23 November 2011
Should India Revalue the Rupee?
Indian Rupee INR has fallen again now to a new historic low of Rs. 52.76/ 1 USD$. At this rate it will touch Rs 58/$ by end of 2012. Now as we say that India is growing as an economic power is it possible to allow its currency to fall at this rate. Currently Indian Rupee is one of the weakest currencies of the top 10 economic powers. How can we say India as an economic power when its actual power i.e. its currency is one of the weakest in the world. Indian government is fuelling inflation by not revaluing the rupee as it says that it will hurt IT and Exports? How? Is India an export oriented country? Then let me point out that Chinese Yaun and Thai Bhat are both stronger than the rupee and both countries export far more goods than India. India imports large amount of cured oil which cost us USD to pay our vendors. Why can't Indian Government force these countries to accept Rupees rather than USD to pay for our oil requirements. Iran recently agreed for the same, but our government made the payments in Euros rather than Indian Rupee. Do we print Euros or USD to give these countries? No so the best option is to make payments in Indian Rupee. We should make agreements with all our trade partners for a currency Swap program which will allow these countries to buy Indian Rupees and pay in them for goods imported from us. This will also revalue our currency and allow it to be accepted world wide.
03 September 2011
Gold seen above Rs 28,000/10 gms
MUMBAI: India's gold futures are likely to extend last week's gains on Monday morning to hit a fresh peak and may rise above Rs 28,000, bolstered by a rally overseas and a weak Indian rupee, analysts said.
International spot gold surged 1.4 percent to score an all-time high for a third consecutive session on Monday, as nervous investors fled to the safety of the bullion amid fears of another U.S. recession and the euro zone's debt crisis.
The most-traded gold for October delivery on the Multi Commodity Exchange (MCX) closed 1.47 percent higher at 27,954 rupees per 10 grams in the previous session. It hit a record peak of 27,989 rupees on Saturday.
The rupee plays an important role in determining the landed cost of the yellow metal and copper, which are quoted in dollars.
Indian rupee weakened in early trades on Monday to levels not seen in nearly nine months due to bunched-up dollar outflows following a local forex market holiday on Friday.
COPPER
Copper futures on MCX are likely to edge higher chasing an upside in the London market and as the rupee weakens, analysts said.
London copper inched up on Monday as investors focused on potential supply disruptions in Chile and a general positive demand outlook, but worries about a global economic slowdown continued to weigh on sentiment.
The most-active copper for August delivery last closed 0.14 percent lower at 402.9 rupees per kg.
International spot gold surged 1.4 percent to score an all-time high for a third consecutive session on Monday, as nervous investors fled to the safety of the bullion amid fears of another U.S. recession and the euro zone's debt crisis.
The most-traded gold for October delivery on the Multi Commodity Exchange (MCX) closed 1.47 percent higher at 27,954 rupees per 10 grams in the previous session. It hit a record peak of 27,989 rupees on Saturday.
The rupee plays an important role in determining the landed cost of the yellow metal and copper, which are quoted in dollars.
Indian rupee weakened in early trades on Monday to levels not seen in nearly nine months due to bunched-up dollar outflows following a local forex market holiday on Friday.
COPPER
Copper futures on MCX are likely to edge higher chasing an upside in the London market and as the rupee weakens, analysts said.
London copper inched up on Monday as investors focused on potential supply disruptions in Chile and a general positive demand outlook, but worries about a global economic slowdown continued to weigh on sentiment.
The most-active copper for August delivery last closed 0.14 percent lower at 402.9 rupees per kg.
25 July 2011
Prahaar: A tactical missile in Army's arsenal
India's ability to win a quick, pre-emptive war against Pakistan has just been enhanced by a useful new set of teeth.
On July 22 morning, at a missile test range in Balasore, Orissa, the Defence Research and Development Organisation launched its first-ever Prahaar missile, a mobile, truck-mounted rocket that can strike within 10 metres of a target that is 150 kilometres away.
The Prahaar gives a huge boost to India's military doctrine of 'Cold Start'.
This method of war would be adopted as retaliation for any grave Pakistani provocation, such as another 26/11 Mumbai-style terror attack.
Cold Start involves multiple, simultaneous invasions of Pakistani territory with quickly assembled Indian Army battle groups, well before Pakistani forces can reach the border and occupy defensive positions.
The Prahaar would provide the army's invading battle groups with lethal fire support, striking Pakistani headquarters far behind the frontlines, and destroying roads, railways, bridges and other communications infrastructure that are essential for rushing Pakistani forces to the border.
Unlike the DRDO's Prithvi missile, which was introduced into service as a 150-kilometre range, nuclear-capable ballistic missile, the Prahaar is categorised as a "battlefield tactical missile".
Its maximum payload of 200 kg does not allow the Prahaar to carry a nuclear weapon (which are seldom under 500 kg). But while nuclear capable ballistic missiles are useful only in the nightmarish eventuality of nuclear war, the Prahaar can be useful at every stage of a Cold Start campaign.
Being a solid-fuel missile, it can swing into action quickly in response to rapidly evolving situations; and its short flight time -- just 250 seconds, or just over four minutes -- allows it to engage fleeting targets that would disappear in the time that it would take to scramble and fly in fighter aircraft.
Furthermore, the Prahaar's range of warheads, which the DRDO has developed, gives the Indian Army multiple options. It could carry a cargo warhead containing bomblets that disperse over a wide area, killing any exposed troops.
Alternatively, it could carry air-delivered mines, which spread across a piece of terrain, denying passage to enemy infantry or tanks. Or the Prahaar could carry a single, high explosive warhead that can demolish even the best-protected target or critical infrastructure.
So far, many of these targets have fallen to the lot of the Indian Air Force. But in a Cold War situation the emphasis of the IAF, especially during the initial crucial days, would focus on attacking the Pakistan Air Force to prevent it from causing casualties in the Indian Army's attacking battle groups, or stopping their advance.
By using the Prahaar against enemy entities that are beyond the range of artillery guns or rockets (30-40 kilometres); or for interdicting enemy reserves and logistic columns far behind the lines, IAF fighters would be freed up for 'counter-air operations' against the PAF.
If, as is more than likely, the IAF buys the Prahaar in numbers, the missile could be effectively launched against forward Pakistani air bases, destroying fighters on the ground and damaging runways, air defence radars and air control networks.
Currently, manned fighter aircraft perform these tasks, often at the cost of pilots' lives and shot down fighters. Pakistan has no battlefield missile similar to the Prahaar.
Over recent years, Pakistan's scientists have focused on developing the Hatf-9 (or Nasr) short range, ballistic missile, which seeks to deter a Cold Start campaign with its ability to deliver a nuclear warhead to a maximum distance of 60 kilometres.
Since most Indian cities are farther than that, strategists believe that the Hatf-9 is intended for counter-force targeting, i.e. against one or more of the Indian Army's integrated battle groups inside Pakistani territory.
This would serve notice of Pakistani resolve to carry out a counter-value strike, which would take the form of a longer-range missile, carrying a nuclear warhead to one or more large Indian cities.
According to the DRDO, the Prahaar is comparable to the US Army's Advanced Tactical Missile System (ATACMS), which was extensively used during the invasion of Iraq in 2003.
The Prahaar is launched from a Road Mobile System developed by Larsen & Toubro, which can carry six missiles.
All six can be fired in a salvo, each of them against a different target.
According to the DRDO, the Prahaar was developed in a period of just two years.
On July 22 morning, at a missile test range in Balasore, Orissa, the Defence Research and Development Organisation launched its first-ever Prahaar missile, a mobile, truck-mounted rocket that can strike within 10 metres of a target that is 150 kilometres away.
The Prahaar gives a huge boost to India's military doctrine of 'Cold Start'.
This method of war would be adopted as retaliation for any grave Pakistani provocation, such as another 26/11 Mumbai-style terror attack.
Cold Start involves multiple, simultaneous invasions of Pakistani territory with quickly assembled Indian Army battle groups, well before Pakistani forces can reach the border and occupy defensive positions.
The Prahaar would provide the army's invading battle groups with lethal fire support, striking Pakistani headquarters far behind the frontlines, and destroying roads, railways, bridges and other communications infrastructure that are essential for rushing Pakistani forces to the border.
Unlike the DRDO's Prithvi missile, which was introduced into service as a 150-kilometre range, nuclear-capable ballistic missile, the Prahaar is categorised as a "battlefield tactical missile".
Its maximum payload of 200 kg does not allow the Prahaar to carry a nuclear weapon (which are seldom under 500 kg). But while nuclear capable ballistic missiles are useful only in the nightmarish eventuality of nuclear war, the Prahaar can be useful at every stage of a Cold Start campaign.
Being a solid-fuel missile, it can swing into action quickly in response to rapidly evolving situations; and its short flight time -- just 250 seconds, or just over four minutes -- allows it to engage fleeting targets that would disappear in the time that it would take to scramble and fly in fighter aircraft.
