To boost foreign inflows into India’s manufacturing and industrial sectors, New Delhi plans to liberalise foreign investments in the ‘non-services sector’ by offering safeguards against future political and economic risks to potential investors on their pre-investment activities.

Sources said the Department for Promotion of Industry and Internal Trade (DPIIT) could soon be deployed to negotiate a chapter on investment liberalisation in the ‘non-services sector’ in the ongoing Free Trade Agreement (FTA) discussions.

The chapter could include ‘pre-establishment’ protection in ‘non-services sector’ whereby investors would get bilateral treaty protection through State-State Dispute Settlement (SSDS) on their pre-investment activities before the venture is established in the territory of either country, they said.

This is a major turnaround from India’s stand since 2015 when New Delhi decided to shun ‘pre-establishment’ obligations to investments in the non-services sector as it risked limiting the country’s policy space, and it revised the Model Bilateral Investment Treaty (BIT) to allow treaty protection to investments only after the ventures were established.

Model BIT 2015 says: "…nothing in this Treaty shall extend to any pre-investment activity related to establishment, acquisition or expansion of any investment, or to any measure related to such pre-investment activities, including terms and conditions under such measure which continue to apply post-investment to the management, conduct, operation, sale or other disposition of such investments”.

Presently, India provides liberalisation commitments in the pre-establishment phase only in the ‘services sector’ while its post-establishment protection is covered in the BIT.

Traditionally, investment treaties have been protective (post-establishment) but as the global trade evolved, these treaties came to encompass liberalisation (pre-establishment) elements as well such as the North American Free Trade Agreement (NAFTA) in 1994.

Development of new consumption trends, altered patterns of international production, emergence of global value chains, more and easier access to market information, and a tougher international competitive environment have affected the way nations negotiate investment treaties.

Sources said India’s thinking is to replace the present Investor-State Dispute Settlement Mechanism which has been the major cause for the country’s cautious 2015 BIT due to adverse arbitration awards against it. Instead, dispute resolutions would be through State-State Dispute Settlement Mechanism.

They said the bilateral treaties would explicitly list the specific sectors where investment commitments would be protected, rather than issue a negative list where each side is considered to have liberalised all sectors, except those highlighted as ‘No Go’ areas.

Also read |<a href="https://www.wionews.com/business-economy/nvidia-indias-reliance-strike-ai-partnership-for-apps-language-models-633792">&nbsp;Nvidia, India's Reliance strike AI partnership for apps, language models</a>

India’s attempts to conclude international investment agreements (IIAs) have yielded limited success as FTAs with&nbsp;Australia,&nbsp;Mauritius, and the&nbsp;United Arab Emirates (UAE) do not contain provisions for overall protection and the standalone BITs with Brazil, Belarus and Kyrgyzstan are not yet in force. FTA negotiations with the United Kingdom, the European Union (EU) and Canada, including for an investment chapter, are ongoing.

Also watch |&nbsp;G20 Summit 2023: How much financial loss will Delhi's most popular markets bear due to closures?

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The Parliamentary Consultative Committee of the Ministry of Commerce &amp; Industry on ‘New Foreign Trade Policy 2021-26’ found&nbsp;“the number of BITs/Investment Agreements signed post 2015 and the number under negotiations as inadequate and not commensurate with the growth of India’s interest in this domain and her rising stature in global affairs”.

&nbsp;

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To boost foreign inflows into India’s manufacturing and industrial sectors, New Delhi plans to liberalise foreign investments in the ‘non-services sector’ by offering safeguards against future political and economic risks to potential investors on their pre-investment activities.

