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India-Kyrgyz Bilateral Investment Treaty comes into force, deepens bilateral economic relation
Jun-06-2025

With aim of fostering bilateral economic relations and encourage cross-border investments between India and Kyrgyz Republic, Indian Finance Minister Nirmala Sitharaman and Kyrgyz Foreign Affairs Minister Zheenbek Kulubaev Moldokanovich have signed a protocol for enforcement of a bilateral investment treaty. The Bilateral Investment Treaty (BIT) signed on June 14, 2019, in Bishkek, between the Government of India and the Government of the Kyrgyz Republic, has entered into force with effect from June 5, 2025. The finance ministry has said that the new BIT replaces the earlier agreement enforced on May 12, 2000, ensuring continuity in the protection of investments between the two nations. The ministry has emphasized the significance of the BIT in strengthening bilateral economic relations and fostering a secure and predictable investment environment. It further added that the BIT aims to promote and protect the interests of investors of either country in the territory of the other country.

Some of the key features of the BIT include an emphasis on sustainable development in the preamble and removal of the most favoured nation (MFN) tag. According to finance ministry’s release, BIT contains two types of exceptions, general exceptions and security exceptions, to carve out a policy space for the State. The general exceptions include, among others, the protection of the environment, ensuring public health and safety, and protecting public morals and public order. Further, in order to provide investors with alternate dispute resolution mechanism, the BIT has calibrated the Investor-State Dispute Settlement mechanism with mandatory exhaustion of local remedies.

In order to retain sufficient policy space with the government in matters relating to local government, taxation, government procurement, services supplied in the exercise of governmental authority, and compulsory licenses, the BIT has excluded such matters. The treaty balances the investor rights with the sovereign regulatory powers of both countries and reflects a shared commitment to create a resilient and transparent investment climate. It is expected to further encourage cross-border investments and deepen economic cooperation between India and Kyrgyzstan.

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