Tokyo/Frankfurt, Sept 22
Suzuki Motor Corp gave Volkswagen until the end of the month to publicly retract a claim the Japanese car maker had violated their contract, stepping up a war of words as it tries to break off equity ties with its estranged partner.

Suzuki, Japan's fourth-largest automaker and owned 19.9 percent by Volkswagen, said it sent a letter on Thursday in Chief Executive Osamu Suzuki's name addressed to his German counterpart, Martin Winterkorn.

Turning the tables on Volkswagen, Suzuki said the German company had until Sept. 30 to revoke a statement that Suzuki had breached a pact by agreeing to a diesel engine deal with Italy's Fiat, which it said had significantly damaged the Japanese company's reputation.

The ultimatum came about 10 days after VW gave Suzuki "several weeks" to abide by the contract. Neither have said what the consequences would be if the respective deadlines were not met, but the alliance is now seen as not being worth the paper it is printed on.

“This partnership did not bring us the benefits we expected, but turned out to be a 'ball and chain' for our managerial independence,” Suzuki's CEO said in the letter.— Reuters

New York, September 22
Amidst a debate on whether Foreign Direct Investment (FDI) in pharmaceutical sector should be regulated and be capped below 100 per cent in India, Finance Minister Pranab Mukherjee today said a decision on the issue would be taken shortly.

The civil society and sections in the government have raised concerns over increase in prices of generic drugs, following a spate of acquisitions of Indian pharmaceutical firms by Multi-Nationals Companies (MNCs).

Talking to reporters here, Mukherjee said Prime Minister Manmohan Singh has called a meeting on the issue next month and a decision would be taken shortly.

Recently, Commerce and Industry Minister Anand Sharma also sought Singh’s intervention in regulating FDI in the sector.

Sharma has said that while FDI into new projects could continue to be at 100 per cent through automatic route, there should be filters on fresh infusion of foreign investments in the existing units. "FDI into existing companies may be placed under the government approval route while enabling oversight on possible takeovers," the minister has said.

Besides civil society, Health Ministry in India has also been airing concerns over rising prices of generic medicines, which have been made affordable by enterprising home-grown industry.— PTI

New Delhi, September 22
The government today announced new rates for duty drawback or tax refunds on 4,000 export items for the current fiscal, which is slightly lower than what was provided in 2010-11.

While notifying the All Industry Rates of Duty Drawback for 2011-12, the Revenue Department said, "most of the items which are already covered under the duty drawback schedule will suffer a minor reduction in the existing drawback rates".

The reduction is mainly on account of the reduction in basic customs duty on crude petroleum as well as a reduction in central excise duty on diesel, it added.

The new Duty Drawback rates will come into effect from October 1.

Exporters will now get drawback on 4,000 items including those which are presently covered under the Duty Entitlement Passbook (DEPB) scheme.

The DEPB scheme, which is popular among the exporters and covers about 1,100 items, will expire on September 30.

The benefits to exporters of these items under drawback scheme is, however, lower by 1-3 per cent in comparison to the DEPB scheme.

It further said that while incorporating these DEPB items in the Drawback schedule, care has been taken to classify them appropriately.

Industry sources said the reduction in refund rates amounts to withdrawal of the stimulus package given in 2008-09 after the global financial crisis.

The government had spent Rs 8,700 crore last year on DEPB refunds on various items in sectors like engineering, chemical, pharma, textile and marine products.

Though exports have shown a remarkable performance, growing by 54.2 per cent between April-August 2011 to $134.5 billion, there are concerns that the momentum may not be sustained in the wake of increasing economic problems in the US and Europe. — PTI

New Delhi, September 22
A high-level committee to suggest legislative and administrative measures to check the menace of black money and bring back ill-gotten funds stashed abroad will meet here tomorrow.

The panel, headed by Central Board of Direct Taxes (CBDT) chairman M C Joshi, would carry forward its earlier deliberations besides scrutinising the suggestions to deal with the menace, a Finance Ministry official said.

