New Delhi, April 15
It is close to elections and cracks within the UPA coalition have started showing. Now, the issue being how to rein in prices of industrial commodities that are sky rocketing.

When asked about the situation on price controls, a bureaucrat said its not just the politicians but also the lobbies that are playing hardball and the action is just heating up to prove who has more money and clout in an election year.

Steps to contain food and cement prices have been taken and now it is the turn of curbing the surging steel prices as was on the agenda of the Cabinet Committee of Prices. But the Cabinet meeting will be conducted only when differences between the UPA key members and allies are resolved.

There are three key players in the decision for banning steel exports - UPA ally and LJP leader Ram Vilas Paswan, who is also the steel minister; finance minister P.Chidambaram; and commerce minister Kamal Nath.

Ram Vilas Paswan’s solution to the problem is reduction of excise and countervailing duties on steel and making domestic coke and iron ore available. In a letter to the Prime Minister, Paswan has asked a composite package for the steel industry so that relief can be given to the distressed sector. “After all, how can Paswan, who hails from Bihar where most of the iron and coking coalmines located, displease the steel manufacturers?” a steel industry executive says.

But the steel ministry bureaucrat has a different take in the matter saying the steel industry has been crying hoarse that the global raw material prices have risen manifold and that’s the reason for increase in steel prices.

But the fact is that most companies have captive mines of coke and iron and in the international market there are always long-term import agreements so that volatile prices don’t affect production and supplies, so there is no question of imports hurting suddenly. It is more likely that the steel companies citing global price convulsions want to take advantage of the fact and raise the prices.

The steel minister does not want exports to be banned so does the commerce minister. Both have their interests. Paswan has steel industry and Nath has exporters lobby backing him, says a prominent steel industry executive.

However, the finance minister is caught in a bind. He needs to get a fix on prices to save the government’s face. At the same time, he is worried about the revenues in an election year. If he cuts excise and countervailing duties, as is demanded by Paswan, his revenue drops.

Besides, there is also going to be loss of revenues from cement export ban, say sources in the finance ministry.

New Delhi, April 15
Few price control policies taken by the governments, including India, are likely to backfire by making the international market smaller and more volatile, a think-tank of International Food Policy Research Institute (IFPRI) has said.

“Price controls and changes in the import and export policies may begin to address the problems of poor consumers, who find that they can no longer afford an adequate diet for a healthy life. But some of these policies are likely to backfire by making the international market smaller and more volatile,” said a IFPRI report .

India has taken “the easy option of restricting food exports, setting limits on food prices, or both,” it said. India recently curbed non-basmati exports, extended ban on pulses for one more year and liberalised imports of edible oils.

“Export restrictions and import subsidies have harmful effects on trading partners dependent on imports and also give incorrect incentives to farmers by reducing their potential market size,” IFPRI warned.

Besides, these trade policies undermine the benefits of global integration, as the rich countries’ trade distortions with regard to developing countries are joined by developing countries’ interventions against each other.

Meanwhile, IFPRI said that price controls would reduce the price that farmers receive for their agricultural products and thus reduce incentives to produce more food. The report suggested that “specific policies” are needed to deal with the causes and consequences of high food prices.

Firstly, India should expand social protection programme for the poorest people-both urban and rural to meet new and emerging needs.Secondly, the developed countries should eliminate domestic biofuel subsidies and open their markets to biofuel exporters like Brazil.Third, the developed countries should also take this opportunity to eliminate agricultural trade barriers, while fourth, to achieve long-term agricultural growth by investing in agriculture, it said. — PTI

New Delhi, April 15
The government is believed to have issued instructions to mobile service providers like Bharti Airtel, Reliance and Vodafone not to route certain Blackberry services unless the required monitoring system was put in place.

According to officials in the Department of Telecom (DoT), Blackberry licensor Research-in-Motion (RIM) has sought time till April 18 to address issues raised by it relating to lawful interception of content sent through Blackberry device.

DoT fears that the service could become a threat to national security since communication through Blackberry devices was routed through a server outside the country.

DoT, along with national security agencies, is now examining why Indian Blackberry service providers, including Bharti Airtel, Vodafone Essar, BPL, and Reliance Communications, who have a partnership with (RIM) have a routing agreement and not a hosting agreement as is required under Indian law.

As per new telecom guidelines unveiled last year control of remote access that includes activation, transfer of data, and termination has to be within the country and not at a remote location abroad.

The new guidelines require RIM and Blackberry service providers to have a hosting agreement necessitating exchange of data and communication to be saved on servers of Indian service providers as against the existing routing agreement, which allows such exchange of data and communication to be hosted on servers outside of the country.

DoT has therefore decided to intervene to check if the existing commercial agreements between RIM and service providers are in accordance with the new telecom guidelines.

