Not interested in foreign banks, want more branches: ICICI - livemint

PTI reports:

"“You must let the local players grow up before further opening the sector for foreign players to put Indian banking sector on a global stage.” Kamath also said India can emulate China in encouraging domestic banks, instead of foreign banks. “They are not giving unrestricted access to foreign banks, rather they are allowing the local banks to grow up... besides their economy started opening up about 15 years ago, while India is only two-three years in this process,” he said."

Parliament passes bill to regulate goods carriers

BS/PTIreports:

"Parliament today passed a key bill to regulate and fix the liability of goods carriers by road, including agents and courier agencies.....The legislation will cover the entire chain of intermediaries engaged in the transport of goods by road. The liability of the common carriers for loss or damage to any consignment will be limited to Rs 10,000."

Time to rescind the ban

BS writes:

"The suggestion mooted by the Confederation of Indian Industry (CII), to extend the ban on milk powder exports till March, is bizarre. The ban was ill-advised in the first place because milk production has steadily and consistently been growing at more than double the rate of population growth, and there was no fear of any shortage of milk. The milk price index, too, has historically remained lower than that of all food items taken together, and also of individual major food items grouped as cereals and pulses, fruits and vegetables, and eggs, meat and fish. If the government’s decision to ban exports, taken last February, which is the beginning of the seasonal lean phase in milk output, was meant to ward off any abnormal rise in prices, that threat (if it ever existed) is now over."

Govt to curb STC`s monopoly of wheat imports

BS reports:

"At an emergency meeting held here on Friday, the empowered group of ministers (EGoM) on wheat, headed by the union minister for external affairs Pranab Mukherjee, has decided in all future wheat import contracts, both MMTC and PEC, which are trading corporations under the commerce ministry, will also be involved. However, STC, which is also a commerce ministry body, will continue to import wheat, said highly placed sources in the food ministry."

By doing what?

Textile ind cautions govt on FTAs

FE reports:

"Nair’s note of caution is significant as India is eager to sign FTAs with Thailand and the ASEAN. The industry has already suggested to the government not to go for tariff reduction for textile products while signing FTAs and bilateral trade agreements with Asian neighbours. The WTO draft on non-agriculture market access (NAMA) released by Don Stephenson in July has already invited concerns for the industry. Indian textiles face tough competition from China, Bangladesh, Pakistan, Laos, Vietnam, and Cambodia. One of the main reasons for China's competitiveness is the artificial exchange rate of its currency. “Some Asian countries procure cheap yarns and fabric from China and export garments and apparels at competitive prices,” said Nair."

Milk prices drop Rs 4/litre in 2 months

BL reports:

"Speculation over a possible extension of the ban on skimmed milk powder (SMP) exports beyond this month has led to a crash in milk prices. Private dairies in the North are currently paying Rs 15-15.50 for a litre of buffalo milk containing 6.5 per cent fat and 8.5 per cent solids-not-fat (SNF) delivered at their dock. The same milk was being sourced at Rs 19-20 a litre in July. “We have seen a drop of around Rs 4 a litre in the last two months. Over the last week alone, prices have gone down by roughly Rs 1.50 a litre,” said Mr Kuldeep Saluja, Managing Director of the Delhi-based Sterling Agro Industries Ltd. Product prices fall He attributed the fall to the decline in realisations from products and speculation over the ban on SMP exports continuing beyond September 30."

Allianz bank gets RBI nod with rider

Allianz bank gets RBI nod with rider:

"The Reserve Bank of India has finally agreed to give a licence to European financial conglomerate Allianz AG for domestic retail banking. However, sources at the central bank point out that in order to obtain the banking licence, Allianz had to compromise by dropping its earlier plan to seek the licence in its own name.

Allianz has now agreed to accept RBI’s condition that the bank be known as Dresdner, a global bank owned by Allianz, which has had a representative office in India since 2000. The central bank has given permission to Dresdner to open one branch in the country."

I liked the "Allianz had to compromise by dropping its earlier plan to seek the licence in its own name" part. If I were RBI I would have insisted on it dropping the 'd' in the middle. Sounds better, no?

India's iron ore exports dip, steel firms seek cap | Reuters.com

India's iron ore exports dip, steel firms seek cap | Reuters.com:

"India's iron ore industry said on Friday that a duty on exports imposed in February and a strong rupee had dragged down sales, but steelmakers disagreed and again sought a cap on overseas shipments.

The government initially set an export duty of 300 rupees per tonne of all iron ores, but later cut the rate applicable to low-grade sales to 50 rupees following protests by the mining industry."

"Losers club" sought to derail India deal - Vodafone | Reuters.com

"Losers club" sought to derail India deal - Vodafone | Reuters.com:

"Arun Sarin, the chief executive of global wireless operator Vodafone Group Plc, called for greater transparency in India's merger approval process to defeat backroom efforts by vested interests to manipulate India's political bureaucracy.

