PM Manmohan in Berlin to attend Inter-Govermental Consultations with its key economic partner Germany

Prime Minister Manmohan Singh arrived in Berlin, Germany to attend the 2nd Inter-Governmental Consultations between India and Germany along with External Minister Salman Khurshid, Human Resource Development Minister M M Pallam Raju, Renewable Energy Minister Farooq Abdullah, and Science and Technology Minister S Jaipal Reddy while Commerce Minister Anand Sharma reached Berlin coming back from Geneva trip.

In addition to the ministers accompanied with the PM, National Security Advisor Shivshankar Menon, who is part of the delegation, will address security-related issues and hold a strategic dialogue during the visit.

The German Chancellor Angela Merkel will be participating in the two day Inter-Governmental consultations.

Before leaving to Berlin, Singh had said in New Delhi that Germany is a key partner for India and is expecting to sign a number of agreements in key areas like infrastructure, manufacturing, science and technology, higher education, vocational training and clean and renewable energy. 

The bilateral trade between the two nations had registered an increase of 18.4 per cent and reached Euros 18.37 billion in 2011. But, due to global economic slowdown, bilateral trade saw a dip of 5.5 per cent last year. Germany is India's largest economic partner in Europe and one of the key global partners for trade, investment and technology. 

Mr. Singh said he will be explaining a number of steps taken by his government to improve the investment environment in the country and making it a profitable destination for investors. He elaborated that he will seek Chancellor's support for an early conclusion of a balanced India-EU Broad-based Trade and Investment Agreement, which will open up new Economic opportunities.

The other important issues which Indian side will take up is to discuss is United Nations Security Council Reforms, regional issues including Afghanistan and counter-terrorism.

The IGCs, first held in May 2011 in Delhi, provide a useful forum for discussions on the full spectrum of bilateral relationship and have helped advance Indo-German cooperation in a broad range of areas.

To mark the 60th anniversary of the establishment of diplomatic relations between India and Germany, Singh will also call on President of Germany Joachim Gauck and participate in the closing ceremony of the 'Days of India in Germany'.

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CECA between India-Malaysia comes into effect from 1 july 2011

The India-Malaysia Comprehensive Economic Cooperation Agreement (CECA), which will come into effect on 1 July 2011, is India’s fourth bilateral Comprehensive Economic Cooperation Agreement, after Singapore, South Korea and Japan. The CECA envisages liberalisation of trade in goods, trade in services, investments and other areas of economic cooperation.

Trade between India and Malaysia has reached US$ 10 billion in 2010-11, an increase of 26% from the previous year. It is expected that the implementation of this agreement will boost bilateral trade to US$15 billion by 2015.

The trade in goods package under India-Malaysia CECA takes the tariff liberalization beyond the India-ASEAN FTA commitments, which were implemented by both countries on 1 January 2010. Under India-Malaysia CECA, the items on which India has obtained market access from Malaysia include basmati rice, mangoes, eggs, trucks, motorcycles and cotton garments, which are all items of considerable export interest to India. At the same time, adequate protection has been provided by the Indian side for sensitive sectors such as agriculture, fisheries, textiles, chemicals, auto, etc.

Under the services agreement of the CECA, India and Malaysia have provided commercially meaningful commitments in sectors and modes of interest to each other which should result in enhanced services trade. The CECA also facilitates the temporary movement of business people including contractual service suppliers, and independent professionals in commercially meaningful sectors including accounting and auditing, architecture, urban planning, engineering services, medical and dental, nursing and pharmacy, Computer and Related Services (CRS), and Management Consulting Services.

The India-Malaysia CECA also facilitates cross-border investments between the two countries. It aims to promote investments and create a liberal, facilitative, transparent and competitive investment regime. The CECA creates an attractive operating environment for the business communities of both countries to increase bilateral trade and investment.

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India and Tanzania Signed Double Taxation Avoidance Agreement to facilitate mutual economic cooperation

Double Taxation Avoidance Agreement (DTAA) was between the Government of the Republic of India and the United Republic of Tanzania for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income on 27th May, 2011 at Dar-es-Salaam.

The DTAA provides that business profits will be taxable in the source state if the activities of an enterprise constitute a permanent establishment in the source state. Examples of permanent establishment include a branch, factory, etc. Profits of a construction, assembly or installation projects will be taxed in the state of source if the project continues in that state for more than 270 days.

Profits derived by an enterprise from the operation of ships or aircrafts in international traffic shall be taxable in the country of residence of the enterprise. Dividends, interest and royalties income will be taxed both in the country of residence and in the country of source. However, the maximum rate of tax to be charged in the country of source will not exceed a two-tier 5% or 10% in the case of dividends and 10% in the case of interest and royalties. Capital gains from the scale of shares will be taxable in the country of source.

The Agreement further incorporates provisions for effective exchange of information and assistance in collection of taxes between tax authorities of the two countries in line with internationally accepted standards including exchange of banking information and incorporates anti-abuse provisions to ensure that the benefits of the Agreement are availed of by the genuine residents of the two countries.

The Agreement will provide tax stability to the residents of India and Tanzania and facilitate mutual economic cooperation as well as stimulate the flow of investment, technology and services between India and Tanzania.

