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DECEMBER 2011
Nepal PM Baburam Bhattarai in India
The Prime Minister of Nepal, Baburam Bhattarai to extend the line of credit of US$ 250 million
visited India from 20 October 2011 to 23 October from EXIM Bank of India to the Government of
2011. During the visit, India and Nepal signed Nepal on similar terms and conditions as the
following mou/agreement:
earlier Line of Credit of US $ 100 Million extended
• Agreement between the two to Nepal.
Governments for the Promotion and
Protection of Investments
(iii) Agreement between the Government
• MOU between the two Governments of Nepal and the Government of India
regarding Indian Grant Assistance
for the Promotion and Protection of
for Goitre Control Programme in
Investments
Nepal
A Bilateral Investment Promotion and Protection
• Dollar Credit Line Agreement between Agreement between India and Nepal was
Govt. of Nepal and Export-Import Bank signed. Finance Minister signed the agreement
of India
on behalf of India and Anil Kumar Jha, Minister
for Industry on behalf of Government of Nepal.
Fact Sheet on MOU/Agreements
signed during the visit of PM of Nepal
(i) Memorandum of Understanding
between India and Nepal regarding
Indian grant assistance for the Goitre
Control Programme in Nepal
A Memorandum of Understanding between
India and Nepal regarding Indian grant
assistance for the Goitre Control Programme in
Nepal was signed on 21 October 2011. Foreign
Secretary Ranjan Mathai signed the
Memorandum of Understanding on behalf of
Government of India and Purushottam Ojha,
Secretary, Ministry of Commerce and Supply,
Government of Nepal signed the agreement on
behalf of Government of Nepal.
Under the Memorandum of Understanding,
India will provide 1.875 Crores (Nepali Rs.3
Crores) to Nepal for the control of Goitre and
other Iodine Deficiency Diseases in Nepal under
the heads of Re-iodisation Subsidy, Packing
Subsidy, Transportation Subsidy and
Advocacy Subsidy. The Government of Nepal
shall procure iodised granular salt from India
for distribution in various parts of Nepal
focusing on 22 districts categorized by Nepal
as remote and inaccessible. The implementation
of the Programme will be monitored by a
Programme Monitoring Team of four members,
consisting of two representatives of
Government of India and two representatives
of Government of Nepal. During the period 1973-
2010, Government of India has provided grant
assistance of 41 Crores to Government of Nepal
for the control of Goitre and other iodine
deficiency disorders in Nepal. Iodine Deficiency
Diseases are a major health problem and it is
hoped that this assistance will help reduce
incidence of Goitre and other Iodine Deficiency
Diseases in Nepal.
(ii) Dollar Credit Line Agreement
between Government of Nepal and
Export-Import Bank of India
A US$ 250 million Dollar Credit Line Agreement
between Government of Nepal and Export-
Import Bank of India was signed today (October
21, 2011). Chairman and Managing Director of
Export-Import Bank of India, T.C.A.
Ranganathan and signed the Agreement on
behalf of Export-Import Bank of India and Lal
Shankar Ghimire, Joint Secretary, Ministry of
Finance signed the Agreement on behalf of
Government of Nepal.
The credit line will be used to finance
infrastructure projects such as highways,
airports, bridges, irrigation, roads, railways and
hydropower projects and carry a concessional
rate of interest of 1.75% p.a., with repayment
period of 20 years, inclusive of 5 years
moratorium.
It may be recalled that during the visit of the
President of Nepal, Dr. Ram Baran Yadav in
February 2010, Government of India has agreed
The Union Minister of Commerce, Industry and
Textiles Shri Anand Sharma has expressed
confidence that India and Italy will reach the
target of Euro 15 bn. Speaking at Ministerial
Forum: ‘Indo-Italian Cooperation: Addressing
Challenges, Strengthening Ties’ , on 31st
October , Shri Sharma emphasized that Trade
between our countries last year stood at US$
8.50 billion and the data till August 2011 “shows
an impressive growth and reflect optimism yet
doesn’t reflect our true potential which is far
greater.”
