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INDIA


 

 

In-depth Business Intelligence

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 598,966 515,000  481,400 12
         
GNI per capita
 US $ 530 480 470 160
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: 020 - (30/09/05)

POLITICS
India's vote against Iran at the United Nation's nuclear agency has caused some turmoil within the UPA government. The Left launched a scathing criticism of the government for alienating Iran. In an interview to NDTV, General Secretary of the Communist Party, Prakash Karat stated that India's posture towards Iran was conditioned by US pressure. The veto against Iran clearly established India's concerns about Iran not meeting its nuclear obligations. BJP leader Yashwant Sinha also criticized the Manmohan Singh government for "abandoning" Iran when it voted with the US-EU on a resolution on Tehran's nuclear program. Critics are arguing that India's stand appears to be a submission to US policy and a surrender of its independence to American motives. Sinha said that the UPA government has made India a client state of the US. Singh further added that "India's consistent position has been that issues in Iran's nuclear program should be resolved through discussions and consensus and not through confrontation." 
The government claims that it has not let Iran down but only followed a stated policy that Iran must meet its obligations under the NPT. The issue had also raised some questions with regard to its impact on the proposed gas-pipeline with Iran and the ensuing talks. The government claims its national self-interest will not be compromised but the Left, the opposition and even experts seem to agree that a major shift in foreign policy has not been debated enough.

INDIA-CHINA RELATIONS
As part of bilateral exchanges to improve ties between the two countries, Union Home Minister Shivraj Patil embarked on a five-day visit to China between September 7 and September 11. The Chinese Embassy released a statement saying that "the visit of the Home Minister is part of the process of continuing high-level bilateral exchanges and will contribute to the further development and diversification of bilateral relations in accordance with the Declaration of June 2003 and the Joint Statement of April 2005." The sixth round of India-China Special Representative-level border negotiations also began with both countries arriving at a "package" solution on the controversial boundary issue. The talks were held between National Security Advisor M K Narayanan and Chinese Vice Foreign Minister Dai Bingguo at the Diaoyutai State Guest House in Beijing. Separately, Indian Ambassador to China Nalin Surie and other senior officials from the Ministry of External Affairs also visited China and met with Communist Party Politburo Standing Committee member and Chairman of the Chinese People's Political Consultative Conference (CPPCC), Jia Qinglin. The two sides agreed to each appoint a Special Representative to explore, from the political perspective of the overall bilateral relationship, the framework of a boundary settlement. (PTI) 

INDIA-US RELATIONS
In a historic meeting, Prime Minister Manmohan Singh and US President George W Bush met in New York to discuss nuclear cooperation and India-Pakistan relations. The Indian leader expressed his concerns about Pakistan's support to terrorism in Kashmir. Even though Musharraf assured Singh that infiltration by militants into Kashmir would be down by mid-August, the pattern seems to continue. Separately, Indian and US national security advisors held talks on relations with Iran and Pakistan. Singh is reported to have told the Americans that if the violence graph dipped, India was ready to look at big peace proposals, like an internal ceasefire, something that Pakistan is keen on. President Musharraf on the other hand lobbied with Washington for a troop reduction in the valley. In a recent interview with Time Magazine, Pakistan's President Pervez Musharraf criticized the United States for abandoning Pakistan as a strategic ally and embracing India. General Musharraf said, "Before 1989, we were a strategic ally of the US and fought a war in Afghanistan for 10 years. Then we got left high and dry. The United States then started to have a strategic relationship with India, which was in the enemy camp. What would the man on the street think?" he asked the interviewer.
This month the navies of India and the US also began their largest ever-joint exercises off the coast of Goa. The exercises featuring the Indian Navy's flagship, the INS Viraat will take on the massive American super carrier, the USS Nimitz. The naval exercise symbolizes close relations between the two countries. Despite the presence of a technology gap, the US Navy was impressed with India's naval weaponry. Captain T N Branch, Commanding Officer of USS Nimitz said that "the exercises are a fantastic opportunity for Indian naval pilots to practice against the best." In the years ahead, India will have two new aircraft carriers in addition to INS Viraat. This will include the Vikramaditya, formerly the Russian Gorshkov and the Air Defence Ship being constructed in Cochin. When these ships and their complement of MiG-29 K fighters enter service, the gap in capability between the two navies will marginally reduce. But for the foreseeable future, the US Navy remains by far the most powerful in the world and the Indian Navy a junior partner in an evolving strategic partnership. 
On the Iraq issue, United States Under Secretary for Political Affairs Nicholas Burns has been pushing for international sanctions against Iran. Burns said that America would meet its commitments to India but the US Congress could be persuaded to back the White House, only if India speaks to Iran. The US official also pointed out that Iran has gone back on its resolution with the European Union on nuclear power. He maintained that Iran should come back to those negotiations and New Delhi should side with the US and persuade Iran to do so peacefully. Burns further said that Prime Minister Manmohan Singh had made it clear that Iran should not acquire nuclear weapons. Burns is likely to visit India next month to carry forward the work on decisions taken during the summit between US President George W Bush and Singh. 

