TPP casts shadow on India’s foreign trade worth over $200 bn: ASSOCHAM

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November 15, 2015

India might have to bear the brunt of 13-nation Trans-Pacific Partnership (TPP) deal as its trade with the TPP countries stood at about $220 billion (bn) i.e. about 29 per cent of the country’s total trade (exports plus imports) in the financial year 2014-15, apex industry body ASSOCHAM said today while cautioning the government.

“The TPP accord will dismantle trade barriers, reduce transaction costs, promote ease of doing business and possibly benefit consumers with lower prices and more choice in member countries,” stated The Associated Chambers of Commerce and Industry of India (ASSOCHAM) in a communication addressed to the Union Finance and Commerce Minister, Mr Arun Jaitley and Ms Nirmala Sitharaman.

India’s total exports and imports were of the order $79 bn (26 per cent of country’s total exports) and $140 bn (31 per cent of country’s total imports) respectively. India’s exports to the TPP block rose by four per cent in terms of value (in dollars) even when the country’s overall exports fell by over one per cent in 2014-15.

Besides, India had received foreign direct investment (FDI) worth $9.5 bn from TPP countries (Japan, Malaysia, Singapore and the USA) which was close to 40 per cent of the total FDI inflows into India worth about $25 bn in the last fiscal.

Challenges posed by TPP pact must be treated as an opportunity for domestic industry in rising to the challenge of higher standards in products, services and framework of rules.

“Such mega trade agreements and other negotiations like Trans-Atlantic Trade and Investment Partnership will erode existing preferences for Indian products in established traditional markets like the US and the EU (European Union) thereby benefitting the partners to these deals” highlighted ASSOCHAM letter to the FM and Commerce Minister.

The TPP block is likely to develop a rules’ architecture that might place greater burden of compliance on India’s manufacturing and services standards for access to the markets of the participating countries, it pointed out.

“Though it is not a member of TPP, India has much at stake as it may lose export market share due to strong trade diversion effects arising from global price reduction felicitated by widespread tariff elimination,” said Mr D.S. Rawat, secretary general of ASSOCHAM.

“Since TPP members would face tariffs in their bilateral trade, it would be more economical for multinational corporations (MNCs) to shift production from non-member countries to countries like Malaysia and Vietnam to reduce production costs,” said Mr Rawat.

ASSOCHAM has thus suggested that TPP and the Regional Comprehensive Economic Partnership (RCEP) should evolve into complementary agreements to serve the entire Asia-Pacific Region in a much better way, more so as the two initiatives have overlapping membership.

Though the RCEP also aims to expand liberalisation commitments contained in existing ASEAN-plus one free trade agreements (FTAs), it is less ambitious regarding depth of reforms, allows far more exemptions for sensitive products and for broad development considerations, and provides more consultative rather than binding dispute resolution procedures.

Huge Scope of Furthering Indo German Relations – Steffen Builger

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saurabh

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November 15, 2015

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In order to further the business ties between India and Germany following the recent meetings of Indian Prime Minister Shri Narendra Modi and his German counterpart Chancellor Dr Angela Merkel, the Confederation of Indian Industry (CII), in association with the Konrad Adenauer Stiftung (KAS), organized a Roundtable Meeting on the Trajectory of Indo-German Relations post Dr Merkel’s Visit on 27 October 2015 at The Imperial in New Delhi. The meeting was graced by members of both Indian and German Parliaments as well as business leaders from a diverse range of industries.

Welcoming the delegates, Mr Deep Kapuria, Chairman, CII Trade Fairs Council & Chairman, Hi Tech Group, said that the growing closeness between the two nations is evident from the recent meetings and signing of co-operation pacts on a range of subjects including technology transfer, clean and green energy, climate change, security and counter terrorism, etc. He informed the German delegation about India’s commitment to grow in an inclusive, responsible and sustainable manner by generating livelihood opportunities in rural as well as urban areas. Highlighting the India Prime Minister’s vision to render Indian manufacturing sector globally competitive through the Make in India mission, he identified Germany as a natural partner in this drive. He added that apart from a strong footprint of German auto companies in the Indian market, the recent years have seen the bilateral trade and investment between Asia’s third largest economy and the European powerhouse multiply manifolds. As part of the recent initiatives of CII to further global business ties, he mentioned the Global Innovation and Technology Alliance (GITA), a CII-DST (Department of Science & Technology, Government of India) joint venture, for developing research based partnerships between international companies.