To boost foreign inflows into India’s manufacturing and industrial sectors, New Delhi plans to liberalise foreign investments in the ‘non-services sector’ by offering safeguards against future political and economic risks to potential investors on their pre-investment activities. Sources said the Department for Promotion of Industry and Internal Trade (DPIIT) could soon be deployed to negotiate a chapter on investment liberalisation in the ‘non-services sector’ in the ongoing Free Trade Agreement (FTA) discussions. The chapter could include ‘pre-establishment’ protection in ‘non-services sector’ whereby investors would get bilateral treaty protection through State-State Dispute Settlement (SSDS) on their pre-investment activities before the venture is established in the territory of either country, they said. This is a major turnaround from India’s stand since 2015 when New Delhi decided to shun ‘pre-establishment’ obligations to investments in the non-services sector as it risked limiting the country’s policy space, and it revised the Model Bilateral Investment Treaty (BIT) to allow treaty protection to investments only after the ventures were established. Model BIT 2015 says: "…nothing in this Treaty shall extend to any pre-investment activity related to establishment, acquisition or expansion of any investment, or to any measure related to such pre-investment activities, including terms and conditions under such measure which continue to apply post-investment to the management, conduct, operation, sale or other disposition of such investments”. Presently, India provides liberalisation commitments in the pre-establishment phase only in the ‘services sector’ while its post-establishment protection is covered in the BIT. Traditionally, investment treaties have been protective (post-establishment) but as the global trade evolved, these treaties came to encompass liberalisation (pre-establishment) elements as well such as the North American Free Trade Agreement (NAFTA) in 1994. Development of new consumption trends, altered patterns of international production, emergence of global value chains, more and easier access to market information, and a tougher international competitive environment have affected the way nations negotiate investment treaties. Sources said India’s thinking is to replace the present Investor-State Dispute Settlement Mechanism which has been the major cause for the country’s cautious 2015 BIT due to adverse arbitration awards against it. Instead, dispute resolutions would be through State-State Dispute Settlement Mechanism. They said the bilateral treaties would explicitly list the specific sectors where investment commitments would be protected, rather than issue a negative list where each side is considered to have liberalised all sectors, except those highlighted as ‘No Go’ areas. Also read | Nvidia, India's Reliance strike AI partnership for apps, language models India’s attempts to conclude international investment agreements (IIAs) have yielded limited success as FTAs with Australia, Mauritius, and the United Arab Emirates (UAE) do not contain provisions for overall protection and the standalone BITs with Brazil, Belarus and Kyrgyzstan are not yet in force. FTA negotiations with the United Kingdom, the European Union (EU) and Canada, including for an investment chapter, are ongoing. Also watch | G20 Summit 2023: How much financial loss will Delhi's most popular markets bear due to closures? The Parliamentary Consultative Committee of the Ministry of Commerce & Industry on ‘New Foreign Trade Policy 2021-26’ found “the number of BITs/Investment Agreements signed post 2015 and the number under negotiations as inadequate and not commensurate with the growth of India’s interest in this domain and her rising stature in global affairs”. WATCH WION LIVE HERE:

Excl: India may liberalise foreign investment in non-services sector through ‘pre-establishment’ protection

"There are decades where nothing happens, and there are weeks where decades happen" — 

These words from Russia's socialist icon Vladimir Lenin pretty well sum up those tumultuous weeks of July 1991.&nbsp;

Enough has been written about the weeks and months preceding the reforms. But if one has to refresh memories in a few lines, here is a quick summary: Unsustainable levels of debt from the mid-1980s onward reached a tipping point during the Gulf War. This affected India’s ability to pay its import bills, putting the country on the brink of bankruptcy.&nbsp;

Now, coming back to the transformative month of July 1991. It began with the back-to-back rupee devaluations on July 1 and 3, done in a bid to keep the ballooning current account deficit in check. This was followed by changes in the export-import policy and the introduction of a new industrial policy. A little-known fact: PM PV Narasimha Rao himself held the industries portfolio.&nbsp;

Finance Minister Dr Manmohan Singh's Budget speech on July 24 gave the final touches to the reform process. Quoting novelist Victor Hugo's popular words, "No power on earth can stop an idea whose time has come", Dr Singh declared the impending emergence of India as a major economic power.

“India is now wide awake. We shall prevail. We shall overcome,” Dr Singh concluded as India formally began its transformational journey.&nbsp;

<a href="https://www.wionews.com/business-economy/india-to-remain-fastest-growing-g20-economy-for-the-next-few-years-moodys-595833">ALSO READ| India to remain fastest growing G20 economy for the next few years: Moody's</a>

Thirty-two years on, not only has India prevailed and overcome the crisis, it is now the fifth-largest economy in the world. India, once a "begging bowl", is now the fastest-growing large economy in the world, with a recent UN report stating that India received the third-highest Foreign Direct Investment in 2022.&nbsp;

The ‘India growth story’ is a continuing process that began in July 1991 and credit must be given to a series of governments, irrespective of their ideological variations and contradictions. Though it is also an unsaid reality that economic reforms are more or less irreversible. But to the credit of successive governments, all have added their own flavour to the reform process.&nbsp;

Recently, the ‘India growth story’ got a big thumbs up from a US-based financial services firm Capital Group, which said that India is poised for a “period of secular growth”, fueled by significant expansion in direct and fixed asset investment.&nbsp;

The report also highlighted that reform measures like Aadhaar, Goods and Services Tax (GST), Unified Payment Interface (UPI) and Production-linked incentive programmes have made India an attractive emerging market economy.&nbsp;

The glowing tribute to the ‘India growth story’ prompted PM Narendra Modi to tweet: “India is a global bright spot with a strong desire to grow even more!"

Perhaps, the biggest advantage that India has is its young demography. "With a median age of 29 years, India in our view has one of the most attractive demographic profiles among the world’s largest economies and can reap benefits from its productive capacity," the report said.

Moreover, India’s billion plus population, once considered a resource burden, is now a boon as it translates into the world’s biggest workforce as well as consumer market. But in an increasingly tech-driven world, it won’t take for this population to turn into a liability if the right policies – upskilling is a major concern – are not put in place. 
 
