Indian Economy - News & Updates - Archive

[Neo]

Wednesday, February 07, 2007

India to face decline in farm output

By Iftikhar Gilani

NEW DELHI: India is poised for another year of declining food production that will further push up prices of cereals and edible oils for the second consecutive year as the government has admitted a drop in their production in the second advanced official estimates for 2006-07 released here on Tuesday.

The total cereal production is estimated to be 194.65 million tonnes, nearly half a million tonnes less than the final estimates for 2005-06. It may actually go down much further as the estimates of wheat production included in the calculations do not take into account the hot spell that made the agriculture secretary sound alarm bells of low outputs.

The official estimates still show wheat production going up from 69.35 million tonnes in 2005-06 to 72.5 million tonnes in 2006-07. The government has, in fact, tried to paint a rosy picture of the total foodgrain production going up as compared with last year, by adding up figures for lentils in which India is always surplus. The estimate of 209.17 million tonnes, however, is still just 580,000 tonnes more than the final estimates of 2005-06. Much worse is the edible oil scenario as the oilseed production is estimated to fall by 4.38 million tonnes -- from 27.98 million tonnes in 2005-06 to 23.6 million tonnes this fiscal, mainly because of the sharp decline of 3.5 million tonnes in groundnut. Rice production is also down from 91.79 million tonnes last year to 90.13 million tonnes while the coarse cereals also recorded a drop from 34.06 million tonnes to 32.02 million tonnes during the period. The story is other way round when it comes to cash crops as the official estimates show a big jump in sugarcane production from 281.172 million tonnes in 2004-06 to 315.528 million tonnes while cotton production is also estimated to go up from 18.5 to 20.964 million bales this year. Jute production is also up from 10.84 to 11.39 million bales.

Critics say the government cannot take comfort by adding up lentils, whose production is estimated to go up from 13.39 million tonnes to 14.52 million tonnes, to show a slight increase in total foodgrain production as they point out that prices of lentils had skyrocketed last year despite high production and, moreover, the reality will bite further if the government's wheat estimates go awry because of the hot spell.

http://www.dailytimes.com.pk/default.asp?page=2007\02\07\story_7-2-2007_pg5_12

 

[Neo]

Friday, 9 February 2007

First-time flyers trouble India

Flying is a new experience for many Indians
Inexperienced flyers are causing a few headaches for India's budget airlines, with one carrier reporting a passenger trying to open a door mid-flight.
India's rapid economic growth has made air travel an option for many more people, as a host of new airlines have taken to the skies in recent years.

But the burgeoning demand for flying has brought its own problems.

A report by one airline revealed that passengers trying to have a chat with a pilot forced an emergency landing.

Frustrated passengers

India is one of the world's fastest-growing aviation markets, but the surge in demand has led to chaotic scenes on flights, with some people struggling to overcome their nerves and adapt to flying etiquette.

According to a report seen by the BBC, a series of recent incidents have highlighted the "growing menace of unruly passengers in India".

Lack of food and nicotine, long delays due to congestion, fog or whatever can frustrate people

Ajay Jasra, Spicejet

On one occasion, a passenger tried to open a door shortly before take-off while a flight circling around Delhi was forced to make an emergency landing after a group of passengers approached the cockpit to complain.

The BBC's Damian Grammaticas said one airport manager quoted in the report said troublemakers were often first-time fliers, but bureaucrats, politicians and other professionals had also proved unruly.

The report recommends that people should be taught the do's and don'ts of air travel and that airlines should be able to breathalyse passengers before boarding if they seem drunk.

Ajay Jasra, from budget carrier Spicejet, told the BBC that there were many reasons why passengers became disturbed.

"Inadequate airport infrastructure, lack of food and nicotine, long delays due to congestion, fog or whatever can frustrate people," he said.

http://news.bbc.co.uk/2/hi/business/6346295.stm

 

[Neo]

Friday, February 09, 2007

India discovers uranium deposits in Andhra Pradesh

By Iftikhar Gilani

NEW DELHI: India has identified the uranium deposits in Andhra Pradesh, which can meet the fuel requirements of India's nuclear power programme and mining for the uranium ore will start by the end of this year.

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister, on Thursday cleared the mining project to be started in Tummalapalle by sanctioning Rs 13.70 crores for land acquisition through the State Government.

Officials said the state government would acquire the requisite land for the Tummalapalle Mining and Milling Project and hand it over to the Uranium Corporation of India Limited (UCIL) for starting exploration and mining. UCIL is a fully government-owned undertaking functioning under the Department of Atomic Energy.

