Indian Economy - News & Updates - Archive

[Bushroda]

The Death of the Indian Dream
By ARAVIND ADIGA
TIME
Wednesday, Jul. 30, 2008

An Indian vegetable vendor sorts chilies at a local market in Mumbai.
PAL PILLAI / AFP / Getty

Inflation in India has hit a 13-year high, but you wouldn't know that as you walk around the Infiniti Mall in Andheri, a Mumbai suburb. The young men and women — many of whom are aspiring models and film stars (the Bollywood studios are not far from here) — are crowding in with their cell phones and laptops, and the place looks as busy as ever.

Visiting a stall that serves bhelpuri — a mix of puffed rice, dough, tomato and coriander that is the quintessential Mumbai snack — I find that the price has gone up from 37 rupees a plate to 42 (about $1), in line with the current inflation rate of 12%. I ask the manager of the stall if sales have slowed down at the higher price. He thinks this is funny, and he shares my question with his workers; they think it's funny too. One of them explains: "If you were happy to pay 37 rupees for a plate of bhelpuri, do you think you'd even notice an increase?" The cost of the dish here is four times what you'd pay out on the street. For these workers, who cannot afford to buy a thing in this mall, not even a bottle of water, everything seems surreally expensive; the surreal getting inflated by 12% isn't an event at all.

When I get to my apartment, I find Suman, the maid who does the cleaning in my building, waiting outside the door. The price of lentils, a key component of most Indian meals, has surged in the past few months. She hasn't been able to increase her rates yet, so she has had to take an additional cleaning job to make sure there is enough food at home. She will have to leave my apartment sooner every day; she hopes I will not dismiss her for this.

Over the past decade, economists have been divided about the great Indian boom. For one party, the Indian economy's amazing growth rates indicate that the country is a nascent superpower — an America in the making. As evidence, they can point to the growing clout of Indian firms like Bennett, Coleman & Co., a privately owned Mumbai media conglomerate that recently bought Britain's Virgin Radio. For the other group of economists, the boom has been an illusion: the majority of Indians have been excluded from the growth, poverty has stayed stagnant, and India is still just a Sudan with a little icing on top. So who is right? As the current bout of inflation shows, they are both right.

The Indian economy is slowing this year, but even if it grows at only 7% or 8%, it will be doing far better than the U.S. and most of Europe. The Indian multinationals that have grown out of the 10-year boom look as strong as ever, with outsourcing giants like Infosys and Tata Consulting Services growing very robustly. Their success has created a huge middle class for which 12% inflation is more of a nuisance than a worry. The long-term future of the Indian middle class is secure. The factors that have driven its success — a sure grasp of English, a facility with technology, a talent for innovation — will continue to be important in the global economy.

But the 300 million or so Indians living in acute poverty are being crushed by inflation. If they thought washing the floors, driving the cars and cleaning the windows of the middle class would open the doors to a better life, they know now that they were wrong. With prices rising, their savings are being eaten away. Higher food and fuel prices are being driven by big changes in the global economy that look set to continue. Even the most cheerful optimist in the past decade has seen the huge divide between the haves and have-nots, but the hope has persisted that it would somehow go away. Inflation has set like cement into that divide, solidifying the gap between the two Indias. The future for the country is two futures: rosy and grim. Indian companies will buy more foreign businesses and more Indian children will starve. In economic terms, India has become neither the U.S. nor Sudan, but something in between — a Latin American republic with an entrenched class chasm. Higher levels of crime and social unrest are almost certain to follow. For years or decades to come, we will not be able to talk of one destiny for all the people of the country.

Aravind Adiga is the author of the novel The White Tiger

 

[Bushroda]

Time to get over India's nuclear bomb
Ties have been strained since New Delhi tested weapon with plutonium from Canadian reactor

Ryan Touhey
The Star, Canada
Aug 01, 2008 04:30 AM

Once labelled by some as the "sick man" of South Asia, India is now an emerging economic power set to become the world's fifth-ranking consumer economy.

As a result, India faces no shortage of foreign suitors, and the governments of Australia, France, the U.K. and the United States are leading the charge. Canada? We've been among the slowest to recognize India's rise.

The board of governors of the International Atomic Energy Agency (IAEA) will meet today and consider approving the U.S.-India Civil Nuclear Deal. Canada is represented on the board but it is uncertain how Ottawa will react to this significant event.

New Delhi and Ottawa still appear unable to shake off the lethargy that stems from a tumultuous bilateral history that still lingers. In order to move forward, Canada and Canadians might have to radically rethink the major bilateral gap between us: India's nuclear program.

There has been little government effort since the mid-1970s to address this issue. Equally, there has been scant public or academic debate on the merits of Canada's bilateral, and nuclear, relationship with India. But this is a difficult and delicate matter. A recent national survey by the Asia Pacific Foundation of Canada noted that only 34 per cent of Canadians polled agreed with the statement "Canada should accept India as a responsible nuclear power."