Shri Sharma also informed that India allows 51
per cent FDI in single brand retail and
government is considering the ways of raising
this limit. Shri Sharma said that the micro, small
and medium enterprises sector is the backbone
of Indian economy, contributing 8% of our gross
domestic product, 45% of manufactured output
and 40% of our exports. “Earlier, the SME sector
in India used to be protected and foreign
investment was restricted in this sector, but
recently we have liberalized this sector to enable
its modernization and now the SME sector is
open to foreign investment just like any other
sector. We view SMEs as incubators of
technology and innovation and would
encourage cooperative partnerships to develop
BABLAO SHRI BALAJI
The Agreement seeks to promote and protect
investments from either country in the territory
of the other country with the ultimate objective
of increasing bilateral investment flow. The
agreement requires each country to encourage
and create favourable conditions for investors
of the other country to make investments it its
territory and to admit investments in accordance
with its laws.
The term investment includes every kind of
asset including intellectual property rights in
accordance with laws and regulations of the
country in which the investment is made.
Principles of Most Favoured Nation Treatment
and National Treatment (NT) have been asserted
in the agreement. Investments from either
country in the territory of the other country are
to be accorded NT and MFN treatment which
means that the investment shall be provided
treatment which shall not be less favourable
than that provided by the country to
investments of its own investors or investors
from any other country. Besides, investors are
to be provided MFN treatment in respect of
returns on the investment.
Provisions have also been made in the agreement
for grant of compensation to the investors
whose investments suffer losses owing to war,
armed conflict, a state of national emergency,
etc. and such investors shall be accorded
treatment by the host country, no less than the
treatment accorded to its owns investors or
investors of any third state.
The Agreement provides that nationalisation or
expropriation of investments shall not be
resorted to except in public interest and in
accordance with law on a non-discriminatory
basis and against fair and equitable
compensation. The agreement also provides for
free repatriation of funds of an investor of either
country.
The Agreement provides elaborate dispute
resolution mechanism to guide settlement of
disputes between and investor and a host
Government as well as between the two
Governments. Dispute resolution mechanism
includes resource to negotiations, conciliation
and international arbitration.
The Agreement shall remain in force for a period
of ten years. Thereafter, it shall be deemed to
have been automatically extended unless either
Contracting Party gives to the other Contracting
Party a written notice. With respect to
investments made prior to the date of
termination of the Agreement, the provisions of
the Agreement shall continue to be effective for
a further period of ten years from the date of its
termination.
It is hoped that the Agreement would serve as a
catalyst in boosting investment flows between
the two countries.
India Italy Trade Cooperations Gains Momentum
between Indian and Italian SMEs” he added.
Shri Sharma said that the Indian design industry
is growing between 23 and 25 per cent every
years, and the economic rise of India has created
a strong consumption demand for various kinds
of clothing, textiles, home furnishings, leather
products, including footwear. In particular, there
is need designers in garment and leather – two
areas where Italy is a global leader. It is a step in
this direction that has prompted India and Italy
to organise a leather fair in Milan in 2012, he
said. In the field of industrial design, National
Institute of Design, Ahmedabad and Milan
Polytechnic Consortium have signed an MoU
for building synergies in design sensitization
and capacity building. in May 2011 after Shri
Sharma’s visit to Milan.
An MoU was signed between the two countries
which envisages that the India-Italy Business
Forum will foster cooperation between the two
countries in sectors such as automotive,
infrastructure, agro-food and agro-industry,
textile and leather, pharmaceuticals, design,
tourism, manufacturing, ICT and higher
education. It will also actively seek to promote
business interactions between SMEs of both
countries.
1 st Indonesia – India Biennial Trade Ministers’ Forum
1. The Minister of Commerce and Industry of the Republic of India, H.E. Shri Anand Sharma,
accompanied by an official and business delegation, visited Indonesia on 3-4 October
2011 and met the Minister of Trade of the Republic of Indonesia, H.E. Mari Elka Pangestu.
