Category Archives: usa

US wants India to bring Hamid Karzai around

http://www.hindustantimes.com/India-news/NewDelhi/US-wants-India-to-bring-Hamid-Karzai-around/Article1-1081845.aspx?hts0021

An America obsessed with the idea Pakistan’s assistance is necessary for an orderly withdrawal from Afghanistan, pushed a soft line on Pakistan with the Indian government.

US secretary of state John Kerry, during the fourth Indo-US strategic dialogue, urged his Indian interlocutors to prod a reluctant Afghan President Hamid Karzai to come around to supporting talks with the Taliban.

“You have good ties with Karzai,” Kerry reminded the Indian side, as he urged India to use its influence on the Afghan president for the peace talks with the Taliban, sources told HT.

It is learnt that at the discussions, Pakistan didn’t figure in a major way and  Kerry mostly stuck to the line of improving trade ties and the “positive signals” Pakistan PM Nawaz Sharif was sending to  India.

At a press briefing, Kerry refused to answer a question as to whether the Haqqani network, a Taliban affiliate close to the ISI, would be part of the proposed peace talks.

According to sources, in another side of a soft Pakistan line, the US was reluctant in “adequately emphasising” standard formulations  like “Pakistan being a safe haven for terrorists” in the context of Afghanistan.

In a bid to assuage Indian concerns on the Afghan peace process, Kerry reassured, “We will consult very closely with India and with others in the region.”

He also said that the Taliban, would have to “disassociate themselves from al-Qaida and from violence” and respect the constitutional protections for women and minorities.

As the Af-Pak region remains a bone of contention between the two sides, the US was looking at greater economic relations to improve ties.

And in strategic terms, both sides sought greater salience in the Indian Ocean and the Pacific region as part of a rebalancing strategy.

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RBI can sell upto $30bn to support rupee; may opt for NRI bond

http://www.hindustantimes.com/business-news/WorldEconomy/RBI-can-sell-upto-30bn-to-support-rupee-may-opt-for-NRI-bond/Article1-1081534.aspx

In order to arrest rupee depreciation, the Reserve Bank of India has a capacity to sell up to $30 billion from the forex reserves and may go for an NRI bond issue to mop-up up to $20 billion, foreign brokerage Bank of America Merill Lynch said on Monday.

“We expect the RBI to eventually mobilise $20 billion via NRI bonds, a la 1998 Resurgent India Bonds and 2001 India Millennium Deposits, as the sell-off of emerging market debt should constrain the ability of FII debt limit hikes to raise forex reserves,” it said, adding that the central bank can sell upto $30 billion to support the rupee.

The BofAML report said that five year money can be raised by issuing the 7 to 9% coupon bonds to stabilise markets, just as it was done in 1998 and 2001.

The country’s banks had raised $4.8 billion and $5.5 billion from the bonds targeted at the diaspora during the economic crisis years in 1998 and 2001, respectively.

BofAML said it expects RBI to defend the Rs. 60 to a dollar level. The rupee opened 40 paise down against the dollar on Monday and was trading at Rs. 59.74 to the dollar at 2:37pm.

Every round of volatility in the rupee (the current one has been on for over three weeks now) causes a dent of up to $15 billion to the forex reserves, and considering where the reserves stand right now, RBI can sell up to $30 billion, the report said.

The selling will get the country’s import cover down to six months from the current seven months, the BofAML said.

Its strategists expect the rupee to peak at Rs. 59 to a dollar, according to the report.

RBI will start buying rupee once markets stabilise and the inflows from Unilver buy back, which would be in the region between $3 billion and $5 billion, happen,  it said.

Raising the rates is not the answer to arrest the fall in rupee, it said, noting that the differential between the $Federal Reserve’s lending rate and the RBI’s is already at a peak of 7%.

India squeezed by QE3

http://www.hindustantimes.com/business-news/WorldEconomy/India-squeezed-by-QE3/Article1-1081741.aspx

US Federal Reserve chairman Ben Bernanke’s comment on rolling back the monetary stimulus package couldn’t have come at a more inopportune time for the Indian economy.

