ABSTRACT
This research paper examines the legal validity of India’s recent decisions to exit or suspend certain international treaties, especially Bilateral Investment Treaties (BITs) and the Indus Waters Treaty, following the Vienna convention. The main focus is on the Vienna Convention on the Law of Treaties, even though India is not an official signatory of it. The paper focuses on Articles 54, 56, and 62, which deal with treaty termination, withdrawal without a clause, and fundamental change of circumstances. It also discusses major cases like White Industries and Vodafone, and analyses India’s Model BIT and its legal reasoning for treaty reform. By balancing international legal standards with national interest, the paper argues that India’s actions, while legally cautious, highlight the need for a more structured treaty for exit policies.
KEYWORDS
Vienna Convention, BITs, Indus Water Treaty, International Law, Treaty withdrawal.
INTRODUCTION
In an increasingly interconnected global order, treaties form a legal backbone of diplomatic relations between nations. Treaties have been the cornerstone of International Relations, offering nations a structured way to engage in co-operation, resolve dispute, and ensure predictability and accountability in cross-border affairs. India has been a party to numerous bilateral and multilateral treaties ranging from trade and water sharing to consular access and peace treaties with strong elements of international diplomacy and conflict resolution.
However, over the years a growing trend of India either suspending, reviewing or expressing intent to exit from some long-standing agreement, especially those involving hostile neighbour like Pakistan and which are perceived as outdated or misaligned with the country’s current strategic or legal priorities.
This shift of India’s foreign policy was most visibly marked in 2017, when India terminated 58 Bilateral Investment Treaties (BITs). This decision was taken because of the growing number of Investor State dispute Settlement claims filed against India, often challenging its domestic regulatory actions and resulting in reputational or financial damage.
In 2023-2025, India Began taking steps to suspend or withdraw from certain high-profile treaties. One such example is the reconsideration of the Indus water treaty (IWT), which was originally signed with Pakistan in 1960. Adding to the context, Following the Pahalgam attack in Jammu and Kashmir on April 24, 2025 which involved a series of civilian casualties, India announced the suspension of the IWT, placing it “in abeyance” (stopped for being used for a fixed period of time).
These actions of India have sparked questions about the Legality of such withdrawals under the International Law. Specifically, The Vienna Convention on the Law of Treaties (1969), which codifies the rules governing the formation, termination, Amendment and modification, suspension of operation of treaties. While India is not a party to the convention, it has consistently followed its principles, many of which are considered customary International Law.
This Paper seeks to examine Indias recent decisions of withdrawing from or suspending certain bilateral treaties in light of the Vienna Convention. Through a detailed analysis of relevant provisions- particularly Articles 54 (Termination of agreement), Article 60 (Material breach) and Article 62 (Fundamental Change of circumstances) the research evaluates the legitimacy of such moves from Legal Standpoint.
RESEARCH METHODOLOGY
This research is based on doctrinal (or secondary) methods. It involves the study of legal texts such as international conventions, case laws, scholarly articles, and government documents, book by Malcom N. Shaw on International Law and various reports. The Vienna Convention on the Law of Treaties forms the core legal framework. Reports, arbitration rulings, and policy papers were used to analyze India’s treaty exit actions in light of international law.
REVIEW LITERATURE
The Legal validity of India’s treaty exit can only be properly understood when we look at one of the most foundational sources in this area is the Vienna Convention on the Law of Treaties (1969), commonly referred to as the VCLT. Although India is not a formal party to this convention, many of its principles especially those found in Articles 54, 56, and 62 are widely regarded as part of customary international law, which India has generally aligned its actions with.
One of the core academic texts used in this research is Malcolm N. Shaw’s book International Law, which gives a detailed explanation of how treaties work in international law. His book also covers key ideas like pacta sunt servanda, and the limits of treaty termination. This helped build a better understanding of how India’s actions fit into international legal standards.
The Brookings Institution’s report on India’s 2016 Model BIT outlines the shift in India’s treaty approach by highlighting its focus on protecting sovereign regulatory space and limiting Investor State Dispute Settlements claims. The report supports India’s legal basis for treaty exits, especially under Article 54.