The project is estimated to provide direct employment to 934 persons in various categories and would include the project-affected displaced persons, the official announcement added.

"The approval of the project will meet the uranium fuel requirement of the nuclear-power programme," Finance Minsiter P Chidambaram told reporters.

http://www.dailytimes.com.pk/default.asp?page=2007\02\09\story_9-2-2007_pg5_10

 

[Janbaz]

Indian inflation hits two-year high

NEW DELHI: India’s inflation hit a more than two-year high of 6.58 per cent on Friday, sparking warnings from the government’s communist allies that high prices were creating “misery” for millions of poor.

The wholesale price index, India’s most closely watched cost-of-living monitor, showed inflation climbed by nearly half a percentage point to 6.58 per cent for the week ended January 27 from 6.11 per cent the previous week.

The rate was the highest since December 11, 2004 and up sharply from the same period a year ago when it stood at 4.04 per cent.

“The rate at which inflation is increasing will spell disaster for the economy in the coming days and bring more misery to the people,” Communist Party of India General Secretary A B Bardhan said.

Bardhan called on the government to institute a public food grain distribution system to help those hit by spiralling prices.

Around 25 per cent of India’s one billion people live on less than one dollar a day. The inflation increase, driven by rising costs of vegetables, pulses and other basic goods, came a day after India hiked its year growth forecast to a torrid 9.2 per cent, from an earlier eight per cent-plus estimate, amid a surge in demand for services and manufactured items.

The Congress-led government, propped up in parliament by the communists, has already expressed fears that India’s economy is “overheating.”

Rising prices have assumed urgency for the government which faces elections in three northern states this month and polls in April in Uttar Pradesh, India’s most populous state and considered politically pivotal.

The government mindful that rising prices can be political dynamite among India’s poor masses who helped propel it to power in 2004 insists price stability is one of its top priorities.

Politicians grimly recall when the Hindu nationalist Bharatiya Janata Party lost power in state elections in Delhi in 1998 mainly due to spiralling prices of onions that are a staple feature of Indian diets.

Inflation now is significantly above the 5.0-5.5 per cent tolerance limit set by the Reserve Bank of India and the new rise stoked expectations of more monetary tightening.

Last month the bank, which has been using a variety of tools to fight inflation since it began a tightening cycle in late 2004, raised its key short-term borrowing rate by a quarter percentage point to 7.5 per cent.

In December, it boosted the amount of money that banks must keep with the central bank, raising the cash reserve ratio (CRR) by 50 basis points to 5.5 per cent in a bid to take cash out of the banking system and slow 30 per cent annual credit growth that is helping fuel economic expansion.

Analysts believed that the rate hiking cycle was over for the time being after an aggressive series of increases and that the central bank would turn to the cash reserve ratio to try to tame inflation.

“The Reserve Bank is probably done with hiking interest rates but not with monetary tightening,” said Rajeev Malik, economist at JP Morgan in Singapore.

Malik said he expected the bank to hike the cash reserve ratio again by around 50 basis points, possibly before its next policy meeting April 24.

“I would expect them to turn to the cash reserve ratio and the government is also toying with letting the rupee get a little bit stronger to make imports a little cheaper,” said T K Bhaumik, chief economist at India’s biggest private company Reliance Industries.

“There is a lot of concern, the government is very much seized by the problem,” said Bhaumik. The government has cut customs duties on cooking oil, cement and other goods in a bid to lower prices of basic necessities.

“These and more such cuts in the budget should help headline inflation to come down from April,” Malik said. The budget is due at the end of February.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=42183

 

[Janbaz]

India sets $80bn export target for IT sector

MUMBAI: India’s rapidly growing information technology sector should aim at a nearly fourfold increase in annual exports of software and back-office outsourcing services by 2010, the country’s prime minister said on Friday.

“We need to work hard to retain our edge and even harder to increase our share of the world market,” Prime Minister Manmohan Singh told nearly 1,000 participants of an international software conference. The three-day conference, organised by the National Association of Software and Services Companies or NASSCOM, India’s main software services trade group, ended on Friday.

India exported $23.4 billion (euro19.53 billion) of such services in the 2005-2006 fiscal year that ended March, a 32 per cent jump on the previous 12-month period, according to NASSCOM figures. Singh said NASSCOM’s export target of $60 billion (euro46.19 billion) per year by 2010 was not high enough. “We must be more ambitious, considering the way our economy and exports are rising. This target should be met by 2008 and by 2010, we should be looking at a target of $80 billion (euro61.58 billion),” Singh said.

