G-20 Governments Need to Work together : Fin Min

some excerpts from Finance Minister's speech on post crisis.

The Brettonwood system emerged after the Great Depression. The current crisis has heralded the rise of G20 as the premier forum for international cooperation. 

In a post crisis scenario, G20 Governments will have to work together to support well functioning international economy. They will need to coordinate policy actions in a manner that can ensure strong, sustainable and balanced growth.

The immediate spheres of such coordination are

(a) macroeconomic policies and exit strategies 

(b) pace of regulatory reforms to ensure financial stability, without affecting prospects of growth

(c) reform in the governance of International Financial Institutions to reflect current economic realities

(d) keeping international trade open and avoiding protectionism and

(e) coordination on climate change and energy issues.

India and Argentina Sign MoU on Cooperation in Agriculture

India and Argentina have signed a Memorandum of Understanding (MoU) on Cooperation in Agriculture and Allied Sectors.The MOU provides a framework for exchange of information on best practices and technologies, cooperation in research and development and promotion of trade, investment and joint ventures. 

Argentina is the largest source of import of soya oil by India.There are 14 Indian companies which have invested about one billion dollars in IT, agrochemicals, steel, pharmaceuticals and cosmetics in Argentina.Agricultural machinery is emerging as a new area of trade and collaboration.

JVC for Design and Development O\of Multirole Transport Aircraft

The effort to design and develop a Multirole Transport Aircraft (MTA) by India and Russia received a significant boost with the signing of shareholders agreement for setting up of a joint venture company.

A Joint Venture will now be formed between Hindustan Aeronautics Limited and the Russian Partners namely United Aircraft Corporation & Rosoboronexport to Co-develop and Co-produce Multirole Transport Aircraft (MTA).

MTA is a 15-20 tonne payload capacity Aircraft which would meet the requirement of the Indian Air Force and the Russian Air Force. The project has been approved by both the Government of India and the Government of Russian Federation.

The main features of MTA are: Maximum take-off weight 65 tonnes, Payload Capacity 15-20 tonnes, Cruise Speed 800 kmph, Range 2500-2700 km, Service ceiling 12 km. The Aircraft will have two engines, state of the art features such as fly-by-wire, full authority digital engine control, modern avionics and glass cockpit.

The total development cost is around US $ 600.70 million (approx Rs.2900 crores) to be equally shared by both the sides. It is planned to manufacture 205 aircraft with 50:50 work share between HAL and the Russian partners.

A Joint Venture Company (JVC) is being established with its headquarters at Bangalore, India for executing the MTA project in which HAL and Russian participants will have equal shareholding.

6th Indo-Oman Joint Commission Reviews Bilateral Economic Relations

Shri Sharma emphasized the priority attached by Indian Government for cooperation with Oman in Petroleum, Gas and fertilizer sectors while the Deputy PM (oman) underscored the need for greater cooperation in capacity building and information technology. Omani side agreed in-principle to invest in India for revival of few closed plants of Fertilizer Corporation of India (FCI) and Hindustan Fertilizer Corporation Ltd. (HFCL) and the expansion in RCF (PSU of Government of India) through investment by Oman Oil Company.

India-Oman Joint Investment Fund initiative is expected to function as a catalyst to promote and partnership between the private sectors of the two countries and enhance the trade and investment between the two countries. Shri Sharma stressed on the need for the fund to be operationalised and augmented immediately.

A number of sectors have been identified for investment cooperation such as (a) Agriculture (b) Air ports, sea ports and railways (c) Hospitals (d) Power including nuclear power (e) Renewable energy including solar and wind energy (f) Mining (g) Oil and gas (h) Education and skill development (i) Tourism (j) Healthcare (k) Infrastructure and (l) Chemicals and Fertilisers. 

The Omani side expressed its keenness for

• setting up super-speciality hospitals in India in the form of Joint Ventures
• Investments in agro processing specially in Indian SEZs

Oman has a strategic location,  which offers huge opportunities for Indian products to these markets apart from the GCC.  

