Investment Incentive Agreement

Investment Incentive Agreement

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

About:
• The agreement supersedes another similar pact signed between the governments of India and the US in 1997.
• The agreement is a legal requirement for the US International Development Finance Corporation (DFC) to continue providing investment support in India.
• Services offered under this agreement include debt, equity investment, investment guaranty, investment insurance or reinsurance, feasibility studies for potential projects and grants.

Significance:
• DFC or its predecessor agencies have been active in India since 1974 and have provided investment support worth $5.8 billion, of which $2.9 billion is still outstanding.
• 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 agency has provided investment support in sectors related to development, such as manufacturing of Covid-19 vaccines, healthcare financing, renewable energy, financing of SMEs, financial inclusion and infrastructure.

Current Status of India-US Relations:

Civil-Nuclear Deal
• The bilateral civil nuclear cooperation agreement was signed in October 2008.

Energy and Climate Change
• As a priority under the PACE (Partnership to Advance Clean Energy), a Joint Clean Energy Research and Development Center (JCERDC) is designed to promote clean energy innovations by teams of scientists from India and the United States.
• India-US Clean Energy Agenda 2030 Partnership was launched at the Leaders climate summit 2021.

Defence Cooperation
• Quad Alliance
• The Malabar exercise in November 2020 portrayed a high point in Indo-US strategic ties, it was the first time in 13 years that all four countries of QUAD came together sending a strong message to China.
• India now has access to American bases from Djibouti in Africa to Guam in the Pacific.
• The four foundational defence agreements signed between the 2 nations include BECA, GSOMIA. LEMOA and COMCASA.
• Trilateral exercises such as Tiger Triumph and bilateral exercises such as Yudh Abhyas, Vajra Prahar, RIMPAC, Red Flag.

Science and Technology
• ISRO and NASA are working together to realize a joint microwave remote sensing satellite for Earth observation, named NASA-ISRO Synthetic Aperture Radar (NISAR).