India,UAE sign bilateral investment promotion and protection agreement

India and United Arab Emirates todaysigned a Bilateral Investment Promotion and Protection Agreement (BIPPA), following a meeting between the visiting Foreign Minister of UAE, Sheikh Zayed Al Nahyan, and External Affairs Minister, Salman Khurshid.

The BIPPA was signed by Obaid Humaid Al Tayer, Minister of State for Financial Affairs from the UAE side and Namo Narain Meena, Minister of State for Finance from the Indian side.

It is being viewed as a landmark agreement which would change the future of UAE's investments coming into India. While UAE and India are each others' largest trading partners with the total bilateral trade totalling in excess of USD 75 billion, investments have not kept pace.

 

UAE investments in India have been hovering just over USD 3 billion mark.

The BIPPA has been worked on as an exception to the norm of India to freeze all BIPPA agreements until a new template is in place.

UAE controls the second largest Sovereign Wealth Fund in the world under the Abu Dhabi Investment Authority. It has been keen to explore major infrastructure projects in India but was awaiting the signature of the BIPPA.

An India-UAE High Level Task Force on Investments which was set up earlier this year to speed up investment opportunities, had met in February 2013 but could not proceed due to UAE's keenness first to conclude BIPPA.

The signing of the agreement today opens up the possibility of the High Level Task Force meeting again in early-January 2014 to explore investment opportunities.

The Abu Dhabi National Energy Company (TAQA) is looking at an investment of USD 700 million in Himachal Pradesh in the electricity sector. DP World Operations is aiming at expanding their footprint in the port sector in India. Likewise possibilities of investments growing by leaps and bounds in Indian infrastructure projects are on the anvil.

With the signing of the India-UAE BIPPA, India now has such agreements with all GCC countries which also opens up possibilities of pursuing India-GCC Free Trade Agreement which has been on the backburner so far.