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INDIA

 

Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 515,000 481,400  460,616 11
         
GNI per capita
 US $ 480 470 450 159
Ranking is given out of 208 nations - (data from the World Bank)

Books on India

REPUBLICAN REFERENCE

Area (sq.km)
3,287,590

Population
1,049,700,118

Capital
New Delhi

Currency
Irdian Rupee (INR)

President
Abdul Kalam

Update No: 008 - (04/10/04)

Nuclear Issues
Asserting that the country had credible nuclear deterrence in place, India's Defence Minister Pranab Mukherjee stated that specialized forces were being raised to tackle the nuclear threat in all its dimensions. "Whatever is needed to safeguard the country and to ensure effective deterrence, in line with our nuclear doctrine of 'no first use', has been done," Mukherjee said in an interview to PTI in New Delhi. According to Mukherjee, the Defence Research and Development Organisation (DRDO) had a definite time-frame on test-firing of the country's intermediate range 3000-km surface-to-surface ballistic missile Agni-III. Moreover, he stated that India was committed to 'no first use' of nuclear weapons and non-use of these weapons against non-nuclear weapon states. The Defence Minister also said that India had reached an understanding with its neighbouring countries to share information on missile test-firing. On the question of establishing safeguards against selective nuclear strikes on forces and on civilians, Mukherjee argued that special troops are being raised to tackle such threats. 

India-Pakistan Relations
This month was particularly eventful in a series of diplomatic negotiations between the foreign officials of India and Pakistan beginning with the talks between the two countries' Foreign Ministers and ending positively in New York with the talks between Pakistani President General Musharraf and Indian Prime Minister Manmohan Singh. These negotiations are part of the Composite Dialogue Process that has been set in motion by initiating talks at the level of foreign ministers. Before Musharraf and Manmohan Singh met in New York, the two foreign ministers made positive steps by suggesting the start of a trans-border bus and forging train links. However, issues like cross border terrorism and Kashmir were not addressed squarely at these talks. But the diplomatic talks that ensued between the leaders of the two countries were hailed as a "historic moment". Pakistan's Foreign Office Spokesman, Masood Khan described the talks as "rekindling" hopes for a viable settlement to the Kashmir dispute. According to one of Pakistan's prominent daily newspapers, the Dawn, the joint statement issued on behalf of Musharraf and Singh was "historic and significant" as it promised to "look into all possible options" for a negotiated settlement of the Jammu and Kashmir dispute. President Musharraf is believed to have hailed the talks as a "major breakthrough" and offering a "win-win" situation. India's Prime Minister Manmohan Singh also seemed pleased with the positive outcome of the talks. 
Though the joint statement issued following the meeting between the two leaders made little mention of India's concerns relating to cross-border terrorism, the Indian Prime Minister later clarified that he raised the issue with the Pakistani leader. At a press conference, Singh is reported to have said that he had "unambiguously" conveyed to the General that talks hinged on the commitment given by Pakistan. Pakistan had assured in January that territory under its control will not be used for terrorist purposes against India. The Prime Minister claimed there was a clear reference in the spirit of the January 6 joint statement. Both sides had agreed that Confidence Building Measures will contribute to generate an atmosphere of trust and mutual understanding. "We cannot discuss any substantive issue and CBMs, if terrorist acts are not controlled. Therefore, there should be no doubt that this is the pre-condition for moving forward," Singh said. The most important outcome of his meeting with President Musharraf is that the two leaders agreed to discuss all options to resolve the Kashmir dispute. Even though the topic of Kashmir has come up in previous summit level meetings, this is the first time that the leaders of India and Pakistan talked about possible solutions in a one-on-one meeting. 
Even though these talks have been deemed to be "historic", it is difficult to predict how far they will actually be successful in setting a precedent. Both sides continue to be suspicious of each others intentions in resolving the Kashmir issue which is a recurrent theme in the pattern of India-Pakistan relations. For instance, this aspect becomes clear when we look at the most recent attempts by President Musharraf to move the dialogue process forward. Indian officials seem hesitant to accept President Musharraf's recent assurance that the Pakistani army would not occupy Siachen glacier if Indian troops withdraw from the world's highest battlefield. Musharraf made this offer to Prime Minister Manmohan Singh during the latest round of negotiations held in New York. The general distrust amongst army officials and politicians stems from the bitter experience of the Kargil war of 1999. New Delhi seems unconvinced about Musharraf's assurances since he is hailed by many in India as the "architect" of the Kargil war. This war which the two countries fought in 1999 was planned by the Pakistanis under General Musharraf's leadership. Pakistan has also used cross border terrorism as a bargaining chip against India to extract concessions from the latter on the Kashmir issue. 