The rupee has crashed to a new low, nearly touching 60 and still counting. As portfolio investors pull out funds, the slide in equity markets continues.

Blame it on QE3. It sounds like the name of a scientific project, but it is essentially a financial market jargon for the third round of quantiative easing or QE by the US central bank.

It involves a large purchase of bonds by the Fed to pump in loads of cheap money into the financial system to aid the American economy. Part of these funds came to emerging markets such as India that were still delivering returns in high double-digits a year.

The tide has since turned.

Financial investors have begun selling Indian stock since the beginning of May and with the curtains likely to come down on the US stimulus package, one can safely expect more billions to move out.

A weak rupee can also fan inflation by making fuel and other imported goods costlier. Oil companies fear that if the trend sustains for a few more days, retail prices of transport fuel would have to be hiked again, which can fan inflation.

Higher inflation will also limit the RBI’s ability to cut interest rates, dimming hopes of lower loan EMIs for individuals.

Also, the record current account deficit (CAD) may restrict the RBI’s elbow room to prop up the rupee by dipping into its $290 billion of foreign exchange reserves, enough to cover imports for seven months, analysts said.

“A reversal of capital inflows would likely wreak havoc on the rupee, as financing the CAD becomes difficult,” said Sonal Varma, economist at research firm Nomura.

“Return of foreign capital in the short term will critically depend on adopting the right policy mix to attract higher investment inflows and improve growth prospects of the economy,” said DK Joshi, chief economist, CRISIL Research.

Struggling to move forward

http://www.hindustantimes.com/editorial-views-on/Edits/Struggling-to-move-forward/Article1-1081625.aspx

Hindustan Times
New Delhi, June 24, 2013

It was telling that the storm over Washington’s attempts to hold open talks with the Taliban in Qatar all but drowned out the maiden Indo-US strategic dialogue of US secretary of state John Kerry. India and the US are now clearly moving apart on the issue of Afghanistan. The Barack Obama

administration is determined to have the US military withdraw from Afghanistan at all costs — including allowing Pakistan to broker a deal that would allow the Taliban to govern in Kabul.

India is strongly opposed to any talk of any future Afghan government that includes the Taliban seeing such a development as a major threat to its security and a fillip for the worst elements in Pakistan. The question is whether the nascent Indo-US strategic partnership can survive differences over Afghanistan — and thus Pakistan.

In a mature strategic relationship, it is not uncommon for partner nations to disagree fundamentally over specific issues while maintaining the larger relationship. France is a treaty ally of the US but has an unusually contentious relationship with the sole superpower.

One should expect India, whose relationship with the US is far more informal and recent, to have its fair share of differences with Washington. The Indo-US relationship is strengthening and deepening in a whole host of other areas.

At the strategic dialogue here, the two largest democracies see eye-to-eye on regions like East Asia and the Indian Ocean and in areas like energy and counterterrorism.

The two countries have dozens of dialogues on every conceivable topic — the kind of interaction that would have been inconceivable even a decade ago.

Yet it is clear that the initial expectations of the Indo-US relationship have not been fulfilled. It would be too much to expect something as large as the Indo-US civil nuclear deal to once again animate relations.

And much of the quiet in areas like defence is because of the bureaucratic hurdles both sides have thrown up against each other. Economic difficulties in both nations have taken the steam out of bilateral trade and investment, leaving only a residue of disputes and protectionist measures.

But what has muddied the waters the most has been the geopolitical uncertainty that has infected both countries. Obama initially flirted with China, went back and forth on Afghanistan, and now makes India wonder about where the US is going with the Persian Gulf.

New Delhi has since been reassured about the US commitment to the Asia-Pacific but believes its worst fears about Afghanistan may be coming true. Until these brushes on the larger canvas are made clearer to the satisfaction of both sides, the Indo-US relationship will struggle to move forwards in the smaller, tactical areas.

Kerry, Khurshid lob visa issue into IT industry court

http://www.thehindu.com/business/Industry/kerry-khurshid-lob-visa-issue-into-it-industry-court/article4847123.ece?homepage=true

The strategic dialogue also provides a roadmap to resolving other economic issues

The Fourth India-US strategic dialogue, co-chaired by External Affairs Minister Salman Khurshid and U.S Secretary of State John Kerry, did not resolve any of the economic issues during their sitting here on Monday but did provide a road map to resolving some of them.

