Skip to main content

India Seeks Fresh Treaties with 47 Nations

Wants new pacts to make it mandatory for foreign investors to exhaust local judicial remedies before seeking arbitration
India has written to 47 countries to nullify the existing bilateral investment agreements and ink fresh treaties that will make it mandatory for foreign investors to exhaust local judicial remedies before seeking arbitration.
The Narendra Modi-led NDA government has prepared a model draft which will serve as the template for all investment agreements in the future and also for reworking the current ones.
“We have written to 47 countries...Treaties that have completed 10 years will be allowed to be lapsed so that a new text can be negotiated,“ a government official told ET.
Some of the countries that India has written to are European nations with whom treaties were signed earlier. Treaties that have been signed recently such as one with the United Arab Emirates will continue with the existing text and be revised later, the official said.
The Bilateral Investment Promotion Agreements (BIPA) seek to promote investment flows between two nations by assuring fair and equitable treatment on post-establishment basis through reciprocal provisions such as national treatment, most favoured nation treatment and mechanism for dispute resolution. The government amended the text after being dragged into international arbitration by as many as 17 companies or individu als including Deutsche Telekom of Germany, Vodafone International Holdings BV , Sistema of Russia, Children's Investment Fund and TCI Cyprus Holdings. India even lost an international arbitration case involving White Industries of Australia.
The Union cabinet had approved the revised model text for the Bila teral Investment Treaty in December. The revised model BIT will be used not just for the renegotiation of existing BITs and negotiation of future BITs but also investment chapters in Comprehensive Economic Cooperation Agreements, Comprehensive Economic Partnership Agreements and Free Trade Agreements.
The model BIPA prepared by India excludes matters such as government procurement, taxation, subsidies, compulsory licenses and national security from the scope of agreement. Although taxation matters were never covered by investment treaties the government decided to incorporate a specific provision after Vodafone served an arbitration notice challenging the retrospective amendment to income tax law to tax its buyout of Hutchison Essar's telecom operations in 2007.
The Economic Times New Delhi, 27th May 2016

Comments

Popular posts from this blog

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…

RBI rushes in to prop up falling rupee

RBI rushes in to prop up falling rupee India’s central bank reportedly intervened in the currency markets on Monday to prevent a further slide in the local unit, which breached the 67 mark to a dollar for the first time in 15 months amid a widening trade gap and runaway import bills fuelled by high crude-oil prices. Some state-owned banks were seen selling dollars aggressively, interventions that market dealers attributed to the central bank’s strategy to stem the decline of the Indian rupee against the US currency. The rupee is the worst performing among a dozen Asian monetary units in the past three months. It lost 4.25 per cent to the dollar during the period, show data from Bloomberg. On Monday, the Reserve Bank of India (RBI) is said to have sold about Rs 800 million collectively on the spot and exchange traded futures markets, dealers said. An email sent to RBI remained unanswered until the publication of this report. The currency market has seen such a strong central bank interven…

GST Refund of Rs 20,000 Cr Pending: Exporters’ Body

GST Refund of Rs  20,000 Cr Pending: Exporters’ Body Refund of over Rs 20,000 crore on account of Goods and Services Tax (GST) is pending with the government with more than half the amount stuck as input tax credit, Federation of Indian Export Organisations said on Tuesday. While claims over Rs7,000 crore were cleared in March, the amount was Rs 1,000 crore in April.However, after exporters’ request, the GST council and tax department are organizing a second phase of Special Refund Fortnight starting May 31, which will enable exporters to draw their refunds at a speedy pace. Many exporters have been unable to file the refund of input tax credit due to technical glitches, exports and claim happened in different months. The major challenge lies on ITC refund especially because the process is partly electronic and partly manual which is cumbersome and add to the transaction cost, the exporters’ body said. On IGST, refunds are getting delayed due to airline and shipping companies not submitt…