INDIA-FRANCE RELATIONS
Prime Minister Manmohan Singh held talks with French President Jacques Chirac, and described India's ties with France as "privileged and strategic". Singh visited France as part of a two-day plan two-day visit en route to New York for the UN General Assembly meet. The two leaders held wide-ranging discussions on India's bid for permanent membership of the UN Security Council and trade and economic cooperation. In Chirac's words India is a major partner in the world for France today. And this is the reason why France has always supported India's positions particularly its legitimate aspiration for a seat at the UN Security Council as a permanent member. The Prime Minister reiterated that India and France were strategic partners. Separately, India also decided to acquire six highly advanced French Scorpene submarines worth US$3 billion (about Rs 13,000 crore). The move comes just days after placing an order for 43 Airbus aircraft at a cost of about US$2.4 billion (nearly Rs 9,800 crore) from a European consortium that includes France (PTI Report). France assured India of cooperation on nuclear energy technology. Chirac also pledged to work with other NSG countries to lift restrictions on purchase of nuclear fuel and reactors. France today came out strongly in support of India's bid for a permanent seat in an expanded UN Security Council. In addition the two leaders held wide-ranging discussions on trade and economic cooperation. Singh invited French power companies to invest in India's nuclear power sector and assured single window clearance for major French investment in the country. As a consequence of Singh's positive statement, the French carmaker company Renault announced that it would manufacture right-hand drive cars in India for export to other countries. 

BUSINESS
The government is clearly worried about what could be yet another effort by some market players to rig share prices. In a meeting on Saturday, specific instructions were given to SEBI and RBI to start investigating any such moves. In the last few weeks there have been reports of banks looking at loans being taken by corporates and now they are investigating individual loans as well, as per instructions from the Reserve Bank of India. The RBI has also been given the mandate to look into the balance sheets of cooperative banks, which it earlier couldn't ask as these banks come under the state governments. Officials fear that money may be diverted into stocks and such diversion of funds is a serious matter. 

The European Union took the India-EU strategic partnership into the future. At the India-EU summit held at New Delhi the two sides pledged to enhance cooperation and boost bilateral ties in the areas of trade and the fight against terrorism. The two sides signed a framework agreement allowing for New Delhi's participation in the Global Navigation Satellite System (Galileo), designed specifically for civilian use worldwide. The Galileo program, a joint European Commission and European Space Agency initiative, represents the first global satellite positioning and navigation system and has an estimated cost of 3.4 billion Euro. It is designed to meet the specific needs of users in every transport domain, especially aviation, maritime, road and rail transport. The London bombings placed the more immediate problem of locating terrorists and the source of their money and infrastructure high on a joint action plan. As part of joint efforts to fight terrorism, India and the European Union decided to work towards blocking access to terrorist financing and cooperate in the fight against money laundering. The European Union is India's largest trading partner. A strategic partnership between India and the European Union would include taking steps towards India's membership to the EU's thermo-nuclear fusion project or ITER at France, a dialogue on Civil Aviation, easing migration and consular issues and cooperation in areas like space, science, technology, health and development. (PTI Report). 