Dr Lars Peter Schmidt, Resident Representative to India, KAS, expressed his enthusiasm for the roundtable and acknowledged the scope for closer ties between India and Germany.

Leading the German delegation, Mr Steffen Builger, Member of German Parliament and Chairman, Young Group, said that closer business ties with India present huge opportunities for India not just in the area of trading but also in research, joint development and production.

Members of the Indian delegation stated that opportunities of mutual benefit between the two countries must be sought with renewed vigour in light of the recent meetings of the heads of state.

Ms Bidisha Ganguly, Principal Economist, CII, made a brief presentation on the state of Indian economy and highlighted features such as a young nation, a robust services sector, high domestic savings and investments, continuously improving fiscal as well as current account deficits and foreign inflows, etc. demonstrating the inherent strength of the Indian economy.

During a brief interaction following the address, the delegates discussed the possibilities for closer ties through addressing the biggest obstacles. The German delegates emphasized the need to address the impediments to the Free Trade Agreement (FTA) between the two nations. In his concluding address, Mr Deep Kapuria assured the German delegation of the renewed focus on the matter of FTAs by the Indian government following the recent high level talks and thanked the delegation for a vibrant discussion.

Government to set up special regulator for bankruptcy cases

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saurabh

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November 15, 2015

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The government is considering setting up a special regulator to look into bankruptcy cases and may make it mandatory to take a call on whether to liquidate a company or not within 180 days, a person close to the development said.

The government is working on a new bankruptcy code based on recommendations given by the TK Vishwanathan committee, which submitted its final report to the government about ten days ago, that would tilt the balance in favour of creditors, the person said.

“Why should the government let go of national asset (company) if the management is unable to

run a company? Under the new code the main aim would be to save the asset and maximise

the value,” the person told ET.

Manoj Joshi, joint economic affairs secretary, had on Tuesday said that the government is keen to present the Bankruptcy Law in the winter session of Parliament. “We are putting a lot of focus on administrative mechanism by which the bankruptcy enforcement could take place,”

Joshi said at a FICCI seminar in Mumbai.

People close to the development said the committee recommendations, if accepted, could give a leeway for many special situation funds to operate profitably in India. Special situation funds normally buy stake in distressed assets and then try to turn them around, making profit on the

upside and then selling the stake.

This is quite difficult in India currently as there is no bankruptcy law which could give a freehand to such funds. Although there are many laws such as the SARFAESI Act (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002) and the Sick Industrial Companies Act, they are tilted towards promoters, industry trackers said.

While the Reserve Bank of India’s new structural debt restructuring (SDR) rules have been introduced, they only benefits banks and not other lenders. The bankruptcy law would try to protect rights of all the stakeholders in a company and wherever needed even go for “automatic liquidation”, said the official quoted earlier.

“Under the new bankruptcy code even unsecure lenders would see their rights being protected. Also till the time the decision is taken by the regulator, the assets of the company would be frozen,” the person said. Industry trackers said such a code could make India more attractive for foreign investors and called for an insolvency framework similar to the ‘Chapter 11’ rescue mechanism in the US.

“A stronger insolvency framework will facilitate economic growth,” said Dinkar V, partner, transaction advisory services, at EY India.

“Protecting the rights of borrowers and lenders clarify the risks associated with lending and make the revival of such (bankrupt) companies easier.

These factors will also unlock the flow of much needed ‘new capital’ to stressed and distressed situations,” he said.

ET first reported on March 1 that the government was looking to bring out a bankruptcy law. Industry insiders said Indian promoters till now have been able to get a way around by not repaying money to the lenders.

Even the public sector banks find it tough to enforce the law. Some, however, warn that even the new code could end up ineffective. “A Chapter 11-like law is a welcome move, but one has to follow it in letter and spirit,” said Anand Desai, managing partner at DSK Legal.

