Keen to attract foreign investments,the government is getting all set to woo investors from the Middle East through measures including a bilateral investment pact and liberalisation of investment norms.
The government is understood to be in discussions on the Bilateral Investment Protection and Promotion Agreement (BIPA) between India and the United Arab Emirates (UAE). Early conclusion of the BIPA would help promote investments into India,especially into the cash-starved infrastructure sector, said a senior government official. Officials from the UAE are also expected to visit India soon to take forward negotiations on the BIPA
In fact,to get a better perspective on problems being faced by investors from the region,the finance ministry has also been holding discussions with commerce ministry.
The UAE is one of Indias largest trading partners and total trade between the two countries touched $74.7 billion in 2012-13.
Additionally,the government is also working on a proposal to ease investment norms for funds from mid-eastern investors for sovereign wealth funds that would enable easier entry of long-term money into core sector projects. The plan,which is at a nascent stage,aims to launch financial products that would help bring in long-term funds to the core sector through sovereign wealth funds.
The move comes after finance minister P Chidambarams visit to the UAE in May this year when he met investors and heads of pension funds in Doha as well as the minister of economic and finance. The two countries had discussed possible investments by Qatars sovereign wealth funds in Indian projects.
The issues were also discussed by the India-UAE High Level Task Force on Investments that met in February this year. At the time,the two countries had discussed an early conclusion of the BIPA and the UAE had promised to invest $2 billion in Indias infrastructure sector. To channelise more investments into the core sector,the government had last month raised the investment cap in government securities for foreign institutional investors by an additional $5 billion for long term money such as sovereign wealth funds and pension funds.