The Unfinished Pillar: Negotiating the EU–India Investment Protection Agreement Between the Investment Court System and State-to-State Arbitration

The conclusion of the India–European Union Free Trade Agreement on 27 January 2026 left its investment pillar unbuilt. Investment protection was assigned to a separate Investment Protection Agreement (IPA), negotiated in parallel since June 2022 and still unconcluded. Meanwhile, European investments made in India after the 2017 termination of India’s bilateral investment treaties with twenty-two EU member states enjoy no treaty protection at all. This article examines the institutional question at the centre of the negotiation: whether disputes under a future IPA should be resolved by the European Union’s two-tier Investment Court System (ICS) or by the state-to-state mechanisms that now characterise India’s trade agreements. It traces the arbitral experience behind India’s 2016 Model Bilateral Investment Treaty, the constraints that EU constitutional law places on any dispute settlement design after Opinion 2/15, Achmea and Opinion 1/17, and India’s treaty practice through 2026, including the pending revision of its Model BIT. Drawing on the literature on institutional choice in investment law, it argues that the two positions are less opposed than the binary suggests. Both reject ad hoc, party-appointed arbitration, and both seek interpretive control by the treaty parties. The real obstacles lie in four narrower issues: exhaustion of local remedies, the taxation carve-out, most-favoured-nation treatment and the enforceability of awards in India. The article proposes a model of “sequenced standing adjudication” that combines dispute prevention, a time-limited domestic remedies phase and state-to-state filters with a bilateral standing court docked to multilateral reform.