The Investment Chapter in the India-EFTA Free Trade Agreement: Is it a 100 Billion Dollar Deal?

The investment chapter in the free trade agreement (FTA) signed between India and the European Free Trade Association or EFTA – a block comprising Switzerland, Norway, Iceland, and Liechtenstein – contains some novel provisions, such as an attempt to quantify the investment that the EFTA states will make in India – USD 100 billion in fifteen years. This has prompted many to describe this as a 100-billion-dollar deal. Another key provision in the investment chapter is that it arguably allows India to retaliate against the EFTA states if the investment does not materialize. . However, a close reading of the treaty provisions shows that the so-called ‘obligation to invest’ of the EFTA states in India is an obligation of conduct, not result. Moreover, the possibility of India’s retaliation is steeped in bureaucratic procedures and contingent on several factors, which makes it practically unworkable. The article also highlights the conspicuous absence of investment protection features in the investment chapter of the India-EFTA FTA. While this is consistent with India’s defensive approach to international law on investment protection and not including such provisions in its recent FTAs, it will pose challenges to EFTA investors due to the high risks of doing business in India.