Investment Incentive Agreement (IIA): UPSC Daily Important Topic | 28 July 2022

Investment Incentive Agreement (IIA)

∆This IIA supersedes the Investment Incentive Agreement signed between both the countries in the year 1997.

∆There have been significant developments since the earlier IIA was signed in 1997, such as the founding of a new organization called Development Finance Corporation (DFC).

✓DFC as a successor agency of the erstwhile Overseas Private Investment Corporation (OPIC) after the enactment of a recent legislation of USA, the BUILD Act 2018.

∆Purpose:

✓To keep pace with the additional investment support programmes, offered by the DFC, such as debt, equity investment, investment guaranty, investment insurance or reinsurance, feasibility studies for potential projects and grants.

✓The Agreement is the legal requirement for DFC, to continue providing investment support in India.

✓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.