There are several other red flags too. By and large, reforms in India have been half-hearted, hasty and irregular. It also does not help India’s reform agenda that the country sees at least 3-4 Assembly elections every year. Thus, political compulsions have often compelled the Union and state governments to prioritise populism over hardcore reforms, in fear of losing popular votes.&nbsp;

While a country like Singapore – the city-state is essentially authoritarian – has had one of the best bureaucratic systems in the world, India has always found itself in the bottom of the global bureaucracy list. Moreover, ‘red tapism’ has been one of the key reasons for India’s historically low rankings in ease of doing business. Notwithstanding the massive improvement in the last few years, a lot needs to be done before India truly becomes a ‘business-friendly’ hub.&nbsp;

But the biggest drawback of India’s economic reforms has been the failure of trickle-down economics. The benefit of the reforms has been largely confined to the urban middle class, while the gap between the rich and the poor has widened sharply in the last three decades.&nbsp;

Take these numbers for some perspective: In 1991, the top 1 per cent owned 16 per cent of India’s total wealth. In 2022, this figure reached 42.1 per cent. In the same period, the bottom 50 per cent saw its share of wealth decline from 12.3 per cent to 2.8 per cent.&nbsp;

Perhaps, India needs another ‘1991’ moment, but this time to correct the mistakes of the country’s ongoing reform process. As India marches ahead on the world stage, the country needs to take everyone along.&nbsp;

 
(Disclaimer: The views of the writer do not represent the views of WION or ZMCL. Nor does WION or ZMCL endorse the views of the writer.) &nbsp;

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"There are decades where nothing happens, and there are weeks where decades happen" — These words from Russia's socialist icon Vladimir Lenin pretty well sum up those tumultuous weeks of July 1991.

"There are decades where nothing happens, and there are weeks where decades happen" — These words from Russia's socialist icon Vladimir Lenin pretty well sum up those tumultuous weeks of July 1991. Enough has been written about the weeks and months preceding the reforms. But if one has to refresh memories in a few lines, here is a quick summary: Unsustainable levels of debt from the mid-1980s onward reached a tipping point during the Gulf War. This affected India’s ability to pay its import bills, putting the country on the brink of bankruptcy. Now, coming back to the transformative month of July 1991. It began with the back-to-back rupee devaluations on July 1 and 3, done in a bid to keep the ballooning current account deficit in check. This was followed by changes in the export-import policy and the introduction of a new industrial policy. A little-known fact: PM PV Narasimha Rao himself held the industries portfolio. Finance Minister Dr Manmohan Singh's Budget speech on July 24 gave the final touches to the reform process. Quoting novelist Victor Hugo's popular words, "No power on earth can stop an idea whose time has come", Dr Singh declared the impending emergence of India as a major economic power. “India is now wide awake. We shall prevail. We shall overcome,” Dr Singh concluded as India formally began its transformational journey. ALSO READ| India to remain fastest growing G20 economy for the next few years: Moody's Thirty-two years on, not only has India prevailed and overcome the crisis, it is now the fifth-largest economy in the world. India, once a "begging bowl", is now the fastest-growing large economy in the world, with a recent UN report stating that India received the third-highest Foreign Direct Investment in 2022. The ‘India growth story’ is a continuing process that began in July 1991 and credit must be given to a series of governments, irrespective of their ideological variations and contradictions. Though it is also an unsaid reality that economic reforms are more or less irreversible. But to the credit of successive governments, all have added their own flavour to the reform process. Recently, the ‘India growth story’ got a big thumbs up from a US-based financial services firm Capital Group, which said that India is poised for a “period of secular growth”, fueled by significant expansion in direct and fixed asset investment. The report also highlighted that reform measures like Aadhaar, Goods and Services Tax (GST), Unified Payment Interface (UPI) and Production-linked incentive programmes have made India an attractive emerging market economy. The glowing tribute to the ‘India growth story’ prompted PM Narendra Modi to tweet: “India is a global bright spot with a strong desire to grow even more!" Perhaps, the biggest advantage that India has is its young demography. "With a median age of 29 years, India in our view has one of the most attractive demographic profiles among the world’s largest economies and can reap benefits from its productive capacity," the report said. Moreover, India’s billion plus population, once considered a resource burden, is now a boon as it translates into the world’s biggest workforce as well as consumer market. But in an increasingly tech-driven world, it won’t take for this population to turn into a liability if the right policies – upskilling is a major concern – are not put in place. There are several other red flags too. By and large, reforms in India have been half-hearted, hasty and irregular. It also does not help India’s reform agenda that the country sees at least 3-4 Assembly elections every year. Thus, political compulsions have often compelled the Union and state governments to prioritise populism over hardcore reforms, in fear of losing popular votes. While a country like Singapore – the city-state is essentially authoritarian – has had one of the best bureaucratic systems in the world, India has always found itself in the bottom of the global bureaucracy list. Moreover, ‘red tapism’ has been one of the key reasons for India’s historically low rankings in ease of doing business. Notwithstanding the massive improvement in the last few years, a lot needs to be done before India truly becomes a ‘business-friendly’ hub. But the biggest drawback of India’s economic reforms has been the failure of trickle-down economics. The benefit of the reforms has been largely confined to the urban middle class, while the gap between the rich and the poor has widened sharply in the last three decades. Take these numbers for some perspective: In 1991, the top 1 per cent owned 16 per cent of India’s total wealth. In 2022, this figure reached 42.1 per cent. In the same period, the bottom 50 per cent saw its share of wealth decline from 12.3 per cent to 2.8 per cent. Perhaps, India needs another ‘1991’ moment, but this time to correct the mistakes of the country’s ongoing reform process. As India marches ahead on the world stage, the country needs to take everyone along. (Disclaimer: The views of the writer do not represent the views of WION or ZMCL. Nor does WION or ZMCL endorse the views of the writer.) WATCH WION LIVE HERE

