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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: 027 - (02/05/06)

INDIA-NEPAL RELATIONS
India has expressed satisfaction at Nepal King Gyanendra's announcement to revive Parliament and expressed confidence that political parties of the country will accept it. 
National Security Advisor, M.K. Narayanan stated "finally, perhaps the King has seen the errors of his ways because he has already gone on air to announce his willingness to restore Parliament. There was a great deal of confabulation before that (King's decision). There was lot of talking by Indian side and lot of others. I think all necessary steps have been taken." Narayanan also said that political parties in Nepal have more or less indicated that they will accept the King's decision and that the people hoped to have an interim government in a few days. 

INDIA-US RELATIONS
Amidst all the speculation over the fruition of the Indo-US nuclear deal, India rejected the US condition, which stated that America would end nuclear cooperation if New Delhi tested a nuclear device. The clause was included in a US draft agreement on civil nuclear cooperation between the two countries. India has already announced a voluntary moratorium on nuclear tests. US Secretary of State Condoleezza Rice has also presented the Bush administration's testimony before the Senate and House Foreign Relations Committee on the Indo-US nuclear deal. In her remarks, Rice said that past non-proliferation policies of the US did not achieve the goals as they isolated India even further. In her words, "this civilian energy initiative will not only advance international security but also increased energy security and increased business opportunities for America leading to more direct and indirect jobs in this country. But all these advantages will have to be seen in the larger context of the elevation of India-United States relationship which is now a strategic partnership." Rice's testimony is being viewed as a tactic by the Bush administration to win over the opposition. The Chairman of the Senate Committee, Richard Lugar has argued that the committee is mindful to the benefits of having a closer relationship with India. But there is an unease among US lawmakers about India's actual intentions of testing nuclear devices. The Bush administration and Democrats like John Kerry are happy to support India and believe that India's impeccable record of non-proliferation will prevent it from using nuclear weapons even if it decides to build them. However, many sceptics within the Congress don't want to buy this position as they believe this could damage international standards of non-proliferation. But, given the fact that the US and India are two of the world's most important democracies, is it not reasonable to assume that just like the United States, India too is aware of its non-proliferation responsibilities? 

INDIA'S RELATIONS WITH GERMANY AND FRANCE
Indian Prime Minister Manmohan Singh visited Germany this month to participate in an annual summit meeting. In Delhi Singh said that the purpose of the visit was to strengthen relations with the European nation. The Premier described Germany as one of India's most important business partners and a major foreign investor. Chancellor Angela Merkel invited Singh and he also called on German President Host Kohler. He also inaugurated an Indian pavilion at a fair in Hanover, where India showcased its business acumen 
India and France conducted joint naval exercises off the coast of Goa. Ten warships, two submarines including the French nuclear sub Saphir, 60 aircraft and over 5000 sailors are participating in these exercises. This is the eighth time that the navies are training together but it is the first time that the Indian aircraft carrier, INS Viraat, and France's giant aircraft carrier, Charles de Gaulle, tested the high seas together. For the first time, an Indian fighter jet, the Sea Harrier, landed on Charles de Gaulle, which is Europe's largest and most powerful aircraft carrier. Once the war games began, the Harriers and the Indian Air Forces' Jaguars faced-off France's Rafale. The main goals of the naval exercise are to augment inter-operability and prepare for a joint force to tackle terrorism, piracy and disasters. From a narrow interest of just carving a niche in the arms sales market of south Asia, through such exercises, over the last few years, France has made efforts to build a comprehensive political and strategic relationship with India. For India, the naval exercises forge a stronger relationship with France but also project India's military might and a budding presence in the region. 

ECONOMY AND BUSINESS
Following the Indian Prime Minister's visit to Hanover, Germany, India has sought more German investments in infrastructure, manufacturing and high-technology sectors. Seeking closer economic cooperation between the two nations, Prime Minister Manmohan Singh said that infrastructure; manufacturing and hi-technology sectors are the three areas where India and Germany can enhance cooperation. During the inaugural session of the Indo-German Business Summit here, Singh extended complete support to German companies and noted that a lot of firms from the European nation were already present in India and expanding their operations. 65 per cent of large German manufacturing companies already have a presence in India and another 30 per cent plan to come there. German chancellor Angela Merkel also asked various industries in her country to tap the immense opportunities in India, asking New Delhi to open up its markets further. 
Volvo India is considering setting up a manufacturing base for some of its construction equipment if it is able to get good volumes in the country. The decision will be made in the next five years according to Volvo India's construction equipment division head, Ityunjay Singh. Singh said during 2005, revenues from the division approximated Rs 450 crore, which was nearly 90 per cent more than 2004. 
One of two contracts to build and operate a cargo terminal at India's IT hub Bangalore's new international airport opening in 2008 has been bagged by a consortium of Singapore Airport Terminal Services (SATS) and Air India. The agreement, the first cargo contract for the Singapore Airlines subsidiary, will be signed before the end of the month. The SATS-Air India team is also competing in the ground-handling category for the new airport, The Straits Times reported. SATS provides in-flight catering at four other Indian airports - Mumbai, Chennai, New Delhi and Kolkata - through its two joint ventures, Taj-SATS Air Catering and Taj Madras Flight Kitchen. SATS has 15 ground-handling and catering joint ventures in eight markets, including China, Vietnam, Taiwan and Indonesia. 

