New Delhi, Feb. 24 -- India's budget for 2025-26 lays out a two-pronged approach to enhancing foreign investments: revamping India's model Bilateral Investment Treaty (BIT) to "encourage sustained foreign investment" and undertaking necessary "regulatory reforms" to ensure a light-touch regulatory framework based on principles and trust to "unleash productivity and employment." Both must go hand in hand.

The "model BIT" referred to is the one released by the government in 2016 to overhaul India's approach to BITs. While India had signed over 80 BITs between 1994 to 2011, it terminated 68 of them in 2016-17. Other countries did likewise, as the 1990s model followed globally was widely seen as outdated. India's reworked model BIT, however,...