 between India and Kyrgyzstan officially came into force today, June 5, 2025){kind=link}
JUNE 05: In a significant step toward enhancing economic relations, the Bilateral Investment Treaty (BIT) between India and Kyrgyzstan officially came into force today, June 5, 2025. The formal ratification and exchange of instruments were conducted in New Delhi by Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman and the Minister of Foreign Affairs of the Kyrgyz Republic, Mr. Zheenbek Kulubaev Moldokanovich.
Originally signed on June 14, 2019, in Bishkek, the new BIT replaces the earlier agreement from May 12, 2000. The updated treaty reflects a modern approach to investment protection, while offering a more balanced and transparent framework for investors from both countries.
The BIT is designed to promote mutual investment while safeguarding sovereign policy space. Among its notable features is the enterprise-based definition of investment, which includes a clear list of included and excluded asset types. The agreement outlines characteristics such as capital commitment, risk assumption, and the potential for profit, ensuring that investments are genuinely developmental in nature.
Significantly, the new BIT excludes matters related to local government, taxation, government procurement, and compulsory licensing. These exclusions preserve the regulatory freedom of both nations while still encouraging investor confidence.
To ensure fair treatment of investors, the treaty defines treatment standards based on customary international law. However, it excludes the Most Favored Nation (MFN) clause, a move aimed at preventing the import of provisions from other agreements that could undermine the host country’s policy autonomy.
The treaty includes well-defined general and security exceptions. These allow both countries to regulate in areas such as environmental protection, public health, and national security without breaching treaty obligations. Importantly, the treaty also introduces a calibrated Investor-State Dispute Settlement (ISDS) mechanism that mandates exhaustion of local legal remedies before international arbitration is pursued.
The BIT demonstrates a commitment to sustainability by emphasizing it in the preamble, reinforcing both countries’ shared goals for responsible investment and development. The agreement seeks to strike a balance between investor protection and the sovereign rights of the host country.
This development is expected to boost investor confidence, increase bilateral investments, and foster deeper economic cooperation between India and the Kyrgyz Republic, aligning with broader regional and global economic integration goals.