POLITICS
Former BJP president L K Advani embarked on a 6000 km-long Bharat Suraksha Yatra ('Protect India' Tour) in Gujrat. The primary objective of this tour was to highlight the corruption and factionalism within the BJP. Advani's recent remarks about the BJP's internal problems have made other senior leaders uncomfortable, who argue that such comments could damage the image of the party. The Bharat Suraksha Yatra is Advani's sixth yatra in the last 16 years, but the general scepticism in the party has raised worries over its political benefits. Advani is also facing increasing awkwardness over his remarks about the release of terrorists following the Kandahar hijack in 1999. The BJP Party Vice President, Pyarelal Khandelwal implied that Advani should have resigned from the cabinet at that time if he was opposed to the move. Advani had hinted last week that he was not party to the decision taken by the NDA government to release the terrorists. His statement disappointed senior party leaders including Atal Bihari Vajpayee, following which Advani had retracted his statement. BJP President Rajnath Singh also accused the UPA of pursuing "politics of appeasement" and argued that the demographic balance of the country was getting disturbed with a disturbing increase in the population of the minorities. Singh expressed concerns over the security situation of the nation, claiming that there was an overpowering feeling among the people about the country's internal and external security, which was being threatened by Maoist insurgency and activities of the (Pakistani) ISI. He alleged that the government had failed to take a pro-active approach to these problems.

In state assembly elections, sixty-five of Assam's 126 assembly constituencies voted in the first phase of elections. According to PTI estimates, there are 900 tea gardens in Assam and around 25 lakh voters here who can influence results in as many as 35 of the 126 seats in the assembly. Traditionally it was the Santhal community or garden labourers who voted for the Congress. But now the younger generation wants to break away from this tradition. The BJP has quite a stronghold in this area because large portions of the tea community speak and understand Hindi. The mainstream Assamese population, on the other hand, still views the BJP as a "cowbelt" party. But the BJP might do well in this area because the tea workers want to improve their situation. A strong trade union among tea workers has bargained for minimum wages, ration and housing facilities. However, the literacy rate among them is appallingly low. These groups are blaming the Congress party for their current state of affairs and hence the tilt towards the BJP; the important lesson being that in Assam, the party that manages to gain the support of minorities, usually succeeds in the elections. However, there are a few obstacles in the forthcoming assembly elections. First, the political parties are facing a difficult task because the minorities have already launched their own party, the United Democratic Front and the tea tribes are willing to change their voting habits. Second, increasingly anxious about losing their argument to the BJP in the tea belt, the Congress is openly admitting that more should have been done for the tea workers. Such factors coupled with the Congress party's shaky position, could inevitably lead the BJP to victory. 

Students to UK
In the latest initiative to boost overseas recruitment of students to study in Britain, Prime Minister Tony Blair has announced a budget of £27 million to attract over 1,00,000 additional overseas students. The Prime Minister's five-year plan will use millions of pounds from the government, the British Council and business to persuade students from "priority countries-India, Russia, China, the United States and Africa - to join the 2,29,000 overseas students" already studying in Britain by 2011. An exhibition at the Indian Institute of Technology in Delhi has displayed over 200 innovations by its students. They hope corporate houses and businesses will show interest in the products. The devices range from multi-purpose fans to trolleys and cycles. 

Six Lane Highway by 2008
The Indian Supreme Court has given the green signal for the 110 km Bangalore-Mysore express corridor project. Finding fault with the state government, the court directed the state of Karnataka to pay Rs 5 lakh to the project developer for what was described as frivolous appeals. The Bangalore-Mysore expressway is an ambitious project; a six-lane highway connecting the two cities aimed at cutting down the travel time. But right from the start the corridor project has been delayed by controversy over the amount of land required for the project. Former PM Dewa Gowda charged the project developer Nandi Infrastructure with acquiring excess land to cash in on the lucrative real estate business. The issue went to the Karnataka High Court, but the state's move to get the excess land from Nandi failed. The road will be a toll road and will cost up to Rs 100 per trip. The company behind the project is confident that they can finish the entire project by the end of 2008. The first phase including peripheral roads, a link road and the first township is likely to be completed by the end of July this year.