'I really did not expect people -- the 'good and great' of India -- to be calling cabinet secretaries, ministers, to say, 'You have to unwind this deal, because we want a piece of it,'' Sarin told a conference of Indian business and academic leaders taking place in Silicon Valley this weekend.

Vodafone edged out some powerful Indian business groups with an $11 billion bid for Hutchison Telecommunications' majority stake in India's fourth-biggest mobile firm in January. It then underwent a three-month regulatory wait -- rapid by U.S. or European standards, he noted.

Sarin said he was confident the deal would sail through until the regulatory process in New Delhi entered its final weeks and he became aware of behind-the-scenes lobbying of key bureaucrats by competitors attempting "to crater the deal."

"The billionaire losers' club was trying to unwind the deal," the Vodafone leader said. "What was fascinating was that there was absolutely no transparency to the process."

Valuations Professionals Bill

FE reports

A concept paper (a copy of which is with FE) on a Valuation Professionals Bill, floated by the company affairs ministry, proposes setting up a council that would certify a “valuation professional”, besides issue valuation standards, set education guidelines, recognise institutes and their course content, and frame ethical codes.

The concept paper defines a “valuation professional” as one who individually, or in partnership, or in limited liability partnership with other valuation professionals, offers services like valuation of business, shares, debt, assets, goodwill, brands and intellectual property. At a time when domestic M&As are on a rise, the concept paper seeks to prohibit companies, both Indian and foreign, from certifying valuations.

Infrastructure, not trade barriers, hurting horticulture exports

Mint reports

High delivery costs, caused primarily by a fragmented supply chain, bad logistics, together with poor standards are hurting India’s horticulture exports much more than trade barriers, says a new report prepared by the World Bank for the agriculture ministry.

Despite producing 11% of the world’s vegetables and 15% of fruits at very competitive costs of about 53% and 63% of average global prices, India’s share in global fruits and vegetables trade has remained at only 1.7% and 0.5%, respectively.

Lead economist with the Bank Aditya Mattoo says, “India is paying a huge logistical tax on agricultural products. The inability to compete abroad today might lead to the inability to compete at home tomorrow. And in horticulture, subsidies are not even an issue.” India has been strongly protesting the multilateral trade negotiation rounds against the high domestic farm subsidies enjoyed in the Euro area, the US and Japan.

The report therefore argues for creation of an integrated and competitive supply chain for agriculture along with radical reform in transport, storage and distribution services before India opens up to foreign competition.

Protectionists in India never miss a chance to point out to high domestic subsidies in US - for at least two reasons. They say US has double standards - even though its they who are guilty of that, having thanked these very subsidies when in the pre-Green revolution days. They say the root of all agricultural woes lie in these subsidies - when there is a bigger problem right here. I am not justifying policies of US, EU or Japan. But I dont think protectionist arguments based on US subsidies aren't justified.

Steel industry wants new panel on mineral policy

PTI reports

“The Hoda Committee has been unable to address the interest of steel industry. The need of the hour is to conserve iron ore to protect the future of steel utilities. So, there is an express need for setting up a new panel to delve into the entire gamut of issues pertaining to iron ore and come out with a mineral policy for the benefit of one and all,” the (Indian Steel Alliance) official said.

After sugar, state to bail out mango growers now

ET reports

THE Maharashtra government seems to have developed “sweet tooth”. Having pumped in hundreds of crore to rescue sugarcane, the cashstarved Maharashtra government is set to help mango.

The state government is giving finishing touches to a financial package for the mango farmers in Konkan, Mantralaya officials told ET. The package could be announced at the cabinet meeting next week, sources said. The state has around 4.5 lakh hectares of land comes under mango orchards, most of it in Konkan. In 2005-06, the state produced more than 6.3 lakh metric tonnes of mangoes. The current season, however, is likely to see the output drop to less than 3 lakh metric tonnes, officials said.

Interestingly, revenue minister Narayan Rane and his bete noire Ramdas Kadam, Leader of the Opposition in the legislative assembly, are seen helping the government in finalising the package, sources said. Both the leaders are from Konkan.

The package would be the first major sop for the region since Mr Rane became the revenue minister. “It’s very important for Mr Rane to pull this off for his region. Sugar barons from western Maharashtra and Marathwada have recently cornered huge subsidies for their regions,” sources said.

A substantial drop in the mango output this season has made legislators from Konkan seek a compensation from the government.

How Indian tax payers subsidize foriegn sugar consumers

Business Standard reports

White sugar fell to the lowest since November 2005 in London after India, the world’s second-biggest producer, agreed to subsidise exports of the sweetener.

The Election Commission approved a government plan to build a sugar stockpile and provide subsidies to exporters, a trade body said today. India will pay exporters up to Rs 1,450 ($34.50) a tonne for transportation costs to the ports, Agriculture Minister Sharad Pawar said March 29 in New Delhi.

Domestic sugar prices have fallen by more than a fifth in the past year because of record output, reducing local producers’ earnings. This prompted the government to lift a ban on exports in July to stop the prices from sliding.

