India Observers

In her lecture at the Wharton Business School, Finance Minister Nirmala Sitharaman made it clear that India’s approach to foreign direct investment (FDI) cannot be indiscriminate. While FDI is crucial for economic growth, India’s volatile geopolitical position necessitates a more measured stance. Her assertion that India "cannot just accept FDI for the sake of it" underscores the need to prioritize national security over unchecked foreign investments, particularly in a region marked by complex political dynamics. This approach has already impacted Chinese companies, halting billions of dollars in investments. Notably, restrictions on Chinese firms like BYD and Great Wall Motor were implemented in 2020. However, it is essential to understand that these measures are not country-specific but rather reflect a broader policy of stringent scrutiny of investments from neighboring countries, rooted in safeguarding India's strategic interests. Critics might argue that heightened s...

The Bilateral Investment Treaty (BIT) signed between India and the UAE on February 13, 2024, represents a significant milestone in the economic partnership between the two nations. As the earlier Bilateral Investment Promotion and Protection Agreement (BIPPA) neared its expiration, the BIT brings with it a renewed sense of stability, continuity, and assurance for investors from both countries. Coming into effect on August 31, 2024, this treaty underlines the importance of sustaining a secure, transparent investment environment. India and the UAE have long enjoyed a robust economic relationship, with the UAE ranking as India’s seventh-largest foreign direct investor. The cumulative investment of around USD 19 billion from the UAE into India and USD 15.26 billion of India’s investment into the UAE underscores the depth of their financial ties. In this context, the BIT not only safeguards existing investments but paves the way for future growth, particularly by offering key provisions tha...