After overlooking India&rsquo;s natural partner Bangladesh for so long, Prime Minister Manmohan Singh has finally walked the walk. With a successful visit to Dhaka, he has shown his commitment to making this developmental process enduring.

Delhi-Dhaka ties: A new beginning

Business Standard

The UPA government is increasingly at war with its ownself. Even among the ministers, distrust has set in. Let alone a party, the Congress does not even appear to be a coalition. The Prime Minister and the UPA chairperson are mute spectators. The legitimacy of the government has been eroded. There are several questions which home minister P Chidambaram has to answer in relation to the fixation of the value of the spectrum in 2008. It is not an internal matter of the government. It involves public revenue.

'What was the PM doing when national loot was taking place?'

&lsquo;Earthquakes don&rsquo;t kill people, buildings do,&rsquo; is a saying Sikkim&rsquo;s native Lepchas love to quote, since the state&rsquo;s mountains are known to tremble often. The truth of this statement again came to the fore in the recent earthquake.

Sreelatha Menon: Weeping Sikkim

The Bharatiya Janata Party&rsquo;s octogenarian leader Lal Krishna Advani ought to have gracefully retired from public life in May 2009 when he led his party to ignominious defeat. In 2004 his party had not gone to the hustings seeking a mandate for Mr Advani as prime minister. That year it was Mr Vajpayee who was defeated at the polls.

Write a book, Mr Advani

India&rsquo;s security is no longer simply predicated on ensuring the sanitisation of its land borders; recent events have shown that it is equally about safeguarding its interests at sea.

Premvir Das: Chinese chequers at sea

The most active December gold contract on the Comex division of the New York Mercantile Exchange settled at $1,639.80 an ounce, down 9.6 per cent. Gold fell as investors sought to sell winning positions to raise cash or meet margin calls in other markets. There was widespread talk of possible selling by big hedge funds covering losses in other markets. Yesterday, trading volumes in December futures at 323,000 lots were 25 per cent above the one-month average. The weekly open interest position jumped 489,577 lots from a week-ago level of 189,056, suggesting build-up of short positions by traders.

Yellow metal may rebound, but nervousness remains

To make the portfolio defensive, add stocks with dividend yields above three per cent.

Is the bear market in its final stage?

While the new managing director of the International Monetary Fund (IMF), Christine Lagarde, spoke of rediscovering the &ldquo;spirit of Bretton Woods&rdquo; at the annual meetings of the Washington, DC-based international financial institutions (IFIs), India&rsquo;s Prime Minister Manmohan Singh reminded the United Nations General Assembly in New York on the same day that the world had changed a lot from the days of Bretton Woods, and the IFIs and the UN system needed to catch up.

Dangerous new phase

The new Takeover Regulations are upon us. Last week, the Securities and Exchange Board of India (&ldquo;SEBI&rdquo;) notified the new regulations based on the draft recommended by the Takeover Regulations Advisory Committee (&ldquo;TRAC&rdquo;), but with fundamental deviations from the recommendations. While many may think this is now a pro-acquirer law, the reality is that the law just got worse for acquirers taking over listed companies. The fine print has provisions that will haunt acquirers who make open offers under the Takeover Regulations.

Pyrrhic victory for lobby against takeover reform

The termination of the Duty Entitlement Pass Book (DEPB) Scheme from October is justified and in fact was overdue. One reason why the beneficiaries are not upset is because they knew that the end was neigh. All they could try was to delay it. It has now been announced by the Finance Ministry that from the 1st October 2011 the DEPB Scheme which is the most popular tax saving facility for exporters would be abolished. The Ministry of Finance and the Ministry of Commerce had undertaken several studies on the oft repeated assertion by the countries importing goods from India that the Scheme had hidden subsidy in it. The alternative to DEPB Scheme is the Duty Drawback Scheme. An exporter can choose either of them. Study on the subject has proved that for the export of a particular commodity, the exporter gets much more than what he would get under the Drawback Scheme.

Delayed demise of DEPB scheme

After displaying considerable flexibility in global climate negotiations at Cancun and Copenhagen, even if in vain, India seems to have stiffened its stand on several key issues for the forthcoming 17th Conference of the Parties (COP-17) on climate change in Durban later this year. This is evident from Environment Minister Jayanthi Natarajan&rsquo;s statement at the recent informal ministerial consultations on this issue in Pretoria. She sought greater commitment on emission reduction from developed countries before India could even begin to discuss the legally mandated agreement on climate change. She also ruled out international verification of India&rsquo;s voluntary action on alleviating global warming, which the country had earlier expressed its willingness to consider under the proposed &ldquo;international consultation and analysis&rdquo; mechanism for member countries&rsquo; domestic climate programmes. Clearly, India wants to keep the spirit of the Kyoto protocol alive.

The climate changes

The road to foreign investment for private equity in India is open, but not smooth. There are sectoral caps, tax hurdles, restrictions on debt instruments, and till very recently, the bugbear of Press Note 18. There are expectations for speedier processes, quick returns and preferential treatment. Private equity players have been demanding certain safeguards, in order to provide protection from the vulnerability of being randomly subjected to the standard FDI Regulations, SEBI Takeover Code provisions, notifications under Securities Contract Regulation Act, on put options and some recent court rulings.