The bankruptcy committee was set up last year under former law secretary TK Vishwanathan to find out ways for resolution of situations where companies were unable to protect interest of all stakeholders

NASA and Boeing Extend International Space Station Contract

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November 15, 2015

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NASA has awarded a key contract to Boeing the International Space Station’s prime contractor, to continue providing key engineering support services, resources and personnel to the program through Sept. 30, 2020. The contract, valued at $1.18 billion, extends for five-years.

NASA and its 16 international partners are analyzing the ability to sustain station operations through 2020. Boeing’s contract includes a task to assess the feasibility of extending the life of the station’s primary structural hardware even further, through the end of 2028. ISS has been continually occupied since Nov. 2, 2000.

“This is a continuation of the successful relationship with NASA and 16 partner nations in maintaining the health of the station,” said John Elbon, vice president and general manager, Boeing Space Exploration. “In addition, it builds on Boeing’s tradition of innovation and technological advancement to incorporate efficiencies and improve performance to the station as its importance to the future of human spaceflight continues to grow.”

The extension includes end-to-end subsystem management for the majority of station systems and allows Boeing to continue providing the program with hardware and software sustaining engineering, among other tasks. The work will be performed at NASA’s Lyndon B. Johnson Space Center, Houston; John F. Kennedy Space Center, Merritt Island, Fla. Marshall Space Flight Center, Huntsville, Ala., and other domestic and international locations.

A unit of The Boeing Company, Defense, Space & Security is one of the world’s largest defense, space and security businesses specializing in innovative and capabilities-driven customer solutions, and the world’s largest and most versatile manufacturer of military aircraft. Headquartered in St. Louis, Defense, Space & Security is a $31 billion business with 53,000 employees worldwide.

Our government is Pro-Poor and hence Pro-Market: Jayant Sinha

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saurabh

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November 15, 2015

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“Hamari sarkar garibo ki sarkar hain,” said Mr Jayant Sinha, Minister of State for Finance, Government of India, as he delivered the Valedictory Address at the concluding session of CAPAM 2015 organised by FICCI here today. Highlighting his government’s framework for economic transformation, the minister emphasised that the present Government’s policies are investment oriented and supply-side focused. “We want to build hard and soft assets like infrastructure, skills and employability of people,” he clarified. “That’s how we build India’s productive capacity.” He explained that the country has to have the productive capacity to power growth for the next 30 years. In the past, there were flashes of high growth, but then that was followed by inflation. “It is time to get out of that trap. The answer is to build the country’s hard and soft assets, ensure longer term growth and lift all of our people out of poverty.” Mr Sinha enunciated five principles to pursue this strategy.

The Government is pro-poor; and because it is pro-poor, it is pro-market; the Government believes in empowerment, not entitlement; minimum government, maximum governance; and cooperative federalism. He discussed the various measures taken by the Government, like universal social security in the form of the ‘Jan Dhan Yojana’. Various initiatives have been undertaken to provide jobs to the youth, such as ‘Make in India’, ‘Skill India’, ‘Mudra Yojana’ and ‘Startup India’. “For the first time micro businesses have the ability to get a loan from a bank without security or collateral,” said the Minister referring to the MUDRA bank initiative. The Government has invested Rs 50000 crore in agriculture. The aim is to have water in every field. The financial sector is being transformed in a big way. Large investment has also gone into creating viable infrastructure. And there is a move to change the fiscal architecture of the country, with devolution of powers and more funds to the states, the Minister added. But, the Minister added, “It takes time to take initiatives from the policy level into day to day lives.” That is the reason why the optimism seems to be muted somewhat. Mr Sinha was confident that the Government’s policy initiatives will transmit through to the economy. Another reason for muted optimismis that the global economy is quite ‘soft’ at present. Hence our exports are not growing as quickly as they should. He called upon the gathering to look at the positive side of things. “If we want to build a better India we can start now,” he said. Mr Atul Joshi, Managing Director and Chief Executive Officer, India Ratings and Research, delivered a presentation on ‘India in a Sweet Spot’. “We are the fastest growing economy in the world, the largest working population, the largest youth and consumer population over the next 30-40 years, but are we capitalising? How is India positioned across the world and across some of the developed markets?” He presented elaborate statistics to show that India is doing better than many of its counterparts globally. India’s GDP at 7.4% is definitely ahead of the other BBB rated countries such as Indonesia, Mexico and South Africa. In terms of real GDP growth in the last five years, India seems to be substantially better positioned than most of the emerging economies.