India and South Korea Sign two Landmark MoUs to Boost Defence Cooperation

Heralding a new chapter in the history of defence cooperation, India and South Korea today signed two landmark Memoranda of Understanding to give a huge boost to the Strategic Partnership between the two countries.

Speaking at the meeting, Mr Antony said  New Delhi will be happy to see the defence industry relationship to be more than a buyer-seller relationship and its further evolution into Transfer of Technology, joint production and joint R&D etc.

The talks covered a wide range of security issues- both regional and global.

Maritime Security

- maintaining peace as well as ensuring  safety and security of sea lanes of communication in the region.

-securing vital energy supplies that pass through the Indian Ocean. 

-like- minded countries working in the Gulf of Aden to coordinate efforts and also exchange information on the happenings in the area.

Regional Security Scenario

- have to maintain balance and restraint even in the face of grave challenges to our security. Our intention is to develop friendly and cooperative relations with all our neighbours  

East  Asian Architecture 

-India looks at itself as an integral part of East Asia. India is a founding member of East Asia Summit and as such, looks at the emerging architecture in East Asia as open and inclusive. 

‘That  is why we welcome the decision of ASEAN Foreign Ministers to move towards the inclusion of the United States and Russia as members of the East Asia Summit.

Protocol for Avoidance of Double Taxation between India and Switzerland

Republic of India and the Swiss Federal Council have signed a Protocol which will amend the existing Double Taxation Avoidance Agreement between the two countries (DTAA). The amended DTAA shall come into operation after it enters into force on completion of internal process by Switzerland side.

Salient features of this Protocol are:

• Article on Exchange of Information has been amended to bring it in line with international standards
• · Under the current DTAA between India and Switzerland, India has not been able to obtain banking information from Switzerland. The protocol now seeks to amend the Article concerning Exchange of Information to enable exchange of such information.
• · Information which is foreseeable relevant for carrying out the provisions of this agreement or to the administration or enforcement of the domestic laws concerning taxes can be exchanged under the DTAA, whereas earlier information which was relevant only for carrying out the provisions of DTAA could be exchanged.
• · Information exchanged is to be used for tax purpose only. However, the new Article also provides for use of information by such other purposes which are allowed under the laws of both States and the competent authority of the supplying State authorizes such use.
• · There is a specific provision to ensure that information will be exchanged even if there is no domestic interest.
• · There is a specific provision for providing banking and ownership information.
• · The new provision will be applicable only for prospective information and not for past information.
• At present the income from international shipping are not covered under the DTAA. This is now sought to be included in the DTAA by providing for residence based taxation for shipping income from international traffic.
• Our earlier treaties used to cover tax sparing provisions where if the income is exempt in one country, the other country used to provide corresponding relief even if such taxes are not paid due to exemption. However, India no longer supports this method and is moving away from profit based exemption. Tax sparing (to the extent of 10% of interest income) is currently there in the existing DTAA. Therefore, it is sought to be deleted in the Article concerning elimination of double taxation.
• Article on Non-discrimination is sought to be amended to provide that difference in tax rate of resident taxpayer and Permanent Establishment of non-resident tax payer should not be more than 10%.
• Recognised pension fund or scheme is included in the definition of resident to enable them to get benefit of the DTAA.
• A provision for Limitation of Benefit is sought to be introduced to prevent misuse of treaty benefits on dividend, interest, royalty, fee for technical services and other income.

Flood Relief Aid for Pakistan

As a more concrete assessment of the damage inflicted by this natural disaster and the urgent needs of the people of Pakistan emerges, Government has decided to increase its assistance to Pakistan from 5 million US Dollars, announced earlier, to 25 million US Dollars. Out of this amount, 20 million US Dollars would be contributed to the ‘Pakistan Initial Floods Emergency Response Plan’ launched by the UN Office for the Coordination of Humanitarian Affairs. The balance of 5 million US Dollars would be contributed to the World Food Programme for its relief efforts in Pakistan.