India’s pressing concerns about a new law that will impose high fees for visas for software professionals will now be largely quarterbacked by corporates.

Reluctant America

India had wanted the issue to be discussed at a meeting of the Trade Policy Forum because it feels the higher visa fees is more of a non-tariff barrier than an immigration issue but the U.S. was reluctant. Both sides felt the industry, which would bear the brunt of the fee hike, should take it up with American legislators framing a new immigration law.

July meeting

Accordingly, this will be discussed at a meeting of the Indo-U.S. CEOs Forum on July 12 in Washington. This forum will also further develop joint initiatives and will discuss ways to overcome business challenges.

During the dialogue, New Delhi pointed out that Indian software professionals working in the U.S. was the pillar of the new closeness between the two countries.

Curbs such as a high upfront visa fee were a trade issue as it affected the working of Indian software companies in the U.S.

The U.S., on the other hand, pressed for a bilateral investment protection agreement but Indian diplomats wanted Washington to be patient as the new template was still being worked out by the Finance Ministry.

The existing format has the provision of a sovereign guarantee for every investment decision.

The Finance Ministry is now working on a model that not only keeps sovereign guarantees out but prohibits aggrieved companies from going in for arbitration if they lose their case in civil courts.

The dialogue also saw India expressing willingness on increasing the foreign direct investment limit in sectors such as defence and insurance although the Government’s ability to deliver on any likely commitment remains doubtful.

 

India assures U.S. a share of nuclear pie

http://www.thehindu.com/news/national/india-assures-us-a-share-of-nuclear-pie/article4846708.ece?homepage=true

Sandeep Dikshit

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U.S. Secretary of State John Kerry with External Affairs Minister Salman Khurshid during a press conference in New Delhi on Monday. Photo: R.V. Moorthy
The Hindu U.S. Secretary of State John Kerry with External Affairs Minister Salman Khurshid during a press conference in New Delhi on Monday. Photo: R.V. Moorthy

India and the U.S. on Monday agreed to set a timeline for operationalising the civil nuclear agreement. The Fourth Strategic Dialogue co-chaired by U.S. Secretary of State John Kerry and External Affairs Minister Salman Khurshid here reviewed several issues ranging from the status of civil nuclear ties between the two countries through defence trade to education and cultural exchanges — through some 30 bilateral panels.

The two ministers felt further high-level meetings should be held to achieve convergence and progress, especially in strategic issues. An example of such meetings will be the visit of U.S. Vice President Joe Biden scheduled for mid-July.

The new U.S. Af Pak envoy James Dobbin, fresh from a visit to Qatar where the Taliban has opened an office, will arrive this Wednesday to ensure India’s concerns are taken on board as the West prepares to politically integrate the insurgent group, Mr. Kerry said at a joint press conference with Mr. Khurshid.

At the press conference, Mr. Kerry almost let slip America’s chagrin at not having tasted the fruits of the India-U.S. civil nuclear agreement by drawing attention to the enormous domestic political capital invested by Democrats and Republicans to ensure New Delhi was given a special exemption by the Nuclear Suppliers Group (NSG).

The Kerry-Khurshid meeting set September as a possible timeline for resolving two issues that have thwarted Westinghouse from setting up six reactors in Gujarat. Another company GE will set up an equal number in Andhra Pradesh but its reactor design has not yet been cleared by the U.S. nuclear regulator. India had promised these multi-billion bonanzas in exchange for supporting its case at the NSG and the International Atomic Energy Agency.

While Washington was able to make India agree on a deadline for clearing Westinghouse’s mega civil energy project, India was handed an assurance for importing shale gas from the U.S., which is likely to accrue by 2016-17. The shipments are likely to originate at the proposed LNG export terminal at Cove Point, Maryland.