India Shining: 32 years of economic liberalisation and the journey into the future

Irish Prime Minister Leo Varadkar said on Saturday that he would campaign for a liberalisation of the country&#39;s restrictive abortion laws ahead of a referendum in the coming months, adding that his views on the issue had evolved.&nbsp;

Varadkar&#39;s government plans to hold the referendum as soon as May to loosen some of the most restrictive abortion laws in the world. His Fine Gael party has agreed to let individual members campaign on either side of the debate.&nbsp;

While the country remains overwhelmingly Catholic - a complete ban on abortion was only lifted in 2013 - public opinion has become far more socially liberal in recent years.&nbsp;

Varadkar, a medical doctor by training, in 2014 described himself as pro-life, but also said that the rules in Ireland, where terminations are only allowed in cases where the mother&#39;s life is in danger, were too tight.&nbsp;

&quot;I believe Ireland&#39;s abortion laws are too restrictive and need to be liberalised,&quot; Varadkar said in an interview with BBC radio on Saturday. &quot;I&#39;ll be campaigning for them to be changed.&quot;

Asked about his previous position, Varadkar said that his views had evolved in recent years.&nbsp;

&quot;I think sometimes that pro-life and pro-choice can be misunderstood ... I think even people who are in favour of abortion in certain circumstances are pro-life,&quot; he said.&nbsp;

&quot;These terms pro-life and pro-choice don&#39;t really comprehend the complexity of this issue, which is a very private and personal one and one, I think, that contains a lot of grey areas.&quot;

Ireland has yet to decide the exact wording of the referendum. A cross-party parliamentary committee last month recommended that the state legislature to allow terminations with no restrictions up to 12 weeks into a pregnancy, a more liberal position than some had anticipated.

An opinion poll on Friday found that a majority of Irish voters would support a proposal to allow abortion up to 12 weeks into a pregnancy, but that many older voters opposed the change.

Varadkar's government plans to hold the referendum as soon as May to loosen some of the most restrictive abortion laws in the world

Irish Prime Minister Leo Varadkar said on Saturday that he would campaign for a liberalisation of the country's restrictive abortion laws ahead of a referendum in the coming months, adding that his views on the issue had evolved. Varadkar's government plans to hold the referendum as soon as May to loosen some of the most restrictive abortion laws in the world. His Fine Gael party has agreed to let individual members campaign on either side of the debate. While the country remains overwhelmingly Catholic - a complete ban on abortion was only lifted in 2013 - public opinion has become far more socially liberal in recent years. Varadkar, a medical doctor by training, in 2014 described himself as pro-life, but also said that the rules in Ireland, where terminations are only allowed in cases where the mother's life is in danger, were too tight. "I believe Ireland's abortion laws are too restrictive and need to be liberalised," Varadkar said in an interview with BBC radio on Saturday. "I'll be campaigning for them to be changed." Asked about his previous position, Varadkar said that his views had evolved in recent years. "I think sometimes that pro-life and pro-choice can be misunderstood ... I think even people who are in favour of abortion in certain circumstances are pro-life," he said. "These terms pro-life and pro-choice don't really comprehend the complexity of this issue, which is a very private and personal one and one, I think, that contains a lot of grey areas." Ireland has yet to decide the exact wording of the referendum. A cross-party parliamentary committee last month recommended that the state legislature to allow terminations with no restrictions up to 12 weeks into a pregnancy, a more liberal position than some had anticipated. An opinion poll on Friday found that a majority of Irish voters would support a proposal to allow abortion up to 12 weeks into a pregnancy, but that many older voters opposed the change.

Irish Prime Minister says he will campaign for liberalisation of abortion laws

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