Furthermore, the Prahaar's range of warheads, which the DRDO has developed, gives the Indian Army multiple options. It could carry a cargo warhead containing bomblets that disperse over a wide area, killing any exposed troops.
Alternatively, it could carry air-delivered mines, which spread across a piece of terrain, denying passage to enemy infantry or tanks. Or the Prahaar could carry a single, high explosive warhead that can demolish even the best-protected target or critical infrastructure.
So far, many of these targets have fallen to the lot of the Indian Air Force. But in a Cold War situation the emphasis of the IAF, especially during the initial crucial days, would focus on attacking the Pakistan Air Force to prevent it from causing casualties in the Indian Army's attacking battle groups, or stopping their advance.
By using the Prahaar against enemy entities that are beyond the range of artillery guns or rockets (30-40 kilometres); or for interdicting enemy reserves and logistic columns far behind the lines, IAF fighters would be freed up for 'counter-air operations' against the PAF.
If, as is more than likely, the IAF buys the Prahaar in numbers, the missile could be effectively launched against forward Pakistani air bases, destroying fighters on the ground and damaging runways, air defence radars and air control networks.
Currently, manned fighter aircraft perform these tasks, often at the cost of pilots' lives and shot down fighters. Pakistan has no battlefield missile similar to the Prahaar.
Over recent years, Pakistan's scientists have focused on developing the Hatf-9 (or Nasr) short range, ballistic missile, which seeks to deter a Cold Start campaign with its ability to deliver a nuclear warhead to a maximum distance of 60 kilometres.
Since most Indian cities are farther than that, strategists believe that the Hatf-9 is intended for counter-force targeting, i.e. against one or more of the Indian Army's integrated battle groups inside Pakistani territory.
This would serve notice of Pakistani resolve to carry out a counter-value strike, which would take the form of a longer-range missile, carrying a nuclear warhead to one or more large Indian cities.
According to the DRDO, the Prahaar is comparable to the US Army's Advanced Tactical Missile System (ATACMS), which was extensively used during the invasion of Iraq in 2003.
The Prahaar is launched from a Road Mobile System developed by Larsen & Toubro, which can carry six missiles.
All six can be fired in a salvo, each of them against a different target.
According to the DRDO, the Prahaar was developed in a period of just two years.
17 July 2011
Indonesia invites Indian investments in infrastructure
CHENNAI: Indonesia has invited Indian industrialists to invest in infrastructure sectors and also look at it as a source of many other products apart from coal in order to expand bilateral trade and investments between the two countries, its envoy said on Saturday.
"Indonesia is not just a large coal producer. We have other national resources which India can look at. We would like to grow the bilateral trade between India and Indonesia to $25 billion by 2015 from the current $13 billion," Indonesian Ambassador to India Andi M. Ghalib said here at a meeting with industrialists organised by Confederation of Indian Industry (CII).
Referring to the 32 memorandums of understanding (MOU) signed between India and Indonesia early this year, he said 18 are business-to-business with an investment/business potential of around $16 billion.
Inviting Indian industrialists to invest in infrastructure sectors in Indonesia, Ghalib said the discussions between the two countries on signing a Comprehensive Economic Cooperation Agreement (CECA) will be held.
Investment cooperation between the two countries is also increasing by the year. India's investment in Indonesia has increased from $11.6 million in 2007 to $44 million in 2010.
Indian investment is present in various industries including mining, automotives and machinery, clothing, agriculture and chemicals.
India is also Indonesia's largest buyer of crude palm oil and an importer of its mining, petroleum and paper products.
On its part, India exports refined petroleum products, wheat, rice, sugar and steel to Indonesia.
According to Ghalib, the two countries are in the process of setting up an Eminent Persons' Group (EPG) to develop 'Vision Statement 2025' for the Indonesia-India strategic partnership.
The EPG would guide the future progress and prepare a blue print of Indonesia-India relations over the next 15 years.
Ghalib said Garuda Airlines is in discussion with India in securing landing rights in couple of major Indian cities.
"Indonesia is not just a large coal producer. We have other national resources which India can look at. We would like to grow the bilateral trade between India and Indonesia to $25 billion by 2015 from the current $13 billion," Indonesian Ambassador to India Andi M. Ghalib said here at a meeting with industrialists organised by Confederation of Indian Industry (CII).
Referring to the 32 memorandums of understanding (MOU) signed between India and Indonesia early this year, he said 18 are business-to-business with an investment/business potential of around $16 billion.
Inviting Indian industrialists to invest in infrastructure sectors in Indonesia, Ghalib said the discussions between the two countries on signing a Comprehensive Economic Cooperation Agreement (CECA) will be held.
Investment cooperation between the two countries is also increasing by the year. India's investment in Indonesia has increased from $11.6 million in 2007 to $44 million in 2010.
Indian investment is present in various industries including mining, automotives and machinery, clothing, agriculture and chemicals.
India is also Indonesia's largest buyer of crude palm oil and an importer of its mining, petroleum and paper products.
On its part, India exports refined petroleum products, wheat, rice, sugar and steel to Indonesia.
According to Ghalib, the two countries are in the process of setting up an Eminent Persons' Group (EPG) to develop 'Vision Statement 2025' for the Indonesia-India strategic partnership.
The EPG would guide the future progress and prepare a blue print of Indonesia-India relations over the next 15 years.
Ghalib said Garuda Airlines is in discussion with India in securing landing rights in couple of major Indian cities.
27 June 2011
Rupee emerging as best performer on rate allure
The biggest interest-rate increases among Asia’s largest economies may turn the Indian rupee into the region’s best-performing currency as investors gain confidence in the central bank’s efforts to damp inflation.
The currency, whose 0.76% total return this month is Asia’s best performance, will gain 13% by the end of June 2012, according to the median estimate of 10 analysts surveyed by Bloomberg in the past month. Benchmark bonds are headed for their first monthly gain since January as Europe’s debt crisis clouds the outlook for the world economy, with the 10-year yield falling 20 bps to 8.21%.
Any further increase in borrowing costs must take into account the impact of “recent global developments” on domestic growth, the Reserve Bank of India said last week after raising rates for a tenth time in 15 months. The yield on India’s notes due in a decade is more than two times the rate in the...UK and almost three times that in the US.
“I have started to buy a bit of bonds in India as the yields are at more-attractive levels as we are now approaching the end of the rising interest-rate cycle in India,” said Philippe Petit, a senior investment manager in Singapore at Pictet Asset Management. “The prospects of slower growth and an eventual decline in inflation also add to the medium-term appeal.”
Growth in the South Asian economy may slow, which “may be unavoidable in bringing inflation under control,” the RBI said on June 16, when it raised the repurchase rate by 25 bps to 7.50%. The central bank has raised its lending rate by 250 bps since the start of March 2010, the most of any monetary authority in Asia’s 10 biggest economies.
Excluding interest-rate returns, the rupee will appreciate 2.1% to 44 per dollar by the end of June 2012, according to...
the median forecast of analysts surveyed by Bloomberg. The median prediction has climbed to 44 from 45.5 on June 9 as strategists led by Standard Chartered updated their forecasts. The currency, which gained 0.1% to 44.95 per dollar on Tuesday, will reach 42 by the end of this year, according to HSBC Holdings.
“We do like the rupee very much,” Sergey Dergachev, a senior portfolio manager at Union Investment Privatfonds in Frankfurt, said. “The RBI is the frontrunner and has been more proactive than central banks in Malaysia, Indonesia or the Philippines due to inflation.” Union Investment has added to holdings of the rupee this quarter, he said.
This month’s rally in India’s bonds was stoked by data on June 1 that showed exports grew 34% in April, the slowest pace in three months. A day earlier, government data showed GDP rose 7.8% in the three months ended March, the least in...
five quarters. The yield on the 7.8% securities due April 2021 rose for the first time in four days on Tuesday, gaining 2 bps, according to RBI’s trading system.
Global funds boosted ownership of India’s debt by $6.6 billion to $20.9 billion in the past year as the difference in yields between India’s notes due in a decade and similar-maturity securities in the US widened 91 bps to 525. Rupee bonds have returned 1.5% this month, the best performance among 10 Asian local-currency debt markets outside Japan, according to indexes compiled by HSBC Holdings.
The spread between India’s one and 10-year notes has narrowed to 13 bps from this year’s high of 79 bps. The yield curve is a gauge of investors’ expectations on inflation and economic growth.
“By the end of July, we see some decent opportunities to make allocations into the rupee,” Kenneth Akintewe, a Singapore-based money manager at Aberdeen Asset...
Management, said. “Indian bonds are attractive from the point of view of relative yields in the region. If you could freely allocate funds at the short end of the curve without any restrictions, that would be an attractive trade.”