Simon Weber’s article on the Kluwer Arbitration Blog examines India’s experience in White Industries and Vodafone, noting how these cases triggered legal reform. Similarly, the Global Arbitration Review article by Khaitan & Co. confirms that India followed proper notice periods under treaty clauses.
Together, these sources show that India’s treaty exits are not just political decisions—they are based on legal rules, past experience, and a desire to protect its sovereignty while still acting within international law.
INTERNATIONAL LAW AND TREATY FRAMEWORK
International law serves as a foundation for maintain order, cooperation, and peaceful relations among countries. One of the vital components is the treaty framework, which enables countries to enter into binding agreements that regulate a wide range of global issues from trade and security to human rights and environment protection. Treaties are governed by established legal principles that ensure clarity, mutual respect, and accountability among states.
The Vienna Convention on Law of Treaties provides the essential legal framework for any discussions of the nature, characteristics, formation and termination of the treaties.
THE VIENNA CONVENTION ON LAW OF TREATIES,1969 (VCLT)
The Vienna Convention on the Laws of Treaties, 1969, is an agreement which governs treaties between states that was drafted by the International Law commission of the United Nations and adopted on May 23, 1969 and entered into force in 1980. Which was then adopted on 20th March 1986 in a Conference, where the Convention on treaties was signed by ninety-seven States and International Organizations.
The Vienna Convention on Laws of treaties was adopted recognizing the importance of treaties as a source of International Law and the role and functions of treaties in international relations and cooperation among nations. It emphasizes that the International Agreements must be based on the principles of free consent and of good faith and pacta sunt servanda, reflecting the foundational principle of International Law. It also highlights the need for a comprehensive and uniform legal framework to regulate the information, interpretation and termination of treaties. By codifying and developing treaty law, the Convention seeks to strengthen international justice and stability in relations among states.
The VCLT provides a structured legal blueprint governs the Life cycle of treaties, from Negotiations and Ratification to Implementation and eventually Termination which applies to treaties between States. The Convention serves as a critical guide in ensuring that the obligation undertaken by the states though the treaties are respected and when necessary, appropriately concluded. This structured approach makes it easier for states to understand their obligations and rights under the convention, facilitating smoother international cooperation. Each part serves a distinct purpose, from defining what constitutes a treaty to establishing processes for resolution in case of disputes.
Some of the most Important Articles within VCLT, Article 54,56 and 62 which are about Termination and Suspension of the Operation of Treaties are examined in this paper to study the Legality of Indias exit from Treaties and how it aligns with the above provision in VCLT.
FORMATION OF TREATIES
According to the Convention, every sovereign state holds the legal capacity to enter into a treaty and the process involved in bringing treaties into effect. The process of treaty formation includes several essential elements, such as the Consent to be bound by the treaty through mechanisms like signature, exchange of instruments, ratification, accession. By clarifying these processes, the VCLT makes sure that there is no ambiguity regarding when the treaty becomes legally binding, thereby avoiding disputes that may arise from different interpretations of the treaty enactment by the parties to the treaty.
PERFORMANCE AND INTERPRETATION
One of the most important segments is Part III, which includes the principle of “pact sunt servanda” enshrined in Article 26 of the Vienna Convention. It implies that every treaty in force is legally binding and must be honored by the parties to it by performing it in good faith. This principle is fundamental to the stability and reliability of international agreements. Without it treaties would be nothing more than statements of intent, with no guarantee that parties would follow through their obligations. Good faith in performance also means that parties must also refrain from actions that would invalidate the purpose of the treaty, ensuring a cooperative spirit among signatories.
A Party to the treaty cannot invoke Domestic Law of its territory as a justification for its failure by to perform their commitments. The Convention offers a systematic approach to treaty interpretation. Article 31 emphasizes interpreting treaties according to the ordinary meaning of their terms, in the context of their object and purpose, while Article 32 allows recourse to supplementary materials like preparatory work to resolve ambiguity or confirm meaning.
AMENDMENT AND MODIFICATION
Treaties which are once concluded, may need to be amended or modified as circumstances change. Amending and Modifying International Agreements share a common aim in that they both involve a revision of treaties, they are separate activities and may be accomplished in different manner. Amendments require mutual consent, whereas modifications can be made by some parties provided they do not alter the rights or obligations of others or conflict with the treaty’s object and purpose.
