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Bippa Agreement of Nepal with Different Countries

With respect to compensation, if investors earn one, it is the “fair market value of the expropriated investment, immediately before the expropriation or before the imminent expropriation is made public, whichever comes first.” Investors may request a review of the compensation offered on the basis of the laws of the host country. Although the interpretation of these provisions is controversial, it should be noted that the scope of the definition of these issues also applies to investments in both countries. It does not apply to claims made prior to the application of the agreement, which means that some Indian companies such as UTL and Dabur Nepal cannot claim compensation for losses already inflicted on their company. Just because we sang BIPPA with India doesn`t mean investors are going to flock to Nepal. BIPPA has certainly given Indian investors more confidence in investment protection and protected them from losses due to arbitrary policy changes. However, BIPPA is not a panacea for all industrial ills and a substitute for genuine domestic policy reforms that could increase foreign and domestic investment. For investment to increase significantly, Nepal faces constraints such as lack of electricity, inadequate infrastructure supply, labour disputes, rising raw material costs, political inconsistencies and high lending rates for key sectors. Article 6 of the Bippa signed with India provides compensation for investors if they suffer losses due to war, armed conflict and the state of emergency. “These investors are treated no less by the host country than its own investors or investors in a third country. Any payment made under this article is freely transferable,” the agreement states. However, government and private sector officials say the government needs to ensure that investors have the security of their investments in order to attract foreign investment. Given China`s growing investment in Nepal, stakeholders say the bippa will help further boost investment. Much of the debate on BIPPA is based on misinformation and an inaccurate understanding of the scope and depth of the agreement.

While the private sector has openly embraced BIPPA, selfish political leaders are politicizing it to make their voices heard through hooks or crooks. For example, former Prime Minister Jhalanath Khanal blamed the government for signing the BIPPA, which he said is not in our national interest. He seems so lost in the dirty political game that he has forgotten what was mentioned in the Treasury`s 2009-10 Economic Study during his tenure as prime minister. It states that “a bilateral investment promotion and protection agreement will be signed with India to encourage Indian investment in Nepal, while preparations are underway to continue these agreements with other countries” (see page 187). This shows how bad our leaders like Khanal`s are at understanding economic issues and remembering what they officially advocated when they were at the forefront of power. Similarly, some influential leaders have argued that BIPPA is contrary to the interests of our country and workers. Their argument is that BIPPA will increase Indian rule and undermine the rights of domestic workers. The overall objective of BipPA is to increase FDI inflows. In this regard, recent studies show that investment protection agreements such as BIPPA do indeed have a positive impact on foreign direct investment, especially when it comes from relatively high-income countries and high-export countries to low-income countries. The impact is greater in countries where national institutions are weak, as investors are relatively more confident in investing in the country under investment protection agreements.

In terms of employment, there is evidence that foreign investors pay relatively higher wages on average and employ more workers than their domestic counterparts in certain sectors, particularly manufacturing. We have already seen that this is also true in our case. Bishnu Prasad Dhakal, undersecretary of state at the Department of Industry Promotion of the Ministry of Industry, said the project sent to China was similar to the one signed with India. “As the Bippa signed with India is the most recent, it has been made the standard document for the agreement with China. We changed some of the content of the draft sent by China before the minister`s approval,” Dhakal said. The bilateral investment promotion and protection agreement (BIPPA), signed between Nepal and India on 21 October 2011, has caused a lot of noise. While some political leaders have censored the government on the grounds that it is “anti-national”, others have avoided appreciating the government`s signing of the agreement, even though they support the idea of BIPPA itself. .

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