Aberdeen has exhausted the Indian government-imposed investment quota in rupee debt, he said. The South Asian economy allocated investment limits for R7,500 crore ($1.7 billion) of government bonds and R2,700 crore of corporate notes to foreign investors at an auction on March 15, according to Sebi.
“The rupee will appreciate because inflation should begin to come off by the end of the year and the rate-hike cycle should be largely behind us,” Priyanka Kishore, a foreign-exchange strategist at Standard Chartered, said....
The currency, whose 0.76% total return this month is Asia’s best performance, will gain 13% by the end of June 2012, according to the median estimate of 10 analysts surveyed by Bloomberg in the past month. Benchmark bonds are headed for their first monthly gain since January as Europe’s debt crisis clouds the outlook for the world economy, with the 10-year yield falling 20 bps to 8.21%.
Any further increase in borrowing costs must take into account the impact of “recent global developments” on domestic growth, the Reserve Bank of India said last week after raising rates for a tenth time in 15 months. The yield on India’s notes due in a decade is more than two times the rate in the...UK and almost three times that in the US.
“I have started to buy a bit of bonds in India as the yields are at more-attractive levels as we are now approaching the end of the rising interest-rate cycle in India,” said Philippe Petit, a senior investment manager in Singapore at Pictet Asset Management. “The prospects of slower growth and an eventual decline in inflation also add to the medium-term appeal.”
Growth in the South Asian economy may slow, which “may be unavoidable in bringing inflation under control,” the RBI said on June 16, when it raised the repurchase rate by 25 bps to 7.50%. The central bank has raised its lending rate by 250 bps since the start of March 2010, the most of any monetary authority in Asia’s 10 biggest economies.
Excluding interest-rate returns, the rupee will appreciate 2.1% to 44 per dollar by the end of June 2012, according to...
the median forecast of analysts surveyed by Bloomberg. The median prediction has climbed to 44 from 45.5 on June 9 as strategists led by Standard Chartered updated their forecasts. The currency, which gained 0.1% to 44.95 per dollar on Tuesday, will reach 42 by the end of this year, according to HSBC Holdings.
“We do like the rupee very much,” Sergey Dergachev, a senior portfolio manager at Union Investment Privatfonds in Frankfurt, said. “The RBI is the frontrunner and has been more proactive than central banks in Malaysia, Indonesia or the Philippines due to inflation.” Union Investment has added to holdings of the rupee this quarter, he said.
This month’s rally in India’s bonds was stoked by data on June 1 that showed exports grew 34% in April, the slowest pace in three months. A day earlier, government data showed GDP rose 7.8% in the three months ended March, the least in...
five quarters. The yield on the 7.8% securities due April 2021 rose for the first time in four days on Tuesday, gaining 2 bps, according to RBI’s trading system.
Global funds boosted ownership of India’s debt by $6.6 billion to $20.9 billion in the past year as the difference in yields between India’s notes due in a decade and similar-maturity securities in the US widened 91 bps to 525. Rupee bonds have returned 1.5% this month, the best performance among 10 Asian local-currency debt markets outside Japan, according to indexes compiled by HSBC Holdings.
The spread between India’s one and 10-year notes has narrowed to 13 bps from this year’s high of 79 bps. The yield curve is a gauge of investors’ expectations on inflation and economic growth.
“By the end of July, we see some decent opportunities to make allocations into the rupee,” Kenneth Akintewe, a Singapore-based money manager at Aberdeen Asset...
Management, said. “Indian bonds are attractive from the point of view of relative yields in the region. If you could freely allocate funds at the short end of the curve without any restrictions, that would be an attractive trade.”
Aberdeen has exhausted the Indian government-imposed investment quota in rupee debt, he said. The South Asian economy allocated investment limits for R7,500 crore ($1.7 billion) of government bonds and R2,700 crore of corporate notes to foreign investors at an auction on March 15, according to Sebi.
“The rupee will appreciate because inflation should begin to come off by the end of the year and the rate-hike cycle should be largely behind us,” Priyanka Kishore, a foreign-exchange strategist at Standard Chartered, said....
Tata Nano Expands in South Asia
The Tata Nano is now in its first overseas markets—Sri Lanka and Nepal—where it arrived in late May and over the weekend, respectively.
Eranga Jayawardena/Associated Press Photo
People in Sri Lanka, the Nano’s first overseas market, checked out the car at a Colombo showroom. A spokesman for Tata Motors Pvt. Ltd. said that these destinations were chosen not just for their proximity.
“Tata Nano is directed at a certain customer profile,” said Debasis Ray, adding that these nations fit the bill.
The car, launched by Tata in India in 2009 and originally billed as the 100,000-rupee car (about $2,200), is directed at families looking to upgrade from a scooter or motorcycle to their first car. Mr. Ray said that although the Nano is more expensive in Nepal and Sri Lanka than in India because of customs duties, it is still the most affordable car in those markets.
In landlocked Nepal, the car starts at close to 800,000 Nepali rupees (about $11,000), while in Sri Lanka, it starts at around 900,000 Sri Lankan rupees ($8,200).
Colombo newspapers reported this month that some Sri Lankans weren’t very happy about the car’s arrival.
Sri Lankan motorized rickshaw drivers last week protested against the Nano, expressing concern that the car, which is being used by a budget taxi service, could lead to them losing their means of livelihood.
Mr. Ray said that about 500 Nano vehicles had shipped to Sri Lanka so far. Taxi service Nano Cabs director Anusha Dharmadasa said they have only acquired 40 Nanos so far, all painted bright yellow, but the service hopes to scale up to 200 by the end of the year.
“The other cab services should be concerned, not the three-wheelers,” said Ms. Dharmadasa.
The first customers overseas aren’t necessarily all from the income bracket that car is pegged at. In Sri Lanka, the first person to buy the Nano was Jayanth Dharmadasa, of the country’s Nawaloka Group business family (Mr. Dharmadasa is not related to the proprietor of Nano Cabs).
Mr. Dharmadasa said over the phone Monday that he already owns several Tata vehicles and was curious about the “cheapest car in the world.” His verdict?
“Very good,” said Mr. Dharmadasa. “Better than what I expected at that price.”
Tata’s Mr. Ray said that the car could eventually make it to other South Asian nations, like Bangladesh. But it’s not likely to ever make it to Pakistan since both India and Pakistan restrict imports from one another on various grounds, making trade between the two nations very difficult.
Eranga Jayawardena/Associated Press Photo
People in Sri Lanka, the Nano’s first overseas market, checked out the car at a Colombo showroom. A spokesman for Tata Motors Pvt. Ltd. said that these destinations were chosen not just for their proximity.
“Tata Nano is directed at a certain customer profile,” said Debasis Ray, adding that these nations fit the bill.
The car, launched by Tata in India in 2009 and originally billed as the 100,000-rupee car (about $2,200), is directed at families looking to upgrade from a scooter or motorcycle to their first car. Mr. Ray said that although the Nano is more expensive in Nepal and Sri Lanka than in India because of customs duties, it is still the most affordable car in those markets.
In landlocked Nepal, the car starts at close to 800,000 Nepali rupees (about $11,000), while in Sri Lanka, it starts at around 900,000 Sri Lankan rupees ($8,200).
Colombo newspapers reported this month that some Sri Lankans weren’t very happy about the car’s arrival.
Sri Lankan motorized rickshaw drivers last week protested against the Nano, expressing concern that the car, which is being used by a budget taxi service, could lead to them losing their means of livelihood.
Mr. Ray said that about 500 Nano vehicles had shipped to Sri Lanka so far. Taxi service Nano Cabs director Anusha Dharmadasa said they have only acquired 40 Nanos so far, all painted bright yellow, but the service hopes to scale up to 200 by the end of the year.
“The other cab services should be concerned, not the three-wheelers,” said Ms. Dharmadasa.
The first customers overseas aren’t necessarily all from the income bracket that car is pegged at. In Sri Lanka, the first person to buy the Nano was Jayanth Dharmadasa, of the country’s Nawaloka Group business family (Mr. Dharmadasa is not related to the proprietor of Nano Cabs).
Mr. Dharmadasa said over the phone Monday that he already owns several Tata vehicles and was curious about the “cheapest car in the world.” His verdict?
“Very good,” said Mr. Dharmadasa. “Better than what I expected at that price.”
Tata’s Mr. Ray said that the car could eventually make it to other South Asian nations, like Bangladesh. But it’s not likely to ever make it to Pakistan since both India and Pakistan restrict imports from one another on various grounds, making trade between the two nations very difficult.
03 May 2011
RBI lowers GDP forecast for FY'12 to 8%
RBI lowers GDP forecast for FY'12 to 8%
Facing downside risks from the sovereign debt crisis in the euro-zone nations and high oil prices, the Indian economy is likely to grow 8 per cent in 2011-12, the Reserve Bank said on Tuesday.