“This is the consumption power that this country holds,” he said. But the ideal situation would be to have high growth and manageable inflation, not vastly fluctuating inflation. Mr Joshi also pointed out that today rural growth in India is not restricted to agriculture. Presently, 70% of rural growth is non agricultural. This shows that the resilience to the monsoon has increased. India’s banking sector is least susceptible to macro risks. Global events will have minimal impact on the country’s banking system. Without a very strong banking system it would not be feasible for the economy to grow substantially. With India’s consumption power, rural growth trajectory and strong banking system, the country now needs to capitalise on these advantages to remain in the ‘sweet spot’ and come out a winner. Mr Sunil Sanghai, Chairman, FICCI Capital Markets Committee and MD & Head-Banking, India, HSBC, welcomed the Minister and the delegates, and Mr Anup Bagchi, Co-Chair, FICCI’s Capital Markets Committee and MD and CEO, ICICI Securities Limited, delivered the Vote of Thanks.

India and ASEAN Strengthening Economic Ties

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saurabh

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November 14, 2015

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India’s economic and political relationship with ASEAN is growing stronger because of new regional dynamics. Many Indian businesses have sought to establish themselves in ASEAN to take advantage of regional trade flows as well as access to the Chinese market.

Recently, the Indian government has stepped up its efforts to solidify its relationship with ASEAN. Vice President Hamid Ansari made trips to Indonesia and Brunei to strengthen ASEAN ties, while the Indian government is also lobbying for an early ratification of a Free Trade Agreement (FTA) between India and ASEAN.

Subhir Gokaran,Economist,appointed as Executive Director International Monetary Fund

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saurabh

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November 14, 2015

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Shri Subhir Gokaran,Economist who was previously posted as former Deputy Governor of Reserve Bank of India(RBI), has been appointed as Executive Director representing the Indian Constituency(India, Bangladesh, Bhutan and Sri Lanka at International Monetary Fund, in place of Rakesh Mohan.

IndianBureaucracy.com wishes the very best.

India signs MoU with Republic of Korea to enhance bilateral air service cooperation

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saurabh

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November 14, 2015

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India has signed a Memorandum of Understanding with Republic of Korea (RoK) after negotiations in New Delhi , to enhance bilateral air service cooperation between the two countries. The major issues that were formalized are as follows :

a) Capacity Entitlement: The capacity entitlement for both the countries have been increased from existing 6 services per week to 19 services per week.
b) Points of Call: -Two additional points of call viz. Chennai and Bengaluru have been granted for Republic of Korea carriers.
c) Additional Beyond Points: -Apart from Tokyo and Los Angeles, two additional beyond points of call viz. Seattle and Vancouver, have been granted for Indian carriers. This means that the Indian carriers can mount air services to these destinations via Korea so that the operations could become more economical.
d) Intermediate Point: -Ho-Chi-Minh city is now available as an intermediate point to the carriers of both countries in addition to Bangkok, Macau or Hong Kong. This gives an opportunity to the Indian carriers to provide additional options to the people travelling to Vietnam.
e) Domestic code share points: – To increase seamless connectivity for the benefit of passengers, both sides agreed to allow domestic code-share to any four points in their respective countries

One major success of the bilateral negotiations with Korea is the retention of fifth freedom on intermediate points at 100%, which had been a bone of contention in the previous talks. For fifth freedom for beyond points India succeeded in keeping the ratio at more than 50% (10 out of 19 frequencies) which was earlier only 50% of traffic rights.

The signing of the MoU comes against the backdrop of two rounds of inconclusive talks on 21st December, 2012 in New Delhi and on 20/21 October 2014 in Seoul, as the two sides could not come to an agreement on various issues including number of frequencies to be increased and the quantum of fifth freedom rights on intermediate points. Therefore, there was a stalemate on enhancement of air connectivity between India and Korea despite the growth in economic and trade relations and tourism between the two countries. Prime Minister Shri Narendra Modi paid a state visit to the Republic of Korea (ROK) on the invitation of Park Geun-hye, President of the Republic of Korea on May 18-19, 2015. The two leaders welcomed and encouraged the ongoing efforts, including through an aviation cooperation conference, by their respective civil aviation authorities to amend the bilateral Air Services Agreement with a view to enhancing flight connectivity and covering more cities.