They discussed ways of expanding bilateral trade and economic cooperation between
the two countries at the 1 st Indonesia – India Biennial Trade Ministers’ Forum.
2. The Ministers noted with satisfaction the Pre-Negotiation Consultations of Indonesia
India Comprehensive Economic Cooperation Agreement (II-CECA), held in Jakarta, 3
October 2011. The Ministers emphasized the need to constructively engage in II-CECA
negotiations which would result in mutual and beneficial outcomes for both countries.
3. The Ministers expressed their satisfaction on the strengthening of bilateral cooperation
and hoped for increasing and diversifying bilateral trade as well as promoting and
stimulating bilateral investment flows. The Ministers hoped that these efforts would help
achieve the bilateral trade volume target of US$ 25 billion by 2015.
4. The Ministers reviewed the deliberations of the two Working Groups: (1) Working Group
on Trade and Investment Forum and (2) Working Group on Trade Facilitation and
Resolution.
5. The Ministers looked forward to the early operationalization of the Indonesia-India CEOs’
Forum.
6. The Ministers welcomed the signing of Memorandum of Understanding between the
Governor of East Kalimantan Province and National Aluminum Company of India on
Technical Cooperation on Aluminum Smelter Industry and Coal Based Thermal Power
Plant.
Indo Malawi Joint Working Group meets in New Delhi on
Mining Resources
The first meeting of the Indo Malawi Joint Working Group on Mining Resources was held on
19th October in New Delhi. The Joint Working Group was formed to implement the MOU
signed in November, 2010 during the visit of the Malawi President to India.
The Working Group discussed the issues relating to exchange of technical information on
mineral resources and mining law. The Indian side offered to the Malawi side; (i) capacity
building and training facilities in the area of geophysical and geochemical mapping,
geoinformatics, mining & other geoscientific areas in the form of long term collaboration; (ii)
joint exploration and development of mines.
The Malawian Government welcomed the Indian Government’ proposals and said that there is lot
of potential for cooperation between the Geological Surveys of both the countries. The technical
and financial investment from India will strengthen the business relationship between the two
countries. Both countries agreed to hold the next meeting as early as possible. The Malawi
Government also invited Indian delegation to visit Malawi at their earliest convenience.
India and Germany Sign Social Security Agreement
A comprehensive Social Security Agreement (SSA) was signed by the Minister of Overseas
Indian Affairs and Civil Aviation, Shri Vayalar Ravi and the Federal Minister of Labour and Social
Affairs of Germany, Dr. Ursula von der Leyen in Berlin. The Agreement which subsume the earlier
Indo-German agreement on Social Security on 8th October 2008 will enhance cooperation on
social security between the two countries. The Agreement with Germany will provide for the
following benefits to Indian nationals working in Germany:
a) For short term contract up to five years, no social security contribution would need to be
paid under the German law by the detached workers provided they continue to make
social security payment in India.
b) The above benefits shall be available even when the Indian company sends its employees
to Germany from a third country.
c) Indian workers shall be entitled to the export of the social security benefit if they relocate
to India after the completion of their service in Germany.
d) The self-employed Indians in Germany would also be entitled to export of social security
benefit on their relocation to India.
e) The period of contribution in one contracting state will be added to the period of
contribution in the second contracting state for determining the eligibility for social
security benefits.
This is the 60th year of diplomatic relationship between India and Germany. There are about 68,500
Indians in Germany most of whom are working as professionals and self-employed. During the
visit of German Chancellor to India in May 2011, both India and Germany reaffirmed that the
bilateral trade should reach US$ 20 billion by 2012. There is a huge potential for Indian for Indian
workers to take employment in Germany. As such, a bilateral Social Security Agreement with
Germany is a significant requirement from the futuristic point of view to take advantage of the
emerging employment opportunities and to strengthen the trade and investment between the two
countries.
India has signed similar agreements with Belgium, Germany (Social Insurance for detached workers),
France, Switzerland, The Netherlands, Luxembourg, Hungary, Denmark, Czech Republic, the
Republic of Korea and Norway.
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