RBI's GDP growth projection is lower than the 9 per cent estimates of the government.
RBI Governor D Subbarao [ Images ] listed risks to the economy in the annual credit policy speech. They include, sovereign debt problems in the euro-zone, high commodity prices, especially of oil, and accentuation of inflationary pressure in the emerging market economies.
The central bank's projections are "based on the assumption of a normal monsoon, and crude oil prices averaging $110 a barrel over the full year 2011-12," he said, adding that "our baseline projection of real GDP growth is around 8 per cent".
On back of estimated 8.6 per cent GDP growth in 2010-11, the government had projected the country's economy to expand at 9 per cent (plus or minus 0.25 per cent) this fiscal. It had expanded at 8 per cent in 2009-10.
The International Monetary Fund and the World Bank had forecast that India's [ Images ] economy would grow at 8 per cent and 9 per cent, respectively.
Subbarao, however, warned that global events may impact the domestic economy.
"Should the global recovery slacken...it will impact our economy through trade, finance and confidence channels," he said.
Recent political turmoil in Egypt [ Images ] and Tunisia, followed by the ongoing civil war in Libya, a major oil exporter and OPEC member, have pushed up global crude prices.
On growth-inflation trade-off, Subbarao said high and persistent inflation undermines growth by creating uncertainty for investors, and driving up inflationary expectations.
"An environment of price stability is a pre-condition for sustaining growth in the medium-term," he said.
Facing downside risks from the sovereign debt crisis in the euro-zone nations and high oil prices, the Indian economy is likely to grow 8 per cent in 2011-12, the Reserve Bank said on Tuesday.
RBI's GDP growth projection is lower than the 9 per cent estimates of the government.
RBI Governor D Subbarao [ Images ] listed risks to the economy in the annual credit policy speech. They include, sovereign debt problems in the euro-zone, high commodity prices, especially of oil, and accentuation of inflationary pressure in the emerging market economies.
The central bank's projections are "based on the assumption of a normal monsoon, and crude oil prices averaging $110 a barrel over the full year 2011-12," he said, adding that "our baseline projection of real GDP growth is around 8 per cent".
On back of estimated 8.6 per cent GDP growth in 2010-11, the government had projected the country's economy to expand at 9 per cent (plus or minus 0.25 per cent) this fiscal. It had expanded at 8 per cent in 2009-10.
The International Monetary Fund and the World Bank had forecast that India's [ Images ] economy would grow at 8 per cent and 9 per cent, respectively.
Subbarao, however, warned that global events may impact the domestic economy.
"Should the global recovery slacken...it will impact our economy through trade, finance and confidence channels," he said.
Recent political turmoil in Egypt [ Images ] and Tunisia, followed by the ongoing civil war in Libya, a major oil exporter and OPEC member, have pushed up global crude prices.
On growth-inflation trade-off, Subbarao said high and persistent inflation undermines growth by creating uncertainty for investors, and driving up inflationary expectations.
"An environment of price stability is a pre-condition for sustaining growth in the medium-term," he said.
01 May 2011
Pakistan inching towards giving MFN status to India
AMRITSAR: Indian Commerce Secretary, Rahul Khullar, who returned after talks with his Pakistani counterpart Zafar Mahmood, said Pakistan is inching ahead to bestow Most Favoured Nation (MFN) status to India.
Khullar, who returned though Attari border check post, said talks on the issue with Pakistan were at an advanced stage and consultations would be
completed by November. He termed the talks with Pakistani commerce secretary as positive.
“We talked on all issues and some important points, including MFN status to India, were discussed in detail and in a highly positive manner,” he said.
“The talks were on specific issues and more will be planned in near future on diverse issues of trade and commerce.”
Commerce secretaries from Pakistan and India met on April 27-28 in Islamabad for 5th round of talks to
further trade and economic relations under the composite dialogue process.
Khullar said he invited Mahmood to India in November, so that talks could be given a final shape.
“We also discussed Lahore-Amritsar trade ties, which need to be strengthened more. With integrated check post getting ready at Attari, trade and commerce will be more strengthened.”
He said that improving trade ties would also work as confidence building measures, ensuring peace and prosperity between the two countries.
Meanwhile, Indian exporters expressed their belief that the trade with Pakistan can jump to $10 billion in three years after the secretary-level meeting this week.
“The bilateral trade will cross $10 billion in next three years, as focus of the joint communique is on the removal of non-tariff barrier which is key to trade expansion,” Ramu Deora, president of Federation of Indian Export Organisations (FIEO), said.
Exporters are upbeat because the statement refers to “immediate necessary” steps to end the discriminatory trade regime. India’s trade with Pakistan is about $2 billion of its global merchandise trade of $595 billion.
According to a study by Indian Council for Research on International Economic Relations (ICRIER), the potential of India, Pakistan trade is $14.3 billion with India exporting goods of about $11 billion and importing $3 billion. Other studies said trade through third countries like United Arab Emirates was much higher at around $3-$5 billion.
The two sides have agreed to consider possibility of a preferential trade deal, ease curbs on investment, banking and relax rules for issuing business visas.
“Businesses can act as a bridge between nations to build political relationships. It is business which is followed by political relationship,” CII president B. Muthuraman said.
“Business community is keen to do business with Pakistan,” Federation of Indian Chambers of Commerce & Industry (FICCI) said.
Analysts said a preferential trade deal would allow the lowering of tariffs or even duty-free import.
The relaxations on investment and banking are significant in light of the bar on Pakistani investments and banks in the country.
Indian officials said relations would be strengthened by the decision to do away with current “positive list” (of items that can be traded) with a “negative list” (a small list of products that require protection and, hence, cannot be traded) within the next six months.
The two sides agreed to examine in two months how to initiate and expand trade in all types of petroleum products and study feasibility of electricity trade. FIEO will take steps to set up a joint chamber with its counterpart in Pakistan. FICCI says potential sectors for trade are agriculture, textiles, surgical goods, and plastics.
Khullar, who returned though Attari border check post, said talks on the issue with Pakistan were at an advanced stage and consultations would be
completed by November. He termed the talks with Pakistani commerce secretary as positive.
“We talked on all issues and some important points, including MFN status to India, were discussed in detail and in a highly positive manner,” he said.
“The talks were on specific issues and more will be planned in near future on diverse issues of trade and commerce.”
Commerce secretaries from Pakistan and India met on April 27-28 in Islamabad for 5th round of talks to
further trade and economic relations under the composite dialogue process.
Khullar said he invited Mahmood to India in November, so that talks could be given a final shape.
“We also discussed Lahore-Amritsar trade ties, which need to be strengthened more. With integrated check post getting ready at Attari, trade and commerce will be more strengthened.”
He said that improving trade ties would also work as confidence building measures, ensuring peace and prosperity between the two countries.
Meanwhile, Indian exporters expressed their belief that the trade with Pakistan can jump to $10 billion in three years after the secretary-level meeting this week.
“The bilateral trade will cross $10 billion in next three years, as focus of the joint communique is on the removal of non-tariff barrier which is key to trade expansion,” Ramu Deora, president of Federation of Indian Export Organisations (FIEO), said.
Exporters are upbeat because the statement refers to “immediate necessary” steps to end the discriminatory trade regime. India’s trade with Pakistan is about $2 billion of its global merchandise trade of $595 billion.
According to a study by Indian Council for Research on International Economic Relations (ICRIER), the potential of India, Pakistan trade is $14.3 billion with India exporting goods of about $11 billion and importing $3 billion. Other studies said trade through third countries like United Arab Emirates was much higher at around $3-$5 billion.
The two sides have agreed to consider possibility of a preferential trade deal, ease curbs on investment, banking and relax rules for issuing business visas.
“Businesses can act as a bridge between nations to build political relationships. It is business which is followed by political relationship,” CII president B. Muthuraman said.
“Business community is keen to do business with Pakistan,” Federation of Indian Chambers of Commerce & Industry (FICCI) said.
Analysts said a preferential trade deal would allow the lowering of tariffs or even duty-free import.
The relaxations on investment and banking are significant in light of the bar on Pakistani investments and banks in the country.
Indian officials said relations would be strengthened by the decision to do away with current “positive list” (of items that can be traded) with a “negative list” (a small list of products that require protection and, hence, cannot be traded) within the next six months.
The two sides agreed to examine in two months how to initiate and expand trade in all types of petroleum products and study feasibility of electricity trade. FIEO will take steps to set up a joint chamber with its counterpart in Pakistan. FICCI says potential sectors for trade are agriculture, textiles, surgical goods, and plastics.
29 April 2011
US enraged over India shooting down F-16, F-18
US enraged over India shooting down F-16, F-18
That the Obama administration, business and industry are deeply disappointed over being rejected for the multi-billion 126 Medium Multi-Role Combat Aircraft deal is a no-brainer. It is palpable.