To say that Canada and India have a controversial past largely due to differences on nuclear proliferation is an understatement. The story remains largely unknown to the Canadian public. With generous terms, we sold our Commonwealth partner two CANDU reactors in the 1960s after donating a reactor the decade before. By 1974, India had tested ts first "peaceful nuclear device" using plutonium from our donated reactor despite assurances to the contrary. Ottawa was furious and condemned India harshly on the world stage.

This event coincided with a period of domestic turmoil under prime minister Indira Gandhi that included the suspension of civil liberties. Too many bureaucrats and politicians in Ottawa had had enough with a country once deemed by Canadian officials to be the most important in Asia. Their disdain was heightened by the fact that India's economy was anemic, it appeared democratically fragile, and neither government was willing to compromise on the nuclear question. It was then that Canadians opted to turn their backs on the subcontinent.

The 1980s were no better. Some elements in the Sikh diaspora sought to foment support in Canada for terrorist activities in the Punjab.

Prime minister Brian Mulroney, as his recent Memoirs reveals, was advised not to host the 1987 Commonwealth Games in Vancouver as a result of terrorist fears and possible threats to India's prime minister. The Air India tragedy followed. India believed Ottawa did not take the threat of Sikh terrorists operating from Canada seriously enough.

In the 1990s, our government's efforts to begin expanding trade ties as India began to open up its economy were largely dashed when New Delhi chose to test two more nuclear weapons.

Fast forward to today. What can we do?

A number of new drivers, particularly our provinces, the private sector and the growing Indo-Canadian community, are seeking to expand trade, education and people-to-people linkages. Ottawa is showing some interest in their efforts, even occasionally suggesting that Canada and India share similar values.

First off, it is imperative for Canadians to realize that while India shares a Westminster-style parliamentary system and Commonwealth connection with Canada, much of the similarity ends there, particularly in foreign affairs.

While these are positive factors, we discovered they only count for so much as we learned decades ago when both countries served on the International Commission for Supervision and Control in Vietnam and differed as we naively expected India to see the Vietnam War as we did – through a Cold-War prism. Instead, India tended to sympathize with the North Vietnamese, viewing them through the eyes of a people who themselves had once been oppressed by colonial powers. Two generations of young Canadian diplomats served on the ICSC. Most returned to Ottawa far from enamoured with their Indian counterparts.

Recently, both countries have adopted different stances to the troubles plaguing Burma and Sudan.

It is imperative for us to understand that democratic values alone will not ensure that Ottawa and New Delhi share a world view that will create common approaches to global issues, or even establish mutual linkages between us. If the Canadian government bases its approach to India on the assumption that both countries share similar values and concepts of democracy, Ottawa may well suffer from the disillusionment experienced in the past. In a globalized world economy, we can't afford to do that with a rising economic tiger and a country that provides the second-largest source of immigration to Canada.

India's academics, policy-makers and politicians regard their country as a great power. The current strains of hyper-realism circulating in Indian foreign-policy circles make it more difficult, whatever our past, for Canada to search for a finely tuned Pearsonian, middle-power pathway with New Delhi.

India and the world have changed.

So must we.

We have to rethink our relationship with India and to seize the opportunities India now offers Canada. Overcoming our nuclear past might not be a bad place to start, particularly in light of the recent U.S.-India Civil Nuclear Deal.

After the IAEA meeting, the deal will still need to be approved by the Nuclear Suppliers Group (NSG) and the U.S. Congress. Once completed, it will bring India's civilian nuclear power plants under the supervision of the IAEA. In turn, the agreement will allow India bilateral civilian nuclear co-operation with the Americans for the first time in more than 30 years.

The international community gets a say in this deal through the NSG, of which Canada is a member. Any one NSG member, including Canada, can veto the agreement.

The deal that only weeks ago appeared to be faltering due to splits within India's minority government has created a precedent and sparked debate among a number of Canada's allies, including Australia, France and Britain. But reaction in Canada has been remarkably muted. Debating the merits – and the faults – of the deal will show India that we are at least willing to consider this question in light of present circumstances. In doing, so we will be sending a strong and positive message to India.

Our India policy has been non-existent for decades regardless of which party has been in power.

It is time to look at India with fresh eyes and to move beyond a history characterized by disagreements.

Ryan Touhey is a fellow at the Canadian International Council (CIC).

 

[Bushroda]

Innovative university sets the flavour of Indian town
cleo Paskal, special to the star
The Star, Canada
Aug 02, 2008 04:30 AM

Manipal, India–Manipal is a typical college town. Which is what makes it so unusual. Here in India, most of the best universities are in the big cities. The rural colleges tend to be a bit parochial. But Manipal University, deep in the wooded hills of Southern India, is an excellent university, ranked in the top 10 in the country in several faculties.