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AUTOMOBILES

Suzuki, Ford Boost India Sales on New Cars


Suzuki Motor Corp., the biggest carmaker in India, boosted sales in the country last fiscal year with new models as General Motors Corp.'s sales slipped. 
Suzuki's Indian unit, Maruti Udyog Ltd. boosted car sales in the year ended March 31st by 9.4 per cent with its 1.3-liter Swift hatchback, its first new car in India in five years, the Society of Indian Automobile Manufacturers said. Ford Motor Co., whose Fiesta went on sale in December, posted an 8.9 per cent gain. 
Suzuki, Honda Motor Co. and other automakers will invest a combined US$3 billion by 2010 to build vehicles in India. Rising incomes in the world's second-fastest growing major economy and low interest rates may help India's car sales rise 10 per cent every year through 2010. Only seven in 1,000 people own a car in India, where sales have reached records for three straight years. 
''Auto companies are enjoying the dividend of a young population with growing purchasing power and easier finance options,'' said R.K. Gupta, who helps manage US$56 million of Indian stocks, including shares of automobile companies, at New Delhi-based Credit Capital Asset Management. ''People get hooked on new models.'' 
About half of India's 1.1 billion people will be between the ages of 15 to 49 at the end of the decade. This is the biggest spending age category, according to Michael Gordon, chief investment officer for the Asia Pacific excluding Japan for Fidelity Investments. 

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FOREIGN RELATIONS

Karzai in India to boost ties

Afghan President, Hamid Karzai, visited India recently to boost ties with New Delhi that have blossomed after the fall of the Taliban regime, in a trip a nervous Pakistan will be closely watching. 
Afghanistan has received hundreds of millions of dollars in development aid from India in the past four years, but its ties with Pakistan have strained after Karzai asked Islamabad to do more to stop Taliban militants infiltrating the border. 
"Well, we are very happy in Afghanistan with India helping us in a manner that is not expected," Karzai told Indian state TV, Doordarshan. 
Karzai will hold talks with Prime Minister, Manmohan Singh, on the official five-day trip. 
India, which did not recognise the radical Taliban regime, lost its foothold in the rugged country where arch rival Pakistan held diplomatic sway for years before the September 2001 attacks on the United States sparked a US-led invasion. 
India is now involved in training Afghanistan's police and diplomats, building roads, hospitals and supporting trade and services as Afghanistan tries to rebuild its war-ravaged economy, despite continuing attacks by Taliban and al Qaeda insurgents. 
"India went out of its way to provide us with great economic assistance. India's help is reaching up to US$600 million. It has helped us in all walks of life," Karzai said. 
Analysts in Pakistan, which has fought three wars with India, said Islamabad was worried over India's growing influence in Afghanistan, which borders Pakistani territory. 
"Pakistan should improve its relations with Afghanistan to check the growing Indian influence," said Hasan Askari Rizvi, Lahore-based foreign policy analyst. 
"The visit should not be a cause of concern for Pakistan because it can't stop it. But the growing influence of India in Afghanistan creates problems for Pakistan." 
New Delhi was a key backer of Afghan forces led by the Northern Alliance which, along with the US military, overthrew the Taliban, aided by Pakistan up to September 2001. 
Islamabad has not allowed overland transit for Indian goods bound for Afghanistan, further hitting Indo-Afghan trade. 
Militant attacks in Afghanistan have increased and relations between Afghanistan and Pakistan have cooled after Karzai's complaints that Pakistan was not taking enough action against Taliban operating on its side of the border. 
President Pervez Musharraf responded angrily, saying members of the government in Kabul were out to malign Pakistan. 
Analysts in India said Singh and Karzai were likely to discuss the activities of Islamic militants on Pakistani soil. 
"Pakistan's territory is a hub for terrorist activities that affects both for Afghanistan and India," New Delhi-based strategic affairs analyst C. Raja Mohan said. 
"Both have a stake in Pakistan adopting a policy that is more harmonised with regional interest ... The Taliban resurgence is a huge problem for Karzai," he said.

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PHARMACEUTICALS

India's Ranbaxy buys Terapia generic-drug firm 

India's biggest pharmaceutical company, Ranbaxy Laboratories Ltd, announced that it has acquired a fellow generic drugmaker, Romania's Terapia, for US$324 million, Deutsche-Presse-Agentur (dpa) reported. 
Ranbaxy, which acquired a 96.7 per cent stake in Terapia, described the deal as a "major strategic step" in expanding its European operations. The move will provide Ranbaxy with two additional manufacturing units, 60 products and access to Terapia's coverage of nearly 4,000 pharmacies and 450 hospitals in Romania. "In future, we intend to make Terapia's facilities our hub for manufacturing in Europe," Ranbaxy's chief, Malvinder Mohan Singh, said. "The deal will combine the strengths of two premier generic companies and will allow Ranbaxy to leverage its expanded base in the rapidly growing Romanian pharmaceutical market, across the European Union and CIS markets," Singh said, referring to the Commonwealth of Independent States, the alliance of 11 former Soviet republics. He added that his firm would be on the lookout for more mergers and acquisitions in Europe.

 

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