But there was also seething anger among the senior administration officials -- at State, Commerce and the Pentagon -- and representatives of business and industry that New Delhi's decision was wholly political and much of the finger-pointing was at Defence Minister A K Antony and the Defence Research and Development Organisation.
However, none of the administration officials, business and industry representatives, including those at Boeing and Lockheed that rediff.com spoke too were willing to go on record with their disappointment and angst, and noted that beyond the notification that they had received from the Indian authorities, they were still "in a fact-gathering mode right now'.
Senior diplomatic sources in Washington told rediff.com, "We are awaiting guidance from Delhi before we make any comments."
Meanwhile, speculation was rife that US Ambassador Timothy Roemer's decision to resign was a fall-out from India's decision, particularly since this was apparently one of his topmost priorities to clinch the deal in favour of the United States.
It may be noted here that US President Barack Obama had made a strong pitch in a secret letter to Prime Minister Dr Manmohan Singh making a strong case on behalf of the American defence giants, saying it would cement the Indo-US strategic partnership and be mutually beneficial in creating several thousands of jobs both in the US and India.
One administration official said, "This was always very important for everybody and one needs to take a step back and realize what was at stake here."
"We all should understand that this was far bigger than just another big defence programme. This was the alignment of two of the largest free-market democracies. That's how we had always couched it."
The senior State Department official said, "Given where we are with the military to military ties, counterterrorism collaboration, dialogue on regional security, I mean, everything we've talked about, where there is the logic and momentum to a deeper and strategic relationship between India and the United States. This deal was really seen as something that would go a long way towards building a strong partnership capacity with a key nation in a strategically important region of the world."
"You bet, it was being looked at as an integral pillar of the whole strategic partnership," the official added.
The official continued, "It was seen as an important pillar of the future relationship -- it was seen as a political and strategic alignment if you will, because that's what it signifies. It's a huge programme. It's a 40-year alignment of product and technology, of industrial collaboration."
Another official, pointed out, "Remember, there were only 18 aircraft, which was going to be delivered in fly-away condition. The other 108 have to be manufactured under co-production license with HAL. You are talking about a very high order of magnitude when it comes to industrial collaboration between two countries."
"So, it was not just the companies -- whoever was to win it -- but two countries. The forces of those two countries, sharing information and technology, know-how, capacity building, training with the Indian Air Force, all of which leads to an expanded strategic relationship."
Referring to Obama's personal letter to Dr Singh pushing for the deal, the official said, "It's not often that the President of the United States directly advocates for a key programme."
Industry sources said that both Boeing and Lockheed Martin would be requesting to receive a formal de-brief from the IAF based on the letters they had received, which they acknowledged were similar to the intimation sent to the US ambassador in Delhi.
In a statement, Roemer, acknowledging that he was "deeply disappointed," said he had been assured at the highest levels of the Indian government that the procurement process for the fighter aircraft 'has been and will be transparent and fair'.
The embassy statement said it "was informed on Thursday that the two aircraft offered by the US government through the Foreign Military Sales process were not selected for procurement by the Indian Ministry of Defence."
"We are reviewing the documents received from the Government of India and are respectful of the procurement process," the statement said, but added, "We are, however, deeply disappointed by this news."
Boeing, which had its F-18 on offer, put out a statement saying that "Boeing today was notified that our Super Hornet proposal for India's MMRCA competition was not short listed in the initial down select. We are obviously disappointed with this outcome."
"Our next step is to request and receive a debrief from the Indian Air Force. Once we have reviewed the details, we will make a decision concerning our possible options, always keeping in mind the impact to the Indian Air Force," the statement said.
Boeing added, "We believe we offered the Indian Air Force a fully compliant and best-value multi-role aircraft for the defined mission. We will continue to look for opportunities to help India modernise its armed services and enhance its aerospace industry."
Lockheed, which was hoping that India would pick its F-16 fighter aircraft, had not put out a statement at the time of going to press.
India apparently had short-listed the Eurofighter and the French Rafale as the leading contenders for the deal.
A senior Pentagon official, who recently visited Delhi and met with senior Defence Ministry officials, including Minister Antony and the IAF leadership, told rediff.com: "We have always said that an American selection would have dramatically transformed the strategic relationship for generations to come."
"I mean that's what you talk about. You talk about the deeper and the more meaningful industrial and technology collaboration between the two industries. It would have set a new tone for the geopolitical future for the next 40 years."
The official acknowledged, "We always recognised that yes, you always have the technology decisions, but the political decision was always going to be a major function of this."
"It was always going to come down to a major political decision. That's where the United States as a whole -- not just the US government -- is somewhat dismayed and obviously disappointed with this outcome. Because we truly believed that we had the two best aircraft in the competition, in terms of what is proven, what is operationally there and the level of technology."
This official asserted, "The level of the technology, which was blessed by us from an export control standpoint, is something we provide only to our closest allies. We had gone through a lot of pushing and pulling in our system to get that level of technology blessed. The people in India must realise that that took a lot."
An industry source just couldn't stop talking about the superiority of the American aircraft, and obviously was totally dejected over the Indian rejection and was finding it difficult to accept it.
"After all," he said, "what were we so proud of? We are proud of the fact that what we had offered to the Indian government were two of the most advanced multi-mission combat aircraft in the world. These aircraft, more than anything else, by the way, have demonstrated military advantage over any current fourth-generation aircraft which was in the MMRCA competition, without any of the risks of technology that's not fully developed or even on the drawing board stage."
The source said, "Let's face it, even some of the other aircraft, even the ones that are selected, having any sort of AESA (Active Electronically Scanned Array) radar, which are still in the drawing board stage."
"Our aircraft have an operational and capable AESA radar that has been flying for the last several years, It's the most advanced technology out there today and its these most proven -- operationally proven, combat proven, and that's the most important thing -- aircraft in the world."
That the Obama administration, business and industry are deeply disappointed over being rejected for the multi-billion 126 Medium Multi-Role Combat Aircraft deal is a no-brainer. It is palpable.
But there was also seething anger among the senior administration officials -- at State, Commerce and the Pentagon -- and representatives of business and industry that New Delhi's decision was wholly political and much of the finger-pointing was at Defence Minister A K Antony and the Defence Research and Development Organisation.
However, none of the administration officials, business and industry representatives, including those at Boeing and Lockheed that rediff.com spoke too were willing to go on record with their disappointment and angst, and noted that beyond the notification that they had received from the Indian authorities, they were still "in a fact-gathering mode right now'.
Senior diplomatic sources in Washington told rediff.com, "We are awaiting guidance from Delhi before we make any comments."
Meanwhile, speculation was rife that US Ambassador Timothy Roemer's decision to resign was a fall-out from India's decision, particularly since this was apparently one of his topmost priorities to clinch the deal in favour of the United States.
It may be noted here that US President Barack Obama had made a strong pitch in a secret letter to Prime Minister Dr Manmohan Singh making a strong case on behalf of the American defence giants, saying it would cement the Indo-US strategic partnership and be mutually beneficial in creating several thousands of jobs both in the US and India.
One administration official said, "This was always very important for everybody and one needs to take a step back and realize what was at stake here."
"We all should understand that this was far bigger than just another big defence programme. This was the alignment of two of the largest free-market democracies. That's how we had always couched it."
The senior State Department official said, "Given where we are with the military to military ties, counterterrorism collaboration, dialogue on regional security, I mean, everything we've talked about, where there is the logic and momentum to a deeper and strategic relationship between India and the United States. This deal was really seen as something that would go a long way towards building a strong partnership capacity with a key nation in a strategically important region of the world."
"You bet, it was being looked at as an integral pillar of the whole strategic partnership," the official added.
The official continued, "It was seen as an important pillar of the future relationship -- it was seen as a political and strategic alignment if you will, because that's what it signifies. It's a huge programme. It's a 40-year alignment of product and technology, of industrial collaboration."
Another official, pointed out, "Remember, there were only 18 aircraft, which was going to be delivered in fly-away condition. The other 108 have to be manufactured under co-production license with HAL. You are talking about a very high order of magnitude when it comes to industrial collaboration between two countries."
"So, it was not just the companies -- whoever was to win it -- but two countries. The forces of those two countries, sharing information and technology, know-how, capacity building, training with the Indian Air Force, all of which leads to an expanded strategic relationship."
Referring to Obama's personal letter to Dr Singh pushing for the deal, the official said, "It's not often that the President of the United States directly advocates for a key programme."
Industry sources said that both Boeing and Lockheed Martin would be requesting to receive a formal de-brief from the IAF based on the letters they had received, which they acknowledged were similar to the intimation sent to the US ambassador in Delhi.
In a statement, Roemer, acknowledging that he was "deeply disappointed," said he had been assured at the highest levels of the Indian government that the procurement process for the fighter aircraft 'has been and will be transparent and fair'.
