RSS-affiliate Swadeshi Jagran Manch (SJM) on Thursday raised concerns over reports suggesting that India has accepted suggestions of other countries regarding rules on investments at Regional Comprehensive Economic Partnership (RCEP) meet.
It even said that the move was contrary to the stated position of the NDA government.
Calling the move as "disturbing", SJM Co-convenor Ashw Mahajan said that the details coming in public domain suggest that the provisions are not only "detrimental" to the interests of the economy, but are also contrary to the stated position of National Democratic Alliance (NDA) regime.
"These provisions are a meek surrender of the sovereign rights of any country to seek the transfer of technology from the investing compes, training to their domestic partners, and removing the cap on the quantum of royalties which domestic compes can pay to their foreign partners," he said in a statement.
He stated that the conglomerates from South Korea, Japan and even China will gain, while India is bound to lose in this.
"This is ante to the spirit of NDA regime's ambitious Make in India plan, and for the integration of domestic industry with the global supply chain," he said.
Mahajan further stated that India can't afford foreign investments in its economy, without any real benefit for the domestic players.
"If MNCs are not helping their partners to improve their know-how and want to repatriate a large part of their revenue to their global coffers, the FDI will become more detrimental for the society," he added.
He said the issues were flagged by the commerce ministry in Modi 1.0 regime and the Commerce and Industries Ministry had prepared a cabinet note, seeking provisions to curb the outflow of the transfer of royalty and other technical fees by multinational conglomerates.
The 2009 annual outflow of nearly $5 billion swelled to $20 billion in the last fiscal, the statement said adding that capping the outflow was actually needed.
"The provisions, negotiators agreed --if they did-- will accelerate the outflow of foreign exchange and would also exert pressure on the balance sheets of the Indian entities of these MNCs as well; along with robbing the shareholders of their fair share of the dividends," he said.
He stated that it will widen the current account deficit and create more pressure on the forex exchange rates.
"And the history tells us, this will never accelerate the investments in the country," he added.
Mahajan further asserted that any such move by the government will be a meek surrender to the country's legal provisions of pushing the investing compes to adhere to these requirements.
"The experience with the other bilateral investment agreements is, the foreign investors pushed the Indian government to litigation in the name of non-fulfilment of the conditions of these investment agreements and sought hefty compensation. As the investment grew, so did the litigation," he said.
He sought a national debate before agreeing to any provisions and urged the ruling dispensation to take stakeholders in confidence about the safeguard mechsm.
"The present structure and provisions are very difficult to accept; would do more damage than resolving any existing challenge," he said.
India has not yet signed the RCEP agreement but has agreed to several provisions that bring it in line with the investment rules applicable in most comparable countries, including banning host countries from mandating that the investing compes transfer technology and training to their domestic partners, and removing the cap on the quantum of royalties domestic compes can pay their foreign partners.
India and the other RCEP countries are currently in the final phase of negotiations in Vietnam.
( With inputs from ANI )