To promote and attract foreign investment, the Finance Ministry is reportedly planning to set up fast-track courts for speedy settlement of disputes involving foreign investors and the government.
The move is to address the issues of enforcement of contracts and dispute resolution faced by foreign investors.
“The ministry has proposed appointing a mediator and setting up fast-track courts in a 40-page initial draft,” said a Reuters report quoting officials aware of the development.
The draft proposal also plans to set up an investment tribunal in the high courts that will take up cases as a matter of priority.
Entrackr’s queries to the finance ministry in this regard did not elicit any response till the time the story was published.
Foreign investors, who usually have to wait for years to get their cases settled, have raised the issue of enforcement of contracts as one of their biggest concerns.
The implementation of the law would reduce litigation for the government as well which at present is involved in over 20 overseas arbitration cases.
Regarding enforcement of contracts, India ranks 163 out of 190 nations.
Though, in recent few months, the government has been taking steps to improve India’s investment scenario.
Earlier in July, the Central Board of Direct Taxes under Finance Ministry had issued a circular saying that income earned by non-resident investors from investments made overseas but routed through alternative investment funds (AIF) will not be taxed in India.
The move is said to resolve the double taxation issue on profits earned by Indian investors from off-shore investments.
According to an estimate, close to 15-20% of the total investments coming into Indian startups are via AIFs.