B U S I N E S S

Indian industry slams US for restrictive trade practices
New Delhi, March 6
Indian industry has slammed the moves by US advocacy groups representing companies to recommend to the US Trade Representative to investigate India for restrictive trade practices.

Sensex hits record high on lower CAD, FII buying
New Delhi, March 6
The BSE Sensex today soared 237 points to end at a new life-time high of 21,513 points on heavy buying by foreign investors across blue chip banking, oil & gas and metal shares on account of a pre-election rally and a sharp drop in current account deficit

Revised tariff norms to hit margins of power PSUs, says S&P
New Delhi, March 6
The revised tariff norms by the central electricity regulator will have a negative impact on the operating performance of state-owned utilities such as NTPC, PowerGrid and NHPC, according to Standard & Poor's Ratings Services. However, the largest rating agency said this will not impact the ratings of these firms.

Indian industry slams US for restrictive trade practices
Disgruntled US firms behind the move, says FICCI
Sanjeev Sharma
Tribune News Service

New Delhi, March 6
Indian industry has slammed the moves by US advocacy groups representing companies to recommend to the US Trade Representative to investigate India for restrictive trade practices.

Industry body FICCI said Indian industry is of the view that the investigation is a manifestation of a broader tension between a handful of disgruntled US companies and the Indian government, which has now spread to the Capitol Hill.

Didar Singh, secretary-general, FICCI, said though India has a social and constitutional responsibility of providing healthcare and better standard of life to its people, the policy drive is geared to meet the country's obligations under Trade Related Aspects of Intellectual Property Rights (TRIPS).

During the United States Trade Representative (USTR) office hearing on the USTR's 2014 Special 301 Hearing on February 24, Alliance for Fair Trade with India (AFTI), Biotechnology Industry Organisation (BIO), Global Intellectual Property Center (GIPC) of the US Chamber, Pharmaceutical Research and Manufacturers of America (PhRMA) and the National Association of Manufacturers (NAM) recommended to the USTR to designate India as "Priority Foreign Country" in its 2014 Special 301 report.

FICCI said the effort being made to declare India as "Priority Foreign Country" under the Special 301 under the US Trade Act of 1974 is a unilateral action to create pressure on India to increase IPR protection beyond the TRIPS Agreement and aims to protect private corporate interests over national interests.

The US advocacy groups have levelled charges against India's business environment, arguing that it is restrictive and discriminatory, with weak protections for intellectual property due to a number of patent invalidations and issuance of compulsory licences. Singh stressed that the "Indian policy is not protective towards its domestic industry, but is protective of the interests and welfare of its citizens."

It said India has a well-established legislative, administrative and judicial framework to safeguard IPRs which meets its obligations under TRIPS and has withheld the test of severe international scrutiny. The two Trade Policy Reviews conducted by WTO in respect of India in 2007 and 2011 have found the Indian IPR regime to be adequate and there has been no mention to the contrary.

With regard to compulsory licensing in the pharma sector, there has only been one case — Natco — where a compulsory licence was granted in India. The decision was taken after fully examining the facts of the case as per the provisions of Indian law.

US allegations

• The US advocacy groups have levelled charges against India's business environment
• Their argument is that it is restrictive and discriminatory, with weak protections for intellectual property.

Sensex hits record high on lower CAD, FII buying
Tribune News Service

New Delhi, March 6
The BSE Sensex today soared 237 points to end at a new life-time high of 21,513 points on heavy buying by foreign investors across blue chip banking, oil & gas and metal shares on account of a pre-election rally and a sharp drop in current account deficit

"Market has hit a new high on the basis of strong FII flows as well as increasing retail participation. Normally it is seen that there is a pre-election rally and that is what is reflected in the levels. We feel a strong political mandate would result into increasing level of optimism and hence new levels for the market," said Motilal Oswal, CMD, Motilal Oswal Financial Services.

ICICI Bank, RIL and L&T led the 24 gainers in the 30-share Sensex while Hindalco and BHEL clocked the best gains.

The Sensex surpassed its previous record closing level of 21,373 points set on January 23, 2014. The Sensex has gained 567.22 points in three straight days. The Nifty's previous record closing high of 6,363 points was made on December 9, 2013.

India's current account deficit fell to $4.2 billion, or 0.9% of GDP, in December quarter of 2013-14 on the back of rise in exports and fall in gold imports.

The rupee was trading at this year's highest level of 61.27 against US dollar when stock markets closed.

Positive cues trend in the Asian region and higher opening in Europe as investors awaited the central bank's interest rate decision and data on jobless claims, further supported the domestic market surge, traders said.

Shrikant Chouhan, head, Technical Research, Kotak Securities, said the Nifty opened above the highest of the previous day and remained firm throughout the day. After December 9, this is the second time the market closed above the magic level of 6,360. The market failed number of times from 6,360 levels but on Thursday the market closed above it with a broad base participation.

Revised tariff norms to hit margins of power PSUs, says S&P
Sanjeev Sharma
Tribune News Service

New Delhi, March 6
The revised tariff norms by the central electricity regulator will have a negative impact on the operating performance of state-owned utilities such as NTPC, PowerGrid and NHPC, according to Standard & Poor's Ratings Services.

However, the largest rating agency said this will not impact the ratings of these firms. "While we think the revised regulatory tariff structure is likely to weaken the operating performances of NTPC, NHPC and PowerGrid, it is unlikely to affect the ratings of these companies," Standard & Poor's said.

The Central Electricity Regulatory Commission (CERC), in its final guidelines for tariff fixation, has shifted the incentive structure to plant load factor (PLF) from plant availability factor (PAF) for the period financial year 2014-2019.

The regulator has also maintained the base return on equity on transmission systems at 15.5%, which is much lower than 18-20% sought by companies.

According to S&P, NTPC's operating profit is likely to decline 10-12% and net income to fall under the new tariff structure - all else being equal.

According to the firm, NTPC's EBITDA and net income will be weaker largely because the company won't be able to enhance its return on equity as much, given that it will now have to use the 24-26% effective tax rate from the 33% corporate tax rate that it has been using so far, and incentives will now be based on PLF from the earlier PAF.

ONGC, Oil India to buy IOC stake at Rs 220 per share

New Delhi, March 6
ONGC and Oil India Ltd (OIL) are likely to buy a 10% stake in Indian Oil Corp (IOC) from the government at Rs 220 per share, aggregating about Rs 5,300 crore. An Empowered Group of Ministers (EGoM) headed by Finance Minister P Chidambaram had on February 28 decided to sell the stake in IOC, the nation's largest oil firm, at a discount of 10% through an off-market deal.

Sources said the IOC scrip traded at about Rs 245 on that day and a 10% discount to that price was calculated to arrive at a selling price of Rs 220 a share. Also, Rs 220 is the three-month average trading price of IOC shares.

The sale of the 10% stake, or 24.27 crore shares, will be through an off-market transaction, with ONGC and OIL each buying 5%. The transaction may take place on March 14 or 15, they said.

Oil Minister M Veerappa Moily had on February 28 confirmed the sale would happen at 10% discount.

IOC shares fell 0.41% to Rs 254.10 on the BSE in afternoon trade today. They have gained more than Rs 42 since January 16, when the EGoM cleared the stake sale at the current market price, plus/minus 1%. — PTI