Sustainable Development and Environmental Protection Under the International Investment Agreements of India – A Critical Review

Abstract

Introduction: In 2015, India adopted the reformed Model Bilateral Investment Treaty (BIT) and terminated most of its existing agreements. Same year, all members of the United Nations agreed on achieving 17 ambitious Sustainable Development Goals by 2030 (UNSGDs) with majority of the goals further highlighting the need for environmental protection. This paper examines the progress in achieving the SDGs through a review of the post 2015 Indian BITs for compliance with the sustainable development-oriented provisions.

Methodology: A review of the global and national reports and databases is undertaken for evaluating progress and gaps in meeting the UNSDGs at the national and state levels in India along with their SDG scores and foreign investment data and rankings. Post 2015 BITs signed, adopted and currently in force were reviewed and analyzed for their compliance with the sustainable development-oriented provisions.

Findings: India’s progress has been slow with further needing about USD 2.64 trillion in investments to meet the UNSDGs by 2030. Even with increased foreign investment there remains a wide gap in international investments and progress in SDG targets for India. Except for a few agreements, even the post reform BITs do not provide adequate safeguards for environmental protection. Both at the national and state level, a higher investment ranking does not naturally reflect a higher SDG score for the respective states e.g. states like Maharashtra and Gujarat together received almost 60% of the total foreign investment but lag in SDG progress in comparison to states that received much less FDI.

Conclusion: Future BITs must be carefully negotiated to make them SDG oriented and implemented with environmental protection and SDGs at their core. Besides mandatory environmental and social impact assessments, a negative or restricted list of areas for foreign investment adversely affecting the environment can be included in all BITs.