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BIPA expected to boost German investments in India

In what has come as a shot in the arm for Indian diplomacy in the aftermath of the nuclear tests, India and Germany have ratified the Bilateral Promotion and Protection of Investments Agreement, reflecting their desire to strengthen economic and political relations.

The instruments of ratification of the agreement were exchanged by Foreign Secretary K Raghunath with his German counterpart Peter Hartmann in Bonn on Monday.

An external affairs ministry spokesman today said the exchange of instruments was the last pending procedure after the German government completed the ratification formalities pertaining to the Bipa, which was signed on July 10, 1995.

He said the coming into effect of the agreement from Monday was a major development in further strengthening the economic co-operation between the two countries. Germany is India's largest trading partner in Europe.

With nearly 1,600 collaborations between Indian and German companies, including nearly 600 joint ventures, Germany is also an important source of technology and investment.

Asked if the foreign secretary, who had since returned to New Delhi, discussed political issues with the German side, the spokesman said there must have been a discussion on all issues of mutual interest.

The interest of German small- and medium-sized companies in India is significant for Indo-German economic packages.

The spokesman said BIPA would contribute in increasing the net inflow of German investment in India and in further strengthening economic cooperation between the two countries.

Insofar as foreign direct investments by Germany in India is concerned, India has got $ 61 billion between 1997-98. In 1997 itself, India got $ 21 billion from Germany.

UNI