Like Cambridge, almost the entire economy of the town is built around the college. Pretty much everyone you meet on the paved and well-lit streets is associated with the school.

The university has set the tone for the town, and it's an amazingly innovative tone. The campus is entirely non-smoking. In an attempt to keep the environment unpolluted, there is a policy to discourage motorbikes and cars, and students are given bikes to use when they arrive.

Going one step further, climate change education is being integrated across the curriculum.

All of this, combined with a very multicultural student body which uses English as a common language, makes Manipal an easy and fun place to visit.

This being a college town there are, of course, plenty of coffee houses filled with the bustle of students (and even a Subway), but there are also historic temples and, a short ride down the hillside, the Arabian Sea (where the Manipal Surf Club catches waves). There is a floodlit, well-tended jogging route, which overlooks rice paddies and coconut groves. There are rickshaws and nuclear physicists. And it is all seamless, relaxed and friendly. This is a place where it is easy to make friends and to feel as though you belong, wherever you are from.

This traditional, yet modern environment has been a big draw for Indians who have settled elsewhere but who want their kids to ``experience'' India. Students come from more than 30 countries, with a strong contingent from North America. Manipal also has agreements with universities in the U.S. and branch campuses in places such asDubai and Sikkim.

About 30 per cent of Malaysian doctors graduate from Manipal, and the Communications Institute has close to a 100 per cent hiring rate for its budding journalists.

Founded more than 50 years ago, the university and town are hitting their stride and growing rapidly with new departments being added all the time – the two most recent being e-banking and geopolitics.

It is unusual to come across a place that is settling in so firmly that you feel you are witnessing the beginning of a tradition.

But just as India is refinding its geopolitical and economic place on the world stage, it is also reasserting its place in world education.

 

[Bushroda]

Indian group has towering ambitions
Marika Dobbin
The Age, Australia
August 2, 2008

INDIA'S economic ties with Victoria are deepening, with one of its largest real estate companies snapping up prime Melbourne sites and planning a $500 million apartment and luxury hotel tower at Southbank.

The Wadhawan Group has gone on a three-month buying spree, acquiring four sites in South Yarra, Brighton and Southbank, including paying $40 million for land in City Road.

Chairman Kapil Wadhawan said the company's investment was part of India's rapid economic expansion and indicative of a deepening financial relationship with Australia. Victoria's Industry and Trade Minister, Theo Theophanous, met Mr Wadhawan and other executives yesterday, following the Government's announcement in May that it would pursue trade and investment opportunities with India.

With a free trade agreement between the two countries under negotiation, Mr Wadhawan said his company would introduce other aspects of its Indian business to Australia, such as housing finance, educational interests and food, beverages and groceries.

"We see Australia strategically as an important destination for us, not just in realty development but also to pursue further trade relations," he said.

"India is already a strong trade partner with Australia. You've got Indians investing in the resource sector in Australia, a number of Indian IT firms are already present in Melbourne, so yes, looking at the overall potential, we see a great opportunity for us to set up a base in Australia."

The Wadhawan Group is seeking approval for more than 800 apartments at Southbank and is in talks with an American hotel chain for a 150-room hotel. It is also planning some luxury apartment buildings in Brighton and South Yarra.

Mr Wadhawan said he was not concerned about the slowing Australian economy or predictions of a downwards slide in housing prices.

"We believe whether it's 800 or 1000 apartments, it's going to get absorbed," Mr Wadhawan said.

"We've got a lot of international owner-investors and we get a sense that the domestic market needs an extremely good product of mid to higher-end."

Austrade organised the whirlwind tour by Wadhawan executives as part of its new responsibility for fostering inter-country investments under a Federal Government expansion of its role.

 

[Bushroda]

India's new G-spots
Shankkar Aiyar
August 1, 2008

For decades, the enduring aphorism that best condensed the economic theory of trickle-down benefits of high economic growth has been "A rising tide lifts all boats". The ultimate mantra of free market evangelists popularised by John F. Kennedy finds vindication across India too.

As India migrated from a $500-per-capita income at the beginning of the decade to $1000 now, higher earnings fuelled consumption and created markets in new geographic landscapes, extending beyond the big metros and even Tier II submetros. Kolhapur, better known for its hand-made chappals; Kannur, famous for the export of communism; cotton town

Erode and Yamunanagar, best known for the manufacture of utensils, are now the destinations for companies seeking consumers and market share.

If Future Group Chairman Kishore Biyani has chosen small town Jharkhand boy Mahendra Singh Dhoni as the brand ambassador for Big Bazaar, it is not just for cricket but market economics too.

