Other Briefings
WTO Chief: No Financial Plan without Emerging Economies
Oct. 30 – The World Trade Organization’s (WTO) Director-General says that there can be no new agreement on the world’s financial order without the cooperation of emerging economies like India, China, Brazil, Indonesia and South Africa.
“As Europe and North America face an economic slowdown, the Emerging Economies of Brazil, India, Mexico, China, Egypt, Indonesia and South Africa continue to grow and they continue to grow in large measure because of trade….In this ever more interconnected world, prosperity in India, China, Brazil is very much in Washington's interest.” Lamy said in a speech he made at Stanford University on October 27 and posted on the WTO website.
The emerging economies are significant to the United States because exports are contributing to GDP. On annualized basis, export and slowing imports contributed 2.9 percent of the U.S. GDP.
India’s House Panel: Companies Must Be Charged More for Court Cases
Oct. 28 – India’s parliamentary standing committee on Law and Justice is proposing that the Supreme Court and High Courts charge higher fees for corporations settling disputes while fees those who are poor and illiterate should be levied, reports The Times of India.
In a scenario when the judicial system is clogged by the huge number of cases, preference to corporate cases that too on minimum court fees may amount to taking away the time meant for the common man, the Committee's chairman E M S Natchiappan told The Times India.
"Early hearing and disposals of cases by the courts in corporate cases only delay the cases of ordinary citizens as they take valuable court time within minimum court fees, therefore, there is a strong case for a differential court fee for the corporate sector," said Natchiappan.
Singh Assures Parliament that India will Tide over Temporary Slowdown
Oct. 23 – Like most nations, India is not an insular economy, it will be affected by the global economic meltdown. Reaffirming his stance, that India's strong fundamentals will prevent it from going under, Prime Minister Manmohan Singh sought to convince foreign investors and the Indian people that although India will face a temporary slowdown, the economy will return to faster growth when the situation stabilises. Singh's statement came to parliment just after the Reserve bank of India cut its key short-term lending rate by one percent to eight percent. The prime minister also promised that inflation would come down in the next two months.
Japan-India Strenghten Bilateral Ties; Pledge Investments, Energy Security and Free Trade
Oct. 22 – Enroute to the Asia-Europe summit to be held in Beijing later this week, Indian prime Minister Manmohan Singh is visiting his Japanese counterpart Taro Aso. The two countries are seeking ways to deepen investments in defence, science and technology and energy security. Both also hope to sign a free trade agreement by the end of this year, boosting bilateral trade to US$20 billion by 2010. Ties between the two nations are already strong, with approximately 30 percent of all of Japan's foreign aid being directed towards India.
Japan will aid India with a US$4.5billion soft loan (the biggest-ever amount Tokyo has provided for a project overseas) to improve the 1468-km Mumbai-Delhi Industrial Corridor project. Manmohan Singh also encouraged Japan to grab a piece of India's nuclear pie, following opening up of the lucrative energy sector. Talks between India and Japan have recently been stalled by tariff negotiations and Japan's tight regulations on generic Indian drugs.
India-Pakistan Restart Cross Border Trade After a Six Decade Hiatus
Oct 21 – Trucks loaded with fresh fruits, honey, nuts, dry fruits and spices crossed the Kashmir valley from Pakistan controlled Kashmir to the Indian side and back for the first time in six decades. In a historic move, the heavily guarded trade route between arch rivals India and Pakistan was opened to trade from both sides on Tuesday. The easing of trade restrictions follows confidence building measures taken by both sides in order to tap the huge potential of trade and economic ties across the India-Pakistan border.
Welcomed by traders and businessmen on both sides of the border, the trade route is heralded as not only a physical gateway for goods, but also has a symbolic and psychological impact – that of opening markets and increasing condidence. Previously goods were transported to the border by porters and loaded onto trucks on the other side.
Russia-India to Sign Civilian Nuclear Energy Deal in December
Oct. 20 – Trying to balance power in the region, Russia agreed to sign a civilian nuclear energy deal with India in New Delhi on Monday, wherein it will help the energy starved nation build four more nuclear energy plants. The Russia-India nuclear pact follows India's nuclear cooperation with the U.S. and France. It also comes just after China agreed to help Pakistan build two more nuclear energy plants and Russia decided to help Iran build a nuclear power plant, all to ease the regions energy needs. India and Russia are also in talks to jointly develop a weapons system.
Russia and India, former cold war allies are expected to sign the atomic energy deal when Russian President Dmitry Medvedev visits India early this December. Russia had agreed to build four reactors in the southern Indian state of Tamil Nadu during past President Vladimir Putin's visit in January 2007.
RBI releases US$30 billion into the Indian Financial System
Oct. 16 – India's central Bank, the Reserve Bank of India will cut the cash reserve ratio (the proportion of their deposits that banks have to maintain in cash with the central bank) by 100 basis points or 1 percent to 6.5 percent, releasing Rs 400 billion rupees ($8.2 billion) into the Indian banking system. This marks the third and steepest cut in CRR in the past two weeks, bringing the CRR down from 9 percent last month.
The RBI has also decided to release Rs 250 billion (US$5 billion) to commercial banks and credit institutions towards a farm waiver scheme immediately. According to the AFP. Last week the RBI announced a cash injection of 600 billion rupees (US$ 12 billion) into the financial system in two instalments. It has also doubled the investment limit for overseas investors in corporate bonds to US$6 billion.
All these measures will collectively, contribute Rs 1,450 billion (US$30 billion) to India's financial system this month.
India Will Achieve its FDI Target This Year
Oct. 14 – Even as liquidity in the Indian economy is drying up, the government has assured the people that enough money is flowing in. Kamal nath, India's commerce and industry minister, announced that while export grew to 30 percent in October, FDI will rise above US$35 billion by the end of this year, meeting the governments target. Earlier he had mentioned that during April-August this year, India had already recieved US$14.6 billion in FDI.
"The huge growth in FDI in India despite global economic slowdown shows how sound and resilient our economy is," Kamal Nath said, adding there was nothing to worry at all. "In August, FDI growth was 124 % and 219% in July this fiscal, which is an indicator to the fact that India with its strong fundamentals can tide over global financial crisis, "he told the Times of India, hinting that India is still an attrctive invetsment destination.
