India, EFTA trade pact talks begin

Commerce and industries minister Kamal Nath announced on Saturday that India and the European Free Trade Association (EFTA) states—Iceland, Norway, Switzerland and Liechtenstein—had agreed to constitute a joint task force (JTF), comprising officials from India and the EFTA states, to negotiate the proposed broad based trade and investment agreement between the two sides.

The announcement came on the sidelines of the World Economic Forum Annual Meeting 2008 at Davos. The JTF would also monitor the implementations of the recommendations of an India-EFTA Joint Study Group (JSG) which was established on December 1, 2006. The mandate of the JSG was to undertake a comprehensive review of bilateral economic linkages between India and the EFTA states and to recommend measures to strengthen the economic engagement. It was also tasked to explore the feasibility of a bilateral broadbased trade and investment agreement.

The JSG, Nath announced, had since met four times and has submitted its report to the governments of India and the EFTA states.

The JSG has also concluded that both sides should advance their economic relationship by exploiting the potential for enhancing trade and investment flows. Considering the complementary structure of the economies, the JSG concluded that both sides would significantly benefit from a bilateral trade agreement.

The JSF also recommended that the two sides should enter into negotiations for such an agreement. These recommendations have been accepted by the two sides.

India is the “Future of The World”, says Sarkozy ahead of visit

A 11 member business team led by Sunil Bharti Mittal, the President of the Confederation of Indian Industry (CII) called on French President Nicolas Sarkozy on Tuesday at the Elysee Palace in Paris.
During the meeting, President Sarkozy referred to India as the Future of the World and described it as one of great and emerging nations of the 21st Century.
The Indian business delegation discussed issues of investment in France; work permits. They also acknowledged good understanding in politics and strategic thinking, but said that trade and investment between France and India needed to improve.
They highlighted the opportunities in infrastructure; in defence equipments especially offset; in healthcare by creating a pool of researchers and academicians; they discussed reduction of drug prices by support to generic drug industry.
The team also discussed the opportunities in the auto industry in India and the need for France to make an iconic investment in India. The business delegation acknowledged that a new chapter in Indo-French relations was expected with President Sarkozy at the helm in France. There were discussions on building synergies between SMEs. In echoing his view of the changing global economic and political order, President Sarkozy was emphatic about India`s role and responsibilities at the high table of global leadership.

India leads global BPO growth

The outsourcing market in Asia Pacific grew substantially in 2007, fuelled primarily by increased demand from corporations based in India, say the latest TPI Index from sourcing advisory firm TPI.

Outsourcing in Asia Pacific saw its second consecutive year of strong growth and showed an increase in demand across all measures. Although the number of contracts signed in 2007 grew by just 4 per cent, their total contract value increased 30 per cent year over year from $9.9bn to $12.8bn and annualised revenues showed a 13 per cent increase, nearly double that of the global average. Asia Pacific was the only geography to show an increase across all of these measures.

The average value of outsourcing contracts in Asia Pacific increased by 25 per cent, from $141mn to $176mn, largely due to the increased mega relationship activity in the region, especially in the last quarter of 2007. The region showed particular strength in mega relationships with nine deals signed in 2007 at a total value of $1.5bn. This represents one third of the mega relationships globally and contrasts sharply with the region's overall share of one-sixth of the global outsourcing market.

Larger contracts have become popular among companies based in Asia. In addition, BPO performance in Asia-Pacific was particularly strong in 2007. BPO TCV in the region soared by 101 per cent, yielding the best year ever for BPO contract values in the region and leading average BPO contract value to increase by 81 per cent.

Outsourcing growth in Asia-Pacific was largely driven by companies in India and China. These countries traditionally known as outsourcing destinations are becoming buyers of outsourcing. India has seen stepped up outsourcing activity within the telecommunications and financial services sectors whereas growth in China has been strongly influenced by a single telecommunications mega deal.

Global financial crisis not to hurt India: Nath

Commerce and Industry Minister Kamal Nath asserted on Wednesday at the World Economic Forum’s annual meeting that India would not be engulfed by the worsening global financial and credit crisis. He maintained that the country’s growth path is based more on the domestic consumption, and not on exports.

“Unlike China, which is relatively more dependent on exports for its growth, the growth in Indian economy is driven by the surging demand,” Nath maintained. He also said India was not “coupled” with the happenings in the US and other economies.

“I don’t see the impact of the financial crisis on India,” the minister reiterated during a session on ‘Update 2008: Economics’.

He argued that “the dynamics of the recession” had changed, adding that the government was more concerned about the sudden spurt in the international prices of food articles.

As expected , the proceedings on the first day of the Davos 2008 were dominated by one issue — the fear of a recession in the US economy, and how it would impact various countries.

Besides, the participants debated whether China and India would continue to grow at a brisk pace given the recessionary pressures on the US economy.

