create a favorable investment climate and promote economic cooperation between the signatory nations.
- India’s BIT Framework: India adopted a new Model BIT in 2015, replacing the earlier version from 1993. The new text serves as the template for negotiating future BITs and the investment chapters of Free Trade Agreements (FTAs) and Economic Partnership Agreements.
Key Features of India’s Model BIT (2015)
- National Treatment: Foreign investors are to be treated equally and fairly, similar to domestic investors, in all matters except in specific sectors where exceptions are mentioned.
- Protection from Expropriation: Limits the ability of the host country to expropriate (take over) foreign investments except for public purposes, in a non-discriminatory manner, and with adequate compensation.
- Fair and Equitable Treatment: Ensures fair treatment of foreign investors, but does not automatically guarantee broader rights like those found in older treaties.
- Full Protection and Security: Investments by foreign investors will be given full protection and security, consistent with the laws of the host country.
- Dispute Settlement: Exhaustion of Local Remedies: Investors must first attempt to resolve disputes within the legal framework of the host country, and only after exhausting all local remedies can they initiate international arbitration.
- Non-Discriminatory Treatment: Ensures protection from discrimination, particularly with respect to domestic investors, and guarantees Most-Favored-Nation (MFN) treatment.
| India -Uzbekistan Relations Historical Ties: – India and Uzbekistan have centuries-old ties dating back to the time of the Silk Road, where cultural, religious, and trade exchanges flourished. – The shared heritage between the two nations is evident in the cultural and historical similarities, including influences from Persian and Mughal eras. – India’s relationship with Uzbekistan grew stronger after the latter’s independence following the collapse of the Soviet Union in 1991. Political Relations: – Strategic Partnership: India and Uzbekistan elevated their relationship to a Strategic Partnership during Uzbek President Shavkat Mirziyoyev’s visit to India in 2018. – Regular High-Level Visits: Both countries regularly engage in high-level visits to deepen political, economic, and strategic ties. Indian Prime Minister Narendra Modi and President Mirziyoyev have met on several occasions, underlining the importance of the bilateral partnership. – Multilateral Engagement: India and Uzbekistan collaborate in various multilateral forums, including the United Nations, Shanghai Cooperation Organisation (SCO), and the India-Central Asia Dialogue. Economic and Trade Relations: – Trade: India-Uzbekistan trade has witnessed growth over the years, though the potential remains largely untapped. The main exports from India include pharmaceuticals, machinery, electronic products, and textiles, while Uzbekistan exports items like fruits, fertilizers, and raw materials. – Bilateral Trade Agreement: Both nations have a Bilateral Investment Treaty (BIT) in place, which protects and promotes investments. They are also working on finalizing a Preferential Trade Agreement (PTA) to enhance trade relations. – Pharmaceuticals: Indian pharmaceutical companies have a significant presence in Uzbekistan, and there have been ongoing efforts to enhance this partnership further. India supplies about 25% of Uzbekistan’s pharmaceutical needs.Information Technology: Uzbekistan is increasingly seeking India’s expertise in Information Technology and digital governance. Defense Cooperation: – Military Exercises: India and Uzbekistan regularly engage in joint military exercises such as DUSTLIK, aimed at enhancing counter-terrorism cooperation. – Defense Training: India provides military training to Uzbek armed forces through its various institutions, enhancing capacity-building efforts. – Security Cooperation: Both nations cooperate on counterterrorism, anti-radicalization, and intelligence-sharing, particularly in the context of growing security concerns in Afghanistan and Central Asia. Cultural Relations: – Cultural Exchanges: India and Uzbekistan have vibrant cultural exchanges that focus on arts, music, dance, and yoga. Hindi is also widely taught in Uzbekistan, and Bollywood is extremely popular. – People-to-People Ties: There is growing interest among the Uzbek population in India’s traditional medicine systems like Ayurveda and Yoga. Uzbekistan regularly participates in cultural festivals in India, and vice versa. Connectivity and Transportation: – Chabahar Port: India, Uzbekistan, and Iran are working on utilizing Chabahar Port to enhance connectivity with Afghanistan and Central Asia, bypassing Pakistan. This would open up opportunities for trade and economic engagement between India and Uzbekistan. – International North-South Transport Corridor (INSTC): Uzbekistan has shown interest in the INSTC, a project that aims to reduce the time and cost of transporting goods between India and Central Asia. Energy and Renewable Resources: – Energy Cooperation: Uzbekistan is rich in natural resources, and India has expressed interest in developing energy partnerships in areas like natural gas and renewable energy. – Nuclear Cooperation: Both countries signed a civil nuclear cooperation agreement for peaceful purposes, focusing on the exchange of knowledge and technology in nuclear energy. India’s Developmental Assistance: – Lines of Credit: India has extended various lines of credit to Uzbekistan to help fund infrastructure projects like road construction, water treatment plants, and renewable energy projects. – Capacity Building Programs: Through the Indian Technical and Economic Cooperation (ITEC) program, India provides training and capacity-building assistance to Uzbek professionals in various sectors, such as health, agriculture, and IT. Challenges – Geopolitical Concerns: Afghanistan’s instability remains a concern for both India and Uzbekistan, particularly after the Taliban takeover. Both nations are working to address common security challenges. – Trade Barriers: Despite the growing relationship, bilateral trade remains below potential due to connectivity issues, regulatory barriers, and lack of direct transportation links. Recent Developments – India-Central Asia Summit: India hosted the India-Central Asia Summit in January 2022, where both nations reiterated their commitment to strengthen ties, especially in trade, security, and energy sectors. – Afghanistan Issue: India and Uzbekistan have expressed common concerns over terrorism emanating from Afghanistan and the importance of ensuring that Afghan territory is not used for terrorism. |
Source: TH
Previous article
News In Short-27-09-2024
Next article
Karnataka Withdraws ‘general consent’ to CBI