The Daily Star (Dhaka) | 1 March 2008
Saarc ministers to talk outlines of investment, protection accord
Our Correspondent, New Delhi
Broad outlines of an investment promotion and protection agreement among Saarc countries are expected to be discussed at a meeting of South Asian commerce ministers this week.
Discussions among South Asian Association for Regional Cooperation (Saarc) countries are already on for such an agreement and what the Delhi meeting would do is to take it further forward by deliberating on its contours, official sources said.
What the commerce ministers would do is to lend a sense of urgency in moving towards finalising the agreement on investment promotion and protection, they said.
The proposed treaty, which had come up for discussion at a meeting of commerce secretaries in Dhaka in November last year, will address post-investment issues and this week’s meeting of commerce ministers would identify measures required to promote cross-border investment in the region, they said.
Specific sectors of interest to investors in Saarc region would be identified during the meeting and steps to be taken to encourage investments in these areas, they added.
A number of the areas in which Saarc countries like India, Sri Lanka, Bhutan, Bangladesh and Nepal have bilateral investments include energy, food products, pharmaceuticals, garments and textile.
Tourism is one area where all Saarc countries are interested in investment pouring in. Some additional sectors could also be identified.
Establishment of a dispute settlement mechanism would be a key part of the treaty and the issue is likely to come up once again in the meeting.
Reflecting its own keenness to see a spur in cross-border investment in South Asia, India had in January this year allowed investment from Bangladesh through Foreign Investment Promotion Board route.
Indian Prime Minister Manmohan Singh and External Affairs Minister Pranab Mukherjee had supported the move to remove Bangladesh from the negative list of Foreign Direct Investment (FDI) into India. Pakistan is the only country from where investment into India is barred.
Officials in New Delhi say India’s north-eastern states stand to gain from possible flow of investment from Bangladesh, particularly in areas like textiles, food processing, bamboo-based products and pharmaceuticals.
They said while Asia has drawn impressive dose of foreign direct investment from outside over the years, the cross-border investment in the region has remained negligible compared to potential.
India hopes Bangladesh’s speedy clearance of $3 billion investment by Tata Group in steel, power and fertiliser would go a long way in brightening up the investment scenario in South Asia.
Another issue likely to figure in the commerce ministers’ meeting is an agreement on trade in services. A study is already on to firm up the services which could be thrown open to regional trade.
The issue of tariff and non-tariff barriers to trade among Saarc countries would also come up in this week’s meeting.
In January this year, India scrapped import duty on more than 4,800 items from Bangladesh, Nepal, Bhutan and Maldives and slashed customs tariff on these products from Pakistan, Sri Lanka as part of efforts to boost trade in Saarc region.