India, UAE ink key investment protection agreement
Dec 13, – The UAE and India on Thursday signed an eagerly-awaited Bilateral Investment Promotion and Protection Agreement (BIPA) that would be crucial in redefining the investment and trade cooperation between the two countries.
The landmark accord promises to significantly boost investments in Indian infrastructure projects by the UAE and will help enhance investor confidence and ensure protection of bilateral investments.
The UAE is the 10th largest investor in India, the third largest Asian economy, in terms of foreign direct investment. Both nations are each other’s largest trading partners with bilateral trade totalling over $75 billion in 2012-13 fiscal. While the UAE’s investments in India have been just over $3 billion, investments made by Indians in the Emirates are estimated to be over $55 billion.
UAE Minister of State for Financial Affairs Obaid Humaid Al Tayer and Indian Finance Minister P Chidambaram signed the treaty following a meeting between UAE Foreign Minister Shaikh Abdullah bin Zayed Al Nahyan and his Indian counterpart Salman Khurshid.
With this accord, India now has such treaties with all GCC countries.
The BIPA, described as a new chapter in the thriving UAE-India economic ties, has been designed to provide a comprehensive framework to investors from both countries and ensure promotion and protection of their investments. The accord will open up the possibility of realising a long delayed India-GCC Free Trade Agreement, which has been under negotiation for quite some time.
The signing of the BIPA also opens up the possibility of a High Level Task Force meeting again in early January 2014 to explore investment opportunities.
In February this year, at a high-level Task Force meeting in Abu Dhabi, co-chaired by Chairman of the Abu Dhabi Crown Prince’s Court Shaikh Hamed bin Zayed Al Nahyan and Indian Commerce and Industry Minister Anand Sharma, both countries agreed to expedite an accord to boost two-way trade and investment, and allocate $2 billion for investments in infrastructure projects in India. Both sides also agreed to establish strategic oil reserves in India and to speed up the resolution of issues associated with existing investments and opportunities for new cross-border investments across a range of sectors.
In May, Indian Finance Minister Chidambaram met heads of UAE sovereign wealth funds and discussed the scope for investing in India’s infrastructure sector as well as in government and corporate bonds.
During his UAE visit in March, Chidambaram pledged more liberal reforms in attracting foreign direct investment and foreign institutional investment to fuel India’s growth. He also assured Emiratis and other foreign investors of a safe and stable investment environment in India and pointed out that huge investment in infrastructure development, availability of millions of young people, and relatively high household consumption rate were strong factors favouring India’s growth.
The Indian minister also reaffirmed that UAE investors’ money would be 100 per cent safe and secure in India, which is on track for an exponential growth in infrastructure and capacity expansion.
The UAE controls the second largest Sovereign Wealth Fund in the world (over $600 billion) under the Abu Dhabi Investment Authority. It has voiced keenness to explore investments in major infrastructure projects in India but was awaiting the inking of the BIPA.
Figures released by the Indian Business and Professional Forum reveal that the UAE has investment interests in India mainly through Emaar and Etisalat while India has varied investment in the UAE, exceeding Dh200 billion.
Press journalist for HRO media – Contributed to this report.
Category: International
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