NEW DELHI: Government is likely to sign a bilateral investment treaty (BIT) with Saudi Arabia, allowing companies from the Gulf state to initiate international arbitration two years after they exhaust legal remedies in India. This is a concession from the current five-year clause in the model BIT finalised by govt a year ago.The Union cabinet had discussed the model BIT last week and officials said for Saudi a two-year window was being provided at a time when Saudi Aramco is looking to invest in two refineries in the country, along with BPCL and ONGC. Besides, other investment plans are also lined up. In the past, govt has made concessions for UAE and Israel.

The move comes at a time when the Union cabinet will consider a proposal to reduce the period for exhaustion of legal remedies from five years. While the original plan was to reduce the period to one year, the decision in case of Saudi Arabia may result in this being extended to two years, officials indicated.“We have a new template which will be approved (by cabinet) shortly. But in the meanwhile, we have not halted the process. We are negotiating with countries with a lot more of those elements which are in the new template,” finance minister Nirmala Sitharaman said on Monday.She said negotiations are underway with several countries, including Canada and Russia, on bilateral investment protection agreements. “If things go well, by Dec we should be concluding agreements with at least three more countries,” she said at the Munich Security Conference, adding that negotiations with Canada could be concluded by Dec or early next year if they progress as expected. The amendment comes at a time when India is seeking to step up FDI inflows.