EconomyForeign Direct Investment
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Model BIT Review to Cabinet; Protecting Indian Outbound FDI New Focus, Net FDI Slips to $7B

Target:UPSC GS-IIIMPSCSSC GATeachingBankingPrelims HighMains HighStatic GK Link
07 Aug 2026
~2 min
Source: Indian Express
Key Data:Net FDI 2020-21: ~$44 billionNet FDI 2024-25: <$1 billionNet FDI 2025-26: $7 billionIndian ODI 2020-21: $11 billionIndian ODI 2024-25: $28 billionIndian ODI 2025-26: $34 billion
Bodies:Department of Economic AffairsCabinetNational Council of Applied Economic Research (NCAER)Enforcement Directorate
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What This Article Covers

1.Economic Affairs Secretary Anuradha Thakur said the revised Model BIT will soon be sent to Cabinet; protecting Indian firms' overseas direct investment is an entirely new dimension in negotiations.

2.Net FDI inflows fell from ~$44 billion in 2020-21 to less than $1 billion in 2024-25, recovering marginally to $7 billion in 2025-26, while Indian ODI rose from $11 billion to $34 billion over the same period.

3.The review includes the contentious five-year local remedies clause of the 2015 Model BIT and a possible negative-list approach to treaty clauses.

The Big Picture
Prelims · HighMains · High

The Centre is finalising a revised Model BIT for Cabinet approval, with a new focus on safeguarding Indian companies' rising outward FDI even as it protects foreign investors. This comes against a sharp fall in net FDI inflows to $7 billion in 2025-26, which has weakened the balance of payments and pressured the rupee.

Exam Lens

Quick Exam Facts From News

Model BIT Under Review2015 edition; Cabinet approval pending
Net FDI 2020-21~$44 billion
Net FDI 2024-25Less than $1 billion
Net FDI 2025-26$7 billion
Indian ODI 2020-21 → 2025-26$11 billion → $34 billion
Gross FDI 2025-26$95 billion (record)
Repatriation 2024-25 + 2025-26Over $105 billion
Local Remedies Clause5 years under 2015 Model BIT

1-Minute Revision

  • ›Model BIT Under Review: 2015 edition; Cabinet approval pending
  • ›Net FDI 2020-21: ~$44 billion
  • ›Target this Data: Net FDI fell from ~$44B (2020-21) to <$1B (2024-25), recovered to $7B (2025-26); Indian ODI rose from $11B to $34B.
  • ›Target this Policy Point: 2015 Model BIT mandates five years of domestic legal remedies before international arbitration.
  • ›Target this Nodal Body: Economic Affairs Secretary (Department of Economic Affairs) under the Ministry of Finance; final approval requires Cabinet.
  • ›Target this Institution: National Council of Applied Economic Research (NCAER) India Policy Forum was the venue.

Mastered this topic? Test your knowledge with a full MCQ quiz.

Practice exam-style questions, track your score, and strengthen your recall.

Q1Static LinkageEasy

Anuradha Thakur, quoted in the news, is the Economic Affairs Secretary under which ministry?

Q2Statement-basedHard

Consider the following statements:

1. The 2015 Model BIT required foreign investors to exhaust domestic legal remedies for five years before seeking international arbitration.

2. Net FDI into India increased from $44 billion in 2020-21 to $34 billion in 2025-26.

3. The Economic Affairs Secretary said the review is exploring a negative-list approach and keeping important red-flag clauses aside.

Which of the statements given above is/are correct?

Q3Data-centricMedium

According to the article, what was India's net FDI inflow in 2025-26?

Q4Application/ImpactMedium

According to Economic Affairs Secretary Anuradha Thakur, what is the 'entirely new dimension' in India's BIT negotiations?

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