The embassy statement said it "was informed on Thursday that the two aircraft offered by the US government through the Foreign Military Sales process were not selected for procurement by the Indian Ministry of Defence."
"We are reviewing the documents received from the Government of India and are respectful of the procurement process," the statement said, but added, "We are, however, deeply disappointed by this news."
Boeing, which had its F-18 on offer, put out a statement saying that "Boeing today was notified that our Super Hornet proposal for India's MMRCA competition was not short listed in the initial down select. We are obviously disappointed with this outcome."
"Our next step is to request and receive a debrief from the Indian Air Force. Once we have reviewed the details, we will make a decision concerning our possible options, always keeping in mind the impact to the Indian Air Force," the statement said.
Boeing added, "We believe we offered the Indian Air Force a fully compliant and best-value multi-role aircraft for the defined mission. We will continue to look for opportunities to help India modernise its armed services and enhance its aerospace industry."
Lockheed, which was hoping that India would pick its F-16 fighter aircraft, had not put out a statement at the time of going to press.
India apparently had short-listed the Eurofighter and the French Rafale as the leading contenders for the deal.
A senior Pentagon official, who recently visited Delhi and met with senior Defence Ministry officials, including Minister Antony and the IAF leadership, told rediff.com: "We have always said that an American selection would have dramatically transformed the strategic relationship for generations to come."
"I mean that's what you talk about. You talk about the deeper and the more meaningful industrial and technology collaboration between the two industries. It would have set a new tone for the geopolitical future for the next 40 years."
The official acknowledged, "We always recognised that yes, you always have the technology decisions, but the political decision was always going to be a major function of this."
"It was always going to come down to a major political decision. That's where the United States as a whole -- not just the US government -- is somewhat dismayed and obviously disappointed with this outcome. Because we truly believed that we had the two best aircraft in the competition, in terms of what is proven, what is operationally there and the level of technology."
This official asserted, "The level of the technology, which was blessed by us from an export control standpoint, is something we provide only to our closest allies. We had gone through a lot of pushing and pulling in our system to get that level of technology blessed. The people in India must realise that that took a lot."
An industry source just couldn't stop talking about the superiority of the American aircraft, and obviously was totally dejected over the Indian rejection and was finding it difficult to accept it.
"After all," he said, "what were we so proud of? We are proud of the fact that what we had offered to the Indian government were two of the most advanced multi-mission combat aircraft in the world. These aircraft, more than anything else, by the way, have demonstrated military advantage over any current fourth-generation aircraft which was in the MMRCA competition, without any of the risks of technology that's not fully developed or even on the drawing board stage."
The source said, "Let's face it, even some of the other aircraft, even the ones that are selected, having any sort of AESA (Active Electronically Scanned Array) radar, which are still in the drawing board stage."
"Our aircraft have an operational and capable AESA radar that has been flying for the last several years, It's the most advanced technology out there today and its these most proven -- operationally proven, combat proven, and that's the most important thing -- aircraft in the world."
Case for rupee trade with Dhaka
Case for rupee trade with Dhaka
New Delhi, April 19: When India’s commerce minister Anand Sharma calls on Bangladesh Prime Minister Sheikh Hasina next week to discuss a new trade deal, he won’t be talking about the possibility of trading in rupees.
However, many Indian and Bangladeshi businessmen would welcome trade in the rupee instead of the volatile dollar with its attendant exchange risks.
India sells some $2.5 billion of merchandise annually to Bangladesh and buys about one-tenth of that from its eastern neighbour, a trade imbalance which Sharma will try to address during his visit with promises of opening up to more duty free imports.
Attiur Rahman, governor of the Bangladesh Bank, the coastal nation’s central banker, told The Telegraph that he would not rule out trade in rupees, “provided the currency became fully convertible”.
For a currency to be acceptable globally by businesses and made part of reserves which central banks around the world buy and keep, it has to be normally fully convertible and stable against most major currencies.
“Trade in local currencies with neighbouring countries would cut down forex risks and may be the way forward, but for the rupee to be acceptable in the wider world, convertibility would be a must,” said D.K. Joshi, chief economist of Crisil.
Till June 6, 1966, the Indian currency was officially or unofficially the acceptable tender over a wide area from Beirut to Hong Kong. In 1966, India devalued the rupee, forcing itself out of global markets.
Aden, Oman, Bahrain, Qatar, Trucial Gulf states (present day UAE), Tanganyika (former name for Tanzania), Uganda, Seychelles and Mauritius were among the nations where the rupee was legal tender. But the currency as global tender is now history and accepted only in neighbouring countries such as Nepal, Bhutan and Afghanistan.
“The Chinese are doing trade deals in renminbi with many countries and we should do the same,” Joshi added.
Though none of the Brics (Brazil, Russia, India, China and South Africa) countries have convertible currencies, they have agreed to their development banks opening lines of credit in their respective currencies for mutual trade.
“Rice trade in rupee could cut out exchange risks and keep the business coming,” agreed D.N.Pathak, executive director of the All India Rice Exporters Association. Though official trade between India and Bangladesh was less than $3 billion, unofficial trade across the border — often by smugglers in medicines, cattle, rice and even eggs — was estimated at over $1.5 billion. This trade is carried out in rupee and taka (Bangladesh’s currency) without any foreign currency payments being involved.
Many neighbours often trade in a robust local currency if that reduces exchange related risks and helps save scarce foreign exchange. However, in the case of India and Bangladesh, with both currencies being defined by its relative value to the dollar, the currency risk would hardly be reduced by converting the trade to rupees.
Explained Matlub Hussein, chairman of diversified Nitol Nilay Group, which among other things assembles Tata trucks and vehicles in Bangladesh, “Unless we change the base (dollar), it won’t make sense but if we can do that then yes it’s a far better of way doing business.”
New Delhi, April 19: When India’s commerce minister Anand Sharma calls on Bangladesh Prime Minister Sheikh Hasina next week to discuss a new trade deal, he won’t be talking about the possibility of trading in rupees.
However, many Indian and Bangladeshi businessmen would welcome trade in the rupee instead of the volatile dollar with its attendant exchange risks.
India sells some $2.5 billion of merchandise annually to Bangladesh and buys about one-tenth of that from its eastern neighbour, a trade imbalance which Sharma will try to address during his visit with promises of opening up to more duty free imports.
Attiur Rahman, governor of the Bangladesh Bank, the coastal nation’s central banker, told The Telegraph that he would not rule out trade in rupees, “provided the currency became fully convertible”.
For a currency to be acceptable globally by businesses and made part of reserves which central banks around the world buy and keep, it has to be normally fully convertible and stable against most major currencies.
“Trade in local currencies with neighbouring countries would cut down forex risks and may be the way forward, but for the rupee to be acceptable in the wider world, convertibility would be a must,” said D.K. Joshi, chief economist of Crisil.
Till June 6, 1966, the Indian currency was officially or unofficially the acceptable tender over a wide area from Beirut to Hong Kong. In 1966, India devalued the rupee, forcing itself out of global markets.
Aden, Oman, Bahrain, Qatar, Trucial Gulf states (present day UAE), Tanganyika (former name for Tanzania), Uganda, Seychelles and Mauritius were among the nations where the rupee was legal tender. But the currency as global tender is now history and accepted only in neighbouring countries such as Nepal, Bhutan and Afghanistan.
“The Chinese are doing trade deals in renminbi with many countries and we should do the same,” Joshi added.
Though none of the Brics (Brazil, Russia, India, China and South Africa) countries have convertible currencies, they have agreed to their development banks opening lines of credit in their respective currencies for mutual trade.
“Rice trade in rupee could cut out exchange risks and keep the business coming,” agreed D.N.Pathak, executive director of the All India Rice Exporters Association. Though official trade between India and Bangladesh was less than $3 billion, unofficial trade across the border — often by smugglers in medicines, cattle, rice and even eggs — was estimated at over $1.5 billion. This trade is carried out in rupee and taka (Bangladesh’s currency) without any foreign currency payments being involved.
Many neighbours often trade in a robust local currency if that reduces exchange related risks and helps save scarce foreign exchange. However, in the case of India and Bangladesh, with both currencies being defined by its relative value to the dollar, the currency risk would hardly be reduced by converting the trade to rupees.
Explained Matlub Hussein, chairman of diversified Nitol Nilay Group, which among other things assembles Tata trucks and vehicles in Bangladesh, “Unless we change the base (dollar), it won’t make sense but if we can do that then yes it’s a far better of way doing business.”
Silver, gold near lifetime highs, dollar loses ground
Silver, gold near lifetime highs, dollar loses ground
Silver and gold were within sight of historic highs on Friday and could resume an uptrend as the US dollar held near three-year lows against a basket of currencies on hopes US monetary policy would stay ultra loose, keeping inflationary price pressures high.