The U.S. also continued to press India on adopting clean energy technologies. Of the large number of joint fact sheets released on every conceivable subject discussed by the two sides, the one on this was the most comprehensive. On Sunday, Mr. Kerry spent nearly half of his 45-minute lecture in convincing India to adopt clean technologies.

Apart from Afghanistan, another sore issue was cyber-snooping by American intelligence agencies. Officials had earlier expressed concern over double standards followed by Internet companies — denying India access to emails while happily opening their vaults to U.S. intelligence agencies.

But Mr. Khurshid sought to play down the controversy, even telling a correspondent that concern was not the right word to use. Mr. Kerry told newspersons that notwithstanding vigorous American efforts to arrest the whistleblower, access by its intelligence agencies to emails and other electronic messaging was meant to track patterns and not to read the content.

Differing viewpoints on Iran cropped up during the press meet. Mr. Kerry was strident on Iran’s refusal to fall in line with the West’s intentions and lauded India for being “very cooperative in holding them [Iran] accountable for proliferation.”

He hoped New Delhi would step in to convince the new leadership in Tehran to fall in line with the West. Mr. Khurshid, recently back from Tehran, maintained that India greatly valued its relationship with Iran and would prefer to judge and test the intentions of the new leadership before considering such a plunge.

Unhappy with compensation

India did not raise the killing of one fisherman and the injuries caused to two others by a U.S. warship off the coast of Abu Dhabi in July last year. In the past, India had expressed dissatisfaction with the paltry compensation given to the injured as well as with a heavily crossed out U.S. Navy probe report which put the blame on the three Tamil fishermen.

India, US to exchange information on corporate frauds: Sachin Pilot

http://profit.ndtv.com/news/corporates/article-india-us-to-exchange-information-on-corporate-frauds-sachin-pilot-323632

New York: With an aim to avert possible corporate frauds and safeguard the interest of investors, India is looking for greater exchange of information and regulatory cooperation with the US.

Besides the US government, India will also engage with the companies, universities and other institutions in New York for enhanced cooperation in various areas, Corporate Affairs Minister Sachin Pilot said.

An increased interaction at different levels would not only boost the bilateral ties, but also help in building stronger checks against corporate frauds in the two countries, the minister told PTI in an interview here during his recent visit to the US.

“We need to ensure there is adequate transparency in the dealings of companies’ disclosures, keeping in mind the number of corporate frauds that have been unearthed in the recent past both in the US and in India,” Mr Pilot said.

The minister said that India and the US would share data to prevent such frauds from happening in the future.

“We want to work not just with the government, but also with the private sector, universities and institutions across the US, enhance training programs, exchange regulatory officers, and promote faculty research and staff training both in judicial and non-judicial areas,” he said.

During his visit, Mr Pilot had meetings with the US Federal Trade Commission chairman FTC Ramirez and Assistant Secretary of State Robert Blake, among others.

Emphasising on the need for greater transparency in matters related to corporate governance, the minister said, “We want to make sure that the aspect of corporate governance is taken into consideration while making laws and legislations.”

“At the same time, companies also need to have more transparency and disclosures in the interest of stakeholders and the general public,” he added.

Mr Pilot also expressed hope that the US investors would look positively at India, which is returning to its growth path after some stagnation for about one and half years.

“As we are moving up, we are looking at investments aggressively from the US. We are looking up to the US investment community in the areas of power, retail, aviation, real estate and infrastructure areas. We see a great interest in India in these areas,” he added.

“The economic downturn in last two years has impacted the sentiments of investors. There were some hiccups and we are working on them. India is still a favourable destination for investors,” Mr Pilot said.

He also hoped that the pending proposals, including those for greater foreign investment in insurance and pension sectors, would be cleared soon.

Story first published on: June 23, 2013 12:26 (IST)

Tags: Sachin Pilot, Robert Blake, Corporate frauds, US economy, Economic growth, Corporate Affairs Minister

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From Reuters

When the Ben and Beijing party comes to an end

On June 24, 2013 16:22 (IST)

When the Ben and Beijing party comes to an end Investors have always been able to count on backing from two sources – US Fed chief Ben Bernanke and Beijing.