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DTAA signed between India and Ethiopia to avoid double taxation and for prevention of fiscal evasion

India signed a Double Taxation Avoidance Agreement (DTAA) with the Federal Democratic Republic of Ethiopia for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income on 25th May, 2011 at Addis Ababa. The Agreement was signed by Shri S.M. Krishna, External Affairs Minister on behalf of the Government of India and by Mr. Sufian Ahmed, Minister of Ethiopia in the presence of the Prime Minister, Dr. Manmohan Singh and the Ethiopian Prime Minister. Mr. Meles Zenawi.

The DTAA provides that business profits will be taxable in the source State if the activities of an enterprise constitute a permanent establishment in the source State. Examples of permanent establishment include a branch, factory, etc. Profits of a construction, assembly or installation projects will be taxed in the State of source if the project continues in that State for more than 183 days.

Profits derived by an enterprise from the operation of ships or aircrafts in international traffic shall be taxable in the country of residence of the enterprise. Dividends, interest, royalties and fees for technical services income will be taxed both in the country of residence and in the country of source. However, the maximum rate of tax to be charged in the country of source will not exceed 7.5% in the case of dividends and 10% in the case of interest, royalties and fees for technical services. Capital gains from the scale of shares will be taxable in the country of source.

The Agreement further incorporates provisions for effective exchange of information and assistance in collection of taxes between tax authorities of the two countries in line with internationally accepted standards including exchange of banking information and incorporates anti-abuse provisions to ensure that the benefits of the Agreement are availed only by the genuine residents of the two countries.

The Agreement will provide tax stability to the residents of India and Ethiopia and facilitate mutual economic cooperation as well as stimulate the flow of investment, technology and services between India and Ethiopia.

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India and Afghanistan signed a MoU to improve cooperation in Information & Broadcasting sectors

India and Afghanistan signed a Memorandum of Understanding (MoU) as a major initiative to boost cooperation for capacity building in critical sectors of Information & Broadcasting. The MoU was signed between Minister for Information & Broadcasting, Smt. Ambika Soni and Dr. Sayed Makhdoom Raheen, Minister of Information & Culture, Government of Islamic Republic of Afghanistan.

Speaking on the occasion, Smt. Soni said this initiative would provide a platform for development of media policies and strategies between the two countries. Dr. Sayed Makhdoom Raheen, Minister of Information & Culture, Government of Islamic Republic of Afghanistan in his remarks stated that the MoU would enable the Government in Afghanistan to draw a roadmap for media policies and strategies in the future.

The MoU signed between the two countries covers a wide range of issues. Prominent being policy and strategy development, project management, financial management and procurement processes. The focus of the MoU is on capacity development covering critical areas which are as follows:

• Development of media policies and strategies.
• Development of independent and free press in Afghanistan.
• Identification of areas of reforms and restructuring in the field of press and media and implementation thereof.
• Development and standardization of media related programmes, graphic designing, production of documentaries and films and other related areas.
• Production and broadcasting activities of Radio and Television of Afghanistan (RTA) including content management.
• Marketing of TV and Radio programmes for revenue generation.

Another key aspect of the MoU relates to the provision of Advisory services for supporting policy and strategy development and system improvement in Afghanistan. This would entail training of Afghan Civil Servants at relevant institutes in India and exposure visits. It would also entail on-job practical training and assisting and establishing training institutes in Afghanistan. As part of the MoU it is also envisaged to exchange publications and research material for capacity development in technical areas.

The MoU has been signed in the backdrop of a range of activities conducted in Afghanistan in critical areas of Information & Broadcasting by the Ministry. These include: Training by Indian Institute of Mass Communication (IIMC) to various Afghan Journalists. Annually IIMC is training several Afghan journalists sent by the Indian Embassy Kabul. India in the recent past has helped build the full fledged Radio And Television Afghanistan (RTA) Stations at Jalalabad Afghanistan. As part of the capacity building technical process, India is also providing satellite uplinking facilities for the state owned television RTA. BECIL representatives in Afghanistan have earlier helped on various projects to RTA. A process has also been initiated to facilitate the flow of films from India into Afghanistan.

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Agreement for avoidance of Double Taxation signed between India and Republic of Columbia

A Double Taxation Avoidance Agreement (DTAA) has been signed between India and the Republic of Colombia for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income.

The Agreement was signed by Shri Sudhir Chandra, Chairman, Central Board of Direct Taxes on behalf of the Government of India and by Mr. Juan Alfredo Pinto Saavedra, Ambassador of the Republic of Colombia to India, on behalf of the Republic of Colombia.

Highlights of the agreement are as follows:

• The DTAA provides that business profits will be taxable in the source State if the activities of an enterprise constitute a permanent establishment, such as branch, factory etc., in the source State. Profits of a construction, assembly or installation projects will be taxed in the State of source if the project continues in that State for more than six months.

• Profits derived by an enterprise from the operation of ships or aircraft in international traffic shall be taxable in the country of residence of the enterprise. Dividends, interest and royalty income will be taxed both in the country of residence and in the country of source. However, the maximum rate of tax to be charged in the country of source will not exceed 5% in the case of dividends and 10% in the case of interest and royalties. Capital gains from the sale of shares will be taxable in the country of source.

• The Agreement further incorporates provisions for effective exchange of information and assistance in collection of taxes between tax authorities of the two countries in line with internationally accepted standards including exchange of banking information and incorporates anti-abuse provisions to ensure that the benefits of the Agreement are availed of by the genuine residents of the two countries.

The Agreement will provide tax stability to the residents of India and Colombia and facilitate mutual economic cooperation as well as stimulate the flow of investment, technology and services between India and Colombia.

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