A fresh batch of U.S. economic data in the form of rising claims for jobless benefits failed to rescue the dollar, which had dropped to its weakest level since July 2008 against other currencies before recovering slightly.
Silver barely moved, standing at 48.32 an ounce by 0234 GMT, having rallied to a record at USD 49.51 an ounce on Thursday. Gold lost USD 1.10 to $1,533.85 an ounce after hitting a lifetime high around USD 1,538 an ounce in the previous session.
"If the dollar continues to weaken, then it's only likely to boost gold as well as silver as the inverse relationship between the two assets persists. I would say that for gold I am still looking for it to hit $1,600 this year," said Ong Yi Ling, investment analyst at Phillip Futures in Singapore.
"In the long term, I think if we see silver prices at such a high level, then it could hurt the industrial demand."
But dealers said strong investment demand for silver would keep the metal at record levels, while a lack of scrap sales in the physical market suggested that investors expected more gains. Year to date, silver was up almost 60%, sharply above gold's 8% gain.
A bullish target at USD 1,549 per ounce is still intact for spot gold, based on its wave pattern and a Fibonacci projection analysis, according to Wan Tao, who is a Reuters market analyst for commodities and energy technicals.
"There's some selling but I would say it's very light," said a dealer in Singapore, who trades gold and silver. "It had been a very busy week, and I am glad today is Friday. It's all quiet, finally."
The CME Group Inc, parent of the Chicago Board of Trade, said on Thursday it would raise maintenance margins for COMEX 5000 Silver futures by 13.2%, making it more expensive for silver speculators to trade in.
Soaring prices hurt the bottom line of certain manufacturers, including photography company Eastman Kodak, which said on Thursday a hike in raw material costs, particularly silver, led to a decrease in its film business revenue.
Trading was subdued in Asia, with Japanese financial markets shut for a public holiday. UK markets will be closed for the royal wedding. Premiums for gold bars were steady in Hong Kong and Singapore.
The dollar index, which tracks the currency's performance against a basket of major currencies, stood at 73.065 on Friday, having plumbed a three-year low of 72.871 on Thursday.
Sentiment for the dollar took a hit this week after the Federal Reserve said it was in no hurry to tighten its ultra-loose monetary policy, a move that gave investors the green light to keep using the dollar as a funding currency to buy higher-yielding assets.
"It all depends on the U.S. dollar, but I would say we only see a small amount of selling in the physical market," said a dealer in Hong Kong.
In the energy market, U.S. crude futures were steady in early trade on Friday, after rising to a 31-month high settlement in the previous session, as a weak dollar helped stem a slide in prices from slower economic growth in the United States in the first quarter.
Silver and gold were within sight of historic highs on Friday and could resume an uptrend as the US dollar held near three-year lows against a basket of currencies on hopes US monetary policy would stay ultra loose, keeping inflationary price pressures high.
A fresh batch of U.S. economic data in the form of rising claims for jobless benefits failed to rescue the dollar, which had dropped to its weakest level since July 2008 against other currencies before recovering slightly.
Silver barely moved, standing at 48.32 an ounce by 0234 GMT, having rallied to a record at USD 49.51 an ounce on Thursday. Gold lost USD 1.10 to $1,533.85 an ounce after hitting a lifetime high around USD 1,538 an ounce in the previous session.
"If the dollar continues to weaken, then it's only likely to boost gold as well as silver as the inverse relationship between the two assets persists. I would say that for gold I am still looking for it to hit $1,600 this year," said Ong Yi Ling, investment analyst at Phillip Futures in Singapore.
"In the long term, I think if we see silver prices at such a high level, then it could hurt the industrial demand."
But dealers said strong investment demand for silver would keep the metal at record levels, while a lack of scrap sales in the physical market suggested that investors expected more gains. Year to date, silver was up almost 60%, sharply above gold's 8% gain.
A bullish target at USD 1,549 per ounce is still intact for spot gold, based on its wave pattern and a Fibonacci projection analysis, according to Wan Tao, who is a Reuters market analyst for commodities and energy technicals.
"There's some selling but I would say it's very light," said a dealer in Singapore, who trades gold and silver. "It had been a very busy week, and I am glad today is Friday. It's all quiet, finally."
The CME Group Inc, parent of the Chicago Board of Trade, said on Thursday it would raise maintenance margins for COMEX 5000 Silver futures by 13.2%, making it more expensive for silver speculators to trade in.
Soaring prices hurt the bottom line of certain manufacturers, including photography company Eastman Kodak, which said on Thursday a hike in raw material costs, particularly silver, led to a decrease in its film business revenue.
Trading was subdued in Asia, with Japanese financial markets shut for a public holiday. UK markets will be closed for the royal wedding. Premiums for gold bars were steady in Hong Kong and Singapore.
The dollar index, which tracks the currency's performance against a basket of major currencies, stood at 73.065 on Friday, having plumbed a three-year low of 72.871 on Thursday.
Sentiment for the dollar took a hit this week after the Federal Reserve said it was in no hurry to tighten its ultra-loose monetary policy, a move that gave investors the green light to keep using the dollar as a funding currency to buy higher-yielding assets.
"It all depends on the U.S. dollar, but I would say we only see a small amount of selling in the physical market," said a dealer in Hong Kong.
In the energy market, U.S. crude futures were steady in early trade on Friday, after rising to a 31-month high settlement in the previous session, as a weak dollar helped stem a slide in prices from slower economic growth in the United States in the first quarter.
India mulls rupee account for Iran oil payments
India mulls rupee account for Iran oil payments
With the UAE refusing to be India’s payment gateway for Iranian crude oil, New Delhi is working overtime to open a rupee account for the Iranians in the Reserve Bank of India.
“The finance ministry is working out the dos and don’ts of the rupee account…That is what this money can be used for by the Iranians and what it can’t. Once the contours are ready, the proposal would be brought before the Cabinet for approval,” said sources. They said the proposed norms would allow Iran to use the rupee to buy only non-strategic imports like railway projects or commodities. “It cannot be used for investing in India or in buying shares or companies here,” they added.
Until last week, India was hopeful of roping in the UAE as the payment conduit after Germany stopped last month accepting money from India for onward transfer to an Iranian-owned, Hamburg-based bank. But the hopes were dashed last week after Abu Dhabi informed the Indian ambassador that its hands were tied due to pressure from the US.
With the UAE refusing to be India’s payment gateway for Iranian crude oil, New Delhi is working overtime to open a rupee account for the Iranians in the Reserve Bank of India.
“The finance ministry is working out the dos and don’ts of the rupee account…That is what this money can be used for by the Iranians and what it can’t. Once the contours are ready, the proposal would be brought before the Cabinet for approval,” said sources. They said the proposed norms would allow Iran to use the rupee to buy only non-strategic imports like railway projects or commodities. “It cannot be used for investing in India or in buying shares or companies here,” they added.
Until last week, India was hopeful of roping in the UAE as the payment conduit after Germany stopped last month accepting money from India for onward transfer to an Iranian-owned, Hamburg-based bank. But the hopes were dashed last week after Abu Dhabi informed the Indian ambassador that its hands were tied due to pressure from the US.
20 April 2011
ISRO successfully sends 3 satellites into orbit
ISRO successfully sends 3 satellites into orbit
India's Polar Satellite Launch vehicle-C16 rocket on Wednesday successfully launched into orbit the latest remote sensing satellite Resourcesat-2 that would study and help manage natural resources along with two nano satellites.
Indian Space Research Organisations's homegrown workhorse PSLV placed in a 'Polar Sun Synchronous Orbit' Resourcesat-2, Youthsat and X-Sat about 18 minutes after it blasted off from the Satish Dhawan Space Centre launch pad in Sriharikota, 90 km from Chennai, at 10.12 am.
"PSLV-C16 Resourcesat-2 mission is successful," a jubilant ISRO Chairman K Radhakrishnan announced shortly after all the three satellites were hurled into space one after another 822 km above earth in a text book launch.
The ISRO chief's announcement was cheered by the battery of scientists at the mission control centre who heaved a sigh of relief as they were gripped by an added anxiety following two successive failures of Geosynchronous Satellite Launch Vehicle missions last year.
The 1,206 kg Resourcesat-2 with a space life of five years replaces Resourcesat-1 launched in 2003 and would provide data with enhanced multispectral and spatial coverage on natural resources.
The GSLV mission in December last year failed when the homegrown GSLV F06 carrying communication satellite Geostationary Satellite -5P exploded mid-air less than a minute after lift-off and fell into the Bay of Bengal. GSAT-5P, carrying 24 C-band and 12 extended C-band transponders, plunged into the sea when the destruct command was issued as the rocket veered from its flight path.
Earlier, the GSLV-D3 mission carrying GSAT-4 had also failed in April 2010, dealing a blow to India's space programme. Today's PSLV flight was its 17th successive mission after the failure of its maiden voyage in September 1993.