The government has also asked RIM to place a monitoring system in India.

Blackberry is a premium mobile service that allows sending and receiving e-mails in the form of SMS and has about four lakh subscribers in India. Most of the high-end users of mobile operators use Blackberry both for voice as well as data services.

“They (RIM) have sought time till April 18 to revert to us on all issues raised relating to lawful interception of the contents on Blackberry. If our issues are not addressed we may be forced to take a stern action,” DoT officials said.

Tata Teleservices is still awaiting approval from the DoT as well as Ministry of Home Affairs to start Blackberry services for its subscribers.

When contacted, Blackberry officials refused to comment saying that as per policy the company does not comment on the confidentiality of regulatory issues in the country.

DoT is likely to meet the service providers again on April 21 to review the situation.

Sources said the Blackberry service provider will have to place the monitoring system in India and that was possible only if the server for routing of calls and e-mails was in the country of operation. — Agencies

New York, April 15
Setting the stage for major airlines mergers in future, Delta Airlines and Northwest Airlines will come together in a USD 3.1 billion deal to create the world’s biggest airlines.

The alliance, retaining the name and flag of Delta, comes in the backdrop of a weak economy and growing competition from Europe and with an aim to contain the rising fuel and operational costs.

To be headed by Delta Chief Executive Richard H Anderson, the deal will see through if it passes regulatory approvals.

The airlines, with a revenue of $ 35 billion and about 80,000 employees worldwide, expect that the merger would make them more competitive globally.

Expecting the next merger to be between the United Airlines and the Continental, the groundwork for which has been laid, Industry analysts warn that the consumers might have to pay higher prices for travel as the competition dwindles and discount airlines are put out of business.

The merger of the United and the Continental would create a further larger airlines.

Under the terms of the proposed all stock swap deal between Delta and Northwest, the latters shareholders will get 1.25 Delta share for each Northwest share they hold.

Experts say it could take up to one year for the two to completely merge the operations given the different systems they follow.

The board of new airlines will comprise of seven members from the Delta and five from the Northwest airlines. Chairman of Delta Daniel A Carp would retain his post.

The Board would also have a representative of the Air Line Pilots Association.

Delta and Northwest said the deal promises to generate $1 billion in annual revenue and cost benefits. Anderson said cost savings would be derived from a reduction in operating expenses, more efficient use of technologies, cutting administrative costs, and bargaining power with vendors.

Delta pilots will get a 3.5 percent equity stake in the new airline and expressed support for the proposal yesterday.

In addition to pilots, U.S.-based non-pilot employees of both airlines would be given a 4 percent equity stake. The deal will combine Delta’s strong Atlanta hub and its trans-Atlantic route network with Northwest’s extensive Asian presence, including a hub in Tokyo. There will be no hub closures, Delta said. — PTI

New York, April 15
Adding to the woes of corporate world battling with soaring input costs and deteriorating consumer sentiments, India’s financial capital Mumbai has emerged as home to the biggest increase in industrial property rents across the world.

According to a new study conducted by US-based real estate consultancy major Cushman & Wakefiled, the industrial property rentals nearly doubled in Mumbai in 2007 from the previous year levels, marking a bigger rise than in places like San Fransisco and Singapore.

Mumbai is followed by Istanbul with a rise of 60 per cent, while IMT Manesar area near New Delhi came at the fifth position across the world with nearly 30 per cent rise in the rentals, the study found.

San Fransisco Peninsula and Singapore came at seventh and eighth position, respectively.

In the overall most expensive location list, three London locations-Heathrow, Hammersmith and Gatwick-were the three most expensive places, followed by Dublin and Tokyo in the top five. None of the Indian locations is named in the top 10 most expensive places.

The prime rents rose by an average of more than 6 per cent across the world, as against 4.5 per cent increase in 2006, Cushman & Wakefield said, adding that “one of the key trends in the industrial market remains the movement of manufacturing operations to cheaper locations such as India, China, South America and Central and Eastern Europe. Asia Pacific has shown the most buoyant growth over the past year. The continuing strong economic expansion of India and China, coupled with the ongoing positive performance of markets such as Vietnam, Taiwan, Singapore, Australia and New Zealand, drove up the rents by just under 15 per cent annually,” it added.

Within Asia-Pacific, Singapore came at third after Mumbai and New Delhi-IMT Manesar in annual rent growth and was followed by Pune and Chennai in the top five. Bangalore-Bommasandra area came at sixth, while Bangalore-Jigani saw the ninth biggest rental rise in the region.

