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.