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Govt rushes to break impasse on Canada investment pact

After Narendra Modi's victory in the elections in May 2014, the Canadian government said it expected the Prime Minister to finally sign the foreign investment pact.

Frank Jack Daniel   New Delhi     Last Updated: April 13, 2015  | 10:20 IST
Prime Minister Narendra Modi
Prime Minister Narendra Modi arrives in Canada on April 14 for a two-day visit. (Photo: Reuters)

Indian and Canadian negotiators are rushing to iron out differences in a long-stalled foreign investment protection pact in time for Prime Minister Narendra Modi's visit to the north American country next week, a government source said.

Modi, marking the first bilateral visit by an Indian prime minister in 42 years, arrives in Canada on April 14 for a two-day visit.    

"The negotiation teams are working even today in Ottawa," the source with direct knowledge of the matter told Reuters.

Negotiations for the agreement, which seeks to protect legal rights of Canadian and Indian investors doing business in the two countries, were concluded in June 2007, but it has yet to be ratified.

Concerns in the Centre over certain provisions of the negotiated pact, which allow a foreign investor to sue the host country at an international dispute settlement agency, are believed to be the reason behind the deadlock.

Several investors have taken the government to international arbitration in recent years, citing provisions of bilateral investment protection agreements.

After Modi's victory in the general elections in May 2014, the Canadian government said it expected the Prime Minister to finally sign the agreement.

The two countries are also negotiating a free trade agreement, but progress has been slow.

Canada is home to 1.2 million Indians but the size of bilateral trade is a relatively small at around US $6 billion a year.

Modi's trip could also clinch a fuel supply agreement with Canada's biggest uranium producer, Cameco, two domestic sources said.

A similar investment agreement with Europe has been reinvigorated and could be finalised within three months, the first source added.

(Writing by Rajesh Kumar Singh) - Reuters

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