True, the stereotypical images of the unpaved economy growing haphazardly persist, but the picture has changed. In fact, the optimism of an 8-plus per cent GDP growth this year, despite the high inflation and the spectre of slowdown, is driven by the new width acquired by the economy.

Thanks to the resurgence of manufacturing which led to the revival of small and medium enterprises, these small towns are now emerging as the fountainheads of entrepreneurship.

Kolhapur, Maharashtra:
Sambhaji Rangarao Patil, 47, is a farmer
who uses his two tractors to grow over
50 tonne of sugarcane and generate an
annual income of Rs 15 lakh

A study derived from the RKSWAMY/BBDO Guide reveals the emergence of new markets that are driving incremental growth in basic durables, automobiles, mobile phones and FMCG. Thanks to growth in both rural and urban incomes, district towns have emerged as hot spots.

In fact, according to the RKSWAMY/BBDO study, 60 district towns of less than five lakh account for a tenth of national consumption. Indeed the top 13 district towns combined could match the consumption of Mumbai and Delhi markets.

You could say that the emergence of these new towns is the result of a serendipitous coming together of factors.

The boom in manufacturing, the priming of the rural economy with a spend of over Rs 2,00,000 crore by the Government and investments in new industrial estates and IT enclaves all combined to generate employment and higher incomes in urban and rural economies. This fuelled consumption of goods, services and real estate triggering the virtuous cycle.

Evidence of the coming together is reflected in the transformation of the towns: take Kolhapur, for instance. Nestled in a fertile valley fed by four rivers, it has always been an agri hub with higher-than-average income levels.

But it is the revival of the textile industry coupled with the opening up of textile and IT parks that has created economic viability. Erode, a small town in west Tamil Nadu, is abuzz with activity every Monday evening as people from as far as Jammu in the north, Assam in the east and Gujarat in the west descend for the weekly Monday Market, which winds up only by Tuesday dawn.

Yarn, processed and cotton fabric are sold and bought from this market. "Nearly 70 per cent of raw materials needed for the Indian textile market flow through Erode," says S. Sivananthan, secretary, Erode Textile and Garments Exporters' Association.

Plastics and steel are the new areas of growth. In a sense, Erode has built on its traditional strengths to emerge as a multifaceted economy." To start with, plastic industries were set up to supply spares for textile companies.

Patiala, Punjab:
Gurjit Singh Mansahia, 62, cultivates
70 acres for horticulture and forestry,
netting an annual profit of Rs 15,000
per acre. He has three cars, including a Skoda

Today we manufacture spares for the automobile sector too, for companies like Hyundai, Tata Motors and TVS Motors," says M.Venkatachalam, managing partner, Jayanthi Plastics.

Evidence of a diversifying economy is visible in the north too. Yamunanagar is no longer a one-business town. Besides hosting biggies like Ballarpur Industries and Saraswati Sugar Mills, it is emerging as a major centre for plywood production. With new projects like the 600 MW Reliance Energy thermal power plant, this town is evolving into a commercial hub.

Ditto with Patiala. Located in Punjab's farm-rich Malwa region, it has been in the fast lane of development since 2000. While agriculture remains the mainstay of the economy, the emergence of the service sector and the presence of a mélange of institutions, including two universities, the Thapar Institute of Engineering and Technology, two medical colleges and two of Punjab's best known public schools, has delivered sustainability.

This, in turn, has fuelled across-the-board real-estate growth catapulting Patiala into the orbit of boom towns. It is hardly surprising then that, come November, it will be among the first to boast a Rs 60-crore wedding trousseau mall set up by Omaxe.

Gowri Arun, who co-authored the RKSWAMY/BBDO study, says, "Growth has created a new wave of consumerism and created an appetite for lifestyles comparable to that in metros."

Biyani, who is planning to set up shops in 110 towns, believes, "There is a big shift in aspiration levels in these small towns which translates into consumption and sales. Confirmation of this comes when we see reality show participants wearing clothes from Big Bazaar."

Sameer Satpathy, marketing head of FMCG outfit Marico agrees: "Now aspiration is not restricted by geography. Rural consumers want the same products as urban ones as they have money and are exposed by media to a new mindset. In fact, today Mumbai and Delhi account for a smaller percentage of the sales than before."

The story is repeated in telecom too. Harit Nagpal, director of marketing at Vodafone Essar, reveals that falling handset prices and tariffs are driving sales. "The bulk of subscriber addition is coming from outside the 20 major cities."

Quite naturally there is a rush to cash in. Banks are ramping up their sales forces to acquire depositors, mutual funds are going rural to attract investors as are automakers. In fact Tier III towns account for a fifth of Tata Motors sales.

