|
A
MOTLEY COLLECTION OF BUSINESS AND ECONOMIC NEWS |
|
|
 Iran gas will be cheapest for India
IA World Bank analysis shows that the proposed pipeline from Iran could bring gas to Mumbai at a cost one-third cheaper than the closest alternative, according to a top bank official. It also said Bangladesh should sell gas to India for the benefit of the entire region.
Such economic home truths could be used to counter political opposition to development projects like that of the US to the Iran gas pipeline, said Praful Patel, World Bank vice-president for the South Asia region.
Similarly, Bangladesh should allow India to use its gas for the benefit of the region as any value addition by Dhaka itself would not be cost effective, he said on the eve of the April 3-4 SAARC Summit in New Delhi, where India will take over the rotating chairmanship.
Citing such examples, Patel said there are clear signs that policymakers and the private sector in South Asia are pushing for closer regional integration as an unprecedented growth, averaging close to 6 per cent per year since the 1990s, has created a new momentum for it.
According to a recent World Bank study, South Asia is the least integrated region in the world. Intra-regional trade is less than 2 per cent of GDP, compared with more than 20 per cent for East
Asia.
|
|
|
 Hindujas plan to invest in UAE realty
NRI businessmen promoted Hinduja Group announced plans to invest over Rs 5,500 crore in health care in India and property development business in UAE, where it is also exploring setting up an automobile unit. The Hinduja Group, which has interests in automobile, oil, IT, banking and health care, signed separate agreements with UAE's state-run firms to pursue development of commercial properties and resorts in the UAE, besides setting up medi-cities, hospitals and day care centres in India.
The group has forged a joint venture with Limitless LLC, a subsidiary of Dubai World, for the health care business, which would see an investment of $1 billion (nearly Rs 4,400 crore) in two to three years.
The project involves setting up of medi-cities in Delhi, Mumbai, Bangalore and Hyderabad with about 2,000 beds.
The investment would most probably come through the group's listed entity in India, Hinduja TMT, Hinduja Group Chairman (India) Ashok P. Hinduja said.
"As Hinduja TMT is a listed company, we have to seek the approval of the board... The group will hold 51 per cent stake in the joint venture with Limitless (the remaining 49 per cent)," he added.
|
|
|
 SEZ developers redraw plans
HDevelopers of special economic zones (SEZs) may have to modify their plans according to the new norms announced by the empowered group of ministers, limiting the size of the zones to 5,000 hectares (around 12,500 acres) and raising the share of the area in them used for principal activities to half, up from the existing 35 per cent.
At the same time, while some SEZ developers hinted that the government might have done them a favour by allowing them to procure land directly from landowners, others felt the government withdrawing itself from the land acquisition process could lead to a logistics nightmare in property title searches.
“The policy will help the smaller SEZs but not the larger ones,” said Mohandas Pai, a director of Infosys Technologies. “In this country it is difficult to find a piece of land—1,000 hectares or more—without inhabitants. It will be impossible for the developers of SEZs to acquire such plots of land,” he added.
An SEZ developer said on condition of anonymity that raising the area of core activity to 50 per cent of a declared zone would jeopardise the viability of SEZs. “Developers will now have to work backwards to achieve financial viability,” he said.
|
|
|
 Kamal Nath hints at duty cuts
Under pressure from the US and the European Union, India has hinted that it is open to the idea of reducing customs duties on wines and spirits. “India wants to avoid the matter going to the WTO’s dispute settlement body. I hope a solution can be found as the matter is being discussed at the highest level,” Commerce and Industry Minister Kamal Nath said after meeting EU Agriculture Commissioner Mariann Fischer Boel.
Both the EU and the US have threatened to move the dispute settlement mechanism of the World Trade Organisation (WTO) over customs duties India imposes on imported wine and distilled spirits.
The effective duty on imported wine and distilled spirits such as whisky range from approximately 150 per cent to 550 per cent.
The US has said in the WTO that India has committed that its tariffs on wine and spirits will not exceed 150 per cent.
“With its fast-growing middle class, India could be an important export market for American wines and distilled spirits if not for these layers of duties. We have raised the issue with the Indian government on several occasions over a number of years. We hope the matter can be successfully resolved in WTO consultations,” said US Trade Representative Susan C. Schwab.
|
|
|
 India ready to slash luxury goods duties
India is ready to cut import duties on luxury goods from overseas, but also wants to guard local manufacturers from unfair competition while aiming to boost the use of Indian materials by global labels in the field, Commerce and Industry Minister Kamal Nath said.
“We don’t want China to do to us what they did to you,” he joked to his French counterpart Christine Lagarde.
Nath suggested that luxury goods, many of which carry a 35 per cent import duty that makes it easier for rich customers to shop for them on their overseas trips, could follow the principle being adopted to tax wines, in which the costlier labels attract lower duties.
He said Indian households with an annual income of over $100,000 numbered two million and were growing at 14 per cent a year, but India also had 300 million people surviving on less than $1 a day. Seeking a way out of the “great paradox,” Nath said India offered strong intellectual property protection and a 25-million strong domestic market to foreign firms.
He asked Indian luxury goods makers to take on the world. “I am sure they are getting bored of French and Italian luxury brands,” he joked.
|
|
|
|
|
|
|
|
|
May 2007
|
|
|
|
|
|