On an average, prime rents rose by a third in India. In most cities, manufacturing space is largely owner occupied, but in Mumbai and New Delhi manufacturing space is available for rent, it noted, adding that activity continues to shift to industrial parks on the outskirts of the main cities and further rental growth is expected next year. — PTI

Rio De Janerio, April 15
After making history by taking over Anglo-Dutch steel maker Corus and Britain’s premium auto brands Jaguar and Land Rover, Indian conglomerate Tata is eyeing a partnership with Brazilian aircraft maker Embraer.

Sources here said talks were on with the Brazilian aircraft manufacturer for starting a joint venture for production of aircraft, as Embraer, the world’s third largest plane manufacturer, was unable to cope with the orders that it was getting from various countries and private players.

Tata had offered to set up a joint venture with the aircraft giant, which is the only manufacturing firm that makes 120-seater commercial jets.

The talks are in an early stage but Tata, with its expertise in various fields, is considered as a serious contender for the joint venture, the sources said.

Embraer (Empresa Brasileira de Aeronutica) is one of Brazil’s leading exporters and is headquartered in Sao Paulo.

It has offices, industrial operations and customer service facilities in Brazil, the United States, France, Portugal, China and Singapore.

In February, Tatas and US aircraft maker Boeing had agreed on a plan to float a JV company that will initially include more than $500 million of defence-related aerospace component work in India for export to Boeing and its international customers.

Under the memorandum of agreement signed by Boeing and Tata, it is contemplated that the joint-venture company will be established by June 2008, and shortly thereafter will begin work of building Boeing aerospace components. — PTI

BRIEFLY

Oil at $112.15
SINGAPORE: Oil futures advanced to all-time peaks on Tuesday, supported by supply disruptions and speculation that the dollar may continue to trend lower. US light crude for May delivery rose by 39 cents to $112.15 a barrel after touching $112.48 a barrel, the highest level ever reached by US crude futures. US futures are up by 17 per cent from the start of the year. — Reuters

Ranbaxy-Astra agreement
NEW DELHI: Ranbaxy Pharmaceuticals has announced that it has reached an agreement with AstraZeneca that would allow Ranbaxy to start exclusive sales of a generic version of ulcer drug Nexium in 2014 in the US. The agreement settles the patent infringement litigation filed by AstraZeneca following Ranbaxy’s submission to the USFDA of an abbreviated new drug application. — PTI

Bajaj Allianz tie-up
MUMBAI: Bajaj Allianz Life Insurance and SKS Microfinance have joined hands to launch a group insurance product for micro-finance organisations, called Swayam Shakti Suraksha. The product offers protection and investment with flexibility and is designed on the lines of a standard endowment policy, a press release stated. 
— PTI

StanChart Equity Fund
MUMBAI: Standard Chartered Asset Management on Tuesday said it has re-opened its equity fund Standard Chartered Premier Equity Fund (SCPEF) for subscription through lump sum investment as well as systematic investment plan. The SCPEF will be open for subscription from Tuesday and will close after collection of a predetermined manageable corpus. — PTI

BoB in pact with HFZA
DUBAI: Bank of Baroda has stepped up its syndication business in the UAE by signing a memorandum of cooperation with the Hamriyah Free Zone Authority for financing the units in the free zone. The Hamriyah Free Zone in Sharjah will promote and facilitate setting up of industries and businesses. —PTI

Kotak Mahindra Bank
MUMBAI: Kotak Mahindra Bank on Tuesday launched credit cards for its customers. The bank plans to issue 15 lakh credit cards in the next three years and has identified salaried and self-employed youths as primary targets in the segment, Kotak Mahindra Bank’s executive vice-chairman and managing director Uday Kotak said here. —PTI

L&T bags contract
MUMBAI: Larsen & Toubro on Tuesday said it has secured a Rs 2,000-crore order from Bombay Dyeing for construction related works at its city-based complexes. L&T’s construction division has bagged the order for developments at the textile mills and spring mills complexes at Worli and Wadala regions of Mumbai, the company said. — PTI

Nokia’s navigation devices
AHMEDABAD: Nokia showcased its navigation devices portfolio here on Tuesday. Nokia (India) head of GTM Raghuvesh Sarup said Nokia currently has five devices with maps and integrated global position system (GPS) that helps customers to navigate and makes it easier for them to find their way. These five models are Nokia 6110 Navigator, Nokia N95 and N95 8GB, Nokia N82 and the Nokia E90 Communicator. — UNI 

Stake in Orchid Chemicals
MUMBAI: Foreign fund Morgan Stanley on Tuesday picked up 0.5 per cent stake in Orchid Chemicals for Rs 8.9 crore in open market transactions. Morgan Stanley and Co International has acquired 3.3 lakh shares of Orchid Chemicals at a price of Rs 269.83 each in a bulk deal at the BSE, information available on the exchange showed.— PTI