“The rest of the world is not as resilient as China and India and it is difficult to predict the repercussions of a severe recession in the US economy if its current consumption of $9.5 trillion slows down drastically,” said Stephen Roach, chairman of investment bank Morgan Stanley in Asia.

Roach suggested that it was wrong to say China and India can grow independently despite the recession in the US economy, adding the domestic consumption in China is about $1 trillion and $ 50 billion in India. He said if the consumption in the US economy shrinked by $3-4 trillion, China and India would be adversely impacted.

However, Nath differed, saying “economic activity has shifted to East Asian economies and what we are witnessing is growing South-South trade”.

Both India’s political and corporate elite are putting a brave face on the worsening economic situation in the industrialized countries, said several analysts at the WEF meeting.

Clearly, there is lack of consensus on whether China and India can be de-coupled from the happenings in the US economy.

However, Yu Yongding, director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, said: “If there is a tremendous slowdown in the US economy, then we must be worried about it.”

Nouriel Roubini, chairman of New York-based Roubini Global Economics, said “if the US economy sneezes, the rest of the world catches a cold”, adding this time the diagnosis in the US was worse.

Economists also remained divided over the role of central banks in bringing the world to the brink of recession, and whether institutions like the Fed were equipped to steer the global economy out of danger.

John Snow, former US treasury secretary, said central banks had performed remarkably over the last two decades. “The issue of whether central banks are capable of vigorous action, bold action, was answered yesterday [referring to the cut by 75 basis points in the interest rate by the Fed on Tuesday].”

Modern India a new center of economic power

NATION READY FOR NEW ROLE IN GLOBAL AFFAIRS

Hardly a breath passes in today's busy world without the mention of India. It is as if that emerging power's presence reaches in all directions, demanding a voice in every significant global conversation. Indeed, some have argued that the "Age of India" is upon us.

At the very least, the 21st century will witness New Delhi's continued rise as one of the principal centers of influence. As such, the community of nations should extend to India more of the benefits that its status warrants, including permanent membership in the United Nations Security Council.

Now, I am not bringing this up simply because British Prime Minister Gordon Brown made it an issue during his visit to India this week, although I was pleased to hear his comments. Both Brown and Indian Prime Minister Manmohan Singh called for India to have a permanent seat, largely because of the country's growing economic clout.

It is time.

I have long believed that the thinking behind the current U.N. Security Council configuration was appropriate for its moment in history, that is, the period following World War II. In the interim, however, several additional nations have climbed to prominence. The old order should change, even though that could dilute the power of the permanent five: the United States, Russia, China, Britain and France.

In considering candidates, India is a logical one, as are Japan, Brazil, Germany, Nigeria, Mexico, South Africa, Indonesia, Egypt and perhaps others.

One appealing proposal would increase the total number of permanent seats to 10, while adding four more revolving positions. In the end, though, an acceptable modification of the U.N. Security Council could happen in several ways.

Brown also discussed the benefits of having New Delhi join an international group - the Paris-based Financial Action Task Force - that combats money laundering and terrorist financing. India's long experience with political violence and its increasing role in the global economy offer a compelling reason for its participation.

Finally, Brown shared words that no doubt resonated with many Indians when he stressed that Britain - the former colonial power in India until 1947 - was no longer the dominant partner in their relationship. Even though some might argue that he was stating the obvious, it was no small gesture to emphasize the new reality. A dose of humility goes a long way in building international ties - a lesson that President George W. Bush once advocated but appears to have essentially forgotten.

"Ours is a strategic partnership of equals. A confident, modern, 21st-century India and a confident, modern, 21st-century Britain," Brown said.

Such respectful dialogue creates the basis for mutually beneficial, enduring cooperation, whether the coming era is the "Age of India" or an environment where several heavyweights - including the United States, China, Europe and India - share the stage.

French award for Shah Rukh Khan

The French government will confer "Officer of the Order of Arts and Letters" title on Bollywood star Shah Rukh Khan for his contribution to Indian film industry, a senior French government official said on Thursday.

"The title is being conferred to recognise the successful work done by Khan in 15-year career span and his contribution to Indian cinema - as an artiste and entrepreneur," Audiovisual Attache - Head of the French Film and TV office, French Embassy in India, Mohamed Bendjebbour said.

The distinction is given to persons who have established themselves by their creativity in the field of art, culture and literature or for their contribution to the influence of the arts in France and throughout the world, Bendjebbour said.

French Ambassador in India Jerome Bonnafont will confer the title on Khan at the inaugural ceremony of four-day French film festival - First rendezvous with French cinema here in Mumbai on January 27.

This is not the first time an Indian film personality is being honoured by the French government. In 2005, renowned director Adoor Gopalakrishnan was bestowed with a similar title as Khan, while last year Amitabh Bachchan was conferred with "The Legion d'Honneur", France's highest civilian honour.

"We have the tradition of honouring great film personalities in India. Our government believes that Indian film industry is today among the best in the world in terms of quality," the official said.