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As part of the Economic Reforms Programme initiated in 1991, the foreign investment policy of the Government of India was liberalised and negotiations undertaken with a number of countries to enter into Bilateral Investment Promotion & Protection Agreement (BIPA) in order to promote and protect on reciprocal basis investment of the investors. Government of India have, so far, (as by July 2012) signed BIPAs with 82 countries out of which 72 BIPAs have already come into force and the remaining agreements are in the process of being enforced.17 In addition, agreements have also been finalised and/or being negotiated with a number of other countries.
The objective of the BIPA is to promote and protect the interests of investors of either country in the territory of other country. Such agreements increase the comfort level of the investors by assuring a minimum standard of treatment in all matters and provides for justifiability of disputes with the host country (it should be noted here that India is not a member of the World Bank group’s body, the ICSID, serving the same purpose. BIPA is India’s version. While the former is a multilateral body, the latter is a bilateral one).