BERLIN: India has put the proposed bilateral investment treaty with the UAE on fast-track to clear the way for Etihad Airways' investment in domestic carrier Jet Airways, separating it from the general review of such investment protection treaties being carried out by the finance ministry.
"The UAE has been very insistent on the finalisation of a Bilateral Investment Promotion Agreement (BIPA) before investments can come. We have had talks in view of the proposed investments in the aviation sector and we have now decided to go ahead with the Bilateral Investment Promotion Agreement separately," External Affairs Minister Salman Khurshid told ET.
Finance Minister P Chidambaram is scheduled to travel to Abu Dhabi to discuss the pact.
The UAE wants to tread with caution as several Gulf investors have faced problems in the past with their India plans. Telecom major Etisalat was forced to close its India operations after the Supreme Court cancelled several mobile permits last year in the 2G spectrum case. Etisalat had a joint venture with the DB Group for its telecom foray in India.
Etihad Airways' purchase of a stake in Jet has been delayed with Abu Dhabi wanting assurance for its investors in the form of a bilateral investment pact.
Treading Cautiously on BIPAs
But the bilateral pact with the UAE has been delayed as New Delhi has decided to re-negotiate all 82 bilateral investment treaties to safeguard its interests, after it got notices from as many as 17 foreign investors.
The government has formed a secretaries' group that will provide a detailed road map for re-negotiation. But, New Delhi does not want this review to come in the way of fresh investments, and has, therefore, decided to formalise the bilateral pact with the UAE on a standalone basis.
India is eyeing stable and long-term funds to finance its current account deficit, which widened to a record high of 6.7% of GDP in the third quarter of 2012-13. Chidambaram, who has already held road shows in Japan, Singapore and Hong Kong, will be travelling to Toronto, New York and Washington to woo investors.
BIPAs seek to promote bilateral investment flows by assuring fair and equitable treatment to investments on post-establishment basis through reciprocal provisions like national treatment, most-favoured-nation treatment and mechanism for dispute resolution.
Etihad is eyeing a 24% stake in Jet. It had started talks for an equity stake in Jet last year after India relaxed ownership rules and allowed foreign airlines to invest up to 49% in local carriers.
The Etihad-Jet deal is expected to inject much-needed funds into Jet and help Etihad expand its reach in the Indian aviation sector. The Gulf carrier paid Jet $70 million for its slots at London's Heathrow airport earlier this month and the two already have a code-share agreement.
http://articles.economictimes.indiatimes.com/2013-04-13/news/38511382_1_etihad-airways-bilateral-investment-promotion-agreement-jet-airways
"The UAE has been very insistent on the finalisation of a Bilateral Investment Promotion Agreement (BIPA) before investments can come. We have had talks in view of the proposed investments in the aviation sector and we have now decided to go ahead with the Bilateral Investment Promotion Agreement separately," External Affairs Minister Salman Khurshid told ET.
Finance Minister P Chidambaram is scheduled to travel to Abu Dhabi to discuss the pact.
The UAE wants to tread with caution as several Gulf investors have faced problems in the past with their India plans. Telecom major Etisalat was forced to close its India operations after the Supreme Court cancelled several mobile permits last year in the 2G spectrum case. Etisalat had a joint venture with the DB Group for its telecom foray in India.
Etihad Airways' purchase of a stake in Jet has been delayed with Abu Dhabi wanting assurance for its investors in the form of a bilateral investment pact.
Treading Cautiously on BIPAs
But the bilateral pact with the UAE has been delayed as New Delhi has decided to re-negotiate all 82 bilateral investment treaties to safeguard its interests, after it got notices from as many as 17 foreign investors.
The government has formed a secretaries' group that will provide a detailed road map for re-negotiation. But, New Delhi does not want this review to come in the way of fresh investments, and has, therefore, decided to formalise the bilateral pact with the UAE on a standalone basis.
India is eyeing stable and long-term funds to finance its current account deficit, which widened to a record high of 6.7% of GDP in the third quarter of 2012-13. Chidambaram, who has already held road shows in Japan, Singapore and Hong Kong, will be travelling to Toronto, New York and Washington to woo investors.
BIPAs seek to promote bilateral investment flows by assuring fair and equitable treatment to investments on post-establishment basis through reciprocal provisions like national treatment, most-favoured-nation treatment and mechanism for dispute resolution.
Etihad is eyeing a 24% stake in Jet. It had started talks for an equity stake in Jet last year after India relaxed ownership rules and allowed foreign airlines to invest up to 49% in local carriers.
The Etihad-Jet deal is expected to inject much-needed funds into Jet and help Etihad expand its reach in the Indian aviation sector. The Gulf carrier paid Jet $70 million for its slots at London's Heathrow airport earlier this month and the two already have a code-share agreement.
http://articles.economictimes.indiatimes.com/2013-04-13/news/38511382_1_etihad-airways-bilateral-investment-promotion-agreement-jet-airways
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