EU Current Affairs

EU, France give 3.5 Million Euros as Grant to Curb Emissions in India

EU and France will give a grant of 3.5 million euros to three Indian cities- Nagpur, Kochi and Ahmedabad as part of the EU’s commitment under the Paris Climate agreement to curb emissions and promote sustainability in these cities.

Salient Highlights

The grants have been provided to help India’s smart city programme under the ‘Moblise Your City’ (MYC) initiative.
India has become the first country to get benefits from the MYC initiative.
The MYC initiative is supported by the French and German government and also has financial support of the European Union (EU). The initiative is aimed at helping 100 cities across the world to reduce Green House Gas (GHG) emissions by promoting sustainable urban transport and sustainability in urban spaces.
MYC initiative was emphasised by the Indian and European leaders during Prime Minister Modi’s recent visit to Europe.
Further it has been stated that more funds would be offered to India to carry forward its sustainable transport initiatives on the three smart cities.

Background

French Development Agency (AFD) has been associated with several projects in India and conservation of biodiversity. AFD, at present, is funding the Vijayawada, Lucknow, Bengaluru, Kochi and Nagpur metro rail projects.

AFD is a public financial institution of France whose mandate is to implement the policy defined by the French government. It is headquartered in Paris. It finances projects in Africa, Asia, the Middle East, Latin America, the Caribbean and the French overseas territories to promote living conditions for populations and economic growth in these regions.

France is the ninth largest foreign investor in India.

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India rejects attempts of EU, Canada for global investment agreement

India, along with Brazil, Argentina and some other nations rejected an informal attempt of European Union (EU) and Canada to work towards a global investment agreement at World Trade Organisation (WTO)-level.

The EU and Canada proposed agreement incorporates a contentious Investor-State Dispute Settlement (ISDS) mechanism. They wanted their investment pact to be the template for a similar multilateral agreement.

What is Investor-State Dispute Settlement (ISDS) mechanism?

The ISDS mechanism permits companies to drag governments to international arbitration without exhausting the local remedies. It also allows them to claim huge amounts as compensation citing losses they suffered due to reasons, including policy changes. The contentious ISDS mechanism already has been incorporated by investment pact by the EU and Canada.

What is India’s position?

India has rejected such mechanism. It clearly held that only after all local options have been exhausted for settling disputes between a corporate and a government, then the issues can be taken up in international arbitration tribunals. It also held that such provisions could be a part of bilateral agreements but they can’t be allowed in a multilateral agreement.

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