India-US pact to activate $ 4 billion development aid

New Delhi, May 23

India and the US signed an Investment Incentive Agreement (IIA) at Tokyo on Monday. It is a legal requirement for continuing US investment support.

The pact would activate proposals worth $ 4 billion that are under consideration by the US International Development Finance Corporation (DFC). This will resolve the irritants that arose after the US Overseas Private Investment Corporation (OPIC) was replaced by DFC in 2018.

The IIA was signed by Foreign Secretary Vinay Kwatra and DFC CEO Scott Nathan. It supersedes the earlier IIA signed in 1997 when OPIC existed. DFC or their predecessor agencies have been active in India since 1974 and have so far provided investment support worth $ 5.8 billion of which $ 2.9 billion is still outstanding.

“Significant developments have taken place since the signing of the earlier IIA in 1997. It will keep pace with the additional investment support programmes offered by the DFC, such as debt, equity investment and feasibility studies for potential projects and grants,” said an official news release.

DFC has provided investment support in crucial development sectors such as Covid vaccine manufacturing, renewable energy and infrastructure. (EOM)