New Delhi: The Government has approved a proposal for a bilateral investment promotion and protection agreement with Saudi Arabia. The decision comes as a prelude to the visit of Saudi King Abdullah who will be the chief guest at this year's Republic Day celebrations.

Disclosing this here on Thursday after a meeting of the Cabinet, Information and Broadcasting Minister Priyaranjan Dasmunsi told reporters that the broad aim of the agreement is to promote and protect investments from either country. He said "investment" is defined as every kind of asset, including intellectual property rights, in accordance with the laws and regulations of the country in which the investment is made.

Follows model text

Mr. Dasmunsi, who said the agreement was finalised during talks held here in September last year, pointed out that the "Model Indian Text" is the basis of the agreement under which IPRs are to be defined with domestic laws.

He said this was perceived to be important for the agreements reached in the Uruguay Round allowed developing countries a 10-year transition period to adopt the provisions of Trade Related Intellectual Property Rights (TRIPS). He said the text provides for extending Most Favoured Nation (MFN) treatment to foreign investments and investors.

"Expropriation and nationalisation will be restored on a non-discriminatory basis and subject to the payment of compensation. Repatriation of all returns from investment is to be allowed without unreasonable delay and on a non-discriminatory basis," he said. In respect of disputes between an investor and the host Government, as well as between the two Governments, a dispute resolution mechanism, including an international arbitration procedure, has been prescribed.

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