The Tribune, Chandigarh, India

	Indian industry has its fears on FTAs with European nations Manav Mander Tribune News Service Ludhiana, June 28 The India government is planning Free Trade Agreements (FTAs) with European countries. However, Indian industry is anxious as Europeans are sensitive to issues which are considered extraneous to trade in this part of the world. Environmental issues, child labour and human rights violations have a tendency to impinge on trade in these nations. The proposed FTA will be beneficial to Europe, as trade volumes will rise. Currently, Europe is facing a recession and some countries are already in its grip. Europe will benefit in the proposed FTA as it will have a very huge market. On the other hand, Indian industry will be greatly handicapped in its export to European countries on the concentrations of issues extraneous to the trade. PD Sharma, president of Apex Chamber of Commerce and Industry said, “The Indian government is already feeling the negative impact of FTAs with different countries. The Prime Minister has even asked the Industry and Commerce Ministry to assess the affect of FTAs on industry. Child labour is widespread in our country. Earlier, too child labour in the industrial units led to cancellation of international orders.” The industry would also suffer on reduction of Custom duty on auto parts, added Sharma. "Automotive component manufacturing industry in Punjab is on the rise. Medium type units are supplying sophisticated components to original equipment manufacturers like Maruti, Mahindra, TATA and Motor Cycle manufacturers etc. Some traditional industries are gradually declining," said Gurpargat Singh Kahlon, president, Auto Parts Manufacturers Association. The problems of the Indian exporters do not end here as there is currently an 'eco rage' in Europe. Products carry carbon footprint labels. These labels show the quantity (in grams) of carbon dioxide emissions associated with making and transporting them. Shoppers identify products with the smallest carbon footprints. Producers have to compete to reduce the carbon footprints of products and consumers would be able to tell whether locally-made goods really were greener than imported products.
	Inflation cost Indians extra Rs 5.8 lakh crore in last three years Sanjeev Sharma Tribune News Service New Delhi, June 28 Rising inflation cost Indian households an additional Rs 5.8 lakh crore during 2008-09 to 2010-11, according to a study by CRISIL Research. The study shows that growth of private consumption expenditure in nominal terms increased to nearly 17 per cent per year during this period from 14 per cent in the preceding 3 years mainly due to the rise in food inflation. "The rise in inflation to 8 per cent per year during 2008-09 to 2010-11 from 5 per cent in the preceding 3 years eroded the purchasing power of money and inflated the consumption expenditure bill of Indian households by Rs 5.8 lakh crore," says Dharmakirti Joshi, chief economist, Crisil. The inflation was, however, not uniform, and food items saw a much sharper price increase as compared to non-food items. Food inflation was at 11.6 per cent during 2008-09 to 2010-11 compared to non-food inflation of 5.7 per cent. Within the non-food category, prices of many items declined. In 2010-11, out of a total WPI basket of 676 items, prices of 146 items in the wholesale price index fell during the year. Prices of another 214 commodities witnessed only a moderate price rise of less than 4 per cent. The fall in prices was more evident in the durables category (television sets, washing machines, ACs etc). "Contrary to general perception, prices of several commodities do decline even during periods of high inflation. Prices of many consumer durables have declined in the last few years. If adjusted for improvement in quality of goods, the decline would be even sharper,” says Vidya Mahambare, Senior Economist, CRISIL. “Consumers immediately feel the impact of rising inflation in food articles because these items are purchased on a daily basis. Durables are not purchased frequently, and hence, a fall in their prices tends to be overlooked while forming inflation expectation, she added.