Yamunanagar, Haryana:
J.K. Bihani, 48, is MD of Galaxy Plywood
Industries, with a turnover of Rs 10 crore.
Believes town will become a commercial hub

Venugopal Dhoot, chairman of the Videocon Group, reveals that 60 per cent of his sales come, not from major metros, but from mini metros and Tier III towns. "The percolation effect of the high economic growth seen in the past five years can be seen clearly across many district towns."

Ergo new methods are being used to penetrate these markets. Handset maker Nokia is using mobile vans to reach customers in district outposts while auto major Maruti-Suzuki holds 'car melas' two to three times a month in smaller towns. Not surprisingly, 30 per cent of its sales come from these towns and panchayats.

The rising tide has lifted the boats. By design or by default, the virtuous factors of economic growth have combined to deliver width and growth to the Indian economy. As marketing strategy consultant Rama Bijapurkar says, "Tier III towns have benefited from steady economic growth, improved road connectivity and aggressive marketers.

Visible consumption increase has happened but there is more to come." It is early days as yet. Unless politics and politicians work to ruin the script, these towns could well provide the next chapters of the India story.

 

[Flintlock]

Clinton Foundation mulls world's largest solar project in Gujarat

Maulik Pathak & Ashish Amin / Ahmedabad August 8, 2008, 0:59 IST

US-based foundation to set up Rs 20,000-crore Integrated SolarCity.

This could well be the world’s largest solar power project at a single location if all goes as planned.

The US-based Clinton Foundation is in talks with the Gujarat government to set up an ‘Integrated Solar City’ project with a capacity to generate a 5,000 Mw over a period of time.

The project, tagged as one of the largest foreign direct investment (FDI) into the state, will also be a landmark project as the cost of power generation is likely to be 70 per cent less — around Rs 20,000 crore — than the conventional cost of generation, say sources close to the development.

The project envisages an integrated solar city wherein all the raw materials including glass and panels will be produced by them, bringing down the cost substantially, said a senior government official.

The cost of generation for thermal energy is about Rs 10-11 per unit. However, according to estimates of Clinton Foundation, the power produced in the solar city will cost around Rs 4 per unit, going by the scale of the project and technology advancement they have on hand.

The Gujarat government has roped in US-based Nobel Laureate John Byrne for charting the state’s solar roadmap and is considering Kutch and Banaskantha as favourable locations for the mega project.

“The Foundation, supported by the likes of GE Energy and Microsoft, already has a war chest of $12 billion which it wants to utilise for green energy initiatives,” sources said.

The world’s largest solar power plant is currently in Mojave Desert of California with a capacity that will go up to 900 Mw in few years.

The Clinton Foundation is also in talks with governments of Andhra Pradesh and Rajasthan for setting up solar power projects.

A number of corporates including Essar, Indiabulls, Reliance, ADAG, Tata Power, Suryachakra and Euro Group have also lined up solar projects in the state.

The Mukesh Ambani-controlled Reliance and Euro Solar have already been given letters of intent of 5 Mw each from the 10 Mw quota allotted by the Centre to each state.

(Business Standard)

 

[Flintlock]

India's growth to be fuelled by 20 cities: Report
7 Aug, 2008, 2104 hrs IST, IANS

NEW DELHI: India's growth will be driven by 20 cities, according to a report released here on Thursday.

These 20 cities together account for 10 percent of India's population, but generate 31 percent of disposable income and in 2007-08 fuelled consumption worth $100 billion, said the report titled "Next Urban Frontier: 20 Cities to Watch".

The report was jointly prepared by economic think-tank National Council of Applied Economic Research and the Future Group's research wing Future Capital Research.

As 379 million people will be added to India's urban spaces over the next 40 years - which is the more than the current population of the US - these cities will be crucial for the economic development and will emerge as the major market for financial services and consumer goods.


The report says more than half the total urban income is generated by these 20 cities and they account for 60 percent of saving of the whole nation.

According to the report, these 20 cities are divided into three categories - mega cities, boom towns and niche cities.

The mega cities are the largest cities in terms of population and overall consumer market.

Boom towns are the next set of big population cities, with high expenditure per household.

Niche cities, which are smaller in terms of overall population but still hit well above weight in spending per household.

The eight mega-cities are all the four metros, along with Bangalore, Hyderabad, Ahmedabad and Pune.

The seven boom towns are Surat, Kanpur, Jaipur, Lucknow, Nagpur, Bhopal and Coimbatore.

The five Niche cities are Faridabad, Amritsar, Ludhiana, Chandigarh And Jalandhar.

The report also highlights some interesting findings such as boom towns registering the fastest economic growth.

It also says more than half of the households in the country will be middle-class by 2016, while the high-income segment will triple by that year.

The report highlights that the mega cities households spend the least on an average on education and recreation, and 19 percent of households prefer to keep surplus income at home.