The Committee is expected to suggest a legal framework for confiscating ill-gotten wealth by declaring it as "national assets".

After the first meeting in June, the panel had sought public comments to deal with the problem of black money.

"The panel received hundreds of comments and the same may figure up in the meeting," the official added.

Members of the committee are from CBDT, Legislation and Computerisation (L&C), Director of the Enforcement Directorate, Director General of the Directorate of Revenue Intelligence (DRI), Director General (Currency), and Financial Intelligence Unit - India (FIU-IND), all wings of the Finance Ministry.

Cornered on the issue of black money, both by the Opposition and civil society, the Government has adopted a five-pronged strategy which include negotiation and re-negotiation of tax treaties with various countries, to deal with the menace.— PTI

ew Delhi, September 22
India has lowered its exposure to America's ballooning debt for three consecutive months, as its holding of the US Treasury bonds fell by $4.2 billion (more than Rs 20,000 crore) between May and July this year.

As per the latest foreign holding data released by the US Treasury Department, Indian holding of the US Treasury bonds -- debt securities issued by the world's largest economy — fell by $1 billion in July to $37.9 billion.

It was the third consecutive month of decline since May, and the longest declining streak since 2010.

At the end of April 2011, India held treasury bonds worth $42.1 billion — close to its record high holding of $42.2 billion in June 2009. The Indian holding declined for three months even before the first-ever sovereign rating downgrade of the US in August.

The data for the last month would be released on October 18.

It was feared that many of the US treasury investors, including foreign entities, would have cut their holdings after the downgrade by credit ratings agency S&P. It had cited reasons like inadequate steps by the US to contain ballooning debt for taking the historic action.

The total debt of the US is moving close to $15 trillion, out of which it owes nearly $4.5 trillion to foreign countries holding US Treasury bonds.

The 3-month decline in the US debt holding by India also happens to be the third longest streak of fall, after the 6-month period of July-December in 2009 and a 5-month decline from January to May of 2008. Indian holding has fallen to a level last seen in August 2010 ($37.9 billion).

A number of other countries including China, the largest foreign holder of the US treasury bonds, raised their exposure in July, as also in previous few months. India is ranked as 15th largest foreign holder of the US debt securities after China, Japan, UK, Brazil, Taiwan, Hong Kong, Switzerland, Russia, Canada, Thailand, Singapore, Luxembourg, Germany and Turkey.

In India, the US treasury bonds are mostly held by the Reserve Bank, while some financial institutions and foreign branches of Indian banks also hold some of these securities.— PTI

Kolkata, September 22
Free-Trade Agreements (FTAs) with Europe, Canada and New Zealand were likely to be wrapped up by this fiscal-end, Commerce Secretary Rahul Khullar said today.

“FTAs with Europe, Canada and New Zealand are likely to be through by the end of this fiscal,” Khullar said at a CII session.

He said preferred trade agreements with Colombia and some other countries in that region have also been worked out.

These FTAs will help India in diversifying into new markets to counter the current global uncertainties. On the DEPB issue, he said the ministry was also planning to put in place a package for the exporters within next three weeks to replace DEPB scheme. He added that exchange rates were likely to remain volatile.

However, Khullar expects that the country which is witnessing a high interest cycle may see a little more peaking before it begins to come down in the next 12 to 15 months.— PTI

New York, September 22
In a move that would bolster its global presence in the aerospace and defence industry, United Technologies will snap up Goodrich Corp in a $18.4 billion deal.

United Technologies is a diversified group and its offerings include aerospace systems and Otis elevators. A supplier of systems and services to the aerospace and defence industry, Goodrich’s products include aircraft landing gear, aircraft wheels and brakes.

Both the companies have presence in India. United Technologies in a statement yesterday said it would buy Goodrich for$127.50 per share in cash. “This equates to total enterprise value of $18.4 billion, including $1.9 billion in net debt assumed,” it noted.— PTI