Sharma also said efforts will be made to define the legal framework of the agreement in investment protection agreements. India and Nepal on Friday use used a new era in bilateral economic relations and concluded three important pacts. India has extended a $250 million Line of Credit (LoC) to boost infrastructure projects in Nepal and signed an investment protection pact with the Himalayan state, without any risk, to support bilateral businesses. On the second day of his visit to India, Nepalese Prime Minister Baburam Bhattarai held in-depth talks with Prime Minister Manmohan Singh, during which the issue of the ongoing peace process and the proposal to integrate Maoist fighters into the Nepal Army played an important role. The agreement provides for a sophisticated dispute settlement mechanism between the investor and a host government, as well as between the two governments. The PIBPA initially applies for a period of ten years. The European Union (EU) has expressed interest in considering a bilateral investment protection agreement (BIPA) with India, which would be disconnected from the draft free trade agreement (FTA) if ongoing negotiations are pending. The two departments exchanged letters in which each claims to have the power to negotiate investment agreements with the country`s trading partners. National treatment and ”most-favoured-nation treatment” are an integral part of investor treatment.
While the ”national treatment clause” promises the foreign investor that he will be treated ”no less favourably” than domestic investors, the most-favoured nation indicates that the foreign investor is treated ”no less favourably” than investors from a third country. While these provisions are intended to ensure non-discrimination, the way they are formulated implies that the government can grant the foreign investor greater incentives than a domestic investor or a third-country investor that does not have a PIBPA. In the interest of greater participation of Indian investors, the Centre should review the provisions on the treatment of investors. Most telecom disputes are the result of the 2012 Supreme Court ruling, which stripped 122 2G licenses granted to mobile operators, including those granted to foreign companies. The court ruled that the government had failed to follow due process when licensing the companies. So far, two of the companies involved, Axiata Group, a Malaysia-based investor with a joint venture with Idea Cellular, and Khaitan Holdings Mauritius Limited, an investor in Loop Telecom, a British telecommunications company, have initiated international arbitration proceedings under the UNCA rules, using the provisions of Mauritius-India BIPPA. . . .