New Delhi, November 14
The Minister for Chemicals & Fertilisers and Steel, Mr Ram Vilas Paswan, today issued an ultimatum to the pharma industry to bring down prices at the earliest or the government will take action.

He warned them not to back track from its commitments to reduce prices of essential drugs, otherwise the government would not hesitate in taking stringent actions against it.

Inaugurating an Assocham conference on “Indian pharma industry: Quest for global leadership’ on today, Mr Paswan said, “The government is committed to establish a ‘Drug Bank’ and provide free drugs to cancer patients those below the poverty line and provide total support to pharma industry to help it becoming global leader by strengthening its research and development base for further innovations.”

Mr Paswan regretted that while a good number of pharmaceuticals representatives met him in bunches belonging to tiny and small, medium and large sized sectors and promised to shrink their margins and ensure delivery of essential drugs to masses about two months ago but did not do so.

“The deadline fixed for curtailment of essential drugs prices numbering 354 promised by industry was October 2, now half of November is over and only 11 entrepreneurs, out of about 6000 pharmaceutical players, have so far honoured their commitments,” pointed out the Minister, warning that in an era of globalisation, when things were opening up, pharmaceuticals industry should face the competition with reduced drugs prices or else face stern and stiff government action.

On new pharma policy, Mr Paswan said that the committee headed by the Secretary, Chemicals & Petrochemicals would submit its report to him latest by November 30, following which the draft policy would be referred to Cabinet for its approval.

The Minister said the Indian pharmaceutical industry has established a strong presence for itself in the global arena in the last over two decades. Presently, it is generating $ 12 billion in terms of annual revenue, out of which the export turnover is around $ 4.7 billion.

The industry globally ranks fourth in terms of volume and is 13th in terms of value. Presently, the Indian pharmaceutical industry is contributing around 22 per cent in terms of value towards global generic drugs market.

The current R&D spend is roughly 7 to 8 per cent of the turnover of the major pharma companies, while the global bench mark is about 15 per cent of the total turnover. There is thus a great need for significant increase in R&D spending. Simultaneously, the government is trying to address the requirement of technically-trained manpower by replicating NIPER like institutions in other part of the country.

Dr Swati Piramal, Director, Nicholas Piramal, said the Indian pharma industry was eager to work with the Ministry closely for reducing the drug prices for the welfare of the common masses. In response, the industry was also looking for relaxation in policy and duty rates. 

Differences between the government and pharma sector turned into a pubilc spat today with the latter calling the draft pharma policy a bid to nationalise the drug industry, while Chemicals Minister Ram Vilas Paswan asked the companies to have ‘more heart’ for the poor.

“The new draft policy is not in tune with the industry growth with all regulations and pricing control mechanisms proposed. This is de facto nationalisation of the private sector with all government controls,” said Assocham Pharma Council Chairman Kewal Handa, who is also MD of Pfizer India.

Speaking at the Assocham conference on ‘Indian pharma industry: Quest for global leadership’, Handa said the draft policy, among others, sought to impose price controls and authority to approve brand names while the industry and consumers were ignored.

Paswan on the other hand, defended the draft policy - a final shape to which is expected by the end of this month, saying it aimed not only at boosting the growth of the sector but also make common people in India benefit from it.

“There is still a wide gap between the reasonable prices and affordable prices in a country like India where almost 30 crore of its population lives below poverty line,” he said, adding even as India’s pharmaceutical exports continued to grow, many in the country still were deprived of medicines. — PTI 

New Delhi, November 14
Even as the country was facing shortage of pulses and its prices were skyrocketing, the Supreme Court has ruled that a prohibitory order on export of the commodity could not be imposed on those consignments already booked by exporters prior to the ban order and cleared by the Customs.

Taking a serious view of the government stopping loading of 87 containers of pulses at Kandla port, booked by the Asian Food Industries for shipment to Middle East prior to the June 27 notification for ban, the court imposed a cost of Rs 1 lakh on the Union Government for withholding back the consignments and then dragging the company to the court.

The government had taken a stand that under the Foreign Trade (Development and Regulation) Act, 1992, it was empowered to take a policy decision to prohibit the export of various goods mentioned in the list under the legislation for six months at a stretch in any exigency.

Though agreeing that government has been empowered to regulate exports under the Act, the court said it had to be applied in different situations by issuing different orders but would not have any retrospective effect. “By reason of a policy, a vested or accrued right cannot be taken away by an amendment,” a Bench of Mr Justice S B Sinha and Mr Justice Markandey Katju ruled.

