India, UAE sign bilateral investment protection agreement

India, UAE sign bilateral investment protection agreementOn Thursday, after India and the United Arab Emirates (UAE) signed a bilateral investment protection agreement, believed to be a key document, roads have now been cleared for the start of negotiations on an India-GCC free trade agreement.

The pact was signed after talks were held between visiting UAE Foreign Minister Sheikh Zayed Al Nahyan and External Affairs Minister Salman Khurshid in New Delhi.

People close to the development said, Obaid Humaid Al Tayer, the UAE's minister of state for financial affairs, and Namo Narain Meena, India's minister of state for finance, signed the agreement.

Government officials said they were satisfied because India had made a special gesture on this agreement. India has frozen all BIPPA agreements while it works out a new template for such pacts. However, New Delhi made a special exception for India's largest trading partner which is, UAE.

India has always wanted to tap UAE's huge sovereign wealth fund which second largest in the world at over $600 billion.  New Delhi wants to tap this to push up FDI in the country (UAE investment in India is a paltry $3 billion).

The India-UAE pact is the first to be signed under a new pattern that includes two key features, the first being ring-fencing the sovereign from being dragged into commercial disputes. The second ensures that if a dispute is referred to and decided upon by an Indian court, the same case cannot be referred to international arbitration.