India Calls For Multilateral Tax Treaty Within South Asia

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New Delhi, March 22: India on Monday called for a multilateral tax treaty and a forward-looking investment regime within South Asia. It asked the South Asian Association for Regional Co-operation (Saarc) countries to deepen and widen the pace of their economic integration.

Addressing the first meeting of the Saarc inter-governmental expert group on investment, arbitration and avoidance of double taxation here, foreign secretary Shashank said such a tax treaty would offer greater and more comprehensive protection to investors. It would also provide relative legal certainty as regards their tax status.

Similarly, a mechanism for settlement of investment disputes at the regional-level would serve as one of the means of attracting foreign investment in the Saarc region, he said.

The experts from the Saarc countries deliberated on various issues concerning trade facilitation measures which would supplement the agreement on South Asian Free Trade Area (SAFTA) signed during the Saarc summit in Islamabad in January.

They discussed various proposals intended to create conditions conducive for promoting trade and investment in the region.

Mr Shashank said the hectic pace of globalisation, the stakes involved for the region in the multilateral trade negotiations and the rush of bilateral and regional trading agreements being entered into worldwide, made it imperative for the Saarc nations to step up the pace of their economic integration.

“We have the potential, talent and resources to make South Asia an economic powerhouse of the world. We must, therefore, seize the moment or else be content with being marginal players on the world stage,” he said.

Emphasising the need for deliberations on investment regime to be forward-looking, taking cognizance of recent changes, Mr Shashank said it should be conducive to promotion of intra-Saarc private investment flows.

It should also increase the competitiveness of the Saarc region by evolving co-ordinated investment promotion programmes and regional approach to investments.

He noted that the successful conclusion of SAFTA was a landmark achievement and sent a clear signal of the strong commitment of the member-states to forging close economic ties.

At the Saarc summit, Prime Minister Atal Bihari Vajpayee had contended that development of greater economic stakes in each other would naturally result in greater sensitivity to the one another’s concerns and pave the way for ambitious goals like free trade area, an economic union, open borders and a common currency for the region.