India, UAE discuss bilateral investment treaty

Mint | 5 October 2023

India, UAE discuss bilateral investment treaty

by Ravi Dutt Mishra

India and the UAE on Thursday discussed a bilateral investment treaty that could see the UAE invest in India’s renewable energy, health, semiconductor and asset monetisation sectors, the union commerce ministry said.

Leaders from both countries reviewed progress made on the implementation of the Comprehensive Economic Partnership Agreement (CEPA) between India and the UAE, which came into force in May 2022.

The UAE-India High Level Joint Task Force on Investments that took place in Abu Dhabi also assessed progress made on the creation of a mechanism to fast-track Indian investments into the UAE.

The Indian side called for strengthening the mechanism, especially for investments in priority sectors such as renewable energy and energy transition, the commerce and industry ministry added.

Mint reported earlier that India may no longer stick to the template for bilateral investment treaties (BIT) that it adopted after terminating most of these treaties in 2016. The change in the approach comes at a time when India is negotiating investment treaties and free-trade agreements with some of its top trading partners, including the UK and the EU.

The union government had annulled BITs that were based on old model texts framed in 1993 after receiving adverse judgments in multibillion-dollar disputes in international courts. To prevent this, the model BIT included the clause “exhaustion of local remedies", emphasising state rights over investor rights in effect.

Meanwhile, both countries also entered into a strategic partnership agreement that will see them work to operationalise the UAE’s national domestic card scheme (DCS). The DCS aims to facilitate the growth of e-commerce and digital transactions in the UAE, cut cost of payments, and enhance the country’s competitiveness and position in global payments, the union commerce ministry said.

"NPCI International Payments Limited (NIPL), a wholly-owned subsidiary of the National Payments Corporation of India (NPCI), has entered into a strategic partnership agreement with Al Etihad Payments for Domestic Card Scheme Implementation in UAE," the ministry said. AEP is an indirect subsidiary of the Central Bank of UAE.

Under the agreement NIPL and AEP will work together to build, implement, and operationalise the UAE’s national domestic card scheme. "The DCS solution provided by NIPL consists of a RuPay stack and value-added services like fraud monitoring services and analytics. NIPL will also assist AEP in formulating the operating regulations for their domestic card scheme," the ministry added. RuPay cards comprise more than 60% of cards issued in India.

source: Mint