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Books on India
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Update No: 044 - (24/09/07)
US RESILIENT ON NUCLEAR DEAL
Exhibiting its commitment to the nuclear agreement with India, Washington has
convened a special session of the Nuclear Supplier's Group to further discuss
the matter. Since the nuclear agreement has faced a lot of criticism and concern
on Indian soil, America believes that it is time to move quickly towards
cementing the agreement. US Assistant Secretary of State Richard Boucher told an
audience of business leaders and Congressional staffers, that "the sooner
we do the nuclear deal, the sooner we turn on the light bulbs so children can do
their homework." Boucher's statement reflects a genuine concern toward
using the nuclear deal for a speedier economic development. However, much also
depends on whether India will follow the safeguards of the Atomic Energy
Commission. Assistant Secretary Boucher also separated the nuclear deal from the
Hyde Act which has been the cause of domestic uproar in India. Boucher claims
that the nuclear deal follows through on the "123 agreement" and not
the Hyde Act; although simultaneously saying that the "123 agreement"
was in continuance of the Hyde Act. Boucher's statements could be misconstrued
especially because of the ambiguity in the agreement. Critics are maintaining
that all this is part of a delicate balancing act on the part of the Assistant
Secretary. On the Indian side, Chairman of the Atomic Energy Commission, Anil
Kakodkar and key Indian officials have been quietly meeting with US officials
and representatives of NSG countries to clearly outline India's expectations on
the waiver issue, while remaining silent on the issue of IAEA safeguards.
Since India is not a signatory to the NPT, Kakodkar has also insisted on a clear
and unconditional exemption from the Nuclear Supplier Group. While the United
States is working out the modalities, it is also expecting India to begin talks
with the IAEA about a safeguards agreement. Kakodkar is expected to meet IAEA
chief Mohammed El Baradei after the NSG meet, to brief him about the progress.
The IAEA has been strongly supportive of the US-India nuclear deal despite
tensions with Washington on other issues, notably Iran. Another possible
impediment to the deal is China, which is carefully assessing the situation and
one might see strong opposition from the Chinese in days to come.
INDIA TENSE OVER DEVELOPMENTS IN NEPAL
Recent development in Nepal has left New Delhi feeling insecure. Nepal
witnessed problems after the rebel Maoists quit the coalition government and
announced a boycott of the Nov 22 elections, and decided on a 'street revolt' to
get rid of the monarchy. Hundreds of Maoist cadres also marched into the capital
Kathmandu and burnt effigies of King Gyanendra.
India placed its security forces on high alert along the border with Nepal as
Maoists pulled out of the Nepalese government. The Interior Ministry alerted
paramilitary and police forces on the India-Nepal border, preparing them for any
possible escalatory situation along the Nepal border. An official from the
Interior Ministry said that the security alert was issued to five states along
the Nepal border to stem the inflow of criminals and arms prior to the
Constituent Assembly elections in Nepal scheduled for November. India shares a
1,751-kilometer border with Nepal. Interior Minister Shivraj Patil also convened
a high-level meeting of officials to review the security scenario along the
border. "We have requested the governments of Uttar Pradesh, Bihar,
Uttarakhand, West Bengal and Sikkim as well as the Sashastra Seema Bal (SSB) to
take all precautionary measures and remain vigilant in view of the political
developments in Nepal", as quoted in a statement issued by the Ministry of
Home Affairs.
INDIA-CHINA BORDER TALKS
China and India will hold a fresh round of border talks, currently planned
for the period between September 24 and 26. The meeting comes as the 11th round
in a long series of talks. The dates were decided during bilateral talks between
Foreign Secretary Shivshankar Menon and senior Chinese officials, including
Chinese State Councilor Tang Jiaxuan, Foreign Minister Yang Jiechi and Assistant
Foreign Minister He Yafei. Mr. Menon's discussions during his two-day visit were
described in a brief press release by the Indian embassy as "positive,
constructive and fruitful." However, Menon has not received any assurances
from Beijing with regard to its support for the India-US nuclear deal. According
to Xinhua news agency, Mr. Tang told Mr. Menon that China and India "have a
solid basis and broad prospect to develop their friendship and
cooperation." "China and India should promote exchanges and
cooperation in various fields, increase coordination and cooperation in
international and regional affairs, so as to promote the bilateral strategic
partnership toward peace and prosperity." Indian Prime Minister Manmohan
Singh is expected to visit China at the end of the year.