With the signing of the above MoU, the air connectivity between the two countries will be enhanced further and this is expected to boost economic and people-to-people cooperation.

Indian Forest Service (Main) Examination, 2015

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November 14, 2015

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Union Public Service Commission will be conducting the Indian Forest Service (Main) Examination 2015 at 08 Centres from 21-11-2015. The Commission has uploaded the e-Admit Cards on its website (http://www.upsc.gov.in.). The candidates are advised to download their e-Admit Cards and take a printout thereof. The candidates will have to produce the printout of their e-Admit Cards at the allotted venue for appearing in the examination. In case the photograph is not visible or available on the e-Admit Cards, candidates are advised to carry identical photographs for each session alongwith proof of Identity such as Identity Card, Voter Identity Card, Driving License, Passport etc. to the venue of the Examination. No paper Admit Card will be issued for this examination by the Commission.

In case of any discrepancy, the candidate may contact UPSC Facilitation Counter in person or on Tel. Nos. 23381125, 23098543 and 23385271.

Indian Air Force Exercise Livewire Continues

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saurabh

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November 14, 2015

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The IAF is in the midst of Exercise Livewire. The exercise has been planned to validate the IAF’s operational philosophy as well as to assist the young generation of air warriors in honing their skills in a near-wartime scenario. Missions flown till date have placed emphasis on joint operations with the Indian Army and Navy. Integrating service elements to provide a better understanding of interoperability forms an important part of training. In addition to air operations, ground defence is also being practised. Updation of security around frontline bases is an ongoing process and this too is being put to test during the exercise. This exercise would assist in enhancing operational capability of the IAF as a whole. Almost all types of existing air assets of the IAF are being exercised.

All India Organisation of Employers urges government to apply amended Payment of Bonus Act, 1965 prospectively from 2016-17

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saurabh

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November 14, 2015

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The applicability of enhanced bonus from April 1, 2015 is fraught with serious financial implications for the Indian industry, particularly the MSME sector. Keeping in view both the financial and operational hardship of industry, All India Organisation of Employers’ (AIOE), an allied body of the Federation of Indian Chambers of Commerce and Industry (FICCI),has requested the government to apply the amended legislation prospectively i.e. from the financial year 2016-17. Expressing concerns of the industry, Mr. Sanjay Bhatia, President of AIOE, has drawn the attention of Mr. Shankar Aggarwal, Secretary, Ministry of Labour and Employment, on the Union Cabinet’s approval to a proposal to amend the Payment of Bonus Act, 1965 enhancing the limit of coverage for payment of bonus from the existing wage limit of INR 10,000 to INR 21,000 as well as the calculation limit for payment of bonus from INR 3500 to INR 7000, respectively. It is understood that the said amendment will be effective from April 1, 2015. Mr. Bhatia, in a communication to Secretary Aggarwal, has pointed out that apart from the burden of financial implications on the MSME sector, industries will face serious functional problems as the enhanced amount of bonus has not been provided for in the balancesheet/accounts statement of the previous year i.e. 2014-15, which ended on March 31, 2015. Since, the allocable surplus for payment of bonus is calculated during the preceding accounting year, out of which bonus is paid in the succeeding financial year, the payable bonus already stands allocated for the present accounting year ending March 31, 2015. Moreover, many industries have already paid bonus to their employees, at the existing rate, before the start of the festival session. The implementation of this proposal effective April 1, 2015 will therefore cause great inconvenience to industries in reallocating the bonus amount retrospectively causing financial and operational hardships.

New Website on National Clean Development Mechanism Authority launched

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saurabh

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November 14, 2015

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A new website – http://www.ncdmaindia.gov.in has been launched by the National Clean Development Mechanism Authority (NCDMA) in the Ministry of Environment, Forests and Climate Change. The new website, launched last Friday, will capture the entire life cycle of CDM Projects. With step, the Ministry has taken another step in applying the principles of e-governance.

