The rule of Exhaustion of Local Remedy (hereinafter the ELR) is a qualification that needs to be complied by the investor. This rule is a part of the customary international law. Various Bilateral Investment Treaties (hereinafter BITs) have included the ELR rule in their texts. The Indian Model BIT is one such instance where the exhaustion of ELR is ´expressly required´. This Model BIT is considered as a departure from the previous ISDS regime in India. This thesis aims to focus on the aspect of Exhaustion of Local Remedies as included in the Model BIT of India. The ELR criteria is one of the prominent requirements in this Model BIT. The initial chapters of this thesis analyze the principles, scope of ELR rule in general. Then there is a brief note on the Model BIT of India. Subsequently, specific scope of ELR rule in the model BIT of India is discussed. The aspect of time period of ELR rule, the futility exception has also been dealt therein. There has been a comparison of ECHR´s ELR provision to ELR rule in the Model BIT of India. This thesis is an attempt to understand the application of ELR rule both in general context as well as within the purview of Model BIT of India