The Asian Food Industries had stated that the government could not impose the ban on it with retrospective date as it had received the supply order for 20,331 MT of pulses from Middle East to be executed between April 22 and May 2. The shipment of 20 containers had already taken place by June 24 and the remaining 87 containers were cleared for shipment between June 23 and 26 for which even the Bill of Loading was issued by the Custom authorities on June 26.

The company further said that the consignment was stopped merely on media reports that government had taken a decision on June 22 to impose a ban whereas the notification to this effect was only issued on June 27.

The Gujarat High Court had allowed the company’s petition and held that it was entitled to export the remaining 87 containers booked and cleared by the Customs.

Upholding the High Court order, the apex court said grant of export permission and giving clearance for it was more relevant than a subsequent ban order. “As soon as such permission is granted, the procedures laid down export must be held to have been completed with.”

The purport and object of the 1992 Foreign Trade Act was to make provision for development and regulation of trade by augmenting export though it empowered the government to make provision for prohibiting, restricting or regulating the export of certain goods listed in the Act, the court said.

New Delhi, November 14
Foreign Direct Investments, for which the government gives various tax incentives, should also widen the tax base so that the exchequer gets higher revenue, a finance ministry official said today.

While there is a revenue foregone when the government gives incentives for attracting FDI, at the same time this investment contributes to increased capital stock and higher employment, Parthasarathi Shome, Adviser to Finance Minister P Chidambaram, said here.

“Ultimately, we have to look at whether we are able to expand the tax base,” he said at a FICCI seminar.

Mr Shome also said India was competing for FDI with other countries in east Asia and the government had to ensure that a fair share of revenue comes to the exchequer without overburdening the taxpayer.

Speaking at the seminar, FICCI president Saroj K Poddar said Dividend Distribution Tax needed to be brought within the ambit of Double Taxation Avoidance Agreement and reduced to a reasonable level of 7.5 per cent.

He also sought tax exemption or taxing at a concessional rate to encourage Indian companies having subsidiaries abroad to rapatriate their earnings into India.

Organisation for Economic Co-operation and Development representative Jeffery Owens said there had been significant changes in the structure of the Indian economy in the last one decade. The challenge now was to adapt the tax system to the changing paradigm, he added. — PTI

Bangalore, November 14
CDC Software, the enterprise software unit of China-based CDC Corporation, today said it was eyeing acquisitions in India, Europe and North America and would double headcount at its development centre here in the next one year.

“We have additional acquisition plans in the next six months. It includes an Indian company, an European company and a couple of North American-based companies,” Eric Musser, President of CDC Software, told reporters here.

CDC Software was expanding its direct sales operations in the Bangalore facility, as well as examining software and services companies to acquire in India, he said.

The company also plans to double the headcount in India from 350 at present, he said.

The group’s subsidiary Pivotal Bangalore Software Development Pvt Ltd, employing almost 50 per cent of the company’s global staff on development side, has already started the hiring process.

Musser said as part of expansion plans, the existing facility here would move to a larger facility early next year.

CDC Software’s Indian arm has operated from the current facility for more than three years. The facility is used for development and support of its Pivotal CRM product line.

The company has also appointed Nagaraja Prakasam as Managing Director of CDC Software Group’s subsidiary in India. — PTI 

New Delhi, November 14
The world’s fifth largest producer of high-quality cotton Uzbekistan is offering a slew of fiscal and infrastructural incentives to attract investments from the Indian textile industry to create a mutual advantageous synergy in the fast growing area.

Addressing mediapersons, visiting Uzbek Textile Minister Ruzikulov Rahmatullah Ruzikulovich said Indian investments were welcome in the textile sector in his country as the cotton textile sector was of strategic importance to Uzbekistan.

Uzbekistan’s total export consisted of cotton which made this central Asian Republic the second largest exporter of cotton in the world, the visiting Minister pointed out. He added that Indian investments in the textile sector would result in tremendous value addition.

Mr Ruzikulovich said Uzbekistan, with its proximity to the key markets of Europe, was an ideal destination for the Indian textile industry.

“Recognising the strategic importance that cotton textile industry holds for our economy, the government of Uzbekistan has decided to promote our country as a hub for textile exports to Europe and USA,” Mr Ruzikulovich said.

