'We're looking at the red flags': DEA secy hints foreign investment rules may become more investor-friendly

Against the backdrop of global uncertainty and a sharper push to draw foreign capital, India is reviewing its bilateral investment treaty model to make it friendlier to foreign investors, economic affairs secretary Anuradha Thakur said on Friday. She said the proposal could soon be taken up by the Cabinet.

Speaking at an event organised by the National Council of Applied Economic Research in New Delhi, Thakur also said private investments have started rising at a steady and stable pace, benefiting from the “crowding in effect” of the public capex surge in recent years. She cited an industry body study while outlining the broader investment picture.

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Review of BIT model

Thakur said the review of the bilateral investment treaty, or BIT, model is a “work in progress” and that consultations with industry are under way. The review comes as the West Asia crisis sharpens the focus on drawing in more foreign capital.

“We are looking at what the red flags are, and we have a negative list. We will set that aside, and see what is the maximum we can put out there,” Thakur said.

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Previously, it was reported that the government was examining whether to relax the five-year timeline for foreign investors, required under the 2016 treaty template, to first exhaust Indian legal remedies before pursuing global arbitration for dispute settlement, among other changes. Reducing this timeline remains a key demand of some foreign partners.

Growth, stability and investment

Thakur said India stands for growth and stability in times of global turmoil. “Capital is not simply looking for high returns; it is also looking for stability, predictability and strategic resilience,” she said. “That is where the importance of a stable macroeconomic and public finance framework comes in.”

She said that for the next phase of development, the country needs to weave its macroeconomic policy, capital formation and industrial strategy into one coherent growth strategy. She also highlighted the need for greater private sector investment in research and development, saying its share is to the tune of 41%, against 75-79% in some advanced countries.

Private investments picking up

Citing various data points and the industry study, Thakur said green shoots are visible in the private investment space. Project execution has picked up and project stalling is at its lowest in a decade. According to CMIE, project announcements by the private sector averaged almost Rs 34.8 lakh crore between 2024 and 2026, accounting for 71% of all new investment announcements, she said.

“Public investment continues to play a catalytic role by crowding in private investment. We are finally seeing movement in this direction,” Thakur said. She added that the Centre’s capex has jumped more than five times since FY15 to reach ₹10.7 lakh crore in FY26, and that for the current fiscal it is budgeted at ₹12 lakh crore.

Thakur’s remarks brought together the government’s review of the BIT model, its effort to attract foreign capital amid global turmoil, and signs of a steady pickup in private investment alongside higher public capex.