India allays concerns of Abu Dhabi investment vehicles
Sharma receptive to treating ADIA, ADIC as separate agencies
Anand Sharma, Commerce and Industry Minister
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Abu Dhabi, Feb. 20:
India is receptive to the requirements of Abu Dhabi
Investment Council (ADIC) and Abu Dhabi Investment Authority (ADIA) to
be considered as separate agencies for investment limit purposes.
This was conveyed to the UAE side by Commerce and
Industry Minister Anand Sharma during the first meeting of the India-UAE
task force on investments here on Monday.
Apprehensions
There is some apprehension that the Reserve Bank of
India (RBI) and the Securities and Exchange Board of India may consider
these two UAE agencies as one, as India has put in place sectoral caps
for foreign investments. Any move to treat various investment vehicles
as a single agency could constrict the level of investments flowing into
the country, it was felt.
In the past, too, there were instances of different
investment agencies of a foreign Government considered as a single
agency for investment purposes by the RBI.
A case in point was Singapore, whose sovereign wealth
fund and another investment vehicle were treated as a single agency by
RBI while deciding the investment cap in a private sector bank.
But, after the intervention of the Indian Government, the investments from the Singapore agencies were treated as separate.
The UAE is keen to expand its engagement with India, but
is seeking comfort of investment protection in the context of past
investments running into difficulties.
There is also concern over delays in project implementation on the Indian side. This has put UAE investors into a quandary.
Bilateral pact
Both sides have now agreed in principle to put in place a
bilateral investment promotion and protection agreement and expedite
its conclusion.
India and the UAE have agreed also to form six
committees to expedite the resolution of issues associated with existing
investments and opportunities for new cross-border investments across a
range of sectors.
srivats.kr
@thehindu.co.in
(This article was published in the Business Line print edition dated February 21, 2013)
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