Investments Current Affairs

Indian, French companies ink pacts worth 13 billion euros

Indian and French companies have exchanged 19 contracts and agreements worth over 13 billion euros in sectors including new and renewable energy, smart grid, nuclear energy, aviation, cement, telecom among others. The agreements were formalised at Indo-French Economic Partnership (IFEP) signing ceremony held in New Delhi in the context of French President Emmanuel Macron’s official state visit to India.

Key Facts

Aviation Sector: The biggest deals signed in terms of value were from civil aviation sector. Low-cost carrier SpiceJet signed $12.5-billion agreement with French aviation major Safran Group to supply 155 CFM LEAP-1B engines for airline’s Boeing 737 MAX aircraft, along with spare engines to support fleet.

Safran also announced its eighth facility in India at Hyderabad, Telangana with 250 employees, for production of harnesses used in civil and military aerospace applications, for both local and foreign programs.

Airports Authority of India (AAI) signed agreement with French engineering company Egis for conducting study of three airports in the country — Lucknow, Pune and Trichy.

Electric Mobility Sector: Four French companies — EdF International Networks, Citelum, G2M and Solstyce — signed an agreement to work together for developing charging infrastructure in India to support electric mobility.

Renewable energy sector: Bharat Light & Power and EDF renewed their contract pertaining to data acquisition to optimise wind and solar energy production.  General collaboration agreement was also signed between French Commission for Atomic and Alternative Energy (CEA) and Vikram Solar to increase production capacity of high performance solar cells and modules.

Cement Sector: French cement maker Vicat announced investment of Rs 1,200 crore in Karnataka to double its production capacity and investment of Rs. 510 crore in cement-grinding unit in Andhra Pradesh.

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Cabinet approves Joint Interpretative Declaration between India and Colombia

The Union Cabinet approved signing of Joint Interpretative Declaration (JID) between India and Colombia regarding existing Agreement for Promotion and Protection of Investments. The agreement was signed between them signed in November 2009.

Key Features of JID

The JID will help to impart clarity on interpretation of existing Agreement as it includes interpretative notes to be jointly adopted for many clauses. It includes definition of investor, investment, Fair and Equitable Treatment (FET), Most Favoured Nation (MFN) treatment, National Treatment (NT), expropriation, Investor-State Dispute Settlement provision and Denial of Benefits.

Joint Interpretative Declarations/Statements

JIDs in general play important supplementary role in strengthening investment treaty regime. Issuance of such statements will have strong persuasive value before arbitration tribunals as Bilateral Investment Treaty (BIT) disputes are increasing. Such pro-active approach by partners can foster more predictable and coherent reading of treaty terms by arbitration tribunals.

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