AGRA: A high-profile tax dispute between the Indian government and British telecoms operator Vodafone Group has made it unlikely that India will sign a foreign investment protection treaty with Canada during a visit this week by Prime Minister Stephen Harper, Canada’s top diplomat in India said yesterday.
Canadian High Commissioner Stewart Beck also signalled an important disagreement with India in negotiations aimed at opening up Canadian exports of uranium to India. There had been media speculation in both countries that Harper’s November 4-9 visit to India might yield a final agreement on foreign investment protection or on nuclear supplies or both, but this will now likely not happen this week. “I imagine we’ll have agreements perhaps in the next year,” Beck said.
The Indian government is putting on hold all its negotiations with other countries on foreign investment protection agreements after Vodafone threatened the Indian government with arbitration proceedings under one that already exists between the Netherlands and India.
“They are taking a look at all their agreements before they finalize any one in particular,” Beck said. “I would say this is going to take more time (than this week),” he said of the Canadian-Indian investment protection negotiations, which have been under way for eight years.
The $2.2bn Vodafone dispute concerns an Indian attempt to change tax laws in a way which would impact Vodafone retroactively. On the question of atomic energy, India plans a major expansion of nuclear power, and it signed a nuclear cooperation agreement with Canada in 2010. But the two countries still need to agree on safeguards before Canada will allow its uranium to be exported to India.
Reuters
