- People closely following the fortunes of the political parties, and in turn the governments at the Centre and the States, would have come across several occasions when the authorities in power make earnest efforts at inviting prospective investors to set up businesses. Of course, that’s the modus operandi for ensuring the economic atmosphere in the country not only flourishes on expected lines but also helps in positioning the nation to keep growing. Nothing wrong with the motive since the economic growth factor is the most key parameter that makes the country poor, developing, and developed, largely based on the robust mechanism of welcoming investors. Since so much is riding on the investor’s intent, the governments are bound to lay a red carpet for them.
PC: DW.com
- As we know, there are several forums offering countries to showcase a conducive atmosphere for investing by the big business houses. One such platform is the World Economic Forum happening in Davos, Switzerland, where global issues are discussed, deliberated, and MOUs signed for future collaboration. The very definition of MOUs – Memorandum of Understanding – defines how the two interested parties arrive at an understanding to proceed further eventually. As a matter of fact, we know that these MOUs are like Valentine’s cards. We can sign as many as we want without landing a date or a dollar. Agreed, there are many reasons to be in Davos right now, not least its AQI. There’s snow too, something Himachal and Uttarakhand have missed this winter.
PC: CP24
- Thankfully, at Davos, the snow is deep enough for activists to carve STOP WARS NOW for Trump’s consumption. And the summit of WEF, where MOUs are always ripe for picking. Last year, Maharashtra’s haul alone amounted to Rs. 16L cr or $185bn – about $10bn more than it would be in today’s rupees. This year’s harvest is likely bigger, with Maharashtra announcing Rs. 14.5L cr of MOUs on the very first day of the five-day jamboree. Other states are present there too. Not unreasonably, opposition parties have questioned the wisdom of signing MOUs with Indian firms in a foreign locale – maybe it’s the clean air in Davos that does the trick. The bigger point is that signing an MOU isn’t like signing other stuff.
PC: NDTV
- If we, humble people, sign cheques, marriage registers, loan applications, employment letters, IOUs, we must keep in mind that these are enforceable. What percentage of MOUs translates into investment depends on who’s counting. Maharashtra claims 75% of the Davos MOUs have been acted upon, a conveniently ambiguous term that can mean anything from actual investment to printing copies of the memoranda for distribution. It’s almost impossible to keep track of the numerous MOUs that the Centre and States sign in a year, but just three states – UP, Andhra, and Bengal – announced MOUs worth over $500bn at their investor summits in 2023. Actual investment in the country was $624bn. MOUs cannot be taken at face value. Simple.
![Pinterest](https://pinterest.com/pin/create/button/?url=https://kanigas.com/does-signing-of-mous-really-carry-substance-apparently-not/&media=https://kanigas.com/wp-content/uploads/2026/01/MoU-Understanding-the-legality-of-memorandum-of-understanding.jpg&description=Governments enthusiastically court investors through global platforms like the World Economic Forum in Davos, signing billions worth of MOUs annually. However, these non-binding Memorandums of Understanding often fail to translate into actual investments, with states making ambiguous claims about conversion rates while the gap between signed pledges and enforceable commitments remains substantial. Unlike binding agreements such as cheques or contracts, MOUs function more like "Valentine's cards" – easy to sign but difficult to track in terms of real economic outcomes.){kind=link}