Beijing, July 13: With the top Indian and Chinese leadership deciding to tap the full potential of trade and economic cooperation, efforts are on to sign a bilateral investment protection agreement that would further step up business links and help reach the targeted 10 billion USD trade figure by 2005. Official sources said that both sides are working on the investment protection agreement - a long-term demand of the business communities of India and China.

"Both sides are trying to formulate a language that is satisfactory to both sides," a source said, adding that in the past Beijing and New Delhi faced some difficulty on this issue since both sides followed different models.

The two sticking points are national treatment of investment and repatriation of profits. While India has signed several such investment protection agreements, the language of these agreements differed considerably with those signed by china with other countries. "Now there is an attempt to formulate something that would be mutually satisfactory," the source said while pointing out that the recent visit to China by Prime Minister Atal Bihari Vajpayee has generated much enthusiasm among Chinese businesses to invest in India.

While welcoming Chinese investments to India, Vajpayee and his Chinese counterpart Wen Jiabao had decided to form a joint study group to review existing cooperation, to identify new areas of promise, and to draw up a perspective plan for the development of a multi-faceted economic interaction between the two countries.

Bureau Report