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Business News/ Politics / Policy/  Narendra Modi’s Switzerland visit sees gains in NSG, black money battles
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Narendra Modi’s Switzerland visit sees gains in NSG, black money battles

Switzerland agrees to 'expeditious' and 'automatic' exchange of information on black money, backs India on NSG inclusion

Prime Minister Narendra Modi with Marie-Gabrielle Ineichen-Fleish, State Secretary for Economic Affairs, at a business meeting in Geneva, Switzerland. on Monday. Photo: PTI Premium
Prime Minister Narendra Modi with Marie-Gabrielle Ineichen-Fleish, State Secretary for Economic Affairs, at a business meeting in Geneva, Switzerland. on Monday. Photo: PTI

Geneva: Switzerland is backing India’s application for membership of the nuclear suppliers group (NSG) that effectively oversees all trade of nuclear materials and parts, and transfer of technology, for civilian (read: peaceful) use of nuclear energy.

During Prime Minister Narendra Modi’s visit on Monday, the country also agreed to the “expeditious" and “automatic" exchange of information of money held illegally in Swiss banks through tax fraud and tax evasion by Indian nationals.

The automatic sharing of information concerning tax evasion and tax fraud, including the illegal accounts, will come into force in 2018. Swiss President Johann Schneider-Ammann said Switzerland will send its state secretary in the federal department of finance Jacques de Watteville to New Delhi next month to discuss the details for cooperation on the information-sharing framework.

“Switzerland will share information on a case-by-case basis," Schneider-Amman said. Switzerland said it is ready to cooperate on fiscal and tax-related issues through an enhanced framework to tackle illegal funds.

“Combating the menace of “black money" and tax evasion is also our shared priority," Prime Minister Narendra Modi said, arguing that “an early start to negotiations on the Agreement on Automatic Exchange of Information would be important in this respect."

“Switzerland is not the problem of global tax evasion and fraud. New havens in Dubai, Hong Kong, and other places are what that India must focus on," a private banker in Geneva said.

Modi did not raise the issue of the quantum or the “figure" for the illegal funds allegedly held by Indian nationals in the Swiss banks, the Swiss President said.

Switzerland’s endorsement of India’s application to NSG, and the moves to crack down on so-called “black money" held outside India by Indians came during a flying visit by Modi to Geneva.

The support of Switzerland, itself a member of the NSG, is important to India’s nuclear journey. A pariah after the 1974 and 1998 nuclear bomb tests, India’s re-entry into the global nuclear regime was facilitated by the 123 Agreement between it and the US.

Although that agreement came into effect in 2008, India has been unable to effectively break into the global nuclear club, largely on account of it not being a member of NSG. While Switzerland’s support is important (the membership is decided by consensus), India’s chances could be scotched by another member, China.

The next meeting of NSG is on 9 and 10 of June.

Still, Switzerland’s support for India’s admission to the nuclear club is an important breakthrough after Berne acknowledged India’s positive contribution to ensuring that there is no proliferation of nuclear materials and weapons.

Apart from NSG membership and black money, Modi and his Swiss counterpart Schnieder-Amman broke new ground on several issues, including the immediate restart of stalled free trade agreement negotiations between the two countries, enhanced dialogue on issues raised by the Swiss pharmaceutical companies on intellectual property rights in India, cooperation in the area of skill development, and working together in the areas of solar and renewable energy.

Modi signalled India’s readiness to resume free trade agreement negotiations with the European Free Trade Association (comprising Switzerland, Norway, Iceland, and Liechtenstein) and also address the concerns raised by the Swiss pharmaceutical companies—Novartis and Roche were present during his interaction with businesses—for higher level of protection of intellectual property rights.

Novartis which lost the Gleevec cancer-drug patent battle in India is opposed to the 3(d) provision in the Indian patent act that doesn’t allow ever greening of patents and compulsory licence provisions.

“We see a perfect connect between our development needs and Swiss strengths," said Modi, in his prepared statement that he read out at the concluding press conference. Modi invited “Swiss companies to avail this great opportunity to be a key partner in India’s economic growth". He admitted that high economic growth in itself is not enough emphasizing that he wants “the Indian economy to be driven by smart and sustainable cities, robust farm sector, vibrant manufacturing and dynamic services".

Modi said India and Switzerland “have both agreed to support each other for our respective bids for the non-permanent membership of the UN Security Council".

The FTA negotiations between India and the four EFTA countries went into cold storage in 2013 after India refused to agree to higher standards for intellectual property protection, said people familiar with the negotiations. The FTA negotiations between India and the EFTA countries are not “just about the [market] access for tomorrow but to create stable conditions for the business community who want to be active in the Indian market," the Swiss president maintained.

The Swiss federal secretary Marie-Gabrielle Ineichen-Fleisch will visit India later this week to start the work on the FTA negotiations. The Swiss business community wants “stability, clarity, and predictability" in strong legislations for GST and protection for IPR issues, she said in her remarks at the meeting between the Swiss business community and Prime Minister Modi.

The brief business dialogue was attended by representatives of Swiss companies such as ABB, LafargeHolcim Ltd, Novartis, Nestle, F.Hoffman- La Roche Ltd, Reiter Ltd, and Schnieder Holding Ltd.

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Published: 06 Jun 2016, 09:14 PM IST
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