The Vietnam–India BIT Is Terminated: the 15-Year Sunset Clause Still Protects Old Investments — What About New Ones?

The direct answer: the bilateral Investment Promotion and Protection Agreement between Vietnam and India (signed 8 March 1997 in New Delhi) was terminated by India in its 2016–2017 wholesale review of its BIT network (the treaties are said to “stand terminated” from April 2017). But the story does not end there: Article 15 provides that after termination, the treaty’s provisions remain in force for 15 years for investments made before the termination date — the “sunset” (survival) clause. So a Vietnamese investment in India (or vice versa) established before 2017 still enjoys treaty protection until roughly 2032. New investments made after termination do not have this shield.

Why India terminated its BITs en masse

India adopted a new Model BIT in 2015 with a much narrower protection philosophy: a narrower definition of “investment”, a requirement to exhaust local remedies (typically five years) before international arbitration, and the removal of a broad most-favoured-nation (MFN) clause. The Indian government sent termination notices to 58 bilateral BITs, treating them as terminated from April 2017. The move followed a wave of ISDS cases against India (White Industries, Cairn, Vodafone and others). The Vietnam–India treaty was among those terminated. For investors, the key context: this was a systematic unilateral decision by India, not a sign of deteriorating Vietnam–India relations — two-way trade and investment keep growing.

The 15-year sunset clause: who is protected, and until when

Article 15 of the Vietnam–India BIT provides an initial 10-year term with automatic renewal, terminable on one year’s notice; after termination, the provisions continue to apply for 15 years to investments “made” before the termination date. In practice: an investment established (licensed, capital contributed, operations begun) before termination still enjoys the full protections — fair and equitable treatment, full protection and security, no expropriation without compensation, free transfer of funds, and most importantly the right to take disputes to international arbitration. Two limits to grasp: only old investments are covered, not new investments by the same investor; and the exact “termination date” can itself be disputed (India says April 2017) — counsel should check the UNCTAD database when advising on a specific case.

New investments after 2017: what protects them without a BIT

Vietnamese investors going to India (or Indian investors coming to Vietnam) after termination lose the treaty layer, but are not left bare. Three substitute pillars: first, the host country’s domestic investment law — India has a detailed sectoral FDI regime; Vietnam has the Investment Law 143/2025/QH15 (effective 1 March 2026). Second, commercial arbitration: put arbitration clauses (e.g. SIAC, ICC, VIAC) into contracts with counterparties — contractual disputes are resolved under the contract, no BIT needed. Third, the 1958 New York Convention — both Vietnam (1995) and India (1960) are members, so commercial arbitral awards are recognised and enforced across the border. Also watch: India is revising its 2015 Model BIT and renegotiating some treaties — a new-generation Vietnam–India BIT in the future cannot be ruled out.

Practical advice for two-way investors

For old investments (pre-2017): inventory the documents proving when the investment was “made” (licences, capital-contribution receipts, contracts) — that is the key to triggering the sunset clause; also mind the treaty’s limitation periods for bringing claims. For new investments: structure transactions through tight contracts, choose arbitration and governing law up front, and buy political-risk insurance for large projects. For businesses pitching new projects with Indian partners: do not cite the old BIT in offering materials — this mistake has appeared in some pitch decks; present the current legal framework honestly. And in all cases, consult counsel versed in both legal systems before signing.