Foreign Investment 05 Oct 2012 by Tojo Jose

Can India successfully chase New Money through the reform measures?

Can India successfully chase New Money through the reform measures?

All of a sudden, the confrontationist atmosphere between the reformists and anti-reformists in the country has been activated; thanks to the cloud burst type reform measures introduced by the UPA government during the last one month.             The political and economic environment suddenly looks like that of 1991. Prime Minister Dr Manmohan Singh has launched a counter attack on the opponents when he remarked that the anti- reformists have not succeeded then (1991) and they will not succeed now.             It seems that the UPA, especially the Congress has completely

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Trade 05 May 2012 by Tojo Jose

Options to stop the Rupee's slide is limited this time

Options to stop the Rupee's slide is limited this time

The Rupee is experiencing severe depreciation pressure due to adverse trade scenario and FII outflows. Rupee has registered a near historic low of 53 plus against the Dollar on the previous day. In the coming days the currency may touch a new low against the Dollar.                 Of course, the immediate reason for the weakening of Rupee is the FII outflow. Foreign investors are extracting negative sentiments from the potential government decision to impose capital gains tax on FII inflows from Mauritius which is tax exempted as per the current Double Taxation Avoidance Treaty.     &n

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Foreign Investment 03 Apr 2012 by Tojo Jose

Vodafone issue reactivated; foreign investors raise concern about stability of India’s tax regime

Vodafone issue reactivated; foreign investors raise concern about stability of India’s tax regime

The government’s budgetary decision to impose taxes on overseas deals which involve underlying Indian assets is now inviting the expected global criticism. In the budget, the Finance Minister announced amendment to the Income Tax Act, enabling the government to tax overseas transactions of Indian assets.             The most important feature of the amendment is its retrospective effect. Because of the retrospective effect, all such transactions from 1962 onwards will be reassessed and made taxable with one legislative touch. Tax practitioners warn that besides, causing chaos the amendment may create an impression in the

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Trade 24 Mar 2012 by Kiran Raj

Indian petrol to Pakistan

When HPCL and Lakshmi Mittal started the working of the Bhatinda Refineries in Punjab, many have doubted that the refinery is ‘an excess capacity’ given the market conditions in the region. But now, an unexpected opportunity is awaiting the plant. The windfall opportunity is that Pakistan is likely to import petrol from India.                 Bhatinda is just 25 KM away from the border.  If Pakistan, facing acute fuel shortages goes for import of petrol from India, the yet to be commissioned refinery will be making revenues as well as history. For Pakistan, India is the most geographically

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India and China 23 Mar 2012 by Tojo Jose

The dragon is 'growing' in the Indian Ocean

The dragon is 'growing' in the Indian Ocean

The real winner of the United Nations Human Rights Commission (UNHRC) voting on Sri Lanka’s human right violation is China. The incident has set a platform for the Chinese to occupy a bigger space in South Asia. China has voted against the resolution while India was compelled to support it because of the pressure from DMK. At the UNHRC, politicians from Tamil Nadu have won but, India has lost. In the pre- independence period, there were several such incidents where the foolish local kings acted against the country and thus leading to the gains of the colonial powers.                 China was awaiting

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Trade 17 Feb 2012

Italian mariner’s mock encounter in the Indian seas and killing of innocent fishermen should not be left unanswered.

Italian mariner’s mock encounter in the Indian seas and killing of innocent fishermen should not be left unanswered.

The killing of two innocent fishermen by the Italian mariners in the fringes of Indian territorial waters is a grave situation. It is clear that the mariners have not tried to check whether the people on the boat were fishermen or pirates. At the time of shooting, nine out of the eleven fishermen were sleeping and it is reported that the Italian mariners were addicted to liquor and were not in a capacity to follow the required procedures before commencing an action.                 The incident itself is a setback to the efforts to eliminate the Somalian pirates from the Indian seas. The incident shows tha

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India and China 12 Feb 2012

Weak factory output in India and declining Chinese trade are not good signs for the world economy

Weak factory output in India and declining Chinese trade are not good signs for the world economy

Economic data from the two fastest growing economies –China and India during the last week is not good for the crisis ridden world economy. In India, the monthly industrial production for December 2011 shows a declining growth trend. On the other, the Chinese trade data for January 2012 has shown both export and import contraction. India’s factory output growth rate of meager 1.8% for December is uncharacteristic to the status of an emerging economy. The figure is more disappointing given that India is a domestic demand driven economy. Domestic production trends rather than trade figures are more important in driving growth rate in the Indian economy. Hence, a low fac

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Trade 11 Feb 2012

Trade with Iran is survival for India; and an opportunity now with US sanctions

Trade with Iran is survival for India; and an opportunity now with US sanctions

The ongoing economic sanctions by the US and the EU on Iran may not succeed without the support of Asian powers- China and India. Developments during the last two months indicate that both India and China are reluctant to follow the US sanctions. On the other side, ever since the beginning of US sanctions, Iran is trying to retain its trade engagement with both countries.             Iran’s economic weight is significant in Asia as a major supplier of crude oil. For China and India, energy security is necessary to support their present high growth phase.        India meets nearly two thirds of its cru

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Trade 09 Feb 2012

Why Britain can’t exit India aid programme soon?

Why Britain can’t exit India aid programme soon?

           During the last week, politicians and media in both Britain and India were exchanging unpleasant comments over the 280 million pound British aid to India. Political parties in Britain were pressing the Conservative government to stop aid to the rising economic power. In India, ruling MPs and opposition leaders requested the government to reject the aid.            In Britain, media and policy makers have quesioned the logic of providing loans to the fastest growing economy, at a time when British economy is facing fund scarcity.  The British government, to put

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Trade 07 Feb 2012

SOUTH ASIA IN THE ASIAN AGE An Analysis of the Potential of Regional Integration in South Asia.

                                                                       One can easily observe that the economic weight of Asia is rapidly increasing. Of the six largest economies of the world, three are in Asia, and of these two, China and India, are the fastest growing economies of the world. During the last few years, the world economy has been moving forward driven by the growth rate of these two most populous emerging markets. Performance in terms of growth rate, GDP size, trade share, industrializati

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