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| UPDATE:US keen to have investment treaty with India |
| Press Trust of India / Washington Jun 16, 2009, 16:13 IST |
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The recession hit US today said it wants to enhance dialogue with India on key trade policy issues, including the bilateral investment treaty under negotiation.
US Trade Representative Ron Kirk will be discussing these issues with India's Commerce and Industry Minister Anand Sharma during a roundtable at the US-India Business council here tomorrow.
"USTR Ron Kirk is committed to enhancing the US-India trade relationship by fostering enhanced dialogue on important trade policy matters including a US-India Bilateral Investment Treaty," the USTR said in a statement.
The bilateral investment agreement would help protect private investment and develop market-oriented policies in partner countries, it added.
The two countries have been trying to bridge differences on the investment protection treaty. While India is willing to give 'post-stage' protection on private investment, the US wants 'pre-stage' benefit.
In simpler terms, if an American company suffers some losses even at the feasibility stage of an investment proposal because of change in government policies, it would like to be compensated.
However, the Indian Finance Ministry is not ready for such an option, an official said. Like all other protection treaties, New Delhi's agreeable to making up for company losses on account of policy change only if the investment has already taken place.
In 2008, the countries held exploratory talks on the treaty that would "provide binding legal rules regarding one country's treatment and investments from another country," it said.
In September 2008, the two governments agreed to launch formal negotiations.
In 2007, the US foreign direct investment in India was $13.6 billion, a 48 per cent increase over 2006 and Indian FDI in the US totaled $3 billion, a 106 per cent increase from 2006.
India is America's 17th largest goods trading partner with $44.4 billion in two way trade in 2008.
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