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Kerala PSC Indian Economy Book Study Materials Page 444Book's First Page
16.6 ndian onom strengthened the foreign investors’ confidence in order to promote and protect on reciprocal basis the Indian economy. investment of the investors. Government of India have, so far, (as by July 2012) signed BIPAs with migA 82 countries out of which 72 BIPAs have already The Multilateral Investment Guarantee Agency come into force and the remaining agreements are (MIGA), set up in 1988 encourages foreign in the process of being enforced.17 In addition, investment in developing economies by offering agreements have also been finalised and/or being insurance (guarantees) to foreign private investors negotiated with a number of other countries. against loss caused by non-commercial (i.e., The objective of the BIPA is to promote and political) risks, such as currency transfer, protect the interests of investors of either country expropriation, war and civil disturbance. It also in the territory of other country. Such agreements provides technical assistance to help countries increase the comfort level of the investors by disseminate information on investment assuring a minimum standard of treatment in all opportunities. matters and provides for justifiability of disputes with the host country (it should be noted here that icsiD India is not a member of the World Bank group’s The International Centre for Settlement of body, the ICSID, serving the same purpose. BIPA Investment Disputes (ICSID), set up in 1966 is India’s version. While the former is a multilateral is an investment dispute settlement body whose body, the latter is a bilateral one). decisions are binding on the parties. It was established under the 1966 Convention on the aSIan developMent Bank Settlement of Investment Disputes between Set up in 1966 with 31 founding members (India States and Nationals of Other States. Though being one of them), today (by March 2017) it has recourse to the centre is voluntary, but once the grown to encompass 67 members—of which 48 are parties have agreed to arbitration, they cannot from Asia and Pacific and 19 from outside. It has withdraw their consent unilaterally. It settles the its headquarters situated at Manila, Philippines. investment disputes arising between the investing The purpose of the Bank is to foster economic foreign companies and the host countries where growth and co-operation in the region of Asia the investments have been done. and the Far East and to contribute to economic India is not its member (that is why the development of the developing member countries, Enron issue was out of its preview). It is believed collectively and individually. The six functions of that being signatory to it encourages the foreign the Bank are as clubbed below: investment flows into an economy, but risks (i) Promoting investment—public and independent sovereign decisions, too. private—and harmonious regional development with special regard to less IndIa’S BIpa developed member countries; As part of the Economic Reforms Programme (ii) Coordinating development policies and initiated in 1991, the foreign investment policy plans (on request); promoting intra- of the Government of India was liberalised regional trade; providing technical and negotiations undertaken with a number 17. Government of India, Ministry of Commerce & of countries to enter into Bilateral Investment Industry, Government of India, N. Delhi, as on 5 April 5, Promotion & Protection Agreement (BIPA) in 2016.