Cairn Energy tax dispute will set precedence: Nadir Patel

Interview with Canadian high commissioner to India

Nadir Patel, the new high commissioner of Canada to India, believes how the Cairn Energy tax dispute is settled will be important for firms wanting to invest in India. In an interview with Nayanima Basu, the first Indian-origin envoy from there says Canada is keen to have a stable and predictable tax regime here. Edited excerpts:

Canada had been pushing for concluding a Bilateral Investment Promotion and Protection Agreement (BIPPA) with India. Have the talks been expedited?

This is an important focus area for us. Our negotiators are in discussion and are expected to meet in the not too distant future. We fully support Prime Minister (Narendra) Modi’s vision, such as Make in India, in infrastructure, Clean India, Smart Cities and pension funds, all of where we can come in. Yet, if you don’t have a bilateral investment treaty in place, it takes away the opportunity from having a stable investment.

You are watching what is going on with the Cairn Energy tax dispute, under which the petroleum giant has been asked to pay $1.6 billion in taxes. Does that make Canadian companies hoping to enter India feel jittery?

We will not comment on specific cases. But, one of the biggest elements of consideration is stability and predictability in the tax system. The greater there is stability and predictability, the less of any jitters for anyone doing business here. India also has a mechanism for advance tax rulings, so there are avenues that can be pursued. It does not put brakes on plans by Canadian companies. But, are we watching these things? Yes, absolutely, as this could be a precedent for similar situations re-occurring. Individual tax rulings aside, it  underscores the importance of having a robust investment agreement.

India and Canada are also discussing a Comprehensive Economic Partnership Agreement for quite some time.

Our negotiators are meeting in the next couple of weeks. Discussions are on over phone calls and video conferences. This is another great example where we can capitalise on the Make in India campaign. A trade agreement can lower cost inputs into the manufacturing sector, creating more opportunities for exports, job creation and economic prosperity.

India’s main demand had been access to Canada’s services market for its professionals. However, of late, isn’t Canada tightening its immigration policy?  

We have got assurances from the highest level of the government here that both sides will be concluding it. But, it has to create a win-win situation, be mutually beneficial. On immigration is concerned, we are modernising the system. Even concerning the temporary foreign workers programme, we are most liberal. India is our single largest source of immigration. The diaspora is a big contributor in India-Canada relations. In my view they are all ambassadors, like I am, and they are very significant. We are targeting 328,945 new immigrants this year.

The US, Australia and Singapore have shown much interest in participating in the ‘Smart Cities’ project. Are you also interested?

We have a lot of expertise in this and are keen to cooperate. We have a lot of capacity in terms of intelligent and smart cities. A consortium of Canadian infrastructure companies consisting of Stantec, WSP and Minaean International Corp signed an agreement with Gujarat Infrastructure Development Board to adopt Dholera. Our goal is to expand this expertise across India. Not only to take on a couple of cities like others are doing but to share our expertise and knowledge to a number of cities in India.

I understand PM Modi will be visiting Canada next month and events similar to the US’ Madison Square will be organised?

I cannot confirm that. Discussions on this did happen last year, on the sidelines of the G20 meet. But whenever it will happen, we welcome him as a rock star.