Context: 

Recently, India and Uzbekistan signed a Bilateral Investment Treaty (BIT) in Tashkent, aimed at enhancing investor confidence between the two nations. 

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• The BIT was formalized by Union Finance and Corporate Affairs Minister Nirmala Sitharaman and Uzbekistan's Deputy Prime Minister Khodjayev Jamshid Abdukhakimovich.
• It aims to assure appropriate protection for investors, including protection of investments from expropriation, transparency in transactions, and compensation for losses, thereby creating a more favourable investment climate.
• This treaty is a significant step towards fostering economic cooperation and ensuring more robust and resilient protection for investors from both countries. 

Bilateral Investment Treaty (BIT)

The framework of the BIT: 

• The BIT assures a minimum standard of treatment and non-discrimination for investors from both nations. 
• It also establishes an independent forum for dispute resolution through arbitration, which is crucial for maintaining investor confidence.

Balancing Regulation and Protection: 

• While providing comprehensive protection to investors, the treaty maintains a balance with the state's right to regulate investments. 
• This ensures that countries can implement necessary policies without compromising investor rights.

Expected Outcomes: 

• The signing of the BIT is expected to pave the way for increased bilateral investments, benefiting businesses and economies in both India and Uzbekistan. 
• Notably, Overseas Direct Investment (ODI) from India to Uzbekistan reached US$ 20 million from April 2000 to August 2024, with significant investments in pharmaceuticals, amusement parks, automobile components, and hospitality sectors.

Bilateral Relation between India & Uzbekistan 

• The protocol on the establishment of diplomatic relations between India and Uzbekistan was signed in 1992. 
• India and Uzbekistan declared their Strategic Partnership in 2011.
• As per Uzbek statistics-2023, India is among the top 10 trade partners of Uzbekistan with bilateral trade of $756.60 million. 
• India's major items of exports to Uzbekistan include services, mechanical equipment, optical instruments and equipment, pharmaceutical products, vehicle parts, and mobile phones. 
• India’s imports from Uzbekistan include juice products and extracts, fruit and vegetable products, fertilizers, lubricants and services.
• India and Uzbekistan participate in joint military exercises under the title “DUSTLIK”, with the fifth edition held in April 2024 in Termez, Uzbekistan. It is held annually and alternates between India and Uzbekistan. 
• India and Uzbekistan cooperate closely at several multilateral platforms such as the UN, G20, BRICS & SCO. Uzbekistan has also actively participated in the Voice of Global South Summit (VGSS).