“The recent acquisition of Tashkent-Toyetpa Teksil Limited in Uzbekistan by Spentex Industries Limited- the textile arm of CLC Group of India, has sparked off a lot of interest in the Indian textile industry about the opportunities offered by investing in our country,” the Uzbek Minister said.

Speaking on the occasion, CEO and Managing Director of ICICI Securities Limited S Mukherjee, who had acted as a sole strategic adviser to Spentex for the $ 81 million Tashkent-Toyetpa deal, said, “Following this deal several of our clients have expressed interest in investing in Uzbekistan.”

Stressing on the need for creating a joint mechanism for promoting bilateral cooperation in the textile and cotton sector, Chairman TEXPROCIL Prem Malik asked the two governments in New Delhi and Tashkent to conclude a Memorandum of Understanding for the purpose. 

New Delhi, November 14
The International Finance Corporation (IFC), the private sector arm of World Bank, and Bangaldesh’s BRAC bank have announced to revive the already devastated banking sector in Afghanistan.

To begin with the IFC will invest in 16 per cent stake in BRAC Afghanistan Bank, a start-up full service commercial bank that will focus on micro and small enterprise loans, and institutional and retail deposit accounts in Afghanistan.

After the fall of Taliban regime in Afghanistan four years ago, Karzai government has been trying to revive the banking sector with international assistance. The Indian Government has also assured the Afghan government that it will open a few branches of Indian public sector banks in Kabul.

The IFC is investing up to $1 million in equity and will also consider providing a technical assistance program to support BRAC Afghanistan Bank’s operations.

One of the largest micro-finance non-profit institutions in Bangladesh, BRAC is taking the lead in establishing the bank. Other shareholders are ShoreCap International and Stichting Triodos Doen.

The CEO of the new bank, Ehsanul Haque, was earlier CEO of BRAC Bank Bangladesh, of which IFC is also a shareholder.

Michael Essex, IFC’s Director for the Middle East and North Africa region, added, “By serving the financing needs of small business clients, the BRAC Afghanistan Bank targets an underserved but rapidly growing market. This will stimulate growth and employment generation in the highly entrepreneurial Afghan society and support the private sector.”

The banking experts said there was strong resistance in the traditional Afghanistan society to interest-bearing loaning, especially in the rural sector, as people see these as un-Islamic.

BRAC Afghanistan Bank will offer loans, remittances, and other financial services to small and informal businesses and medium-size companies in Afghanistan. The bank’s targeted clients, many of them women, would otherwise have little opportunity to borrow money from commercial banks.

The bank opened its first branch on November 9 in Kabul.

The bank expects to reach one lakh borrowers over the next few years. The bank will also recruit and train about 300 loan officers and bankers in Afghanistan to build up the financial sector.

Notably, the IFC has so far funded a range of other initiatives to support the financial sector in Afghanistan. It is a shareholder in the First Microfinance Bank of Afghanistan, which started operations in May 2004, and has provided this bank with a $3.5 million standby revolving facility to fund its growing loan portfolio. 

Mumbai, November 14
India’s largest IT services firm Tata Consultancy Services has bagged a $100 million (nearly Rs 450 crore) deal from US healthcare company Kimberly-Clark, which owns brands such as Huggies and Kleenex.

Sources close to the development said the contract was one of the largest outsourcing deals involving the Dallas-based healthcare firm.

When contacted, a TCS spokesperson refused to comment.

The company has recently bagged a $90 million deal from Australia’s Qantas Airways.

TCS is also in the race for a huge IT contract from the Bank of China, which would be one of the largest outsourcing deals in Asia.

Earlier, while releasing its quarterly results, TCS had announced it was working on at least five deals, each worth more than $100 million, and that its revenues would cross the $4 million mark by the end of the current fiscal. US market accounts for more than 60 per cent of the company’s revenue. — PTI

Mumbai, November 14
Rupee today closed two weeks low of 45.19/20 against the US dollar compared to the previous close of 44.99, on sustained heavy demand in dollar by banks and some corporate sectors.

There were rumours that the Central Bank intervened the market and drove the rupee down to the level of 45 against the dollar. The intervention was done to inject rupee liquidity as well as to protect the export competitiveness of the country.

The RBI today fixed the reference rate at Rs 44.90 per US dollar, down by 45 paise from its Friday’s rate of Rs 44.45, an RBI spokesperson said. — UNI