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K.R. Srivats

New Delhi April 23 The Grand Duchy of Luxembourg is keen to enter into a double taxation avoidance agreement (DTAA) with India to improve trade and investment ties.

The elements of the proposed DTAA are likely to figure in the talks between the visiting Minister of Economy and Foreign Trade, Mr Jeannot Krecke, and Finance Minister, Mr P. Chidambaram, on Tuesday.

"This (not having a DTAA with India) is a major anomaly. It is also a reason for bilateral trade being below potential. If people are going to be taxed twice, obviously they are not going to be interested," Mr Krecke told Business Line.

Luxembourg, which has investible funds of about 1,800 billion euros and is also home to some of the most successful global companies, has more than 70 DTAAs with nations around the world.

Its fund management industry, whose representatives visited India last month, is also keen on a DTAA between the two countries.

The current trade level between India and Luxembourg is at about 40 million euros, which Mr Krecke said was "far below potential."

On investments from Luxembourg in India, he was confident that Arcelor-Mittal would invest in Orissa and that some procedural problems would have to be solved.

"Some of our actors (private players) have, in very specific fields like engineering and infrastructure, already made strong commitments to business here."

On whether he would make a case for setting an aggressive bilateral trade target, during his planned interaction with Commerce and Industry Minister, Mr Kamal Nath, Mr Krecke said: "I don't think we will put a target, but we will see what elements are necessary for improving trade."

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