Due to cancellation of the 2G spectrum by the Supreme Court a number of firms, including some telecom companies, threatening to drag India to international tribunals to protect their investment. 

Thus the government is planning to form a committee headed by Cabinet Secretary to handle broader issues involving foreign investments made under bilateral agreements with other countries.

The issues arising out of Bilateral Investment Treaty (BIT) or Bilateral Investment Protection Agreement (BIPA) signed between India and other nations will be handled by the new committee.

Russian conglomerate Sistema JSFC following licence cancellation of its joint venture firm Sistema Shyam Teleservices has served a notice to the Centre invoking the right to protect its investment under a bilateral treaty after the Supreme Court cancelled 122 telecom licences on February 2, in the 2G spectrum allocation case.

Besides, Telenor Asia Pte, Singapore; Capital Global Ltd and Kaif Investment -- both Mauritius based investors in Loop Telecom; and Vodafone International Holdings BV, the Netherlands, have served legal notice to the government.

The Committee will not look into specific notices served by an investor to government.

What is Bilateral Investment Promotion And Protection Agreements?

As part of the Economic Reforms Programme initiated in 1991, the foreign investment policy of the Government of India was liberalized and negotiations undertaken with a number of countries to enter into Bilateral Investment Promotion & Protection Agreement (BIPAs) in order to promote and protect on reciprocal basis investment of the investors.

The objective of Bilateral Investment Promotion and Protection Agreement is to promote and protect the interests of investors of either country in the territory of other country. Such Agreements increase the comfort level of the investors by assuring a minimum standard of treatment in all matters and provides for justifiability of disputes with the host country.

Government of India have, so far (2011 data) signed BIPAs with 82 countries out of which 72 BIPAs have already come into force and the remaining agreements are in the process of being enforced. In addition, agreements have also been finalized and/ or being negotiated with a number of other countries.