India and Switzerland Sign Double Taxation Avoidance Agreement

A protocol amending the existing Double Taxation Avoidance Agreement was signed here today between Republic of India and Swiss Federal Council. The Signing ceremony was held at the Ministry of Finance, North Block, New Delhi. The protocol was signed for the Republic of India by Shri Pranab Mukherjee, Finance Minister while the Swiss Federal Council Foreign Minister, Ms. Micheline Calmy-Rey signed for the other side. Shri Ashok Chawla, Finance Secretary, Shri Sunil Mitra, Revenue Secretary, Dr. Kaushik Basu, Chief Economic Advisor from Indian side and Ambassador Philippe Welti, Ambassador George Marlin amonth others were present from Swiss side.

Extradition Treaty with Neighbouring Countries

India has no Extradition Treaty with Afghanistan, Bangladesh, China, Maldives, Myanmar and Pakistan. For signing of an Extradition Treaty with any country, mutual consent is required for initiating negotiations through diplomatic channels.

India has Extradition Treaties with the USA (1999), Canada (1987), Britain (1993) and has Extradition Arrangements with Italy (2003) and Australia (1971). The Extradition Treaties/Arrangements signed with these countries are working smoothly.

It is the policy of the Government of India to conclude Extradition Treaties with as many countries as possible so as to ensure that fugitive criminals are extradited to face trial in India.

Look East Policy of the Country

The ‘Look East Policy’ of the Government has been evolving since the early 1990s and has significantly deepened India’s engagement with the countries of East and Southeast Asia. India’s trade and Investment with that part of the world has been enhanced significantly. India had signed a ‘Trade in Goods’ agreement with ASEAN in 2009, which became operational from 1 January 2010. India has concluded a Comprehensive Economic Partnership Agreement with the Republic of Korea (RoK), which is also being implemented from 1 January 2010.

India and China have established a Strategic and Cooperative Partnership for Peace and Prosperity and have enunciated a Shared Vision for the 21st Century. There are regular high-level political contacts between the two countries. The two sides have established a dialogue architecture to discuss the entire range of bilateral relations. The functional cooperation between the two countries is expanding in all areas. During the visit of Commerce and Industry Minister to China in January 2010, the two countries signed a MoU on Expansion of Trade and Economic Cooperation. An Agreement on the Establishment of the Direct Secure Telephone Link between the Prime Minister of India and the Chinese Premier was signed during the visit of the External Affairs Minister to China in April 2010. Both sides have agreed that they are committed to resolving outstanding differences, including on the Boundary Question, through peaceful negotiations, while ensuring that such differences are not allowed to affect the positive development of bilateral relations.

NORTH KOREA CONDUCTS 2nd NUCLEAR TEST

Unfazed by global pressure, a defiant North Korea today conducted a second “more powerful” nuclear test and test-fired three missiles, triggering an emergency U.N. Security Council meeting and calls for a global “action” against a “reckless” Pyongyang.

Russian experts said the North Korean blast was up to 20 times more powerful than the its first nuclear test on October 9, 2006. Some South Korean experts said the power of the second blast was comparable to the bombs which hit Hiroshima and Nagasaki during World War II.

Japan, South Korea and the U.S. — along with China and Russia — (six party talks) have been negotiating since 2003 to persuade North Korea to abandon its nuclear programmes in exchange for energy aid and security guarantees.

END - USER VERIFICATION AGREEMENT WITH U.S

The agreement is needed for important defence purchases

This will avoid fresh negotiations and signing of documents each time India wants bare minimum requirements for purchases.

The agreement is currently needed for acquisitions such as the Long Range Maritime Reconnaissance Aircraft for the Indian Navy and other defence procurement.

