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India hits back
at USA on India to take up
BPO issue with US Bids for PACL to
be invited again Kangra tea
industry in crisis Microsoft
launches ‘Office Hindi’
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EU commits 30 cr
for assistance in Safta IPCL roadshow
today
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India hits back at USA on outsourcing issue New Delhi, February 16 “It is strange that on the one hand, people are talking about opening up of market, and on the other hand, banning business process outsourcing. Our agriculture is fragile as it is not subsidised, like in the US,” Commerce Minister Arun Jaitley said after an hour-long meeting with US Trade Representative Robert Zoellick here. Zoellick, however, maintained “trade is a two-way street...Trade should be win-win. We have to see how can we create additional jobs on both sides.” This can be done if India opens up both services and agriculture which will strengthen US hands to lift the ban on outsourcing, Zoellick told a news conference. The US Trade Representative, however, sought to turn down the impression that the US was closing its economy. “It is unfair to say that we are closing our economy, if that was so we would not have a $ 9 billion trade deficit with India”, he said. Mr Zoellick cited the high tariffs as reflective of the closeness of the Indian economy even as significant reforms have taken place in areas such as information technology. “The average Indian bound rates of 112 per cent are twice the world average and 10 times that of the US. The applied rates of 38 per cent are three times that of the US”, he said. A Bill to ban BPO outsourcing has been passed by several states in the United States and is pending approval from several other states. The Indian BPO industry has received a lot of backlash in recent times and has been held responsible by many think-tanks in the US for declining employment
opportunities in America. The comments of Mr Zoellick has to be seen in America’s current political situation with Presidential elections not very far away. In India, also, the general elections are going to be held in about two month’s time. Knowledgeable observers here say neither the US nor the Indian Government will be willing to deviate from their respective positions, at least till the time the elections are over. Mr Zoellick is at present undertaking a whirlwind tour of several countries in a bid to trash out ways and means to untangle the deadlock in multi-lateral trade negotiations. Before visiting India, the US Trade Representative toured China, Japan, Singapore and Pakistan. He would move later to South Africa, Costa Rica, Geneva and Paris.
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India to take up BPO issue with US
New Delhi, February 16 “The government will be taking up the crucial issues relating to Business Process Outsourcing (BPO) with the US Commerce Secretary who arrives in India on Tuesday,” Additional Secretary in the IT Ministry S. Lakshminarayanan said. Inaugurating the two- day National Summit on ‘India — the knowledge capital — moving up the BPO value chain’, Mr Lakshminarayanan said IT Ministry had prepared briefs for the Minister of Communication and IT to enable him take up the issues India had been confronting arising out of BPO controversy with his
counterpart. Nothwithstanding a 20 per cent lower operating cost to US companies outsourcing from here, India was facing three major non-tariff barriers in terms of taxes, visas and legislations in that country, Mr Lakshminarayanan said. “The software industry is paying $ 300 million in social security taxes in US which is likely to rise to $ 1 billion by 2008. In Japan, the 20 per cent withholding tax on onsite and offshore services make the Indian industry uncompetitive”, he added. In the EU, there was a social security tax for every member country which added to the burden of the Indian companies, he said. In the US, the number of H1B visas had been reduced to 65,000 from the earlier 1.95 lakh, while there were moves to tighten L1 visas (intra-company transfers), he said. On legislations in the US, Mr Lakshminarayanan said apart from the various state Bills to ban outsourcing, there was a federal legislation which restricted sub-contracting to countries like India. Acknowledging the need for sustained efforts to overcome non-tariff barriers like moves to ban outsourcing, he said government was providing financial and official