India-Saudi Arabia investment agreement to be signed
Press Information Bureau, Government of India
Press Release
12 January 2006
BILATERAL INVESTMENT PROMOTION AND PROTECTION AGREEMENT WITH THE KINGDOM OF SAUDI ARABIA
The Union Cabinet today approved the proposal for signing the Bilateral Investment Promotion and Protection Agreement with the Kingdom of Saudi Arabia.
The text of the Bilateral Investment Promotion and Protection Agreement with Saudi Arabia was finalised during the sixth round of negotiations held at New Delhi on September 29-30, 2005. The Model Indian text is the basis of the Agreement.
The broad intent of the Agreement between the two countries is to prmote and protect investments from either country. Under Article 1, “Investment” is defined as every kind of asset, including intellectual Property Rights (IPRS) in accordance with the laws and regulations of the country in which the investment is made.
The salient features of the Model Indian Text include, inter-alia, the definition of Intellectual Property Rights (IPRs) which is to be defined in accordance with domestic laws. This was perceived as being important, for the agreements reached in the Uruguay Round to allow developing countries a ten year transition period to adopt the provisions of Trade Related Intellectual Property Rights (TRIPS). It provides for extending National Treatment and Most Favoured Nation (MFN) treatment to foreign investments, and in addition MFN treatment, for investors. Expropriation and nationalisation are to be restored to only on a non-discriminatory basis and subject to the payment of compensation. Repatriation of all returns from investment is to be allowed without unreasonable delay and on a non-discriminatory basis. In respect of disputes between an Investor and the host Government, as well as between the two Governments, a dispute resolution mechanism including an international arbitration procedure is prescribed.
Bilateral Investment Promotion and Protection Agreements (BPIA) have been signed till date with 57 countries since negotiations were commenced in 1994. Agreements have also been finalised with 4 other countries and negotiations being held with number of other countries.