SUSPENSION AND TERMINATION
There are a number of methods available by which treaties may be terminated or suspended. These include mutual agreement, a material breach, or the emergence of circumstances that render performance impossible. However, where a treaty contains no provision regarding termination and does not provide for denunciation or withdrawal specifically, a state may only denounce or withdraw from that treaty where the parties intended to admit such a possibility or where the right may be implied by the nature of the treaty. Article 62 incorporates the principle of rebus sic stantibus, a Latin maxim meaning “things thus standing.” This principle allows for treaty withdrawal when there has been a fundamental change in circumstances that the parties did not foresee and which radically alters the obligations under the treaty. Additionally, if a new peremptory norm of international law arises, any existing treaty conflicting with it becomes void and terminates accordingly. These provisions underscore the importance of adaptability and coherence in the international legal framework.
EFFECTS OF TERMINATION
Termination of a treaty releases the parties from future obligations, but any rights or duties that arose before termination remain valid and enforceable, which ensures that states cannot evade their responsibilities simply by exiting a treaty. This clause preserves the stability of international relations by ensuring that commitments made in the past are respected, even if a treaty is no longer in force.
INDIA’S TREATY EXIT PRACTICE
India in recent years has terminated or suspended numerous International Treaties. In 2016 the Government notified termination of dozens of Bilateral Investment Treaties (BITs), especially with long standing partners. For example, in 2016-17, the government issued termination notices to 58 countries including the United Kingdom, France, Germany and Sweden with whom existing BITs have either expired or were expiring soon. Since 2016, India has terminated 75 BITs of 83 signed BITs, the most recent one being the Latvia.
In each case India followed the treaty’s exit clause (usually one year notice after the initial term), complying with article 54 of VCLT. India also entered new “next-generation” investment treaties for instance with UAE, Belarus, Taiwan, Kyrgyzstan which are largely based on its 2016-17 Model BIT.
India’s stated rationale for withdrawing or renegotiating treaties centers upon reclaiming regulatory autonomy and limit exposure to Investor- state Dispute settlement (ISDS) claims. Landmark cases such as:
-White Industries v. India (2011): India was held liable for failing to provide effective judicial remedies and had to pay damages of USD 4.1 million to an Australian Investor.
– Vodafone v. India (PCA Case no 2016-35): The tribunal found India’s retrospective tax demand violated the India–Netherlands BIT, ordering India to cease enforcement and reimburse legal costs.
In response, India developed and released a Model BIT in December 2015 (published in 2016) was designed to limit state liability and protect policy space. The new model narrows definitions of investment, excludes taxation from ISDS, and mandates a 5-year exhaustion of local remedies before arbitration. It serves as the basis for future negotiations, with India issuing exit notices to states whose existing BITs did not conform to the model. By 2021, India had negotiated only four new BITs (with Brazil, Belarus, Kyrgyzstan, and UAE), while terminating 68 others.
India has also taken action in non-investment contexts. In 2023, it suspended the Indus Waters Treaty (1960) with Pakistan, citing national security after the April 2024 Pahalgam terror attack, India announced the IWT would remain “in abeyance” (suspended) indefinitely until Pakistan “irrevocably ends its support” for cross border terrorism. The Indian Ministry of External Affairs referred to “fundamental change of circumstances,” a legal standard under international law, to justify the suspension.
LEGAL ANALYISIS UNDER THE VIENNA CONVENTION
- Article 54 (Termination Clause)
VCLT Article 54 allows a party to terminate or withdraw “in accordance with the provisions of the treaty”. In India’s case, nearly all targeted BITs explicitly allow a party to terminate by notice (commonly one-year notice after an initial term). India has consistently followed this procedure. For example, its 2016 notice to the Netherlands ran the full termination period, and India has similarly given proper notice for the other 50+ BITs it pulled off from. The India–Netherlands BIT, for example, provided that it would remain in force for 15 years from 1996 and could be terminated by one year’s notice thereafter; India gave notice in Dec. 2016, so the treaty protections for new investments ended around Dec. 2017. Under Article 54, these withdrawals are legal exercises of treaty rights – so long as India waits the required time. Because India followed the contractual notice procedures, these terminations are generally valid under Art. 54. Thus, India’s BIT exits via notice are sound under Article 54.
