Chandigarh, August 2
India’s decision to allow foreign direct investments from Pakistan may be a big step in confidence building and a move in the right direction to improve trade ties with the estranged neighbour. But industry, especially in Punjab that shares its border with Pakistan, is quite skeptical about any major economic push through FDI.

Industry and trade associations in Pakistan had been demanding for quite some time that India amend its rules and allow them to invest in India. With the new confidence building move, India can look forward to investments from Pakistani entrepreneurs in textile sector, cement production, sports goods manufacturing and footwear industry, which are amongst the strongest industrial sectors in Pakistan.

However, industry in Punjab is not much enthused by the move. Gunbir Singh, a leading Amritsar based entrepreneur and member of the CII national council on public policy, said Punjab may not really be the FDI destination chosen by the entrepreneurs from across the border.

“Foreign direct investments can travel anywhere where investment is encouraged. Investors will look at places where there is ease of doing business. Only if the Punjab government aggressively solicits FDI can the state hope for investments pouring in from Pakistan. Major infrastructure initiatives, too, will be required by Punjab to attract foreign investors,” he said.

Arvinder Singh, a leading basmati rice exporter from Amritsar, said though basmati shelling is a big industry in Pakistan, he did not see much investments flowing into Punjab simply because of high taxes in the state. “In case Pakistani rice shelling units would want to invest here, they would do it in Delhi or other states where taxes are much less. Also, Punjab has poor connectivity to ports. Investors would take all this into account while choosing a destination to invest in India,” he said.

The former president of the Northern India Textile Mills Association, too, was skeptical about Pakistani textile industry making an investment here.

“Pakistani textile industry is very competitive and they will not like to invest here. There is little that India can offer them better than their own country in the textile sector, so we see little scope of investment here,” he said. 

Frankfurt/Main, August 2
The European Central Bank left its key interest rate unchanged at 0.75 per cent Thursday. Markets are now waiting to hear ECB president Mario Draghi speak at a news conference, where they hope he will give some sign that the bank will help lower the borrowing costs that threaten the finances of Italy and Spain by buying up government bonds in the open market.

Draghi sharply raised expectations last week when he said that the ECB would "do whatever it takes" to save the 17-country bloc that uses the euro and that "believe me, it will be enough."

Yet any effort to purchase bonds faces serious complications. An earlier effort bought over 210 billion euros in bonds, but did not decisively lower bond rates, or "yields", for troubled Spain and Italy. Germany's influential central bank, the Bundesbank, has expressed skepticism, saying the purchases could come too close to bailing out government finances — something the ECB's treaty forbids it from doing.

The decision to keep the key interest rate decision unchanged was largely expected — even though the eurozone economy is in a slump and a rate cut might have cheered markets as a sign the bank was willing to act. Analysts say, however, that a rate cut might have only limited effect on the economy since rates are already at a record low. Holding off on rate cuts also helps push indebted countries, including Spain and Italy, to continue cutting their deficits and reforming their economies.

Stocks across Europe were broadly unchanged following the announcement of the rate decision as traders waited for the start of Draghi's news conference.

The ECB had cut the refinancing rate only last month, on July 5, after cuts in November and December. The cuts lower the cost of credit to banks, businesses and consumers. But few are borrowing because of the slack economy and fear that worse may come. — AP

New Delhi, August 2
Unitech Ltd, Telenor's minority partner in its Indian mobile telecoms joint venture, has filed a petition with the country's Company Law Board seeking to stop the joint venture company from auctioning off its assets, a Unitech spokesman said on Thursday.

In an auction notice on Wednesday, the joint venture, which operates under the Uninor brand, invited potential bidders to express interest by Aug 6 and said its majority owner Telenor was willing to bid in the auction.

Unitech had already said on Wednesday it would take legal action against the planned auction of assets.

Telenor and property firm Unitech fell out after their joint venture's operating permits were revoked under an order by by the Supreme Court to recall the regional radio spectrum licences awarded to the JV and a number of its rivals in a scandal-tainted 2008 sale. Telenor has blamed Unitech for losing the current licences and is seeking to scrap the joint venture. It has said it would either leave India or buy out Unitech and migrate the business to a new entity to buy fresh permits under a new round of licensing. — Reuters

Toronto, Ont., August 2
Research in Motion refuted on Wednesday a new round of Indian media reports, which claim that the BlackBerry maker has granted the government the encryption keys to its secure corporate email and messaging services.

India is one of the Canadian smartphone maker's few growing markets, where it is expanding aggressively. The company is facing falling sales elsewhere as customers abandon the BlackBerry in favour of Apple's iPhone and a slew of devices using Google Inc's Android software, leading to RIM's shares falling by more than 50% over the past one year.

RIM, which has been grappling with the government for years, reiterated that it cannot provide access to its enterprise email and messaging services as the company itself does not possess the encryption keys for the same and these remain in the control of its corporate clients.

A media report that cited a telecom department official and certain documents reviewed, said RIM had provided the government a solution that gave it access to corporate emails. RIM categorically denied this claim in a statement. It has more than once refuted similar claims in India over the last two years.

"RIM is providing an appropriate lawful access solution that enables India's telecom operators to be legally compliant with respect to their BlackBerry consumer traffic, to the same degree as other smartphone providers in India, but this does not extend to secure BlackBerry enterprise communications," said Waterloo, Ontario-based RIM in a statement.

RIM gave India access to its consumer services, including its Messenger services, in January last year after authorities raised security concerns, but said it could not allow monitoring of its enterprise email. The Indian government is fearful that encrypted BlackBerry services could be used to foster unrest or allow militants to organize attacks.

'SECURE & ENCRYPTED': David Paterson, RIM's head of government relations, said he is positive that the Indian government recognizes encryption is fundamental to attracting and maintaining international business in the country and that it would not make any demands that could jeopardize foreign investment in India.

"The fact is that BlackBerry enterprise communications in India remain secure and encrypted. No change has been made or ever can be made in India or anywhere," he said in an interview.

RIM has also faced similar political pressures in the Middle East and elsewhere. It also blocked pornographic sites on its browsers in Indonesia last year following government pressure.

Enterprise clients — corporations and government agencies signed up to the BlackBerry Enterprise Server — are assigned encryption keys stored only on individual user accounts. — Reuters

Mumbai, August 2
Market regulator Securities & Exchange Board of India on Thursday streamlined the Direct Market Access (DMA) facility, which gives the investors a direct access to the stock exchange's trading system without any manual intervention by the broker.

According to the new guidelines, the investors seeking to avail DMA facility would not have to enter into a separate broker-client agreement and it would be replaced by a simpler terms-and-conditions document, the regulator said.

However, the brokers would have to specifically authorize clients or investment managers acting on behalf of the clients for providing DMA facility, after fulfilling Know Your Client (KYC) requirements and carrying out necessary due diligence.

The broker would have to maintain proper records of such due diligence procedures, SEBI said in a circular.

Currently, the Direct Market Access facility is available only for the institutional clients. Some of the benefits of the facility include direct control of clients over orders, faster execution of their orders, reduced risk of errors associated with manual order entry and lower transaction costs. — PTI