India's growth to be fuelled by 20 cities: Report- Indicators-Economy-News-The Economic Times

 

[Marshal]

Two of Orissa's most controversial projects have got the green signal from the Supreme Court. The court cleared the Sterlite mining project and the Posco steel plant in Orissa which have been delayed by protests by tribals and villagers.

The Sterlite project worth $800 million was stuck for a long time over environmental concerns. Tribals in the region said the project to come up in Kalahandi district will severely damage the ecology of the region.

Now Sterilite, the promoters of the Vedanta group have been asked to pay for the welfare of the tribals.

Posco plans to build $12bn steel plant in India at the total project cost at Rs 51,000 crore.

http://http://www.ndtvprofit.com/2008/08/08160127/Sterlite-Posco-projects-clear.html

 

[Flintlock]

ASEAN, India to sign free trade pact in December: official

8 hours ago

BANGKOK (AFP) — Southeast Asian nations expect trade with India will soar once the regional bloc ASEAN signs a just-concluded deal with New Delhi at a regional summit in December, officials said Friday.

Talks in Brunei Thursday removed the remaining obstacles to the pact, which will liberalise trade in goods between India and the 10-member Association of Southeast Asian Nations, said the group's secretary general Surin Pitsuwan.

The deal covering billions of dollars of trade in goods, but not services, is expected to be signed during the ASEAN-India Summit in December, officials said, though it was not immediately clear when it would take effect.

Talks were supposed to have wrapped up last year, but got bogged down over Indian tariffs on crude and palm oil from regional heavyweights Indonesia and Malaysia, as well as metals and textiles from Thailand, officials said.

"It's done. All final obstacles on palm oil tariffs have been resolved," the Indonesian trade ministry's Director General of International Trade Cooperation Gusmardi Bustami told AFP in Jakarta.

Total trade between ASEAN and India amounted to 28.7 billion dollars in 2006, putting India eighth on the list of the bloc's trading partners behind countries like Australia and South Korea, according to ASEAN figures.

A top Thai trade official predicted that number will rocket once the deal takes effect.

A more limited bilateral deal between Thailand and India was signed four years ago. Before the pact, two-way trade stood at one billion dollars a year, but now has jumped to four billion dollars a year, said Chana Kanaratanadilok, deputy director of Thailand's department of trade negotiations.

"Free trade between ASEAN and India will make a huge impact. Two-way trade between our country and India could average about 10 billion dollars a year," Chana told AFP.

The agreement with India is part of ASEAN's strategy of building trade pacts with major regional partners.

The bloc is pushing ahead with FTA negotiations with Australia, New Zealand and the European Union, and is hoping for the early implementation of a comprehensive economic partnership agreement with Japan.

ASEAN has also signed a landmark deal with Japan's economic rival, China, to create the world's biggest free trade zone by 2010.

Such bilateral deals could play an increasingly important role in future growth after the breakdown in global trade talks in Geneva earlier this week.

The attempt to break the seven-year deadlock in the so-called Doha Round of trade-opening talks hit deadlock between India and the United States over tariffs on agricultural goods in the event of an import surge or price fall.

For India, the ASEAN deal will help expand its influence in Southeast Asia at a time when the country is vying with China for trade ties and access to natural resources.

India adopted a free-market economy in the early 1990s and is keen to expand trade ties with ASEAN, but it is also keen to protect sensitive sectors such as agriculture and textiles, which provide livelihoods for millions.

Talks on the ASEAN deal had stalled over differences on products which India wanted excluded from tariff cuts.

New Delhi had submitted a list of 1,414 products, while ASEAN's target number was 400. The final list is reportedly about 560 goods, but officials would not give details on exactly how the differences were overcome.

 

[Flintlock]

India must address problems concerning teachers: Tharoor

New Delhi (PTI): Right to education will not be a reality in India unless problems concerning teachers are addressed, former United Nations Under Secretary General Shashi Tharoor said on Friday. Speaking at a function to launch 'Guruvar Awards' for teachers, Tharoor said there is a shortfall of about 25 lakh teachers in India at present. The pupil-teacher ratio in India is the worst in the world, he said.

"Under these circumstances, right education could only become reality only when we address the problem of teachers and make teaching an attractive profession," he said. He said nearly 40 per cent population of India are illiterates. In addition, 25 million children are out of schools now.

Tharoor's views assume significance as the draft Right to Education Bill on Friday came up for discussion in the Cabinet whcih referred it to a Group of Ministers. Dubai-based Varkey GEMS Foundation, a charitable trust working in education, launched the award for teachers for their contributions in the field.

"This is a novel initiative to felicitate teachers and encourage more people to join this profession," Tharoor said. The award would be given to four teachers selected from a pool of teachers from 3000 schools in India every year. Experience of teachers and their project work would be the main criteria for selection, GEMS's chairman Sunny Varkey said. The foundation would start giving awards from next year.

