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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)

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Update No: 038 - (28/03/07)

INTERNAL SECURITY ISSUES
India has recently become the hot-bed of renewed terrorist attacks. Maoist rebels attacked a security post in India's east-central state of Chhattisgarh, killing 55 policemen and injuring 12, according to statements released by Indian news reports. The group consisted of 200 to 300 Maoist rebels who lobbed grenades and petrol bombs and fired indiscriminately in the predawn raid on a police post in Rani Bodli, about 525 kilometres south of the state capital, Raipur. The rebels then set fire to the remote jungle outpost and planted landmines around it before escaping with arms and ammunition. Chief Minister of Chhattisgarh, Raman Singh said that the dead included 15 personnel of the Chhattisgarh Armed Forces and 34 special police officers recruited from among local tribal people. The Chhattisgarh Armed Forces is a special police unit trained to fight insurgents. The Maoists claim to be fighting for the cause of poor farmers. According to various news sources, the Maoists have established dozens of war training centers and units manufacturing explosives. The state has witnessed over 600 violent Maoist related activities in the last one year. As a result of this new thrust in violent activities, more than 50,000 villagers have been evacuated into temporary shelters set up by the state. The Maoists are most active in Chhattisgarh and southern Andhra Pradesh states where they are also known as Naxalites. The birth of the Naxalite movement can be traced back to the 1960s when it originated in West Bengal. The primary message of the Maoists has been to reject parliamentary democracy and capture political power through an armed struggle based on guerrilla warfare. Today, they pose one of the most serious threats to India's internal security. 

IRAN-PAKISTAN-INDIA GAS PIPELINE
In a recent development, Indian Foreign Secretary Shivshankar Menon rejected any link between the proposed Iran-Pakistan-India (IPI) gas pipeline project and the political situation in the region, particularly the Iran nuclear issue. He stated that the project did not have any links to the general political situation in the region. The IPI project is still underway and has not reached its final stages. There are various issues that need to be addressed from structure to costs. Moreover, the Indian foreign secretary stated that there were some technical and feasibility matters on which the governments had to take decisions. On the issue of Iran possessing nuclear weapons, Menon said that India would like to see a peacefully negotiated solution to the problem which satisfies both the international community and Iran. Regarding Tuesday's meeting, Shivshankar Menon said he and Foreign Secretary Riaz Muhammad Khan held a first round of talks and that the talks would be continued Wednesday morning. 

INDIA'S NEW PAKISTAN POLICY
India has significantly toughened its Pakistan policy, indicating that it would not make any compromises on thwarting terrorist activities. External affairs minister Pranab Mukherjee, has suggested that the Indian government is weary with all the terrorism its people face and now has an "enough-is-enough" attitude towards Pakistan. While refraining from pointing a direct finger at Pakistan's government, Mukherjee said that terrorist outfits were being constantly cultivated and nurtured in Pakistan, and that New Delhi was afraid of Pakistan's nuclear weapons falling into the hands of radical Islamists or jihadis. Mukherjee also displayed concern for the current instability in Pakistan caused by the removal of a senior Chief Justice. New Delhi has been harping on various occasions that the dialogue with Pakistan could not make a breakthrough unless Islamabad lived up to its January 2004 commitment of eradicating terrorism. While India is open to exploring creative and cooperative solutions that could influence the dialogue positively, it is waiting, in large part, for Pakistan's resolve and commitment to be reflected a little more clearly. 

INDIA-CHINA
Lord Christopher Patten, former European Commissioner and the last Governor of British Hong Kong recently declared that there must be a "recognition of the leaderships of India and China" for any trans-Atlantic unity or progress. Releasing for India 'Straight From The Gut', part two of his memoirs 'Not Quite The Diplomat', Patten outlined his stand on the "state of nations and where they are heading" for an august gathering at the British Council Patten is currently the Chancellor of Oxford and Newcastle Universities. The two countries have an important role to play in the future geo-political arena. Patten believes that at least in terms of sheer size, India could eventually overtake China. Patten displayed a zeal for the ideals of democracy and pluralism. 

CORRUPTION
According to a survey by the Hong Kong based Political and Economic Risk Consultancy (PERC), India is perceived as Asia's fifth most corrupt economy while the Philippines is the most corrupt economy. In a grading system with zero as the best possible score and 10 the worst Singapore at 1.20 and Hong Kong with 1.87, were ranked by foreign businessmen as the cleanest economies among the 13 Asian economies. The Philippines with a score of 9.40, worsening up from 7.8 last year, was ranked as the most corrupt. Perception of corruption in Thailand worsened after the military seized power in September, though PERC argues that it had not noted a worsening in the actual situation in the Philippines despite its deteriorating score. Thailand and Indonesia, both on a grade of 8.03, were tied as Asia's second most corrupt nations. 

INDIA-EU TRADE AGREEMENT SUFFERS ROADBLOCKS
A planned free-trade deal between the European Union and India has run into serious difficulties over whether or not it should include clauses relating to human rights and weapons of mass destruction. Critics also argue that such an agreement might weaken India's control over the economy. The EU is bound by a 1995 decision by its member states' leaders that any trade or political agreement with the outside world must contain a commitment to human rights and democracy. But the EU's executive, the European Commission, has been arguing that an exception should be made for India, which does not want this clause inserted. Commission officials say human rights are already covered by a 1994 cooperation agreement between the EU and India and that a free-trade accord should be limited to economic issues. Similarly, India is opposed to having a clause relating to weapons of mass destruction (WMD). Although the clause would commit India to supporting international conventions against chemical and biological weapons, it would not deal with the nuclear Non-Proliferation Treaty, which India has declined to accept. Annalisa Giannella, adviser on WMD to EU foreign-policy chief Javier Solana, confirmed this month that some EU states are willing to omit such a clause. She argued that if the EU fails to apply to India the WMD clause it systematically includes in agreements with other countries, this would "establish a terrible double standard". The EU has cited India's and Brazil's reluctance to pry their markets open to Western firms as one of the reasons the Doha Round of world trade talks has so far been unsuccessful. Peter Mandelson, the European trade commissioner, is seeking to have investment issues included in a bilateral deal with India. This is despite investment being taken off the agenda of the Doha Round after protests from developing countries. Anti-poverty advocates are concerned that a deal designed to placate Western multinationals would reduce India's ability to restrict the activities of such firms within its borders. 
The question on the minds of many is that the EU is primarily interested in furthering its mercantilist interests, rather than improving the multilateral trading system. Mandelson's policy of pursuing bilateral deals has driven a wedge between EU trade officials and their counterparts handling development aid. By going after bilateral deals, the EU seems to be subverting the entire idea of a "multilateral trading system". While the EU accounts for almost 20% of India's total external trade, India is only the EU's 10th-largest trading destination, at 1.8%. India also receives less than 1% of the EU's foreign direct investment. Those who favor trade liberalization, argue that it would help alleviate poverty in India and open up further European companies in India which would create jobs. However, others believe that the intrusion of foreign companies in Indian markets is precisely the reason for the lack of jobs in indigenous industries. Right now, whatever the EU might seek to accomplish, looks like a double edged-sword.

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