Investment Incentive Agreement (IIA): Signed

India and the US have signed the Investment Incentive Agreement (IIA).

This arrangement should result in increased investment support from America’s development finance institution in a variety of areas.
The deal replaces a 1997 agreement between the governments of India and the United States.
The agreement is a legal prerequisite for the Development Finance Corporation (DFC) to continue investing in India.
Debt, equity investment, investment guarantee, investment insurance or reinsurance, feasibility studies for future projects, and grants are among the services provided under this agreement.

Since 1974, DFC or its predecessor organisations have been active in India, providing investment support totaling USD 5.8 billion, of which USD 2.9 billion is still unpaid.
DFC is considering proposals worth USD 4 billion for providing investment support in India.

DFC has made investments in sectors that are important for development, such as Covid-19 vaccine manufacture, healthcare finance, renewable energy, SME financing, financial inclusion, and infrastructure.

In 2020-21, the United States was India’s top export destination and second-largest trading partner.
In 2020-21, India’s exports to the US were valued at $51.62 billion, while imports were valued at $28.88 billion, resulting in a $23 billion trade deficit for the US.
The US is the fifth FDI source to India.
A bilateral India-US CEO’s Forum exists to involve the business sector more fully in discussions about trade and investment issues.
The India Infrastructure Collaboration Platform was also established to help India achieve its infrastructure demands by using cutting-edge US technologies.

Pic Courtesy : Business Today, PIB

Content Source : Hindustan Times