	CCEA to consider giving nod to Cairn-Vedanta deal tomorrow New Delhi, June 28 The Cabinet Committee on Economic Affairs (CCEA) may on June 30 consider giving nod to Edinburgh-based Cairn Energy Plc selling stake in its Indian unit to London-listed mining group Vedanta Resources. The $9-billion transaction is listed as the second item on the agenda of CCEA that will meet on 1645 hours on Thursday, a source privy to the development said. As of now, the CCEA has just two items listed for discussion. As if in preparation for the nod which will come with conditions attached, the Edinburgh-based energy explorer yesterday announced lowering of the price at which it will sell 40 per cent stake in Cairn India to Vedanta by over Rs 3,800 crore. A GoM headed by Finance Minister Pranab Mukherjee had on May 27 recommended that the government nod be given to the transaction only if Cairn or its successor agrees to bear a portion of royalty payable on its mainstay Rajasthan oil fields and also accepts its liability to pay cess on the crude oil produced from the fields. If imposed, these conditions will materially affect the deal and Cairn/Vedanta by agreeing to lower the sale price appears to be headed towards accepting them. Cairn Energy will sell its 40 per cent stake in Cairn India to Vedanta at Rs 355 per share instead of Rs 405 a share agreed in August last year. It will now get gross proceeds of Rs 27,007 crore (about $6.02 billion) instead of Rs 30,811 crore ($6.84 billion) initially expected.— PTI
	GST rates to be between 16-20%, says CBEC Kolkata, June 28 The Central Board of Excise and Customs (CBEC) today said that tax rates under the proposed Goods and Services Tax (GST) regime in India is likely to be between 16 per cent and 20 per cent. "GST rates are typically between 16 per cent and 20 per cent. In India it is likely to be the same," CBEC Chairman Sumit D Majumdar told reporters here. He said tax rates under the proposed GST would come down sharply and the number of assessees would rise by 5-6 times. Although rates would come down, tax collection would go up due to increased buoyancy, he said on the sidelines of a session organised by the Bharat Chamber of Commerce. A Constitutional Amendment Bill on GST was introduced in the Lok Sabha in the last Budget Session. The GST would subsume most of the indirect taxes like excise duty and service tax at the central level and VAT on the state front, besides local levies. The implementation of GST has been stuck for years due to differences between the Centre and some states over the new structure. Majumdar said a dispute settlement authority would be set up to resolve conflicts between the Centre and states.— PTI
	US backs France’s Lagarde for IMF top post Washington, Jun 28 The US today declared its backing for the "exceptionally talented" French Finance Minister Christine Lagarde's candidacy to head the IMF, on the eve of a board meeting that is set to elect the successor to Dominique Strauss Kahn. "I am pleased to announce our decision to support Christine Lagarde to head the International Monetary Fund," Geithner said in a written statement. "Minister Lagarde's exceptional talent and broad experience will provide invaluable leadership for this indispensable institution at a critical time for the global economy," he said. Lagarde, 55, is expected to be chosen as early as Tuesday and become the first woman to head the IMF. The statement said the US was "encouraged by the broad support" Lagarde had secured from IMF member countries, "including from the emerging economies." It commended Mexican central bank governor Agustin Carstens, who is also vying for the job. — PTI
	India, New Zealand in talks to boost trade, defence ties New Delhi, June 28 India and New Zealand today discussed a host of international, regional and bilateral issues with a focus on boosting trade between the two sides and working towards the early conclusion of a Free Trade Agreement. Prime Minister Manmohan Singh and his counterpart Johan Key held talks during which the two deliberated upon the enhanced engagement across a range of trade and economic sectors, including science and innovation, education and defence. The two sides also inked two pacts — Audio-Visual Co- Productions to build on existing film industry links and Science and Innovation Protocol for Cooperation. "India welcomes increased trade and investment flows between India and New Zealand and would like to expand our trade significantly beyond current levels. The Prime Minister and I reviewed the status of our negotiations on the bilateral Free Trade Agreement. These are proceeding well and in the right direction," Singh told reporters after the meeting. He said New Zealand, like India, has a stake in ensuring the safety of sea lanes of communications and combating piracy. Key, who was accompanied by Trade Minister Hon Tim Groser, Member of New Zealand Parliament Kanwaljit Singh Bakshi and a high level business delegation, is on a three-day visit to India. — PTI
	Insecticides India to invest `75 crore in setting up three facilites Ruchika M Khanna Tribune News Service Chandigarh, June 28 Agro chemicals manufacturer, Insecticides India Ltd (IIL) is on an expansion spree. The company is setting up two new manufacturing facilities and an R&D facility, with an investment of Rs 75 crore in this fiscal. The company is also getting aggressive on buying new brands of agro chemicals so as to enhance its product portfolio. IIL is also concentrating on developing technicals at their R&D centre. Rajesh Aggarwal, MD, said that most of the expansion work would be over by the end of this quarter, and they would start commercial production at the two plants and commission the R & D centre at Dahej (Gujarat) in three months. “We have already set up a manufacturing facility at Udhampur, which will produce formulations. The new facility at Dahej will produce formulations as well as technicals, and will be commissioned next month. The R & D centre at Dahej, too, would be operational by September this year,” he said, adding that they have increased capacity in formulations by 70 per cent . “Though our capacity in technicals is just 2,000 tonnes per annum, we are scaling this capacity to 10,000 tonnes per annum once the Dahej is commissioned. We expect our topline to grow to Rs 1,000 crore by 2013,” said Aggarwal.
	Plantronics to strengthen base in India New Delhi, June 28 Looking to take advantage of the booming telecom and call centre market in the country, the US-based Plantronics launched new products here and is confident of India becoming one of its top markets in the Asia Pacific region. Plantronics Country Manager (India) Bobby Joseph said, "The consumer and enterprise communication space has been growing strongly. India is one of the fastest growing market for us and we are confident that it will be among the top markets for us in Asia Pacific soon". The company is hoping to make a rise on the back of strong demand in domestic call centres, telecom and enterprise communications verticals. The growth in call centre business is being driven by domestic companies, he added. — TNS