New Delhi: After the India-European Free Trade Association (EFTA) trade deal that witnessed $100 billion investment commitment, Switzerland is now pushing for a new bilateral investment treaty (BIT) with India and a “red carpet” for investors from the four-nation bloc to meet the target.
The issue of the investment treaty, a sore point with most countries, was flagged during a bilateral meeting between the Indian and Swiss finance ministry officials last month, sources said.The model treaty put in place by the Indian govt is unacceptable to most developed nations as it is seen to be limiting the ability of foreign investors to seek remedial action and the progress on disputes under the Indian system is seen to be very slow.
Although the two countries are “taking stock”, the Indian side is unwilling to offer any concessions at the moment as it believes that the large market and a strong economic growth in the coming years offer an attractive proposition for overseas investors. The model agreement was put in place after India received a few setbacks in arbitration initiated by foreign companies, and cases that came up in the aftermath of the 2G verdict by the Supreme Court, which cancelled the telecom licences granted by DMK-nominated telecom minister A Raja during UPA.
The model BIT is an area of concern not just with Switzerland and the other three nations that are part of EFTA, but also with the UK, which wants modifications as part of the trade deal it has been negotiating with India. In case of EFTA, each member will have to negotiate a separate BIT with India.
As for the red carpet, an EFTA desk will help the European countries to facilitate investments, which was the focus of the commitment over 15 years. Separately, during last month’s meeting, Switzerland has also pitched for concessions for financial sector players, such as insurance companies, sources said.
The Swiss side is learnt to have argued that relaxations will create more interest in India and help meet the investment goal.
The issue of the investment treaty, a sore point with most countries, was flagged during a bilateral meeting between the Indian and Swiss finance ministry officials last month, sources said.The model treaty put in place by the Indian govt is unacceptable to most developed nations as it is seen to be limiting the ability of foreign investors to seek remedial action and the progress on disputes under the Indian system is seen to be very slow.
Although the two countries are “taking stock”, the Indian side is unwilling to offer any concessions at the moment as it believes that the large market and a strong economic growth in the coming years offer an attractive proposition for overseas investors. The model agreement was put in place after India received a few setbacks in arbitration initiated by foreign companies, and cases that came up in the aftermath of the 2G verdict by the Supreme Court, which cancelled the telecom licences granted by DMK-nominated telecom minister A Raja during UPA.
The model BIT is an area of concern not just with Switzerland and the other three nations that are part of EFTA, but also with the UK, which wants modifications as part of the trade deal it has been negotiating with India. In case of EFTA, each member will have to negotiate a separate BIT with India.
As for the red carpet, an EFTA desk will help the European countries to facilitate investments, which was the focus of the commitment over 15 years. Separately, during last month’s meeting, Switzerland has also pitched for concessions for financial sector players, such as insurance companies, sources said.
The Swiss side is learnt to have argued that relaxations will create more interest in India and help meet the investment goal.
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