support to the industry in its effort to fight outsourcing backlash. “We are funding Nasscom in its campaign against outsourcing backlash besides offering inputs into negotiations and we have provided assistance to them for hiring lobbying firms in the US,” he said. He said the Nasscom had initiated its global public relations campaign in January last year targeting mainly at the US and UK where the key objective was to confront essential policy issues in US Congress, Bush Administration and key states and UK Parliament. The major challenges were the proposed legislations in states like New Jersey and Maryland where bills have been introduced against outsourcing but were currently on hold. In Indiana and Michigan, bills have been tabled, Mr Lakshminarayanan said. He said to fight the outsourcing backlash, Nasscom had been in touch with IT Association of America and added that a high-level group with
officials from External Affairs, Commerce and Industry, Finance and Communications and IT Ministries take stock of the measures. “The Indian government is in constant touch with the US Government on the developments taking place there on the issue of outsourcing through its Ambassador. India’s concern and anxieties were being conveyed to the US administration regularly on the issue through proper channel ever since the controversy erupted on BPO,” Mr Lakshminarayanan added. The official said stringent visa rules by the USA were having adverse impact on the Indian business. Mr Lakshminarayanan said USA would have to be dependent on foreign technical manpower because the country was facing acute shortage of skilled manpower, which was expected to widen. In the two-day summit, organised by Associated Chamber of Commerce and Industry
(ASSOCHAM) and World Bank, Ministry of IT and states of Gujarat, Haryana, Himachal Pradesh, Kerala,
Maharashtra, Punjab, Tamil Nadu and Uttaranchal are actively participating. The ASSOCHAM has suggested to the Indian Government that it should forward a well-prepared economic argument to the U.S. Senate supporting outsourcing. The chamber feels that nearly 3/4th of the American and European households invest in shares of companies and venture funds. If outsourcing improves the rate of return of these companies, the ultimate beneficiaries would be the shareholders. It is also of the view that outsourcing to India leads to greater workforce productivity and according to the value chain-process, this leads to higher economic growth.
— Agencies
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Bids for PACL to be invited again New Delhi, February 16 Ms Vinni Mahajan, Director-cum-Secretary, Directorate of Disinvestment, Punjab, said bidders would have to submit their expression of interest before March 12. Since the market conditions for the basic product of the company, caustic soda, had improved the core committee of the Cabinet at a recent meeting gave a go ahead to the directorate to call for bids. Further, she said, “PACL has approached the Punjab State Electricity Regulatory Commission to allow it to purchase power from Himachal Pradesh or from other sources at a lower price. The commission is expected to take a decision in this regard by month-end.” The company is spending over Rs 25 crore annually on power bill alone. She admitted that no bidder had come forward last time in April, 2003. However, she said, “We are expecting better response this time, as the company’s financial performance has improved and it has registered nominal profit this quarter.” UTI Bank will be the adviser for the proposed bids. A senior official of PACL said as per the unaudited financial results for the half-year ended on December 31, 2003, the company registered a net profit of Rs 41 lakh as against the losses of over Rs 10.81 crore during the corresponding period last year. He said, “The net sales of the company has increased to Rs 38.23 crore in quarter ended on December 31, 2003, as against Rs 36.08 crore in the quarter ended on December 31, 2002. The total annual income of the company is around Rs 100 crore. The interest costs have also come down to Rs 4.43 crore from Rs 5.52 crore during the same period.” After offering VRS to the surplus staff, the wage bill had also decreased by over Rs 1 crore annually. The Board of Directors of the company has also called upon the state government to convince the Centre to lower the excise duty on caustic soda and to increase import duty on caustic soda to play a level-playing field to the domestic players.