Singh also asked the information technology sector to strive to help India’s large rural population. “We need to ensure that our large rural population gets the benefit of the information technology explosion ... It can focus on solutions which can benefit the farmer, the artisan, the weaver and the home worker,” he said.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=42188
This was an obligation to the nation, he said. Nearly 70 per cent of India’s more than 1 billion people live in rural areas, mostly depending on agriculture for survival.

 

[Neo]

Saturday, February 10, 2007

Dabur India looking at Pakistan

LAHORE: In line with its global expansion plan, Dabur India is looking at starting its local manufacturing facility in Pakistan.

The industry sources said the company is expecting that its facility would be operational by the end of next fiscal. It may be noted that the company has made its foray in Pakistan through its subsidiary Asia Consumer Care (Pakistan). Dabur already has manufacturing facilities in Nepal and Bangladesh. The company is also planning to expand its existing product portfolio by adding more products in the skin-care and home-care segment and is also planning the acquisition route in order to expand the business.

http://www.dailytimes.com.pk/default.asp?page=2007\02\10\story_10-2-2007_pg5_9

 

[Neo]

Saturday, February 10, 2007

US com chief to talk WTO, retail in India

WASHINGTON: US Comm-erce Secretary Carlos Gutierrez will urge India to do more to help break a deadlock in world trade talks on a visit to the rising Asian economic power next week, he said on Thursday.

Gutierrez, who is leaving on Sunday for a trip to India, told Reuters he will also study India’s plans to liberalize its retail sector while encouraging New Delhi to play a bigger role in helping wrap up the Doha round of world trade talks.

The key to a deal lies in getting deeper US cuts in farm subsidies, which developing countries say give farmers there an unfair market advantage, and in securing similar reforms from the EU, Japan and other big importers on farm tariffs.

http://www.dailytimes.com.pk/default.asp?page=2007\02\10\story_10-2-2007_pg5_15

 

[Neo]

Saturday, February 10, 2007

Indian inflation at 2-yr high adds to rate rise case

NEW DELHI: India’s annual inflation rate rose to a two-year high in late January, adding to expectations that last week’s interest rate rise would be followed by further measures to calm price rises ahead of state elections this month.

The rise in wholesale price index to 6.58 percent for the year to Jan 27 was the biggest since Dec. 11, 2004, topping a forecast of 6.48 percent in Reuters poll, Friday’s data showed.

“It is above everybody’s expectation. It is beyond the tolerance level of the Reserve Bank of India and the finance ministry,” said Rupa Rege Nitsure, economist with the Bank of Baroda.

“The money markets and government securities market will have to be prepared for a more stringent monetary environment.”

The yield on 10-year government bonds edged up to 7.84 percent from 7.83 percent ahead of the data, while the rupee weakened slightly to 44.10 per dollar.

The data sent wheat, soy and sugar futures lower on heavy selling as fears mounted that the government would come out with strong measures to curb inflationary pressures.

The spike in inflation comes ahead of elections in three states later this month and one in Uttar Pradesh, perhaps India’s most electorally important state, in April.

Fearing a backlash in the elections, the Congress Party, which heads the ruling national coalition, has been fighting an uphill battle to control prices in recent weeks.

It cut import duties on cement, capital goods, steel, aluminium, copper and other industrial raw materials, as well as palm and sunflower oils in January.

“Basically, the effect of customs duty cuts has not come into play. It will take some weeks. Inflation may start coming down after that,” said Saumitra Chaudhuri, economic adviser at rating agency ICRA.

The central bank has said getting inflation down to its target range of 5.0-5.5 percent at the end of the financial year in March 31 is a policy priority.

Last week, the central bank raised it short-term lending rate by 25 basis points to 7.50 percent. It left its borrowing rate unchanged at the quarterly policy review.

While analysts expect another rate rise at or before the next policy review on Apr. 24, some felt the central bank would be in no rush to tighten policy just yet.

“It’s too early to say what the RBI might do in the near future. They have raised repo rate just nine days ago. It will take some time for the impact to be felt,” said Arun Kaul, general manager of treasury at Punjab National Bank in New Delhi.

The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it has covers a higher number of products and is published weekly.

