Mumbai, December 5
The ministry of home affairs has cleared British oil firm Cairn Energy's $6 billion deal to sell a stake in its Indian business to Vedanta Resources in the final government approval needed, a source with direct knowledge of the matter said Monday.

The ninistry, while giving the security “no objection certificate” (NOC), highlighted eight areas of concern, including 64 legal proceedings against Vedanta and its subsidiaries in various courts, sources privy to the development said.

The security clearance was one of the conditions that the government had set for Vedanta group buying 40 per cent stake in Cairn India from UK's Cairn Energy Plc.

Cairn Energy and Vedanta have already agreed to the other condition of Cairn India paying cess and royalty on crude oil produced from its mainstay Rajasthan oilfields.

Cairn India does not pay royalty and cess on its 70 per cent share in the Rajasthan block as per the contract, but its current majority owner, Cairn Energy, and new owner Vedanta forced it to accept the government condition of making royalty cost recoverable and paying Rs 2,500 per tonne cess.

Also, the government had a conditioned approval to the deal on ONGC, which has 30 per cent stake in Rajasthan block and pays royalty on behalf of Cairn India, giving its NOC. Oil & Natural Gas Corp (ONGC) has agreed to give NOC if Cairn India accepts to make royalty cost recoverable and pay cess.

Sources said the ministry's November 25 letter to the oil ministry pointed to Vedanta Group's investment in cases of "default of payment, human rights violations, environmental damage in its mining and metal projects etc in India and abroad."

But these concerns did not have a "direct bearing on the security NOC", it said.

The cases highlighted include alleged customs duty evasion by Sesa Goa in iron ore export. — PTI

Mumbai, December 5
India may face its worst financial crisis in decades if it fails to stem a slide in the rupee, leaving the central bank with a difficult choice over how to make best use of its limited reserves to maintain the confidence of foreign investors. If the Reserve Bank of India is too timid, it risks adding fuel to the ire of portfolio investors, which India relies on heavily to cover its imports tab.

Aggressive intervention would leave the central bank open to criticism that it is wasting precious money on problems that are beyond India's control anyhow, noteably Europe's debt crisis.

Unlike most of its Asian peers, India has recently been running large current account and fiscal deficits. That means it must attract sufficient foreign money —namely, US dollars — to close the gap, and a weaker home currency makes that costlier.

This is a perennial problem for India. The current situation is so worrisome because India is grappling with big internal and external economic threats simultaneously. Growth is slowing. Inflation remains high. Political paralysis has stymied domestic reforms.

The RBI, the last line of defence against a currency meltdown, has cautiously begun to support the rupee, but its firepower may be more limited than its $300 billion in reserves would suggest.

Beyond India's borders, Europe is the biggest worry. As its banks deleverage, investment money has flooded out of India's markets. If Europe's debt troubles deteriorate, India could be hit with a balance of payments crisis as severe as the one that forced a sharp devaluation in 1991. The rupee, which has dropped 16% in the past four months.— Reuters

New Delhi, December 5
Even as there are indications the policy on foreign direct investment in multibrand retail may not be operationalized soon, apex chamber Confederation of Indian Industry (CII) on Monday expressed the hope there would be a political consensus on the issue.

In a statement calling for permitting FDI in retail to go ahead, CII president, B Muthuraman said went on to add: “CII hoped to see an early consensus on the issue among the political leadership of the country”. “It’s in the national interest and therefore, we are hopeful that all significant political stakeholders would converge on the subject soon”, he added.

Terming the decision to invite foreign direct investment in the retail sector as a major reform, a CII statement said that this would greatly improve investment sentiment in the country.

“At a time when declining investments have led to slower GDP growth, the entry of foreign funds in retail as envisaged by the government would go a long way in boosting confidence,” he said.

According to the statement, FDI in multibrand retail will give a boost to the organized retail sector, which positively impacts several stakeholders including — farmers, consumers, MSMEs and hence, the overall economy.

According to a recently released CII study, opening up of FDI in retail can increase organized retail market size to US $260 billion by 2020. This would result in an aggregate increase in income of US$ 35-45 billion per year for all producers combined; 3-4 million new direct jobs and around 4-6 million new indirect jobs in the logistics sector, contract labour in the distribution and repackaging centers, housekeeping and security staff in the stores.

The government also stands to gain by this move and can be expected to receive an additional income of $25-30 billion by way of increased tax collection and reduction of tax slippages.

London, December 5
Europe's debt crisis might have pushed its economy into a far steeper contraction than anyone thought and growth in China is sputtering, according to surveys that point to a sharp global slowdown taking place.

Even though there are fresh signs the US economy is perking up, business surveys on Monday were mainly downbeat and confirmed the economic toll of the euro zone's sovereign debt crisis.