The Hindu News Update Service

 

[Neo]

India becoming major importer of sugar​

NEW DELHI: India, a large exporter of sugar this year, will become a big importer of the sweetner after October 2009 as the crop shrinks and demand in the world’s top consumer rises, a leading producer said on Friday.

The country may import up to four million tonnes in the crop year from October 2009, Sanjay Taparia, finance director at Simbhaoli Sugars Ltd, told Reuters in an interview. He said India’s imports would have been even higher but the country’s choked ports would not be able to handle such a surge.

Sugar output in India, the world’s second largest producer after Brazil, is likely to be 26.5 million tonnes this year, down from a record 28.4 million tonnes last year. Exports in the current year are likely to be a record four million tonnes. Some expect production to fall further to 18-19 million tonnes in 2009/10 as deficient rainfall this summer has affected planting in some parts of the country.

Taparia said demand in the year that begins in October 2008 would be met from the new crop and stocks of 11 million tonnes. “But in 2009/10, we will have to import for sure,” Taparia said, adding that India would become a larger importer in years ahead as farmers turn to less risky and more lucrative crops. Domestic demand is steadily growing by 1-1.5 million tonnes annually in India, the world’s leading consumer of sugar, and could touch 24 million tonnes in 2009/10.

Traders say sugar prices have risen to 16.50 rupees (40 cents) per kilogram on forecasts of lower output in the next two years. The previous year’s all-time high production had hammered down prices to 14.50 rupees per kg. reuters

Daily Times - Leading News Resource of Pakistan

 

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ASEAN, India to sign free trade pact in December​

BANGKOK: Southeast Asian nations expect trade with India will soar once the regional bloc ASEAN signs a just-concluded deal with New Delhi at a regional summit in December, officials said Friday.

Talks in Brunei Thursday removed the remaining obstacles to the pact, which will liberalise trade in goods between India and the 10-member Association of Southeast Asian Nations, said the group’s secretary general Surin Pitsuwan.

The deal covering billions of dollars of trade in goods, but not services, is expected to be signed during the ASEAN-India Summit in December, officials said, though it was not immediately clear when it would take effect.

Talks were supposed to have wrapped up last year, but got bogged down over Indian tariffs on crude and palm oil from regional heavyweights Indonesia and Malaysia, as well as metals and textiles from Thailand, officials said.

“It’s done. All final obstacles on palm oil tariffs have been resolved,” the Indonesian trade ministry’s Director General of International Trade Cooperation Gusmardi Bustami told AFP in Jakarta.

Total trade between ASEAN and India amounted to $28.7 billion in 2006, putting India eighth on the list of the bloc’s trading partners behind countries like Australia and South Korea, according to ASEAN figures.

A top Thai trade official predicted that number would rocket once the deal takes effect.

A more limited bilateral deal between Thailand and India was signed 4 years ago. Before the pact, 2-way trade stood at $1 billion a year, but now has jumped to $4 billion a year, said Chana Kanaratanadilok, deputy director of Thailand’s department of trade negotiations.

“Free trade between ASEAN and India will make a huge impact. Two-way trade between our country and India could average about $10 billion a year,” Chana told AFP.

The agreement with India is part of ASEAN’s strategy of building trade pacts with major regional partners. The bloc is pushing ahead with FTA negotiations with Australia, New Zealand and the European Union, and is hoping for the early implementation of a comprehensive economic partnership agreement with Japan.

ASEAN has also signed a landmark deal with Japan’s economic rival, China, to create the world’s biggest free trade zone by 2010.

Such bilateral deals could play an increasingly important role in future growth after the breakdown in global trade talks in Geneva earlier this week. The attempt to break the seven-year deadlock in the so-called Doha Round of trade-opening talks hit deadlock between India and the United States over tariffs on agricultural goods in the event of an import surge or price fall.

For India, the ASEAN deal will help expand its influence in Southeast Asia at a time when the country is vying with China for trade ties and access to natural resources.

India adopted a free-market economy in the early 1990s and is keen to expand trade ties with ASEAN, but it is also keen to protect sensitive sectors such as agriculture and textiles, which provide livelihoods for millions.

Talks on the ASEAN deal had stalled over differences on products which India wanted excluded from tariff cuts.

New Delhi had submitted a list of 1,414 products, while ASEAN’s target number was 400. The final list is reportedly about 560 goods, but officials would not give details on exactly how the differences were overcome. afp

Daily Times - Leading News Resource of Pakistan

 

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India's top court clears Posco, Vedanta projects in key rulings​

By Penny MacRae

NEW DELHI (AFP) - India's top court has cleared South Korean steel giant Posco's plan for a 12-billion-dollar plant in a controversial case seen pitting farmers' interests against growing industrial development.