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AVIATION

Indian Airlines gets clearance for purchase of 43 airbus jets


After more than three years, India has cleared the way for Indian Airlines to buy 43 Airbus jetliners that the state-owned carrier needs to rejuvenate its aging fleet and to compete with the country's privately owned airlines, the Wall Street Journal Europe reported on Sept 8th.
Indian prime Minister, Manmohan Singh, who valued the order at about US$2.2bn (1.8bn Euro), unveiled the agreement at a news conference with British Prime Minister, Tony Blair, who was visiting India. Both leaders hailed the agreement as a sign of growing cooperation and trade relations between India and Europe, where Airbus is based.
The US$2.2bn figure is based on catalogue prices for the planes. Airlines usually win supplier discounts on large orders, and while Airbus spokesman, David Velupillai, acknowledged that his company had reduced its prices for the jets, he declined to give details.
"What we are seeing is the final stage in a very thorough and long approval by the Indian government," Mr Velupillai said from airbus's headquarters in Toulouse, France.
The jets include 20 A321s, 19 A319s and 4 A320s. The airline plans to use them to replace some of its older planes and to add capacity to its fleet, which currently consists of 62 planes.
Airbus is jointly owned by European Aeronautic Defence & Space Co., which has an 80% stake, and Britain's BAE Systems PLC, which holds 20%.
Privately run Indian carriers stole the limelight at the Paris Air Show in June, with new low-cost airline IndiGo buying 100 Airbus planes in a deal with a catalogue value of US$6bn and Jet Airways, India's largest private carrier, placing orders with both Airbus and US-based Boeing Co. with an estimated list price value of US$4.3bn.
Indian Airlines first approved the Airbus deal in early 2002. But efforts by Indian government officials to renegotiate prices for the aircraft postponed completion of the order, according to Indian Airlines spokesman, Ashok Sharma.

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ENERGY

ONGC states PetroKaz aspirations

India's Oil and natural Gas Corporation recently said publicly for the first time that it remained in the race to buy PetroKazakstan, which went to a winning US$4.18bn bid form China's CNPC in August.
RS Butola, managing director of ONGC Videsh, the overseas exploration arm of the state-owned company, said the Indian management was still examining a counter-bid, the deadline for which was October 18th. "We have kept all our options open. We may re-bid," he said on the margins of ONGC's annual general meeting in Delhi.
ONGC would probably bid with an entity controlled by the family of steel billionaire Lakshmi Mittal. It is understood ONGC has researched the merits of a counter-bid and has provisionally secured financing. However, the state-controlled Indian company will have to weigh the risk that the move could spark a political row between India and China.
State-owned CNPC's bid for PetroKaz is part of Beijing's plan to secure energy resources to fuel its fast-growing economy.
Mani Shankar Aiyar, India's petroleum minister, who helped bring ONGC and Mr Mittal together in a partnership to acquire overseas energy fields, said a final decision to pursue PetroKaz was a matter for the joint venture.
"It is for OVL and Mittal to determine the value of a renewed commercial bid." But Mr Aiyar told the FT that , if the company re-bid, he would "be supportive."
The ONGC-Mittal partnership was narrowly defeated in the contest for PetroKaz in circumstances that the minister has described as unsatisfactory.
Subir Raha, ONGC chairman, also used the annual meeting to criticise what he saw as meddling by petroleum ministry officials in the company's affairs. "Companies are not (government) departments," Mr Raha said, referring to a messy and unsuccessful attempt by ministry of petroleum officials to appoint two additional civil servants to the ONGC board.
Mr Aiyar, who had rebuked his officials for their public spat with Mr Raha, declined to comment on the matter. In private correspondence to the minister that was leaked recently, Mr Raha, a powerful industry veteran who has spearheaded ONGC's bold expansion overseas to strengthen India's energy security, threatened to quit over the affair.
Mr raha said ONGC would be expanding its domestic capacity, with the resumption of output from a well off the coast of Bombay that was damaged by fire in July, and with a Rs33bn (US$751m) investment over three years to develop energy fields in the north east of India.

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FOREIGN COOPERATION

India reviews ties with Kazakstan

India and Kazakstan explored ways to bolster mutual cooperation in oil and energy areas during foreign office consultations held in the Kazak capital Astana recently, Kazinform reported. 
Negotiations were held between the Secretary of the Indian Ministry of External Affairs, Rajiv Sikri and Kazak Deputy Foreign Minister Vladimir Skolin and foreign Affairs Minister Kassymzhomart Tokaev were also present during the meeting. The Kazak side assured to help OVL-Mittal Enterprise, a joint venture floated by ONGC Videsh Ltd. Indian Petroleum Minister Mani Shankar Aiyar is likely to visit Almaty in October to attend Kazakstan international oil and gas exhibition.
The Kazak energy minister will also visit New Delhi to take part in the Asian Energy Conference proposed to be held in November. Indian Minister of External Affairs K Natwar Singh recently visited Kazakstan for the Shanghai Cooperation Organisation summit in which India was, for the first time, granted observer status.

 

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