As per the U.S. laws, all foreign military sales are guided by the Golden Sentry programme that is governed by its Department of Defence while the Blue Lantern programme is governed by the Department of State.

This is to ensure that the product sold to a country is being used for the stated purpose.

http://www.hindu.com/2009/05/25/stories/2009052559421400.htm

PEACE PIPELINE

Iran and Pakistan on Sunday signed a deal to lay a gas pipeline for taking Iranian gas to Pakistan.

As originally proposed, the project envisages construction of 1,100 km of pipeline in Iran, 1,000 km in Pakistan and 600 km in India. It will help to transfer 150 million cubic metres of gas a day. Construction of the 56-inch-diameter pipeline will be completed in five years.

project was conceptually attractive, but the turbulence in Pakistan’s Baluchistan province posed practical difficulties in its implementation.This makes india rethink about india joining the project.

http://www.hindu.com/2009/05/25/stories/2009052556920100.htm

PROJECT HIGHNOON

- A Project by EU to assess the impact of retreat of himalayan glaciers and possible changes of monsoon on distribution of water resources in north India.

- A project involving research insti. from netherlands,Britain,swiss & India.TERI, IIT DELHI & Kharagpur to participate

- aim is to integrate available climate data,hydrological data and state of art regional models. also link results of estimation and applicable adaptive measures.

- develop scenarios for snow melt and monsoon patterns and various simulation models.

Read full excerpts here

S.M.KRISHNA spells FOREIGN POLICY

1. Stengthen ties with the country's neighbours
2. consoliate strategic partnership with U.S,Russia,China,japan and E.U
3. Continue Look east Policy
4. aim of non aligned foreign policy and strengthening its autonomy
5. economy : sustain growth rate of 9 - 10%
   
6. pakistan : friendship tie if islamabad took credible action to dismantle terror infrastructure
7. Srilanka : Political steps towards the effective devoltion of power within Srilankan constitution in such a way, all including tamil can feel at home and lead dignified living at their own free will

also see

India - Brazil economic sync

India exports minerals, fuels, iron and steel, energy equipments to Brazil and imports sugar as Brazil is the largest producer of sugar.

Brazil is also important exporter of iron ore, vegetable fat, ethanol and leather.

Dairy products, food processing, high end fashion, leather, machining equipment, technology and healthcare were broad areas for potential collaboration.

Phalcon AWACS arrives

Indian Air Force (IAF) pilots will fly home the first of the three Phalcon Airborne Early Warning and Control Systems (AWACS) on Sunday, making India the first country in the South-Asian region to have this capability.

The AWACS will provide India the means to track incoming missiles and look deep into the neighbouring countries under all weather conditions.

AWACS are primarily used for detection of incoming hostile cruise missiles and aircraft from hundreds of km away in all weather conditions and directing air defence fighters during combat operations against enemy jets. It also helps detect troop build-up in hostile territories.

With the induction of the Phalcons, frontline IAF fighters like Sukhoi-30MKIs, Mirage-2000s and Jaguars will now be backed by “eyes in the sky” to look much beyond the country’s borders through direct data linking.

Isreal's Phalcon

Road to Energy efficiency in US

The new policy requires U.S. auto makers to produce cars and trucks that achieve an average 35.5miles per gallon by 2016, and will reduce America’s carbon dioxide emissions by 30 percent.

Environmentalists said the new policy would do more to reduce global warming pollution than any of the other measures taken by Mr. Obama so far.

Mr. Obama said the policy would help America’s ailing car industry to meet the challenges of moving to a low-carbon policy. Tuesday’s plan will require auto makers to improve fuel efficiency by 5 per cent every year, starting in 2012. By 2016, all new cars will have to achieve 39mpg while trucks will have to get 30mpg. Each class of vehicle will be assigned an efficiency target, which means that carmakers will have to adapt SUVs as well as trimmer vehicles.

furthur notes