Besides Resourscesat-2, the PSLV rocket also launched Youthsat, weighing 92 kg, a joint Indo-Russian nanosatellite for stellar and atmospheric studies. The third satellite was 106-kg X-sat, an image applications spacecraft built by Nanyang Technological University, Singapore.
This is the first time, ISRO is launching a Singapore-built satellite. Radhakrishnan said the launch of two foreign satellites showed the PSLV's reliability had been recognised internationally.
"It is a glad moment for the entire ISRO community. ISRO has proved its mettle and the mission performed exceedingly well. It's a reassurance to the nation that the confidence in ISRO is fully justified," Mission Director P Kunhikrishnan said in remarks that summed up the mood of the space scientists who needed the morale booster after the double GSLV failure.
It was anxiety all the way for the Indian space scientists at the Mission Control since the rocket blasted off and injected the satellites into space. Each stage of successful separation was greeted with loud applause.
The Resourscesat-2 with three high resolution cameras on a single platform would capture images that will be useful in assessing the health of crops, monitoring deforestation and water levels in reservoirs and lakes besides the snow-melt in the Himalayas.
ISRO officials said it would help in catering to the national and global data needs to address multiple aspects of resource inventory and monitoring in specific areas of applications including agriculture, water resources, rural development, bio-resources and geological exploration.
Data from the satellite would help in facilitating a variety of applications including disaster management and related activities. Apart from the three cameras, with high, medium and coarse resolutions, Resourcesat-2 also has two solid state recorders with a capacity of 200 GB each to store images which can be accessed by the ground stations later.
It also carries Automatic Identification System from COMDEV, Canada, as an experimental payload for ship surveillance in VHF band to derive position, speed and the information about ships.
Minister of State for Parliamentary Affiars and Prime Minister OfficeV Narayanaswamy described the successful launch as a landmark event and said the Prime Minister and the government "are with the scientists to do more such work."
India's Polar Satellite Launch vehicle-C16 rocket on Wednesday successfully launched into orbit the latest remote sensing satellite Resourcesat-2 that would study and help manage natural resources along with two nano satellites.
Indian Space Research Organisations's homegrown workhorse PSLV placed in a 'Polar Sun Synchronous Orbit' Resourcesat-2, Youthsat and X-Sat about 18 minutes after it blasted off from the Satish Dhawan Space Centre launch pad in Sriharikota, 90 km from Chennai, at 10.12 am.
"PSLV-C16 Resourcesat-2 mission is successful," a jubilant ISRO Chairman K Radhakrishnan announced shortly after all the three satellites were hurled into space one after another 822 km above earth in a text book launch.
The ISRO chief's announcement was cheered by the battery of scientists at the mission control centre who heaved a sigh of relief as they were gripped by an added anxiety following two successive failures of Geosynchronous Satellite Launch Vehicle missions last year.
The 1,206 kg Resourcesat-2 with a space life of five years replaces Resourcesat-1 launched in 2003 and would provide data with enhanced multispectral and spatial coverage on natural resources.
The GSLV mission in December last year failed when the homegrown GSLV F06 carrying communication satellite Geostationary Satellite -5P exploded mid-air less than a minute after lift-off and fell into the Bay of Bengal. GSAT-5P, carrying 24 C-band and 12 extended C-band transponders, plunged into the sea when the destruct command was issued as the rocket veered from its flight path.
Earlier, the GSLV-D3 mission carrying GSAT-4 had also failed in April 2010, dealing a blow to India's space programme. Today's PSLV flight was its 17th successive mission after the failure of its maiden voyage in September 1993.
Besides Resourscesat-2, the PSLV rocket also launched Youthsat, weighing 92 kg, a joint Indo-Russian nanosatellite for stellar and atmospheric studies. The third satellite was 106-kg X-sat, an image applications spacecraft built by Nanyang Technological University, Singapore.
This is the first time, ISRO is launching a Singapore-built satellite. Radhakrishnan said the launch of two foreign satellites showed the PSLV's reliability had been recognised internationally.
"It is a glad moment for the entire ISRO community. ISRO has proved its mettle and the mission performed exceedingly well. It's a reassurance to the nation that the confidence in ISRO is fully justified," Mission Director P Kunhikrishnan said in remarks that summed up the mood of the space scientists who needed the morale booster after the double GSLV failure.
It was anxiety all the way for the Indian space scientists at the Mission Control since the rocket blasted off and injected the satellites into space. Each stage of successful separation was greeted with loud applause.
The Resourscesat-2 with three high resolution cameras on a single platform would capture images that will be useful in assessing the health of crops, monitoring deforestation and water levels in reservoirs and lakes besides the snow-melt in the Himalayas.
ISRO officials said it would help in catering to the national and global data needs to address multiple aspects of resource inventory and monitoring in specific areas of applications including agriculture, water resources, rural development, bio-resources and geological exploration.
Data from the satellite would help in facilitating a variety of applications including disaster management and related activities. Apart from the three cameras, with high, medium and coarse resolutions, Resourcesat-2 also has two solid state recorders with a capacity of 200 GB each to store images which can be accessed by the ground stations later.
It also carries Automatic Identification System from COMDEV, Canada, as an experimental payload for ship surveillance in VHF band to derive position, speed and the information about ships.
Minister of State for Parliamentary Affiars and Prime Minister OfficeV Narayanaswamy described the successful launch as a landmark event and said the Prime Minister and the government "are with the scientists to do more such work."
Tax notice to Kings XI Punjab
Indian Premier League [ Images ] team Kings XI Punjab [ Images ] was issued a notice for non-payment of entertainment duty, which it owed for the first match of the fourth edition of the Indian Premier League, played at the PCA stadium in Mohali on April 13.
Also, the franchise team was not yet accorded mandatory permission for the stock, sale and service of liquor for the remaining three fixtures slated here for April 21, May 8 and 10.
After the KXIP failed to deposit the requisite entertainment duty even five days after the first match, the Excise and Taxation department issued a notice on Monday to its management asking to submit the details of the tickets sold and revenue generated and pay the requisite entertainment duty at the rate of 25 per cent of the total income.
Assistant Excise and Taxation Commissioner (AETC) Baldeep Kaur has directed the team management to deposit the levy without any further delay, failing which action under Land Revenue Act would be initiated against the organisers for recovery of entertainment duty arrears.
Confirming the development, Kaur said that the application of the KXIP seeking permission for the rest of three matches was still under consideration and a decision will be taken shortly after taking into account the terms and conditions followed during the first match.
Though the home team had initially sought permission for all the four matches to be held here but the permission was accorded only for the first game, that also on the condition that the permission for the other three would be given after checking the compliance of terms and conditions during the first match.
The franchise had paid Rs 56,32,314 on account of entertainment duty payable on the income from sale of tickets during the IPL season III for two matches played here on April 2 and 9, 2010, to procure the permission for IPL season IV matches.
However, the KXIP had been waived off almost Rs 2 crore entertainment duty, which they owed for the matches played before March 31, 2010.
Also, the franchise team was not yet accorded mandatory permission for the stock, sale and service of liquor for the remaining three fixtures slated here for April 21, May 8 and 10.
After the KXIP failed to deposit the requisite entertainment duty even five days after the first match, the Excise and Taxation department issued a notice on Monday to its management asking to submit the details of the tickets sold and revenue generated and pay the requisite entertainment duty at the rate of 25 per cent of the total income.
Assistant Excise and Taxation Commissioner (AETC) Baldeep Kaur has directed the team management to deposit the levy without any further delay, failing which action under Land Revenue Act would be initiated against the organisers for recovery of entertainment duty arrears.
Confirming the development, Kaur said that the application of the KXIP seeking permission for the rest of three matches was still under consideration and a decision will be taken shortly after taking into account the terms and conditions followed during the first match.
Though the home team had initially sought permission for all the four matches to be held here but the permission was accorded only for the first game, that also on the condition that the permission for the other three would be given after checking the compliance of terms and conditions during the first match.
The franchise had paid Rs 56,32,314 on account of entertainment duty payable on the income from sale of tickets during the IPL season III for two matches played here on April 2 and 9, 2010, to procure the permission for IPL season IV matches.
However, the KXIP had been waived off almost Rs 2 crore entertainment duty, which they owed for the matches played before March 31, 2010.
28 February 2011
Indian General budget to be announced
Budget for India will be announced today by Finance Minister Pranab Mukharjee. As every Individual we are expecting that Income Tax slab will be raised to Rs. 3 Lacs now for individuals.
27 February 2011
11 February 2011
::Indian Petrol Prices:: Rs 65.50/ltr
Indian Petrol prices have increased to Rs 65.50/ltr in the last 1 month. This increase is due to the increase of petrol prices above $100/barral in international market
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