The Tribune, Chandigarh, India

Chinese premier Wen Jiabao visits India tomorrow
Envoy hopeful of talks on free trade

TALKING POINTS

China and India plan to sign a series of business deals like Reliance Power’s deal with Shanghai electric

Both powers compete from Latin America to Africa for natural resources

India's trade deficit with China rose to $16 billion in 2007-08 from $1 billion in 2001-02

New Delhi, December 13
China hopes to have free trade discussions with India during the Chinese Premier Wen Jiabao visit to New Delhi this week, a signal of how the two Asian powerhouses may try to smooth tensions over their economic and border rivalries.

“The free trade agreement is the next stage (of India-China relations). It is our hope that we can start the process,” China’s envoy to India, Zhang Yan, told reporters in New Delhi on Monday.

“We are very much positive on these issues. I think that in general the Indians think it is positive but need more time.”

While a deal could be years away due to Indian fears it could become a dumping ground for cheap Chinese goods, it highlights how world powers are trying to boost ties with a South Asian nation that is one of the few stars in a weak world economy.

Wen Jiabao's visit will be the first to India by a Chinese premier in four years and comes a month after President Barack Obama's trip. President Nicolas Sarkozy and British Prime Minister David Cameron have also visited India this year.

Despite a boom in bilateral commerce in the past decade, and cooperation on global issues such as climate change, India and China remain deeply suspicious of each other's growing international influence.

Both powers compete from Latin America to Africa for resources. Many in India fear China wants to restrict its influence, potentially by opposing a UN Security Council seat for India or encircling the Indian Ocean region with projects from Pakistan to Myanmar.

Assistant Chinese Foreign Minister Hu Zhengyue said everything would be up for discussion during the December 15-17 visit to New Delhi. Wen then goes straight to Pakistan, India's nuclear armed rival, for another two nights.

“No issues are off the table,” Hu told reporters in Beijing, adding the India trip was to expand bilateral trade, increase cooperation and promote regional peace and stability.

China and India plan to sign a series of business deals, including one agreed in October for Shanghai Electric Group Co to sell power equipment and related services worth $8.3 billion to India's Reliance Power.

Representatives from Shanghai Electric and commercial banks would accompany the delegation and try to iron out financing details, said Liang Wentao, a deputy director general at the Ministry of Commerce. He would not give a value for the total amount of deals to be signed.

India's trade deficit with China rose to $16 billion in 2007-08 from $1 billion in 2001-02, according to Indian customs data. China is India's biggest trading partner, with bilateral trade expected to pass $60 billion this year.

India has sought to diversify its trade basket, but raw materials and other low-end commodities such as iron ore still make up about 60 percent of its exports to China. — Reuters

Infosys worried over Radiagate hitting India’s image
Shubhadeep Choudhury
Tribune News Service

Bangalore, December 13
S Gopalakrishnan, CEO of software major Infosys, today expressed concern about the controversy triggered off by the taped conversations of publicist Nira Radia with various people including industry magnates and journalists adversely affecting the image of India globally.

Talking to reporters at the sidelines of a book release function at the Infosys campus here, Gopalakrishnan said, “Entire world is now focused on India. All of us should work together to put all these things (the controversy) behind us.

Gopalakrishnan, perhaps the first Indian CEO (besides those who figure in the tape) to comment on the controversy, said unfortunately the constituents of the controversy consisted of people from various walks of life such as politics, industry, media and the likes.

While saying he would not like to comment on any specific individual who figured in the tape, Gopalakrishnan said in any society some people were found to be bad. “But it does not necessarily mean that everyone should be painted with the same black brush,” he said.

“We should all work hard to put the episode behind us and make sure that we rise up to the expectation of the entire world,” he said.

Gopalakrishnan, however, added that the persons figuring in the rapes should not be judged hastily.

“We should not judge somebody too fast. Wait for the system to decide that. We are very judgmental right now,” he said.

Earlier, Gopalakrishnan released a book entitled ‘Leadership @ Infosys’, a compilation of essays. Published by the Penguin Books (India), the book describes the companys leadership approach and how it identifies leaders.

The Infosys CEO said that while it was not uncommon in the West for companies to share their success stories, the practice is not so common in India. To the extent, this book is unique, he said.

Reckitt Benckiser acquires Paras Pharmaceuticals

New Delhi, December 13
Multinational FMCG giant Reckitt Benckiser today said it has agreed to fully acquire Ahmedabad-based Paras Pharmaceuticals Ltd for Rs 3,260 crore. As part of the deal, the company will buy the 63 per cent stake of emerging markets private equity investor Actis, along those of Sequoia Capital and the remaining shareholders, including Paras founder Girish Patel and his family, Reckitt Benckiser (RB) said in a statement.

RB will finance the transaction from existing facilities, it added.

Commenting on the acquisition, Reckitt Benckiser CEO, Bart Becht said: "It creates a material health care business in India, one of the most promising health care markets in the world with the addition of a number of strong and leading brands." Paras Founder and Chairman Girish Patel, who will sell his family's stake in the business said: "We have been on a rewarding journey with Actis and the quality of our partnership has proved to be the key reason for the recent success of the company...I believe RB will take our already strong brands to the next level."

Paras is a privately-owned firm with a portfolio of leading over-the-counter health and personal care brands including, Moov, D’Cold, Dermicool, Krack, Itch Guard and Ring Guard.

It also has a personal care business led by Set Wet, a leading hair gel and deodorant brand. — PTI

RCom launches 3G services in three metros, Chandigarh
Tribune News Service

New Delhi, December 13
Anil Dhirubhai Ambani Group’s (ADAG’s) Reliance Communications (RCom) today launched 3G services in four circles making it the second private operator after Tata Teleservices to start the service this year. The services were launched in Delhi, Mumbai and Kolkata and in Chandigarh.