As Asia embraces casinos, India hedges its bets

Another China central bank worry; companies push into lending

What’s wrong with economics, anyway?

The global middle class awakens

Market Data provided by © Accord Fintech.
© Copyright NDTV Convergence Limited 2013. All rights reserved.

US denies India access to Headley for fresh questioning

http://www.firstpost.com/world/us-denies-india-access-to-headley-for-fresh-questioning-902101.html?utm_source=top_menu

India will not get fresh access to Mumbai terror attack mastermind David Headley, who is currently in American jail, for questioning, the US indicated on Monday.

This was conveyed to India during the Indo-US strategic dialogue held here today for which Secretary of State John Kerry is in New Delhi.

India had persistently asked the US to give access to Headley for a second time to get more information about the audacious attack in November 2008.

David Headley

File picture of David Headley.

The US interlocutors have cited Headley’s plea bargain with the American authorities (under which a person avoids death penalty by confessing to the crime) and indicated its difficulty in allowing Indian investigators to further question him.

Headley, who had carried out the recce of the 26/11 targets for the Pakistan-based terror outfit Lashkar-e-Taiba, had also opposed further interrogation by Indian investigators, official sources said. Indian investigators had questioned Headley in 2010.

However, India may be allowed to question Headley’s accomplice Tahawwur Hussain Rana who helped his childhood friend to recce the 26/11 targets.

Indian investigators believe that if they could quiz Pakistani-Canadian Rana, many information could come to light as he was a close associate of his Pakistani-American friend Headley.

The investigators believe that Headley and Rana have a lot of information and their interrogations could throw more light on the conspiracy hatched to carry out the worst terror strike in India and role of those behind it.

Headley had pleaded guilty to 12 terrorism charges, including his involvement in the November 2008 terror attacks in Mumbai that claimed 166 lives. He had, however, entered into plea bargain with US authorities.

Kerry asks India to play greater role in Aghanistan, Iran negotiations

http://www.firstpost.com/world/kerry-asks-india-to-play-greater-role-in-aghanistan-iran-negotiations-901005.html

Apart from seeking the implementation of the civil nuclear deal and various other topics, US Secretary of State John Kerry today said that they looked to India to play a greater role in resolving issues between the US and nations like Afghanistan and Iran.

Emphasising that any talks with the Taliban, following the setting up of a political office in Qatar, would be process led by the Afghan people, Kerry said that the US would be briefing Indian authorities about the process.

Thanking India for its support in Afghanistan, Kerry said that were in touch with Afghan President Hamid Karzai.

“This is an Afghan-led process,” Kerry said.

Noting that there were certain conditions to be met, like the Taliban severing ties from terror groups like the al-Qaeda, he said,” If these conditions are met, then negotiations will take place with the high peace council of Afghanistan.”

“It is better to explore the possibility of having a peaceful resolution if it is possible,” he said.

John Kerry and Salman Khurshid. AFP

John Kerry and Salman Khurshid. AFP

He said he hoped that talks with the Taliban would provide “an avenue for the reduction of violence,” but in the event that it did not, the US was prepared to continue to train and equip Afghan armed forces well beyond 2014.

The US secretary of state, who is on his maiden visit to the country, said he is certain that India will encourage President Karzai to ensure all provisions are made for free, fair and transparent elections in Afghanistan.

“The people of Afghanistan need to see and feel that the elections are free and fair,” he said, adding that India needed to help it.

The US also expects India to convince the new leadership in Iran to prove to the world that its nuclear programme was indeed for peaceful purposes as claimed.

Kerry said that the US understood India’s relationship with Iran and hoped that India will urge the new leadership there not to “miscalculate” the US’ intention.

“We urge Iran to prove to the world that their peaceful nuclear programme is indeed peaceful. We hope India will help us, ” Kerry said.

He also said the US is looking forward to the early implementation of civil nuclear deal with India.

The two ministers said that they have had substantial discussions on tackling terrorism, joint ventures in space co-operation, defence, development, education, agriculture and health.

Minister of External Affairs Salman Khurshid said that he and US Secretary of John Kerry have struck a right note during the bilateral talks.