INDIA - ISRAEL COLLABORATION CRITICISED
Muhammad Farooq Rehmani, Convenor and Chairman of the All Parties Hurriyet
Conference (G) J&K, has expressed serious concern over regular clandestine
interaction between Indian and Israeli armies in Kashmir. He criticized a
proposed visit by the Israeli defense minister to Jammu and Kashmir as dangerous
for peace in the region. Rehmani who strongly supports the Kashmiri cause,
believes that the talks between India and Israel in Kashmir could worsen human
rights situation in Jammu and Kashmir. Rehmani has been also trying to persuade
Pakistan to raise the issue of state terrorism in J&K with India, in their
forthcoming joint meeting on terrorism. He said India must be forced to
demilitarize Kashmir to allow Kashmiris to begin their normal political
activities without fear and harassment. He said only pro-Indian groups in
Kashmir enjoyed civil liberties and political freedoms, while pro-freedom
political workers were dubbed as terrorists and sent to prisons for long
detention. He said the Kashmir movement was always a peaceful freedom struggle
while the label of terrorism against it was to malign it to safeguard India's
nefarious designs in the region. While Rehamni's remarks are very critical of
India's efforts in Kashmir, there has to be merit to not including third parties
such as Israel in the entire debate on Kashmir. Including Israel given the
ground realities of Kashmir could be mistaken by Pakistan as India's advances
towards a third party for the settlement of the Kashmir dispute.
WALL STREET JOURNAL REPORT
According to a very recent report in the Wall Street Journal, Asia is likely to
grow this year at a faster rate than initially expected. In its Asian
Development Outlook 2007 Update, the Manila-based Asian Development Bank raised
its 2007 growth forecast for Asia excluding Japan to 8.3% from 7.6% in the March
outlook, and its forecast for 2008 to 8.2% from 7.7%. The Asian Development Bank
expects India's economy to grow 8.5% this year and next, up from its prior
forecasts of 8% for 2007 and 8.3% for 2008. If China and India are excluded, the
other economies in developing Asia are expected to grow a more modest 5.7% in
2007 and 5.6% in 2008. China and India combined account for 55% of developing
Asia's gross domestic product. The report also says that the main challenges to
growth next year are contingent on whether distress in credit markets deepens
and spills over into the wider financial system and real economy.
INDIA- SRI LANKA ECONOMIC PACT
India and Sri Lanka have entered into a Comprehensive Economic Partnership
Agreement which is expected to take the Sri Lankan and Indian economies beyond
trade in goods towards greater integration, and to impart renewed impetus and
synergy to bilateral economic interaction. The Indian government plans to go all
out to assist Sri Lanka to expand its economy by exploring new opportunities in
sectors like IT and BPO. Sectors for cooperation include telecom, professional
services, construction and engineering, ICT, energy, tourism etc. Alok Prasad,
Indian High Commissioner in Sri Lanka, while speaking at a meeting organized by
the Indo- Lanka Chamber of Commerce and Industry, made these assurances. Alok
Prasad also said that one of the main goals was to enable greater economic
liberalization by removal of non-trade barriers. The Indian High Commissioner
also noted that Sri Lankan trade with India had been increased by ten fold since
2000 and Sri Lankan exports to India have recorded a 90 percent increase under
the FTA while Indian exports to Sri Lanka increased by 45 percent. India is the
third largest market for Sri Lankan exports.
THE INDIAN RUPEE MAKES A STEADY CLIMB
As foreign investment reaches its peak in India, the Indian rupee is expected to
climb higher against the dollar. Lifted by a tide of overseas money into
domestic shares following a cut in US interest rates, the Indian currency
strengthened beyond the psychologically key 40 rupees to the dollar barrier for
the first time in nine years last week. The rupee closed on Friday at 39.87 to
the dollar and analysts expect it to gain further in coming months as foreign
investors buy shares and pour money into plants and infrastructure projects to
exploit the booming economy. "We're looking for a rupee of around 39 to the
dollar by year end and for the rupee to go to around 38.5 or 38 to the dollar by
mid next year," said Richard Yetsenga, HSBC's Asia currency strategist in
Hong Kong. While the rupee is going up, its increase depends on the central
bank's decision to slow the rupee's appreciation.
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