Cement makers irked over lifting of addl customs, CVD

BL reports

The cement manufacturers have expressed concern over the Centre's decision to do away with countervailing duty and additional customs on imported Portland cement. However, the impact is likely to affect investor sentiment and capacity creation rather than encouraging imports, they say.

According to Mr Puneet Dalmia, Vice-President, Dalmia Cement (Bharat) Ltd, the decision brings down the price spread between imported cement and domestic product. The price difference is about Rs 25-35 a bag.

With the Government doing away with the 16 per cent countervailing duty, amounting to Rs 600 a tonne, the difference drops by Rs 30 and the lifting of additional customs duty means an impact of another Rs 1-2.

Effectively, the prices of imported cement and domestic cement are brought on par with each other. This could have some marginal impact on prices in the coastal areas, but prices elsewhere will not be affected because of the logistics cost. Another leading cement manufacturer based in the South said that it was regrettable that the Government had decided on the move despite cement prices being stable for the last month or two. It is the market that is deciding the prices.

Lowering trade barriers - such as bringing down import duties - is good. But it's better to be skeptical when government does it to control prices.

At the same time, look at how cement makers behave.

Some time back, the virtues of free market were so clear to them. When FM introduced a dual tax rate for cement, they all cried whats happening to free markets.

Now, when trade barriers come down, they say it's 'regrettable'.

Cement import: Makers must conform to Indian standards

Business Line reports

Overseas cement manufacturers intending to export have to obtain quality certification from the Bureau of Indian Standards (BIS) to the effect that their manufacturing units conform to Indian standards.

"Foreign manufacturers seeking to export cement to India will have to obtain a licence under the BIS Certification Scheme for their units," Mr P.K. Batra, Director, Central Marks, BIS, told Business Line.

The grant of licence by BIS is subject to an application to be made by the exporting manufacturer and the license is granted after personal inspection of the factory by a BIS official and satisfactory testing of samples in India.

The exporting unit will have to pay one per cent of annual export contract value to BIS as marking fees. This is in addition to a minimum marking fee of $2,000.

Drop prices or you’ll be made to, govt warns pharma firms

Mint reports

India could increase the number of drugs for which it fixes prices under the Drug Price Control Order (DPCO) from 74 to 354—the number of essential drugs according to the government—if pharmaceutical companies did not keep their promise to reduce prices, according to the Union minister for chemicals, petrochemicals and fertilizers, Ram Vilas Paswan.

Last year, the government had fixed the wholesale and retail margins on around 1,000 branded generics (off-patent drugs) at 15% and 35%, respectively.

The prices of these drugs are not determined by the National Pharmaceutical Pricing Authority (NPPA), which enforces DPCO.

The margins on some of these were as high as 1,000% before the government’s order, which was expected to result in a significant reduction in prices of drugs from October onwards.

Some of the companies hadn’t yet complied with this order, said Paswan.

State depts oppose move to centralize drug mfg licensing

Mint reports

The Union government’s proposal to create a Central Drugs Authority that will regulate and monitor the functioning of pharmaceutical companies has run into opposition from the drug departments of state governments, which believe the move will limit their own role.
The government’s move to create CDA—modelled on the Food and Drugs Administration of the US—will expand the powers of the current pharmaceuticals regulator, Drug Controller General of India or DCGI, and set up departments to monitor clinical trials, medical devices, vaccine and other drugs-related businesses. The CDA, awaiting parliamentary nod, will function under the ministry of health and family welfare.

These bureaucrats!

Indian planters urge Thai FTA plan rethink

Mint reports

Fears of concessional import of natural rubber from Thailand under the proposed free trade agreement (FTA) has caused a flutter in the rubber sector with growers and traders requesting the Centre to desist from any such move.

United Planters Association of South India (Upasi) president J.K. Thomas has, in a representation to the government, requested it to reconsider the move to allow cheap import of rubber from Thailand.

Thomas said he feared that the agreement would mean delisting rubber from the sensitive list which would bring down the present import tariff from 20% to 5%.
Indian Rubber Dealers’ Federation vice-president N. Radhakrishnan noted that Thailand is the largest natural rubber producer with an annual production of around 32 lakh tonnes. Both groups claim that the move would seriously affect the livelihood of small and marginal growers who account for 90% of the more than one million growers producing 8.03 lakh tonne of rubber annually.

Brass parts makers strike metal

FE reports

Nearly 3,000 brass part units in Jamnagar, Gujarat, will go on a symbolic one-day strike to protest the substantial surge in the prices of brass scrap, a key raw material used by the industry. Both at the London Metal Exchange (LME) and domestic commodity exchanges, the prices of brass parts have been constantly rising for the past four months.

Attributing speculative trading as the reason for the rise, brass parts manufacturers said that the prices of brass scrap have increased to Rs 270 per kg, from Rs 215 - Rs. 230 four months ago. Surprisingly, the prices were as low as Rs 80 - Rs 100 two years ago.