ABSTRACT
While pursuing economic liberalization, several developing countries have moved towards s foreign direct investment (FDI) assisted development path in the last two decades. The rampant signing of bilateral investment treaties (BITs) by these countries is one aspect of this liberalization. BITs safeguard foreign investors’ interests in the host country, so as to further spur FDI. Several studies exist to see the role of BITs in inward FDI to developing countries. This chapter tries to see BITs’ role in outward FDI (OFDI) from India. For the analysis, the chapter uses OFDI data from India for the period 2007 to 2014 for 140 countries. Among these 140 countries, India has signed a BIT with over 50 of them. Using fixed-effect and random-effect models, the study does not find a significant positive impact of BITs on Indian OFDI. Indian firms seem to have invested in countries having high per capita income, high growth and large potential market size. The role of host country institutions is also vital in investment decisions.