Economy
The $47 billion Japanese corporation NEC has finally put its foot directly into the booming Indian IT space, with the announcement of operations of its wholly owned subsidiary Niteo Technologies (P) Ltd, from Chennai. "This is our first direct entry into India. We have been operating through partnerships with tier I software companies like Infosys and Wipro since 1996. We want to grow our business here and hence we have entered on our own," Yuji Ichimura, Vice President, Corporate Planning and Marketing, NEC Solutions (America) said. Niteo will follow a three pronged strategy in India. One of the major goals will be to strengthen the partnerships which NEC has already established. "We will grow the business with our partners. We source anything between $60 to 80 million worth of software services from Indian companies. Last year alone our sourcing grew by 130 per cent. We will continue that growth pace with that engine," he said. The second engine will be Niteo's own operations which will initially be in the data field. "We will undertake mid to high-end operations at Niteo like business intelligence and content management, he is reported as saying.
The latest news on the outsourcing front in India is that the textile industry in India is being seen as the next big outsourcing story for India. Apparel Export Promotion Council chairman A Sakthivel estimates that Tirupur has seen an investment of Rs 750 crore in plant and machinery and fresh employment of as many as 15,000 people in the last single year. The Netaji Apparel Park in Tirupur, being set up at an investment of Rs 300 crore, is about to go on stream, and when fully functional, will see some 21,000 people working there. A high-tech weaving and processing park that will house shuttle-less looms is coming up near Surat, which houses the largest artificial silk and synthetic textiles cluster in the country with around 6.5 lakh power looms. Total garmenting capacity of Arvind Mills is expected to increase from the current 11.5 million pieces per shift to 14.5 million pieces by the end of 2004-05, and this is proposed to be doubled by fiscal 2007 by working two shifts. The company is also planning incremental investments of Rs 50-100 crore per annum in fabric.
A major development on the economic front is that Foreign Direct Investment (FDI) in the crucial sectors of telecom and civil aviation are likely to be raised. While the government received some initial opposition to this move from the left parties, the latter have given their green light to hike FDI to 49 per cent from the present 40 per cent in civil aviation, particularly in private Indian airlines like Jet Airways and Air Sahara. Finance Minister P Chidambaram convinced the Left parties on the importance of foreign investment. In return, he agreed to seriously consider the Left's demands for hiking the EPF interest rates to 9 per cent. In Civil Aviation it is now agreed upon that even after the hike, Indian Airlines and Air India (the two major airlines in India) will be out of the FDI ambit. "If the management control remains with Indians then we have no problem if it is hiked to 49 per cent. It will help the airlines to expand and modernize their fleet," says D Raja, CPI leader. And foreign airlines will not be allowed to pick up equity in domestic airlines. But analysts say the restriction on private airlines entering the domestic sector will certainly hamper the growth of an industry that's desperate for big-ticket investments. In the telecom sector, the internal differences between the Finance, Home and Telecom ministries have been sorted out. The government has opted for a middle path to hike the ceiling to 74 per cent. While the Telecom Ministry will not insist on minority Indian shareholders controlling over 50 per cent voting rights in the companies board. 
Finance Ministry has also agreed that boards of telecom companies must have 50 per cent Indians, including Indian CEOs. Security clearance will also be required but only from one agency, a move clearly to pacify the Home Ministry.

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