India is receptive to the requirements of Abu Dhabi Investment Council (ADIC) and Abu Dhabi Investment Authority (ADIA) to be considered as separate agencies for investment limit purposes.

This was conveyed to the UAE side by Commerce and Industry Minister Anand Sharma during the first meeting of the India-UAE task force on investments here on Monday.

Apprehensions

There is some apprehension that the Reserve Bank of India (RBI) and the Securities and Exchange Board of India may consider these two UAE agencies as one, as India has put in place sectoral caps for foreign investments.

Any move to treat various investment vehicles as a single agency could constrict the level of investments flowing into the country, it was felt.

In the past, too, there were instances of different investment agencies of a foreign Government considered as a single agency for investment purposes by the RBI.

A case in point was Singapore, whose sovereign wealth fund and another investment vehicle were treated as a single agency by RBI while deciding the investment cap in a private sector bank.

Bilateral pact

But after the intervention of the Indian Government, the investments from the Singapore agencies were treated as separate.

The UAE is keen to expand its engagement with India, but is seeking comfort of investment protection in the context of past investments running into difficulties.

There is also concern over delays in project implementation on the Indian side.

This has put UAE investors into a quandary.

Safe Investments

Both sides have now agreed in principle to put in place a bilateral investment promotion and protection agreement and expedite its conclusion.

India and the UAE have agreed also to form six committees to expedite the resolution of issues associated with existing investments and opportunities for new cross-border investments across a range of sectors.

>srivats.kr@thehindu.co.in

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