Average growth of 8.3 percent in the past three years has left ports, roads and power generation overstretched. The government estimates the Indian economy will grow 9.2 percent in 2006/07, its fastest pace in nearly two decades.

http://www.dailytimes.com.pk/default.asp?page=2007\02\10\story_10-2-2007_pg5_29

 

[Neo]

Saturday, February 10, 2007

Italy’s Prodi to lead major trade delegation to India

ROME: Italian Prime Minister Romano Prodi announced on Friday a “big new foreign policy initiative” aimed at boosting trade links with India, where he will lead a delegation of hundreds of business leaders next week.

“We are launching a big new foreign policy initiative to allow Italy to regain its place” among India’s major trading partners, Prodi told a news conference.

“It is the opening of a new chapter in our relations with Asia, with a country that will be more and more important and, with China, will be the gateway of Asia,” Prodi said.

About 45O representatives from 350 small or medium-sized businesses, as well as employers’ association chief Luca Cordero di Montezemolo who is also chairman of automakers Fiat and Ferrari and several major bankers will accompany Prodi to India from Saturday to next Friday. They will make stops in New Delhi, Kolkata, Mumbai and Bangalore.

For Italian employers, “India has great priority not only because of the extraordinary dynamism of the economy of this country but also because of the long history of Indian entrepreneurs and consumers using Italian brands and technologies,” Prodi said. The first Italian companies expanded into India in the 1970s, he noted.

Italian government figures show huge growth in bilateral trade in recent years, with Italian imports spiking by 83.5 percent between 2000 and 2006, while exports surged by 115.5 percent. Nevertheless, Italy is ranked only 28th as a supplier to India, and 34th as a client.

Prodi will wrap up the visit with a meeting in New Delhi with his Indian counterpart Manmohan Singh when the two are expected to touch on the thorny subject of reforming the UN Security Council.

“One of the few problems between Italy and India is the big difference (on the issue) which has never been hidden and which does not prevent us from having good relations,” Prodi said.

India is among countries seeking permanent membership on the Council under the reform, while Italy supports a proposal to add non-permanent members that would be elected for two-year terms, with the possibility of immediate re-election.

http://www.dailytimes.com.pk/default.asp?page=2007\02\10\story_10-2-2007_pg5_34

 

[Neo]

Saturday, February 10, 2007

‘India pushes for a stronger rupee’

MUMBAI: The Indian government is pushing for a stronger rupee to curb inflation that is hovering near its highest level in two years, the Economic Times newspaper reported on Friday, citing unnamed finance ministry officials.

The rupee, which hit a one-year high of 44.03 against the dollar in early trade, has risen 6.8 percent from a three-year low in July last year.

It would have gained more but for intervention by the central bank, which is worried about the impact of a stronger rupee on India’s exports, traders said.

The finance ministry has indicated to the Reserve Bank of India governor it was comfortable with a stronger rupee, the newspaper said.

Data showed the Reserve Bank of India bought about $5 billion in November and December to stem the rupee’s rise, and traders believe it has played an active role again this year.

http://www.dailytimes.com.pk/default.asp?page=2007\02\10\story_10-2-2007_pg5_35

 

[Neo]

Initial bids for Hutchison Essar at $16-20bn

MUMBAI: Initials bids for Hutchison Essar have valued India’s fourth-biggest mobile operator between $16 and $20 billion, local newspaper said on Saturday, but a source said it could be a month before a final decision was made.

“The entire process could take a month,” the source close to a bidder said. India’s Essar group, which holds a third of the company, has put in a bid while reiterating it had right of first refusal in any buyout, a source told Reuters on Friday.

The local media said bids had also been submitted by the midnight deadline on Friday by Britain’s Vodafone Group Plc, India’s Reliance Communications Ltd and the Hinduja group.

Media reports have suggested Hutchison Telecommunications International Ltd, which owns 67 per cent in the mobile firm, will consider the bids in a board meeting on Sunday.

“HTIL will reveal the highest price offered to each of the remaining bidders separately,” the Hindustan Times paper said, citing one of the bidders. “Each will be asked if they want to revise their bid.”

Bids valuing the company at $18-$20 billion had been submitted by e-mail, the paper said. The Economic Times paper said bids valued the company at $16-$17 billion, and that Altimo the telecoms arm of Russian conglomerate Alfa had also made an offer.

The Hutchison Telecom board will discuss the bids on Sunday and then place them before shareholders for approval on Feb 15, the paper said.

Hong Kong’s South China Morning Post said Hutchison Telecom hopes to identify a preferred bidder by the Lunar New Year Feb 17.

