The pact would lead to enhanced investment support by DFC in India
India has signed an Investment Incentive Agreement (IIA) with the United States in Tokyo on 23 May 2022 to keep pace with the additional investment support programmes, offered by the US International Development Finance Corp (DFC), such as debt, equity investment, investment guaranty, investment insurance or reinsurance, feasibility studies for potential projects and grants.
The IIA was signed by Vinay Kwatra, Foreign Secretary, and Scott Nathan, Chief Executive Officer of DFC during Prime Minister Narendra Modi’s visit to Japan and meetings with the visiting US President Joseph Biden as well as his delegation in Tokyo.
This IIA supersedes the Investment Incentive Agreement signed in 1997 by the two Governments.
Significant developments have taken place since the signing of the earlier IIA in 1997 including the creation of a new agency called DFC, a development finance agency of the US Government, as a successor agency of the erstwhile Overseas Private Investment Corporation (OPIC) after the enactment of a recent legislation of USA, the BUILD Act 2018.
The latest IIA is to keep pace with the additional investment support programmes, offered by the DFC, such as debt, equity investment, investment guaranty, investment insurance or reinsurance, feasibility studies for potential projects and grants, said the Ministry of Finance.
The Agreement is the legal requirement for DFC to continue providing investment support in India.
DFC or their predecessor agencies are active in India since 1974 and have so far provided investment support worth US$5.8 billion of which US$2.9 billion is still outstanding.
Proposals worth US$4 billion are under consideration by DFC for providing investment support in India.
DFC has provided investment support in sectors that matter for development such as COVID-19 vaccine manufacturing, healthcare financing, renewable energy, SME financing, financial inclusion, infrastructure etc.
It is expected that signing of IIA would lead to enhanced investment support provided by DFC in India, which shall further help in India’s development, the Ministry said. fiinews.com