They come at the start of a week that could prove crucial in resolving a debt crisis which threatens to tear apart Europe's common currency area, something that would have catastrophic implications for the global economy.

The eurozone's composite purchasing managers index (PMI), while improving slightly month-on-month in November, still tallied with a 0.6 percent quarterly rate of decline for the last three months of this year.

That would be worse than any forecast from more than 30 economists in a Reuters poll last month, which projected a mere 0.1 percent decline for the fourth quarter. In essence, it was a case of the pace of decline slowing a bit.

World stocks rose on Monday as confidence grew that European leaders would make big strides in solving the debt crisis. — Reuters

New Delhi, December 5
Credit rating agency CARE today said India's exports growth is likely to be hit in the coming months due to eurozone crisis. "Though India is primarily a domestic economy, India's exports are positively linked to the global economic growth. This is likely to adversely impact India's export growth in the coming months," CARE said in a report titled Impact of Euro crisis and global slowdown on India.

However, it said the growth will be only marginally affected by the slowdown in the euro region debt-stricken countries as our exposure is low. "Average elasticity between India's exports and the advanced nations or the euro region's GDP is 0.18," it said.

It is observed that in 2010-11, India's exports to the European region and US moderated. However, the country's exports to the Asian and the African region, which have a greater share in India's exports, grew during this period, CARE said.

The report also said FDI had not been significantly affected by the crisis while the FIIs are showing outflow in the last couple of months. It, however, noted that the software services and other export oriented sectors would benefit from the rupee depreciation.

India's earnings from the software sector have been increasing steadily over the years at 27.7%. In 2008-09, the world economic growth slowed to -0.7% but software services continued to increase, albeit at a slower rate, it said. — PTI

New Delhi, December 5
Growing competition and falling market share has forced the country’s largest car maker Maruti Suzuki India Ltd to venture into earlier uncharted territory and take on the increasing competition.

As a result at the forthcoming Auto Expo the market leader will showcase the company’s strengths in arenas like products, product segments, technology, production capacity and research and development capability.

In distinct departure from its usual self, the company will put on show two utility vehicle (UV) segment offerings at the center stage of its pavilion this season.

The global premiere of the UV portfolio at the Auto Expo not just indicates Maruti Suzuki’s foray into the competitive UV segment, but also marks its preparedness for the fast and competitive market conditions ahead.

The fierm will do the global unveiling of the `country’s first compact multi purpose vehicle (MPV) — the Ertiga. Besides, as in the past it will showcase another concept car from the company’s stable. While in the past the Kizashi was in this segment, this time round it would be the concept compact SUV at the centre stage.

According to company’s managing executive officer (marketing & sales), Mayank Pareek, “As the market gets more competitive, we have to gear up for the new dynamics. We’re thus showing the best we can offer. The new models like the SUV, MPV and MUV will prove to the world that we are future-ready. We need to get first-hand feedback for this.”

Maruti Suzuki officials said the firm’s foray into newer segments displays its confidence and preparedness for the future. The company targets to achieve the market share of over 50% in the passenger vehicle segment by 2015.

As the company limps back to normalcy after the crippling strike at its Manesar plant last month, the company officials said that the company was is in full command with its complete portfolio, additional capacities, newer segments which are supported by the largest retail network.

Incidentally, the company’s parent, Suzuki Motor Corp, has accorded an A grade status to the Delhi Auto Expo, which is at par with global auto shows like Frankfurt, Paris , Tokyo and Shanghai.

New York, December 5
The value of merger and acquisition deals in the cyber security space touched $10 billion globally in the first half of the year, a significant 70% jump in comparison to the entire 2010 calendar year, according to global consultancy firm PricewaterhouseCoopers.

The report further said that growth momentum in the cyber security market will continue in the future as well.

The cyber security market comprises companies that provide products or services for defensive and offensive applications across the IT, telecom and industrial domains.

According to PwC, "In the first half of 2011, there were 37 deals accounting for $10.2 billion in deal value, representing a 70% increase compared to the full year 2010."

The deal value was primarily driven by Intel's $7.8 billion acquisition of McAfee, which was completed in February, 2011.

"Deal activity in cyber security is expected to continue to grow given the fragmentation of the market and the attractive growth outlook. Tech and IT firms are making acquisitions to differentiate their offerings while defence firms continue to do deals to diversify away from shrinking defence budgets," PwC security industry leader Barry Jaber said.

The market is vast, with total global cyber security spending expected to reach $60 billion in 2011 and forecast to grow at 10% every year during the next three to five years, PwC said. "Growing threats and awareness and changes in technology, such as mobile devices and cloud computing, are key drivers of spending growth in the cyber security market," Jaber added. — PTI