“We have so far done a lot of good work to keep the India-US relationship growing and on a personal note Kerry and I seem to have struck a right note,” Khurshid said.

He said that the two countries have exchanged 112 senior officials in high level visits with the US and both the countries will continue to build on the good work done so far.

Kerry reiterating Khurshid’s opinion on having struck the right note and said Vice President Joe Biden will visit India towards the end of July to strengthen ties between the two nations.

Import barriers: Why US forgets Tariff of 1789 before blaming India

http://www.firstpost.com/business/import-barriers-why-us-forgets-tariff-of-1789-before-blaming-india-901653.html

By Yonathan Benyamini

US Secretary of State John Kerry arrived in Delhi creating a flurry of activity even before the onset of this week’s Indo-US strategic dialogue. Kerry’s agenda is wide and includes bilateral trade, security and defence, science and technology and climate change.

But despite Kerry’s statement that the US regards India not as a “pivot” but “key partner” to re-balance in Asia, the US Chamber of Commerce, National Association of Manufacturers and other angry US business groups allege that the government of India is discriminating against US exports. Trade discussions with India were a point of concern, during the nomination of the new US Trade Representative. Michael Froman, who was appointed to the position last week, was chosen to press the US point of view. Forty US senators also signed a letter to Kerry, in which they urged him “to press for swift action make clear to your Indian counterparts that the United States will consider all trade tools at its disposal”.

US Secretary of State John Kerry in India on Monday. AFP

US Secretary of State John Kerry in India on Monday. AFP

Earlier the business groups had sent a petition saying the Indian government’s attempt to create domestic jobs was “unacceptable for a responsible middle-income country and rising global power”. They claim the import barriers established by India’s policy threaten the $60 billion bilateral trade relationship. They view it as an attempt to flout the economic system, as trying to strengthen their economy at the cost of hurting that of the US.

It’s a shame that they can’t recall such hypocrisy in the history of their own nation, though. It’s sad that they remain ignorant of their own distant past.

Yes, India’s decision to embrace the free market has justified the abandoning of its import-substitution policy. Capitalisation of its non-discriminatory trade has allowed it to experience decades of robust growth. But let’s say theoretically, India reforms its current trade practices. It could certainly maintain an open flow of trade. It could, without question, pursue a more innovative policy that would appease US businesses. And albeit this is all true, so is the insincerity of the United States.

It seems as if the US has forgotten its similar plight as a developing country. The precursor to the American Civil War, the Tariff of 1789 was a heavy tax on imports meant to encourage domestic manufacturing. As the first significant piece of legislation passed by the US Congress to create jobs, it effectively established precedent and basic principles for US trade policy.

A consequence of the onset of the Great Depression, The Smoot Hawley Tariff raised tariffs within the US to a historic high. Instated by then US president Herbert Hoover in desperation, the act elicited a storm of foreign retaliatory measures. US trade policy came to symbolize beggar-thy-neighbor policy — the very grievance of which the US now accuses India. The US department of State reported that US protectionism caused imports to decline from $1,334 million in 1929 to just $390 million in 1932, and exports from $2,341 million to $784 million – a decline in world trade by about 66 percent.

It is only after the realisation of this misfortune that the US assumed its position as a champion of free trade. A champion whose current president vows to create “jobs that pay well and can’t be outsourced”. An advocate that refuses to cut domestic farm subsidies, and places tariffs on technological and solar competitors in China. A paradigm that sanctions regimes, distorting the equilibrium of trade.

India was obliged to reduce its oil dependence on Iran for six months before being exempt, just the other day, from harsh US sanctions.

The United States would also be wise to realise that India holds the key to leveling the playing field with China. At the lower end of the greatest economic war to date, the US has failed to grasp that job creation is essential to maintaining the economic gap with China. Approaching a 1 percent growth of GDP per generation, the US will be surpassed by the Asian superpower within the next two years.

At the current rate, the year 2040 will witness China’ contribution of 40 percent of the world GDP, dwarfing the mere 14 percent produced by the US.

Perhaps the very frustration preoccupying US business groups intimates the inception of a new era, of an epoch no longer dominated by the presence of the United States.