Posts Tagged ‘commerce minister’

Dubai Woes to Hit India Hard? “No” Says India’s Think Tank :)

 

Dubai Woes to Hit India Hard? "No" Says India's Think Tank


Indian policy-makers
are not really worried over the potential adverse impact on the country’s economy because of the multi-billion-dollar debt default risk faced by Dubai World, ranked among the largest conglomerates in the region.

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Commerce Minister Anand Sharma said “India is a very large economy. It is a resilient economy”.

“I don’t think some development in real estate in Dubai will have an impact on the Indian economy” he added.

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🙂

He also said “As far as India is concerned, the housing, real estate sector and construction industry are all doing well.

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This is confirmed by the increasing demand for construction materials, cement and steel,”

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Finance Secretary Ashok Chawla also saw little impact of the Dubai World’s woes on the country’s economy.

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Though he was a trifle more circumspect and preferred to watch the situation before hazarding a guess.

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“We will have to study what the issue is, what is the problem, what will be the possible implication if any for the Indian economy, the people and corporates,” Chawla told.

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🙂

Asked if the crisis will impact money flows into India,since the Gulf region accounts for over half the total inward remittances worth over $25 billion annually from expatriate Indians,

Chawla said: “It’s unlikely.”

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The state-run Dubai World stunned the global financial world Thursday when it announced it would need to restructure its debt, estimated at $59 billion, to preempt default and asked creditors for a six-month deferment.

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The conglomerate, which has a host of companies under its fold, has interests in a wide range of businesses such as realty, infrastructure, logistics and economic zones.

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And that is not just in the region but across a clutch of countries including India.

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🙂

Indian equities reacted adversely to the development, with the benchmark sensitive index (Sensex) of the Bombay Stock Exchange (BSE) down as much as 634.16 points, or 3.76 percent, midway into the trading session Friday.

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It later recovered and closed with a loss of some 220 points, or 1.3 percent over the previous close.

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🙂

Indian markets have rallied more than 100 percent from the lows a year ago,mostly backed by news of recovery and not necessarily on fundamentals,”

said Jagannadham Thunuguntla of brokerage firm SMC Capital.

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“This is why such news will have a negative impact on our markets and we will be dragged down,” Thunuguntla, who heads the equities division of SMC Capital told.

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Even some Gulf-based companies, like Emmar, which have business interests in India, said there will be virtually no impact on their ongoing projects in India.

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The response was similar from India’s leading engineering and construction major Larsen and Toubro Ltd, which said its exposure in Dubai was around $20-$25 million.

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🙂

Foreign Investors Protest India’s Tax Regime

Foreign Investors Protest India’s Tax Regime

Foreign Investors Protest India’s Tax Regime

In a demonstration of solidarity in economic diplomacy, the ambassadors and high commissioners of seven rich countries have jointly protested against features of, what they term, India’s “retrograde’’ tax regime.

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The ambassadors of the US, the Netherlands and Spain, high commissioners of the UK, New Zealand and Australia and the head of the European Commission delegation have expressed their anxiety over the “growing unpredictability in India’s tax policies’’ and written to finance minister Pranab Mukherjee seeking an appointment.

They said India’s policies were creating an “unquantifiable risk in investment planning’’.

The letter has been marked to commerce minister Anand Sharma, deputy chairman of Planning Commission Montek Singh Ahluwalia and cabinet secretary K M Chandrasekhar, among others.

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The concern pertains to the application of punitive tax liabilities on deals with retrospective effect.

Their anxiety was triggered by the $2 billion tax controversy involving Vodafone’s $12 billion buyout of Hong Kong-based Hutchison’s stake in Hutch-Essar.

And now include tax troubles in deals such as

SabMiller’s acquisition of Foster’s Indian beer business,

Aditya Birla Nuvo’s acquisition of shares in Idea Cellular from AT&T Mauritius,

transfer of GECIS Global (Luxembourg) shares by GE to a consortium of US private equity funds and,

Vedanta’s acquisition of Sesa Goa shares held by Mitsui through a UK holding firm.

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In other words, what was until now seen as a problem between tax authorities and Vodafone has now escalated into a standoff between the governments of seven nations, including the US and the EU.

Source : Times Of India 14/10/09