India has conveyed to the United States its readiness to begin talks on a bilateral investment treaty, a subject that has been hanging fire between the two countries for some years.
Washington has been assiduously pushing India for such a treaty aimed at protecting private investment, developing market-oriented policies in the partner country, and promoting US exports. It was raised once again on Friday at the US-India CEOs Forum meeting at the State Department.
We have said yes, we are ready for it. We are in favour, Commerce and Industry Minister Anand Sharma told reporters after his meetings in Washington. We have signalled our acceptance and positive response, he said, but noted that no dates have been finalized on a start date for negotiations.
The United States, which has such bilateral investment treaties with more than 40 countries, believes such a pact will protect American investment abroad, encourage adoption of market-oriented domestic policies that treat private investment in an open, transparent and non-discriminatory way, and support development of international law standards consistent with these objectives.
India has its own Bilateral Investment Promotion and Protection Agreement (BIPA) with 82 countries, of which 72 are already in force. Its objective is to promote and protect the interests of investors of either country in the territory of other country.
The US India Business Council believes that such a pact with India would provide protection to US investors from arbitrary, discriminatory or confiscatory Indian government measures, enforceable by recourse to independent international arbitration.
Such a treaty could help facilitate additional investment in infrastructure and other areas in India where investment is badly needed and would provide protections to Indian companies as they expand investments in the US, says a note from the council on the issue.
The council reckons with such a bilateral investment agreement, India could look for more in-bound investment by giving US investors more confidence in the stability and predictability of the investment environment in India.
Besides agreeing to negotiate an investment pact, India and the US have also decided to hold the much-postponed meeting of their bilateral Trade Policy Forum in Delhi later this year. The last meeting of the forum was held in 2011, with the one scheduled for early 2012 failing to materialize.
Sharma spoke of the two sides now agreeing to hold an uinterrupted dialogue on economic and trade issues.
Commenting on India’s concerns over the US Immigration Bill, passed by the Senate and now pending before the House of Representatives, Sharma said he was hopeful that India’s concerns would be suitably addressed in the final version of the legislation on this subject.
At their meetings with US officials and lawmakers over the last couple of days, both Sharma and Finance Minister P. Chidambaram pointedly brought up the issue since the provisions in question would hurt Indian professionals and IT firms operating in the US.
At his news conference, Sharma disagreed with the perception that India was not all that welcoming for US and other foreign investors, saying New Delhi was doing everything to correct such a misperception. He cited a series of policy decisions in force to facilitate conduct of business in India.
The minister maintained that two-way trade between India and the US could be raised to $500 billion annually by 2020 if we make a real effort. Currently, the bilateral trade stands at $106 billion which, Sharma said, was much below the potential.