Ratings agency Fitch said on Friday the “strategic value” of Hutchison Essar which has 16 per cent of India’s fast-growing mobile market “would be most significant” to Vodafone and Reliance Communications.

http://www.thenews.com.pk/daily_detail.asp?id=42328

 

[Neo]

Doubt cast on potential gold rush in India’s retail sector

NEW DELHI: The leader of India’s ruling Congress party has sounded an alarm over fears that big foreign firms looking to enter the country’s retail sector could force millions of mom-and-pop stores to shut.

Sonia Gandhi has called on the government to “consider having the relevant issues properly examined before further decisions” are taken on giving international retailers more access to India’s lucrative retail sector.

Her call this week came amid reports that Michael T Duke, the vice chairman Wal-Mart the world’s largest retailer was due in India on February 22 to partner formally with Bharti Enterprises to start a nationwide store chain.

The Congress leader said in a letter to Prime Minister Manmohan Singh that she had “received suggestions from many quarters about the desirability to first study the possible impact of transnational supermarkets on the livelihood security of those engaged in small-scale operations.”

India’s 15 million dusty, chaotic and cramped corner shops fear competition from the giant retailers.

They worry that big, air-conditioned stores with swish, shrink-wrapped produce will drive them out of business, despite assurances from industry figures that the market is large enough to accommodate virtually all players.

Small retailers are already alarmed that India’s biggest private company, Reliance, plans to “revolutionise” the way Indians shop by opening thousands of western-style supermarkets across the country.

The government still bans foreign retail chains from selling directly to consumers. But they are using a backdoor to enter the market by starting wholesale and sourcing firms, which supply a local retail partner.

Retailers like Wal-Mart, France’s Carrefour, Germany’s Metro and Britain’s Tesco have been making a beeline for India’s $300-billion retail industry in what commentators have dubbed the “great Indian retail gold rush”.

Organised retail sales from chain stores still makes up around just three per cent of the Indian sector.

Congress said party leaders were seeking ways for small shopkeepers to be protected from an expected further loosening of the government’s foreign direct investment (FDI) policy for the retail sector.

“We’re not for a ban but Congress wants safeguards in place before implementation of the FDI (retail) policy,” Congress spokesman Abhishek Manu Singhvi told reporters this week.

The prime minister’s office has asked “for details on FDI policy in retail and we have sent our comments,” Commerce Minister Kamal Nath said this week,

without giving further details.

Last September, Gandhi urged similar caution on Special Economic Zones (SEZs) aimed at boosting foreign investment when she questioned whether agricultural land should be diverted to non-agricultural uses.

The government has now put on hold its ambitious plans to set up SEZs nationwide until such issues as compensation for displaced farmers have been settled amid violent protests in the eastern state of West Bengal.

Arvind Sing Hal, the head of Indian retail consultancy Technopak, said despite the controversy he was still “very, very optimistic that the retail sector will soon get opened up.”

However, an economist with a foreign credit rating agency, who did not wish to be named, said he expected the government would proceed cautiously with economic reforms.

http://www.thenews.com.pk/daily_detail.asp?id=42326

 

[Neo]

Hindalco to buy Novelis for $6bn

MUMBAI: India’s largest aluminium producer, Hindalco Industries, announced on Sunday it was buying the US-based firm Novelis for six billion dollars in the latest big-bucks foreign takeover by an Indian firm.

The all-cash deal follows Tata Steel’s 7.0-billion-pound buyout last month of Anglo-Dutch producer Corus, the largest-ever foreign acquisition by an Indian company. That deal showcased the increasing financial firepower of Indian firms being driven by nine per cent growth rates.

“This is India’s largest acquisition of a North American company and will catapult us into a Fortune 500 companies list,” said Kumar Mangalam Birla, chairman of Aditya Birla conglomerate, which owns Hindalco.

He said the transaction was expected to be finalised in the second quarter and included $2.4 billion of debt. It requires the support of two-thirds of Novelis shareholders and approval under Canadian law. The firm is offering $44.93 a share, a premium of almost 17 per cent over Novelis’ stock close of 38.5 on Friday.

Novelis is a leader in aluminium products across Europe and Asia, with a presence across 11 countries and employing 12,500 people. Its customers include US auto giant General Motors and soft-drinks mammoth Coca-Cola. Birla said the group’s sales were expected to nearly double to $20 billion from the current $11.8 billion.