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Kangra tea industry in crisis Dharamsala, February 16 The tea industry in Kangra has seen many ups and downs during past 150 years but technical help provided by the CSIR and Palampur Agriculture University provided some good moments during last three decades . But since the signing of the WTO by India, the tea industry all over the country is facing crisis and the situation in Kangra is worst. Out of four co-operative tea factories three are closed for last two years and the employees are sitting idle. These co-operative factories have large outstandings payable to tea planters as well as loans and have no resources to meet their obligations. As a result three factories at Sidhbari near Dharamsala, Bir near Baijnath and Baijnath are closed . The only factory still running is that at Palampur but it is only on verge of closure as its debts are mounting. According to Mr Gupta, the manager of Palampur co-operative tea factory, the losses have crossed Rs 1.5 crore and dues of the planters are more than Rs 1 crore. In case the state government fails to come to the rescue , factory will not be able to work next season which starts in March. Mr. Gupta when questioned about the recent Rs. 8 per kg subsidy announced by the Centre said the announcement was ambiguous and he did not know who will get this amount. The earlier subsidy never reached Kangra tea planters. Revenue Minister and a leading tea planter B.B.L. Butail was hopeful that the state government with help from financial institutions like Nabard and commercial banks will come to the aid of the tea planters. He said efforts will be made to ensure that the subsidy announced by Centre is also made available
to the Kangra tea planters. But small tea garden owners feel that unless immediate steps are initiated to revive the tea industry , any action taken later will be fruitless as the season will go waste. They also feel that steps must be taken to ensure quality tea production which has a good market.
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Microsoft launches ‘Office Hindi’
Mumbai, February 16 Microsoft’s first offering developed specifically for the Indian market, ‘Office Hindi’ will allow users to create documents and communicate with others in Hindi and navigate easily using the menus and toolbars in Hindi. It supports nine Indian languages, empowering Indian users to leverage the global standards-based Office applications suite in the language of their choice. The two editions of the product — Office Hindi Professional and Office Hindi Standard — will be available through Microsoft’s regular sales channels. Microsoft also announced the availability of online resources, training material and partner support to ensure that customers adopt and integrate the offering into their infrastructure smoothly. Microsoft Corporation India Pvt Ltd managing director Rajiv Kaul said, “Our local language initiatives are aimed at helping Indian users realise the same benefits of IT as their peers the world over. Office Hindi combines a world class computing experience with the comfort and familiarity of the Hindi language — and we are confident of the value it will offer users in India.” The offering has seen significant investment in product development and has been engineered to offer the greatest value and choice to the Indian user. The development team comprised more than 50 professionals involved in various aspects including coding and testing. Microsoft hoped that Office Hindi would offer significant benefits to Central and state Governments, public sector undertakings, banking
industry, education institutes and local developer community. “The product went through a six-month testing process with customer audiences, with their feedback incorporated at each stage,” he added. The professional version offered a switchable interface providing users with the flexibility of easily deploying the Hindi and English interface as required, he said. Microsoft had first announced its intent to launch this offering in India, during the visit of its chairman and Chief Software Architect Bill Gates in India in 2002.
— Agencies
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| EU commits 30 cr for assistance in Safta
New Delhi, February 16 “We welcome the positive outcome of the recent SAARC Summit in Islamabad, in particular the decision made to reinvigorate the organisation....the EU is ready to increase its support to
SAARC by providing technical assistance for implementation of the Free Trade Area,” European Commissioner for External Relations Chris Patten told reporters after holding talks with External Affairs Minister Yashwant Sinha. Describing as “extremely exciting” setting up of SAFTA, for which India had played a leading role, he said EU would provide the amount to give assistance in areas like customs on which it had years of experience. On the issue of outsourcing, Patten said the EU, which is India’s main trading partner and biggest foreign inward investor, had “no problem with outsourcing. It is good for you and good for us”. He said while the union understood India’s concerns, New Delhi should also look into certain trade
issues. — PTI
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IPCL roadshow today New Delhi, February 16 While no official confirmation was available, it is learnt that Disinvestment Minister Arun Shourie and Chairman of Reliance Industries Mukesh Ambani is expected to be present during the roadshow. The seven day roadshow will continue till February 24. The public issue is scheduled to open on February 20 and close on February 27. The government had offloaded its 26 per cent stake in 2002 to Reliance Industries. The government presently holds about 33.95 per cent stake in IPCL. While about 5 per cent stake would be offered to the employees the balance 29 per cent would be offloaded through the public issue.
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