Economy & Trade

Taking Control of the Situation; India Reshuffles her Key Portfolio’s

Dec. 4- Security of the country being under severe scrutiny, and having to answer to mass public outrage against the government the political duo of Manmohan Singh and P Chidambaram have decided to take India’s major portfolio’s under their wing. P Chidambaram was chosen to head India’s home ministry, responsible for domestic security while Cambridge educated economist Manmohan Singh will hold both portfolio’s that of Prime Minister and finance minister. Singh is also expected to revamp the Union Council of Ministers shortly, however is likely to make minimal changes as elections are due next May. The union cabinet is still looking for a suitable replacement to Maharashtra’s Chief Minister Vilasrao Deshmukh who has submitted his resignation papers.

With the additional charge of Finance, the Prime Minister is now in charge of eight Ministries/ Departments; Information & Broadcasting, Environment & Forests, Coal, Personnel, Public Grievances & Pensions, Planning, Department of Atomic Energy and Department of Space, according to the Indian Express.

Exports, Manufacturing Output Drops

Dec. 2 – India’s exports declined for the first time in seven years as the economy reeled under the impact of the global slowdown in key export markets and slowing output at home. India's exports declined by 12.1 percent in October to US$12.82 billion, the first year on year fall in nearly three years. Imports however grew by 10.6 percent to US$23.36 billion in October compared to US$21.12 billion in the same month last year. As a result, trade deficit narrowed slightly to US$10.54 billion in October compared with US$10.63 billion in September.

India, Pakistan, the U.S. tread on Diplomatic Thin Ice

Dec. 2 – India-Pakistan ties which were at the strongest ever just a few weeks ago have disintegrated since the terrorist attacks on Mumbai’s landmarks were traced back to Pakistan. Diplomatic tensions between the two countries have escalated with India having to negotiate and stand its ground extremely prudently. While cabinet meetings have been held in both New Delhi and Islamabad to resolve political tensions that have arisen as a result of the attacks, U.S. secretary of State, Condoleezza Rice is also flying into Delhi to lend her support to India.

While global teams pour into India to help with the investigations Indian authorities realize they have to play their cards wisely. Besides national elections being around the corner, New Delhi also realizes it has to work together with Pakistan to weed out the terrorists. While tough measures need to be adopted in tough times, political analysts agree that this is not time for India to act in haste under popular pressure. At stake are two things, both close to India’s and the US’s interests—retaining a civilian government in Pakistan and maintaining the tempo of the war on terror. India’s future reactions therefore have to balance these with India’s natural desire for a tough response.

FDI to grow, government tries to reinstil investor confidence

Dec. 1 – Foreign direct investment to India surged to US$2.56 billion in September this year, up 259 percent over the same month last year and industry experts, including Dezan Shira & Associates, are confident that investment will continue to flow in spite of the recent terrorist attacks.

The volume of investment that comes into India in the future will depend on how well the present government tackles peace and security within the country’s 29 states, rife communal tensions between the Hindu’s and Muslims, and security along India’s borders. It will also depend on how quick the government is in weeding out extremist forces and reassuring the domestic and foreign investors of Mumbai and India by instilling a feeling of security.

Terror Attacks Continue in Mumbai; Ex-PM V.P. Singh Dies

UPDATES: For more information on the terrorist attacks visit 2point6billion.com.

Nov. 28 – Mumbai is gradually getting back on its feet 36 hours after the city came under attack by a large group of organized terrorists. The stock exchange and some offices in the north of the city are open and trains, buses and three wheeled auto rickshaw’s are back on the streets.

South Mumbai remains under curfew as Marine Drive leading up to Colaba and Nariman Point, the commercial center of South Mumbai,remainsl under siege. The death count rose to 125 people, including six foreign nationals overnight, with more than 327 reported injured. Terrorists are still holed up in the Taj Hotel, the Oberoi Trident and Nariman House, home to the ultra-orthodox Jewish outreach group Chabad Lubavitch. India's elite national security guard replaced the army and set up command posts around Nariman House. The commandos, with the help of snipers and helicopters, worked overnight to flush out the terrorists, storming the Jewish community center early Friday morning.

India Moves Closer to Joining the Madrid Protocol

Nov. 25 – The government of India recently approved modification in the Trademarks (Amendment) Bill, encouraging the transfer of technologies to India and quickening the process for India to join the Madrid Protocol on Trade Marks. The move is also a step towards streamlining registration and protection of trademarks within India, ultimately leading to a one window paperless system.

“The amended bill will provide better protection to Indian trademarks in designated member countries and afford reciprocal protection to trademarks from member countries abroad,” minister of state in the prime minister’s office, Prithviraj Chavan told the Financial Express.

India to Set Up US$10 bn Infrastructure Fund

Nov. 24 – In order to ensure that infrastructure projects in India are not stalled due to a lack of funds, the government has decided to set up a dedicated Rs. 50,000 crore (US$10 billion) infrastructure fund. The fund, according to the Economic Times is expected to be available for projects developed by both private and public-private joint ventures to build roads, airports, power plants or ports. Some of the infrastructure projects that are in the planning stage include 43 IT cities, developing roads in India's Northeast, and completing the US$90 billion industry corridor which will connect India's capital New Delhi with her commercial capital Mumbai.

India Will Not Fall Into Recession

Nov. 19 – Will India follow the United States, Japan and 15-nation Eurozone into a Recession? Government officials, economic and industry captains doubt it. While growth is expected to slow down in the subcontinet, the Indian government feels it has taken adequate measures to stimulate the economy offseting effects of the global economic slowdown.