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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: 077 - (28/06/10)

INDIA-PAKISTAN: DIPLOMATIC TALKS BEGIN
Indian Home Minister P. Chidambaram is currently meeting his Pakistani counterpart, Rehman Malik, in Islamabad in the latest in a series of high-level discussions aimed at improving relations between the nations. This meeting is scheduled before the regional meeting of interior ministers from South Asian nations commences later next week. The meeting will build on discussions between the two countries' foreign secretaries. In July, foreign ministers of India and Pakistan will meet as part of a peace-talk process initiated in February. Mr. Chidambaram is also expected to provide Mr. Malik with evidence of Pakistan links to the Mumbai attacks, while Islamabad could raise the issue of alleged Indian involvement in the separatist struggle in Baluchistan. India wants Pakistan to arrest more Islamist militants linked to the Mumbai killings before it accedes to Pakistan's requests to move talks on to other areas like cross-border trade and the division of water resources in the disputed Kashmir region.

There is however an opportunity for forging stronger ties with Pakistan in the economic area. Pakistan is very keen to re-engage with India on granting Most Favored Nation (MFN) status. India has already granted MFN status to Pakistan allowing the country to export 1,934 categories of items. The Planning Commission estimates have put the potential for bilateral trade at $10 billion. Full-blown Indo-Pak trade and investment ties would take the economic profile of the region to the next level. The initiative to expand trade and investment ties came from Pakistani leadership to which India has responded positively. The foreign secretary’s visit and the home minister, Mr P. Chidambaram’s consultations with Pakistan’s interior minister, Mr Rahman Malik, could help revive full dialogue between India and Pakistan.

THE GHOSTS OF BHOPAL
In 1984, one of the world’s worst industrial accidents occurred at the Union Carbide Plant in Bhopal. 500,000 people were exposed to a toxic gas leak from this plant and the tragedy claimed the lives of 15,000 people. Today, the same episode has come back in the news causing much uproar in the wake of an Indian court decision to sentence seven Indian directors of Union Carbide to only two years in jail. Instead of providing any consolation to the public, the verdict has generated anger at the government’s handling of the tragedy and its failure to bring to justice the American parent group and its bosses. New Delhi is addressing the issue by suddenly increasing the compensation to the families of those killed and injured, seeking the extradition of Warren Anderson, the octogenarian ex-chairman of Union Carbide, and pursuing an acknowledgement of liability from Dow Chemical (which bought Union Carbide in 2001). Shockingly, while the India government initially demanded $3.3bn compensation from the company, the country’s Supreme Court eventually brokered a settlement that allowed Union Carbide to pay just $470m, and cleared the company of any other civil or criminal liability! Sadly, the government’s prospects of obtaining either Anderson’s extradition, or an acknowledgement of liability from Dow are extremely weak. And like many of the cases that remained buried under layers of dust in India’s bureaucratic offices, this too is destined to meet a similar fate.

DEREGULATION
According to a Wall Street Journal Report, a government panel has decided to make petroleum prices free from government control. This means that gasoline and diesel prices will follow global prices and as a first step it raised gasoline prices by 3.5 rupees per liter, or 7%, and diesel by 2 rupees per liter, or 5%. For private companies like Reliance, the move represents a step closer to a more level playing field for fuel sales in India. Its shares rose 1.1%. The government compensates the state-owned oil marketing companies for some of their losses. It was on track to spend $17.7 billion on subsidies for such firms this year, but after the recent decision, the total will likely drop to $13.5 billion, Barclays Capital estimates. But there are fears that with the new development, the country’s inflation rate will rise and the Central Bank may have to take recourse to implementing stricter controls.

INDIA – JAPAN NUCLEAR PACT
The Japanese Foreign Ministry is all set to begin talks with India on sealing a civil nuclear cooperation pact. The first round of talks will be held on June 28-29 in Tokyo, according to Japan's Ministry of Foreign Affairs.

The signing of a nuclear treaty between the two countries will lead companies like Toshiba Corp, Hitachi Ltd and Mitsubishi Heavy Industries to sell reactors in India. Japanese firms are already in partnership with companies from the US and France and are engaged in joint development of nuclear reactors. Hitachi Ltd works in tandem with General Electric (GE), while Mitsubishi Heavy Industries works with France's Areva. Areva and GE have already received approvals for two reactors in India. But the two companies depend on Japan's nuclear reactor technologies. Both Areva and GE use reactor vessels made by Japan Steel Works Ltd, GE in particular relies on Hitachi Ltd for nuclear reactor projects. If Japan's deal with India does go through, it will be the first agreement between Japan and a country that isn’t a signatory to the Nuclear Non-Proliferation Treaty. The US and France had also urged Japan to sign a nuclear deal with India, which would clear the way for GE and Areva to use Japanese suppliers for nuclear projects in India.
  

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