“We plan to retain all Novelis employees and see strong synergies across products, with an edge in research,” Birla told reporters. “Though Novelis will be a wholly owned subsidiary, we have no plans to merge it into Hindalco.” The deal will create a global integrated aluminium producer providing low-cost raw materials and production capabilities, Birla said. Post-acquisition, the Birla group will have 50 per cent of its turnover coming from overseas. Hindalco closed at Rs173.25 last Friday at the Mumbai stock exchange, having gained nearly three per cent in the past month on media reports of a possible buyout of Novelis, an Atlanta-based company spun-off from Canada’s Alcan.

“A key positive from the deal is that Novelis’ products are insulated against economic cycles. There will be stable cash flows going ahead,” a senior company official said. Hindalco company officials also said product synergies and geographical reach were huge. “Novelis has a global market share of 19 per cent for aluminium rolled products.

Hindalco’s global share will improve in the high-growth Indian market for rolled products,” said Debu Bhattacharya, managing director of Hindalco. Ed Blechschmidt, acting chief executive officer of Novelis, said in a statement on the company’s website that the deal represented “outstanding value”. “The board has agreed that the transaction with Hindalco delivers outstanding value to Novelis shareholders,” the statement said.

“The combination of Novelis’ world class products with Hindalco’s downstream assets in a rapidly growing Asian market is an exciting prospect,” it added. Novelis reported a loss of $102 million in its third quarter earnings in November last year. In 2005, the company reported net sales of $8.4 billion, according to the company’s website.

http://www.thenews.com.pk/daily_detail.asp?id=42528

 

[Neo]

Tuesday, February 13, 2007

‘Toyota to build new plant in India by 2010’

TOKYO: Toyota Motor Corp plans to build a new plant by 2010 in southern Indian concentrating on inexpensive, smaller model cars, the Nikkei business daily reported on Monday.

The new plant, which would be built close to the company’s first plant in the country near Bangalore, would aim at producing 100,000 cars a year, roughly doubling the firm’s output capacity in India. It would cost roughly 40 to 50 billion yen ($328 to $410 million) to build, the report said.

Asked about the article, a Toyota spokesman said the company did not have any such concrete plans at present but stopped short of saying the report was incorrect. India’s passenger vehicle market is forecast to expand rapidly, and other major Japanese car makers such as Suzuki Motor Corp and Honda Motor Co have a sizeable presence.

Suzuki said last week it will invest a further 200 billion yen in its Indian venture to expand capacity at car and engine plants. Toyota, Japan’s top auto maker, last week posted a near-20 percent rise in quarterly profit on brisk sales in North America and Europe, and kept its forecasts for an eighth straight year of record earnings intact.

http://www.dailytimes.com.pk/default.asp?page=2007\02\13\story_13-2-2007_pg5_19

 

[Neo]

India asked to open consumer sector to foreign investors

NEW DELHI: US Trade Secretary Carlos Gutierrez told India on Tuesday to open its booming consumer sector to foreign investors and “fight back the temptation” to build economic walls.

Gutierrez met top Indian officials at the start of his first-ever trip here and was scheduled to meet Prime Minister Manmohan Singn for talks on Wednesday. “More needs to be done to open India’s markets there are some sectors such as retail, banking, financial services and telecommunications where obstacles remain,” Gutierrez told Indian business leaders.

“Needless bureaucratic hurdles, protectionist policies or caps on foreign ownership, hamstring businesses that wish to contribute to this burgeoning market and bring goods, services and increases options to Indian consumers,” he added.

India must “fight back the temptation to put on the brakes and put up walls continued economic success will only result from transparency and openness not protectionism and isolationism,” he said.

Gutierrez’s call came a week after the chief of India’s ruling Congress party voiced fears that the entry of global firms into the country’s retail sector could down the shutters on millions of mom-and-pop stores.

The government is also under pressure from its communist allies which prop it up in parliament to go slow on reforms, arguing that India’s uncounted millions living below a poverty line will get swamped in an open economy.

The United States is India’s largest trading partner and two-way trade totalled $29 billion to the end of November, according to the latest figures available.

In December, Gutierrez’s, deputy, Franklin Lavin, led the biggest-ever US trade team to India, signalling Washington’s desire to find a toehold in the surging economy fuelled by a 300-million-strong affluent middle class.

The US commerce secretary said one of the primary aims of his trip to India was also to seek New Delhi’s backing in making the moribund Doha Round of World Trade Organisation talks a success.

http://www.thenews.com.pk/daily_detail.asp?id=42652