June 16, 2007
No. 82
The Honourable David Emerson, Minister of International Trade, today announced the
conclusion of negotiations on a Foreign Investment Protection and Promotion
Agreement (FIPA) with India. He made the announcement following a meeting in
Toronto with his Indian counterpart, the Honourable Kamal Nath, Minister of Commerce
and Industry.
“The Government of Canada considers India to be a priority market for the country. And
we are delivering on our commitment to strengthen our relationship with India,” said
Minister Emerson. “This FIPA is a concrete step in our efforts to secure improved
access for Canadian firms to a rapidly growing market.”
The Canada-India FIPA will provide added security and predictability to the legal
framework for two-way investment. It sends a strong signal by providing business from
both nations added assurance for their investments in the other country. Given the
strategic importance of investment as a driver of trade in today’s global economy, a
FIPA provides a solid platform from which Canada and India can grow their commercial
relationship in the future.
“The Indian market offers tremendous opportunities for Canadian investors,” said
Minister Emerson. “Canada is strongly committed to encouraging two-way investment.
This agreement will provide a stable environment for investors and will further stimulate
trade and investment flows between our two countries.”
FIPAs are bilateral agreements that protect and promote foreign investment through
legally binding rights and obligations. They encourage two-way investment by providing
investors with the protection and predictability they need when investing in foreign
markets.
The two ministers met in Toronto as part of Minister Nath’s three-day visit to Canada.
The meeting built on a recent visit to India by Minister Emerson and a successful
Canadian trade mission to India led by Ted Menzies, Parliamentary Secretary for
International Trade, in March of this year.
In their meeting, Minister Emerson and Minister Nath reviewed a number of bilateral
trade and investment issues, and discussed ways of building on the FIPA to further
deepen the Canada-India partnership. They also took stock of ongoing WTO
negotiations and discussed how best to move forward in these talks.
Last year, our two-way trade grew to a record level of $3.6 billion, including a
55 percent increase in merchandise exports to India. That constitutes the highest
increase in 14 years.
Two-way foreign direct investment increased by more than 17 percent to $528 million.
Stronger growth is also anticipated in the coming years in light of the vibrant
relationship being built between the business communities of both countries.
Minister Emerson also noted that Canada’s New Government is committed to growing
these numbers and intensifying our commercial relationship with India. Consequently,
Canada is further enhancing its trade resources in existing offices in India in locations
such as New Delhi and Mumbai, as well as in Hyderabad and Kolkata.
Canada and India have long-standing ties, built upon shared values of democracy and
pluralism and on strong people-to-people links. Canada’s New Government is
committed to bolstering economic relations between India and Canada.
Please visit http://www.international.gc.ca/commerce/india2/menu-en.asp for further
information.
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For further information, media representatives may contact:
Jennifer Chiu
Press Secretary
Office of the Minister of International Trade and Minister for the Pacific Gateway and
the Vancouver-Whistler Olympics
613-992-7332
Trade Media Relations Office
Foreign Affairs and International Trade Canada
613-996-2000
http://www.international.gc.ca
Backgrounder
FOREIGN INVESTMENT PROTECTION AND PROMOTION
AGREEMENT BETWEEN CANADA AND INDIA
On June 16, 2007, the Canadian Minister of International Trade, David Emerson, and
the Minister of Commerce and Industry for the Government of India, Kamal Nath,
announced that they have concluded the negotiation of a Foreign Investment Protection
and Promotion Agreement (FIPA), and agreed to submit the proposed agreement to
their respective governments for approval, with a view to working toward its entry into
force as soon as possible.
India has consistently been identified by Canadian business as a priority partner for the
negotiation of a high-quality FIPA. The country’s rapidly expanding economy and
commitment to the liberalization of its investment regime will provide significant
opportunities for investors in a variety of sectors, including financial services,
infrastructure, information technologies, life sciences and natural resources.
In providing greater predictability and certainty, the FIPA will enable Canadian business
to take advantage of new investment opportunities in India. By facilitating investment
flows between our two countries, the agreement will also strengthen the bilateral
relationship and increase trade in merchandise and services.
Foreign Investment Protection and Promotion Agreement
A FIPA is a bilateral, reciprocal agreement designed to protect and promote foreign
investment through the establishment of legally binding rights and obligations. The
Canada-India FIPA will require that the host government:
• apply its laws pertaining to the admission of investment in an objective and
impartial manner;
• ensure the fair and equitable treatment of investors and provide full protection
and security for their investments, in accordance with principles of international
law;
• protect foreign investments against expropriation or nationalization;
• treat foreign investors established in its territory in a non-discriminatory manner;
• allow the repatriation of profits or proceeds of an investment without restrictions;
and
• ensure that government measures affecting investments will be transparent and
implemented with due process.
The FIPA also includes a dispute settlement mechanism, providing the investor with
access to international arbitration in the event of a dispute.
Finally, in keeping with normal practice, the FIPA includes a clause that ensures the
agreement does not affect either party’s ability to protect national security.
Canada currently has FIPAs with Argentina, Armenia, Barbados, Costa Rica, Croatia,
the Czech Republic, Ecuador, Egypt, Hungary, Latvia, Lebanon, Panama, the
Philippines, Poland, Romania, Russia, the Slovak Republic, Thailand, Trinidad and
Tobago, Ukraine, Venezuela and Uruguay.
For additional information about Canada’s existing FIPAs, see
http://www.international.gc.ca/tna-nac/fipa-en.asp.