In another key case viewed as a test of tribal rights, the court approved British mining company Vedanta Resources' proposal to mine bauxite on land held sacred by locals to feed a 900-million-dollar aluminium refinery.

The plant to be built by Posco, Asia's top steel producer, in the resource-rich eastern coastal state of Orissa would be the biggest foreign direct investment in India since it launched market reforms in 1991.

But the plant, which aims to create 18,000 jobs in a poverty-ridden part of the country over the next decade, has stirred violent protests by farmers objecting to loss of their land.

In both rulings Friday, the court imposed environmental and compensation conditions but the stipulations did not satisfy the projects' opponents.

"The ruling has no bearing on our struggle. We'll continue our fight against Posco. We'll never give up our land," said Abhoy Sahu, head of the group spearheading the protests against the steel project.

The government has been keen to draw foreign and domestic investment to create job-generating industries.

But the shift from agriculture has stirred big debate and often violent local opposition as many projects encroach on farm or tribal land.

Seoul-based Posco welcomed the court ruling and said it would proceed swiftly with the project, initially agreed in 2005, requiring 4,000 acres (1,600 hectares) of land.

POSCO plans a four-million tonne steel plant and a 400-megawatt power plant.

The company has a "firm commitment to the project" and is determined to move ahead "at full speed," said Posco India senior general manager Vikash Sharan.

Vedanta also said it was happy with the approval of its plan to carry out open caste bauxite mining on what tribals say is their holy mountain, also in Orissa state.

The company had sought permission to mine vast bauxite deposits in the fertile forested Niyamgiri Hills to supply the aluminium refinery it built nearby.

Vedanta has been feeding its refinery with bauxite purchased from other Indian states.

The case was seen as an important test of tribal and environmental rights against industrialisation.

London-based Survival International director Stephen Corry called the ruling "a devastating blow" to "all of India's tribal peoples."

In Orissa, Dongria Kondh tribal Jitu Jakaka, said: "We are deeply connected with the mountain... our sacred place. It is home to our god Niyamraja. We will not allow the company to mine our land."

Last November, Norway's state pension fund withdrew 13 million dollars in investments in Vedanta, accusing it of "causing serious damage to people and to the environment" in India.

India's top court clears Posco, Vedanta projects in key rulings - Yahoo! News

 

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India keen to share IT expertise in e-governance ​

Press Trust Of India / Kuala Lumpur August 09, 2008

India is keen to share its expertise in Information and Technology with the Commonwealth countries to help them take up e-governance in a big way, Lok Sabha Speaker Somnath Chatterjee said today.

Addressing the final plenary of the Commonwealth Parliamentary Conference here, he said that the world has witnessed a revolution in the field of information and communication technologies which has impacted it in a variety of ways.

Chatterjee, who is heading the Indian parliamentarians delegation to the 54th Commonwealth parliamentarians meeting underway here, said that there was a need for making available authentic information to MPs to enable them function effectively.

In this regard, he said generation of electronic data base and introduction of networking technologies has helps MPs in India to take "informed decisions".

Chatterjee said that in India E-governance Plan is being implemented as the Central, State and local government levels at a cost of Rs 2,30,3000 million.

He pointed out that the launch of the Lok Sabha Television has help in disseminating vital information about Parliament and its functioning to the people.

Commonwealth Parliamentary Association's outgoing chairman, West Bengal Assembly Speaker Hashim Abdul Halim, was appointed the Treasurer of the CPA for a three-year term till 2011 by the General Assembly.

It also elected Chatterjee, Bihar Speaker Uday Pratap Singh and Assam Speaker Tanka Bahadur Rai as Regional representatives from India Region on the Executive Committee of the CPA.

India keen to share IT expertise in e-governance

 

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Inflation will come down in 3-6 months, says FM ​

Bangalore August 08, 2008

Finance Minister P Chidambaram today said the inflation rate will come down in the next 3-6 months with the tight monetary measures taken by the Reserve Bank of India. The country's rate of inflation crossed the 12 per cent mark on Thursday and the wholesale price index stood at 12.01 per cent.

"We have seen four years of good growth and this year is a difficult year due to things beyond our control. The rising crude oil prices in the international market has resulted in the rise in inflation. The internationally traded commodity prices have gone up over the last one year, on which we have no control," he said.

"What we are trying to do is, given the price effect we are trying to moderate aggregate demand by using tight monetary measures by sacrificing a bit of growth. That is the only way in which inflation can be tamed," he said addressing a discussion organised here today in connection with the launch of his book, "A view from the outside".

When the world economy slows down in 2008-09 and aggregate demand is contained, crude oil and commodity prices will also moderate, he said.

Inflation will come down in 3-6 months, says FM