The on-line uploading of project related information in a module wise pattern will help to capture the entire life cycle of CDM projects. It will also enable monitoring of the projects at different stages. This web-based application will promote transparency in operation and monitor sustainable development activities relating to the CDM projects in the country. It will be the first such web-based application developed globally in this direction.

Speaking on the occasion, Secretary, Ministry of Environment, Forest and Climate Change, Shri Ashok Lavasa, appreciated the initiative to further streamline the working of India’s National CDM Authority. The NCDMA is reckoned as one of the most efficient and pro-active Designated National Authority (DNA).

Shri Lavasa recalled that the National Clean Development Mechanism Authority (NCDMA) was established in December 2003 for according Host Country Approval (HCA) to the CDM projects. Till April 30, 2015, it has accorded HCA to 2, 941 projects facilitating possible investment of about Rs. 579,306 crores in the country. These projects are in sectors of energy efficiency, fuel switching, industrial processes, municipal solid waste, renewable energy and forestry which spread across the country (covering all states in India). As on 24th April 2015, 1, 564 out of a total of 7,629 projects registered by the CDM Executive Board are from India, which is the second highest in the world. Certified Emission Reductions (CERs) issued to Indian projects is 191 million (13.27%).

Since the inception of NCDMA, it used to approve projects based on the submission of hard copies of all documents. In July 2010, the Ministry of Environment and Forests, with the help of GIZ, developed the existing website (http://cdmindia.gov.in/admin/) to reduce the processing time and large-scale usage of papers to automate the project data submission process and started paperless operation partly, in July 2010.

Later, the Government mandated large-scale CDM projects to commit and earmark 2% of revenue generated from the sale of Certified Emission Reductions (CERs) to support sustainable development activities for the local communities. However, the existing framework does not have the requisite information and also lacks information on the status of the registered/ unregistered projects accorded Host Country Approval. Thus, to improve the functionality of the Designated National Authority (DNA), it was decided by the Members of the NCDMA to capture the entire lifecycle of the CDM projects and also have provision to monitor the commitment of the project proponents for sharing of 2% of the CERs revenue.

The new website has been designed and developed with the help of GIZ. This MIS is a web-based collation and monitoring tool functioning in a module-wise manner. It will capture all information provided by the project proponents in various modules starting from user registration, prior intimation, submission of projects, host country approval, validation, registration, issuance and Transaction of CERs. Based on the submission, it will undergo approval workflow, documenting all events relating to host country approval; NCDMA meetings, Issuance of Letter of Authority. The reporting module will generate various reports displaying the status of projects.

Shri Lavasa also said that in the second commitment period of the Kyoto Protocol (2013-2020), the number of CDM projects has come down drastically. In comparison, it may be seen that in 2012, there were 3, 227 projects registered with United Nations Framework Convention on Climate Change (UNFCCC) and in 2013, it was reduced to 307 projects. In 2014 it was further reduced to 158 projects and in 2015 it is only 47 projects registered so far. Interestingly, in 2013, India has registered 115 projects, which are the highest by any country. Last year, the NCDMA has accorded Host Country Approval to 76 projects and India registered 56 projects with UNFCCC in 2014. Thus, keeping a futuristic view, this website may help DNA to prepare for the future market mechanisms evolving under the UNFCCC.

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Indian Bureaucracy

TPP casts shadow on India’s foreign trade worth over $200 bn: ASSOCHAM

Huge Scope of Furthering Indo German Relations – Steffen Builger

Government to set up special regulator for bankruptcy cases

NASA and Boeing Extend International Space Station Contract

Our government is Pro-Poor and hence Pro-Market: Jayant Sinha

India and ASEAN Strengthening Economic Ties

Subhir Gokaran,Economist,appointed as Executive Director International Monetary Fund

India signs MoU with Republic of Korea to enhance bilateral air service cooperation

Indian Forest Service (Main) Examination, 2015

Indian Air Force Exercise Livewire Continues

All India Organisation of Employers urges government to apply amended Payment of Bonus Act, 1965 prospectively from 2016-17

New Website on National Clean Development Mechanism Authority launched

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