Abu Dhabi based Etihad Airways becomes the first major foreign investor in India’s airlines sector as it entered a strategic partnership with Jet Airways, taking 24% stake for Rs 2058 crores. The deal holds significant for both Jet as well as the country’s aviation sector. For Jet, it can solve financial woes with Etihad alliance. For the government, the deal is a successful chase for FDI. The deal may make the Etihad- Jet a major force in the country’s aviation sector as Etihad has strong footing in the overseas segment. Jet can now better tailor its services given the scale advantage and flexibility from having a global partner. Implication is that in internati
Surprising outcome of the Commerce Minister’s meeting with the EU Trade Commissioner Karel De Gucht in Brussels regarding the proposed FTA with the EU is that India will not go ahead with its tough intellectual property regime. In the preliminary discussions, India has offered the EU that the country will stick on to the WTO’s TRIPs regime. This will have big implication since, many TRIPs plus provisions including a strong compulsory licensing regime (Baer issue) and an anti-evergreening provision (Novartis issue) should be softened under the FTA with the EU. Government’s move to have a liberal TRIPs regime favoring Pharma MNCs of EU seems to be counter balanced
In a significant development, the government through different ministries is pressing for the entry of two major FDI venture by foreign companies in the domestic aviation sector. The two foreign companies- Dubai based Etihad and Singapore based AirAsia are set to make their Indian entry through their proposed alliances with Jet Airways and Tata respectively. In the case of AirAsia- Tata alliance there is a hurdle that the set 49% FDI limit in the sector is applicable for existing domestic airlines. The AirAsia Tata proposal is a new entity, without existing operation in the country. Here, the government is going to make a clarification by extending the ceiling to new companies as
The UAE is insisting on signing the Bilateral Investment Protection Agreement with India before making serious investment in the country including that of the proposed Etihad deal with Jet Airways. UAE’s demand for BIPA has informed at the meeting of the India-UAE task force on investmen at New Delhi. Bilateral investment Treaties (BITs) are agreements between two Countries for the reciprocal promotion and protection of investments in each other's territories by individuals and companies situated in either country. The basic purpose of BIPA is to protect the investment made in other countries. So far India has signed eighty two BIPAs with different countries. The dem
North Korea disturbs the world again with another nuclear bomb. This time more powerful and more strong, capable to disharmonize the world order. Like his predecessors Kim Jong Un prefer to stay in the old path of roughness. Change in regime had taken place, but not in policies. In short, North Korea is not ready to change its course and the Korean peninsula finds itself in the baking pot. The mistake is being repeated. The policy of rogueness and brinkmanship had failed much in the past. The nuclear test of North Korea is actually going to benefit its rivals. Continuous violations of the UN resolutions are quite normal for North Korea and have driven away the world away fro
A clear manifestation of changing attitudes. India’s foreign policy makers start displaying confidence with regard to India’s ability to intervene in overseas affairs. India commits to reconstruct Mali, the land locked country of West Africa, wounded by terrorists. This is for the first time that India intervenes in the domestic affairs of a country away from its natural sphere of influence. For the last one decade Africa has been the focal point of our foreign policy prism. Several major powers have strong presence in Africa, except India. India shifted the focus very late. Better late than never. India’s participation in the’ Support and Follow Up&r
In a pre-budget intervention, the government has increased import duty of gold to 6% to contain the precious metal’s import. Gold was the third largest import item for India during the last fiscal year, after crude and machineries. The present step became necessary because of the rising current account deficit. Monthly trade data is one of the most disappointing one after the crisis year of 1991. Exports have registered a decline for the seventh consecutive month in November. Imports are rising, dominated by essential raw material and equipments and machineries imports. The latter two are unavoidable given their priorities on the production front. On the other hand, Gold imp
The exclusion of Chinese telecom hardware firm Huawei from the list of domestic gear manufacturers by Department of Telecom is a difficult decision. In the telecom department’s list, Huawei’s rivals like Nokia Siemens and Ericson are included. Huawei is the biggest firm in the sector and it has already provided key machines to Indian telecom companies. It is the second largest telecom hardware company in the world and it is expected to edge out Ericson to get the first position this year. The company was established in 1987 by a former PLA officer Ren Zhengfei. Because of its military connection in the past, Huawei is facing suspicious eyes in many countries. The US a
The implementation of the much discussed General Anti-Avoidance Rules has been postponed by the government to 2016 from the current targeted date of 1st April 2014. Postponement of the GARR take-off will continue to benefit both foreign and domestic investors to route their money to India through tax havens like Mauritius. Implication of the government decision is that investors will not come under the GAAR proposed tax net two more years. Finance Minister P Chidambaram’s effort is to attract foreign capital to fill the widening current account deficit. Current year trade data shows that the country is going to face one of the toughest situations in recent years.Imports a
The India –EU Free Trade Agreement is in incubation. Both parties are trying to sort out differences existing on many fronts. The FTA is important for Europe than for India because of the evolving global economic environment. Firstly, Europe is slowly dipping into recession amidst aging demography and shrinking GDP. Its exports are coming down due to strong competition from countries like China and South Korea. European firms are migrating and relocating production to new demand geographies in the emerging world. Many observers believe that the decline of Europe is not transient and hence is fundamental. How
Dictionary on Indian Economy
- Logic of withdrawing Rs 1000 and Rs 500 notes
- Raghuram Rajan: The Gladiator returns to Chicago
- Why the GST reform is transformational?
- Good intention but poor thinking - what troubles demonetization?
- India Black Money Report: CBI underestimates black money at Rs 25 lakh crore
- High interest rate rather than inflation is the macroeconomic problem for India right now
- Japan’s first trade deficit in 30 years is part of the Global Shift
- Why we need an emergency monetization plan as well?
- Arvind Subramanian rocks with 'Chakravyuha' in Economic Survey
- NREGS: give respect to the tax payer’s money