Contrary to widespread expectations, India and Canada failed to sign a long-pending Foreign Investment Protection and Promotion Agreement (FIPPA) during the visit of Canadian Prime Minister Justin Trudeau despite a push and concerns expressed by Canadian pension funds over the slowdown in investment inflows.
The issue of concluding the FIPPA was “extensively discussed” during a bilateral meeting between Prime Minister Narendra Modi and Trudeau here on Friday. However, the two sides could not come to an agreement, sources told BusinessLine .
However, India and Canada on Friday signed a series of MoUs and agreements, including on IT, energy cooperation and sports, to expand bilateral ties. Sources said the Canadian delegation had even cautioned India on the “slowdown” in investments in pension funds, which is one of the main sources of funding for India’s infrastructure assets.
Disappointment for Canada
Canada had been pushing for the investment treaty long before Trudeau landed in India. A number of his cabinet ministers have been visiting India on a regular basis to push India into signing the FIPPA.
The FIPPA, which is aimed at safeguarding investor rights of both countries, was almost ready in 2013.
However, faced with a series of international arbitration cases, India revoked all investment treaties and came out with a new model.
“We have also decided to strengthen our economic cooperation. Canadian pension funds are one of the main sources of investments for developing India’s infrastructure. We have asked our chief negotiators to double their efforts in concluding the negotiations for a CEPA (Comprehensive Economic Partnership Agreement) and FIPPA,” Modi said during a joint press conference with Trudeau.
Last year, Canadian Minister for International Trade François-Philippe Champagne had told BusinessLine that the FIPPA was almost ready to be signed. He had visited India twice last year in an effort to get the agreement off the ground.
Yet another demand made by Canada was to de-link the FIPPA from the CEPA because negotiations on the CEPA have not yet reached the final stage.
However, interestingly enough, Canada managed to obtain for itself investments worth around $1 billion from Indian firms. “Earlier this week we took a major step in strengthening our economic relationship when I announced a billion dollars in two-way investments between Canada and India, which will create 5,800 good middle-class jobs back home in Canada. Whether it is Canadian firms exporting to India or India’s global companies creating jobs for Canadians, we all win,” said Trudeau.
Efforts in combating terror
“We discussed ways to enhance our security cooperation. Terrorism and violent extremism are a threat to democratic and pluralistic societies like India and Canada. To combat these, it is important we work together. We have agreed to take this cooperation further. Our NSAs, who have met earlier, have decided to establish a ‘Framework for Cooperation on Countering Terrorism and Violent Extremism’”, said Modi.
According to the joint statement, both sides recognised that terrorism, violent extremism and radicalisation present acute challenges to global peace, stability and prosperity. The two leaders resolved to combat terrorism and violent extremism in all their forms and manifestations.
“They called for bringing terrorists to justice and holding accountable state sponsors of terrorism, including cross-border terrorism.
“They further emphasised that no country should allow its territory to be used for terrorist and violent extremist activities,” the statement said.