Regulatory space: A safe haven for private equity

If China haunts India&rsquo;s &lsquo;Look East&rsquo; policy, so does it the &lsquo;Look West&rsquo; outreach to the Gulf.

Sanjaya Baru: China in Gulf

The consumer law in India will apply to foreign carriers in addition to the Carriers Act and international conventions, the Supreme Court stated last week in the case, Trans Mediterranean Airways vs Universal Exports. The remedy available under the Carriers Act by way of a suit will not bar a consumer complaint under the Consumer Protection Act, the court clarified. This is because the remedy by way of a consumer complaint is in addition to other remedies and not in derogation of them. This is made clear by the Consumer Protection Act itself. In this case, an exporter of garments sent a consignment from Mumbai to Madrid via Amsterdam. There was some confusion with regard to the address of the consignee and therefore it was not delivered to the proper address. This led to the dispute. The Indian exporter moved the National Consumer Commission in Delhi.

Foreign carriers subject to Indian consumer law: SC 

The 2011 International Fiscal Association (IFA) congress opened on 9/11 at the Paris convention center to show solidarity on the 10th anniversary of terror attacks. This year&rsquo;s Congress was attended by over 2400 participants representing over 50 countries, drawing international tax experts from the profession, academia, tax administrators &amp; tax judges. Set up after the First World War, IFA is the world&rsquo;s leading non-governmental, body engaged in research in the areas of tax &amp; fiscal matters. The non-partisan nature of IFA prohibits it from lobbying with the Governments. The annual congress affords an opportunity to debate researched topics on financial &amp; economic aspects of taxation .The research papers and congress deliberations serve as useful guidance to countries including bodies such as the OECD, G7, the UN and lately G20 in formulation of fiscal policies. The week is an enriching experience and considered as achieving &lsquo;Tax Nirvana &lsquo; .

2011 IFA Congress @ Paris: Incredible India

India and China are currently holding their first-ever Strategic Economic Dialogue (SED). This is along the lines of a similar dialogue between the US and China, and to that extent, is a Great Powers powwow. One is on the verge of Great Power status; the other is just a seeker. One projects hard power and membership of the United Nations Security Council (UNSC); the other is the soft-power mascot, knocking on UNSC&rsquo;s door. Whatever may be their differences, they take each other seriously.

Ajit Ranade: Benefiting from Chinese FDI

Looking into the future often entails an extrapolation of the recent past. Growth is rapid in emerging economies like China and India, while it is sluggish in the US and Europe. If this relative advantage is projected into the future, there are no prizes for guessing that the former countries will overtake the latter. The acronym Brics became complete with the inclusion of Brazil and Russia. Brazil&rsquo;s economy is expected to be larger than Italy&rsquo;s by 2020; India and Russia will be larger than Spain, Canada or Italy. China is already the world&rsquo;s second-largest economy and is rapidly closing in on the US.

N Chandra Mohan: Future engines of global growth?

Watch an IPL match live for Rs 10&rdquo; was the promise. The first truly inclusive success story of free India, mobile telephony, promised to carry the nearly 850 million mobile subscribers to the next giant leap &mdash; mobile applications such as mobile commerce, mobile trading, live TV on mobile and so on. This was back in early 2010 around the time of the 3G spectrum auction process, which culminated in a government revenue windfall of $25 billion and was lauded as the near-perfect way to allocate state resources.

Praveen Chakravarty: Resource Curse or Winner's Curse ? What's worse?

The draft Approach Paper for the Twelfth Five-Year Plan, prepared by the Planning Commission, makes several interesting observations about India&rsquo;s energy sector and its problems. You may like to compliment the Planning Commission for its candour, but it is likely that such forthright views have emerged simply because the government&rsquo;s apex think tank realises it is helpless about the rot that has set in.

A K Bhattacharya: Addressing the energy crisis

Following the 11.4 per cent decline in the dollar value of the rupee over barely a quarter, the sharp slump of last week has further complicated an already tricky situation for the Reserve Bank of India (RBI). Not surprisingly, RBI Deputy Governor Subir Gokarn has expressed &ldquo;concern&rdquo; about the sharp depreciation within &ldquo;such a short period of time&rdquo;. It is hard to predict what the ramifications will be, given that the depreciation has varying implications for different economic actors. While RBI has been slow to intervene in the foreign exchange market, and it had reasons for being slow, it may have no option but to act with greater alacrity in days to come. The depreciation in the dollar value of the rupee is evidently owing to foreign capital seeking a safe haven in the US dollar, in response to the volatility currently roiling global financial markets, especially the euro area.

Riding out the storm

When India&rsquo;s Commerce and Industry Minister Anand Sharma met his counterpart in Beijing last year, he spoke mainly about India&rsquo;s yawning trade deficit and China agreed that this was a problem that needed fixing. The trade deficit has since got bigger and Indian businesses complain that they still play on a non-level playing field when it comes to China. Yet, when the deputy chairman of the Planning Commission, Montek Singh Ahluwalia, sat down with his counterpart, Zhang Ping, chairman of the National Development and Reform Commission, they chose to focus on the big picture, the long run and the global situation, avoiding the thorny subject of bilateral trade.

Business across borders

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