The company is looking at launching its 3G service in all 13 circles for which it has the spectrum by March end next year.

“Our tariffs will be affordable, simple and transparent based on try and buy pricing proposition,” RCom's President and CEO (Wireless Business) Syed Safawi told reporters here.

The company has also lined up packages on a daily basis starting from Rs 10 and beyond depending on the application and content requirement of the customer. Subscribers will also have the option to pay based on per-use, per-second or per-week basis. RCom had bagged 3G spectrum in 13 circles for which it had paid about Rs 8,585.04 crore to the government.

TTSL, which bagged 3G spectrum in nine circles, has already started 3 G service from Diwali this year.

Besides, the private telcos, state-owned BSNL and MTNL, who had got 3G spectrum ahead of the private operators, already offers 3G service in the country.

The company said that it has also forged pacts with Universal Music for content, Nokia and Ericsson for applications and Motricity for web portal. Existing subscribers will be automatically upgraded to 3G services if they have a 3G-enabled smart phone. On video-calling, the company said that they are awaiting the government's permission to launch the service in the country. It is optimistic about getting the clearances along with other operators.

‘Airlines must do more to bring fares down’
Tribune News Service

New Delhi, December 13
The government today said it was not ‘fully satisfied’ with steps taken by air carriers so far to lower ‘astronomical’ fares, asking them to do more to bring ticket costs down. Following a meeting of the newly-formed Civil Aviation Economic Advisory Council (CAEAC), Civil Aviation Minister Praful Patel said, “Astronomical fares need to be controlled,” adding that ministry had already advised the airlines to do more.

Maintaining that the government could not be a mute spectator to the airlines charging exorbitant fares, Patel said “We are not fully satisfied with steps taken by the airlines so far. “Spot fares (last moment tariff) cannot be unreasonable,” the minister said.

The CAEAC has decided to set up a small working group, comprising representatives of the air carriers and passengers' associations, to recommend measures to ‘ensure transparency’ in fixing of airfares, while keeping DGCA directives in mind. This working group would meet in the next fortnight and the CAEAC would meet in January to review the situation, the minister said.

Indicating that the airlines should take the measures recommended by DGCA within a given ‘time-frame’, Patel said the DGCA could take ‘further action’ under Rule 135 of Aircraft Rules, which deals with transparency in publishing of airfares.

The ministry has already issued directives to the domestic carriers to maintain transparency in airfares so that passengers are aware what price they would be charged if they travel on a particular sector on a given date.

Following the directives of the DGCA, the airlines had brought down tariffs 20-25 per cent. The regulator later asked the airlines to ensure transparency by keeping passengers informed about the fares available sector-wise and date-wise in layman’s language.

380 firms set to be taxed for M&A deals in FY’08

New Delhi, December 13
Having scrutinised more than 380 merger and acquisition deals from 2007-08, the Income Tax department is expected to soon slap entities concerned with notices for tax totalling several crores of rupees.

Although the scrutiny has been on for a couple of years now, the department must raise tax demands or else the cases will get barred by time this year under the provisions of the I-T Act, sources said.

The multi-million dollar deals involving overseas mergers, acquisitions and infusion of private equity into Indian companies pertain to fiscal 2007-2008 for which December 31 is the last day for scrutiny, assessment and raising of tax demand, a source in the I-T department said.

While some deals among these 386 have already been dealt with, a number of deals struck during that period will be sent tax notices, sources said.

The IT Department, which has already slapped a Rs 11,000 crore tax notice on telecom operator Vodafone for its 2007 buy of Hutchison's assets in India, is expecting a "good" revenue mop up from the other companies under review.

Special units of the IT Department specialising in international taxation treaties and laws are coordinating in studying and scrutinising these deals, the sources said. — PTI

Kinnow production dips
Jangveer Singh
Tribune News Service

Chandigarh, December 13
This year, kinnow production in the region has dipped. From last year’s record production of 8.5 lakh tonnes, it is likely to be 6 lakh tonnes this year. This has led to a rise in prices. Orchard owners are selling the fruit at between Rs 12 and Rs 15 a kg. In the retail market, kinnow is selling at Rs 30 a kg.

Horticulture department Joint Director Gurkanwal Singh said high temperatures at the time of flowering, coupled with increased droppings were responsible for the reduced production this year.

He added plants were also exhausted due to over production last year. Horticulturist Deepak Puri from Hoshiarpur says most farmers have decided to advance the harvesting season to take advantage of the sunny days, which witness more sales. He says the sharp difference between day and night temperatures had also helped the farmers with the fruit attaining orange colour faster than usual.

Puri said farmers could bargain more this year as the fruit is expected to be of better quality.

“This is because the number of pieces of fruit per tree has decreased this year,” he said.

Figures show land under kinnow is increasing. A combination of factors including good prices, installation of waxing and grading plants that improve the shelf life of the fruit and marketing subsidies, which ensure kinnow reaches the South India market has led to the rush to grow kinnow.

Around 38,400 hectares are under kinnow orchards in Punjab, mainly in Hoshiarpur and Ferozepur districts. Increased prices are expected to seal the fate of both government-processing plants at Hoshiarpur and Abohar. The plants might not be able to attract any fruit at the current prices.

Both plants, which have a capacity of around 400 tonnes per day, have been getting negligible fruit since the last two years. The plants had then offered a rate of around Rs 7 a kg, something that will not find any takers this year.