- Article 56 (No Exit Clause)
Article 56 governs treaties that have no termination or denunciation clause. It provides that such treaties “is not subject to denunciation or withdrawal” unless the withdrawing party can show either that the parties actually intended to allow withdrawal, or a withdrawal right is implied by the nature of the treaty. If India tried to abandon a treaty lacking any exit clause (and did so unilaterally), it would risk violating pacta sunt servanda – the fundamental obligation to honour treaties. India has mostly avoided this problem by terminating only those treaties that explicitly allowed notice or by securing mutual consent. For a treaty silent on exit, India would need either express party agreement or a legal argument (e.g. invoking Article 62) to create an “implicit” right to exit. Therefore, Article 56 constrains India, it cannot simply walk away from a silent treaty.
- Article 62 (Fundamental Change of Circumstances)
Article 62 of the Vienna Convention (the rebus sic stantibus clause) allows termination or suspension if there has been a “fundamental change of circumstances” that was unforeseen and radically alters treaty obligations.
Two conditions must be met and neither party’s own wrongdoing can have caused the change. Specifically: (1) the changed circumstances must have been an “essential basis” of the consent to be bound, and (2) the change must “radically transform” the extent of obligations under the treaty.
India has hinted at Article 62 in its recent actions. Notably, in suspending the Indus Waters Treaty, India explicitly cited a “fundamental change of circumstances” as- security threats, demographic shifts, climate needs and invoked Article 62 as the legal basis. If India tried a similar claim for withdrawing from BITs, for example citing a dramatic shift in the global investment landscape, it would face difficult legal consequences. No tribunal has ever accepted a BIT termination on such broad grounds. In past cases, tribunals examining Article 62 claims have set a very high bar – typically reserving it for truly exceptional events, for example the end of colonial rule, massive economic collapse. Arguably, changes in investment trends or other policy concerns would not qualify as “radical” enough to meet Article 62.
SUGGESTIONS
Looking at how India has been exiting from treaties, I believe there are a few things the government can do better. First of all, India should try to create a proper framework or set of guidelines for the Termination and suspension of Treaty. Right now, it seems like some decisions are made outright, and that can lead to confusion or mistrust. If there’s a proper step-by-step process that is followed every time, it would show that India is acting responsibly. Also, instead of ending treaties completely, India can initiate talk to the other country involved and try to fix the parts of the treaty that are no longer working. This can be done through mutual understanding without going to court or causing tension. Another thing is, not every treaty is harmful or risky. India should identify which treaties are actually causing problems and only focus on those, instead of ending many at once. It would also help if India had stronger systems within the country to solve disputes, so that it builds trust among foreign investors so that they feel safe and confident without needing to go for international arbitration every time. Even though India is not officially part of the Vienna Convention, it should still try to follow the general rules that most countries respect. This will make India’s actions more acceptable globally. Lastly, I think decisions like exiting from big treaties should not be taken by just a few officials. Parliament or other public bodies should be involved too, so that the decision reflects the country’s overall thinking, not just the government’s opinion.
CONCLUSION
India’s evolving treaty practice, particularly its termination of BITs and the suspension of the Indus Waters Treaty, marks a significant assertion of sovereign control in international relations. In most cases, India has followed Article 54 of the Vienna Convention, where India has adhered to procedural requirements for treaty withdrawal. So, when India gave proper notice before ending many of its BITs, it acted within its rights. However, when it comes to treaties that don’t mention an exit option, Article 56 and 62 makes things more complicated, especially in cases lacking explicit exit clauses or attempting to invoke “fundamental change” as justification.
Although India is not a signatory to the Vienna Convention, it still mostly follows its rules, since many of them are now part of customary international law. By aligning its actions with the principles of good faith, pacta sunt servanda, and legal certainty, India can balance its national interests with international credibility. Going forward, a more structured, transparent, and diplomatically nuanced treaty exit strategy will be essential, not only to safeguard India’s interests but also to uphold its image as a responsible and rule-abiding actor in the global legal order.
NAME- Aaditya Pawar
College- Siddharth College of Law, Mumbai.