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Oil imports: India-Iran work out rupee trade mechanism (23 feb) MANGALORE: Indian and Iranian governments have worked out Rupee trade mechanism for payment of India's total crude imports from the latter in Rupees rather than convertible currency - the US Dollar normally used for such trade globally. The new mechanism is expected to be operational in two months. This arrangement comes in wake of American and European antinuclear sanctions that are increasingly disrupting Iran's economy. Anup K Pu
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  Oil imports: India-Iran work out rupee trade mechanism (23 feb)   MANGALORE: Indian and Iranian governments have worked out Rupee trade mechanism forpayment of India's total crude imports from the latter in Rupees rather than convertible currency- the US Dollar normally used for such trade globally. The new mechanism is expected to beoperational in two months. This arrangement comes in wake of American and European anti-nuclear sanctions that are increasingly disrupting Iran's economy.Anup K Pujari, Director General of Foreign Trade interacting with reporters on the sidelines of Karnataka: Export Vision 2020, exporters' convention organised by Federation of Indian ExportOrganisations (Southern region) here on Monday that a decision to denominate our trade in rupeeterms was taken at a bilateral meeting of two countries as trade cannot be done usinginternational currency. It is not barter, but it is almost like barter, he said.Explaining the mechanism worked out, Anup Pujari said whatever oil India imports from Iranand for that oil whatever money India is supposed to pay, part of that amount will be retained ina bank in India. Thereafter, any Indian who exports to Iran need not have to bother about someUS bank. Once (export) documents are negotiated, the designated Indian Bank, where the moneywill be kept, will pay the exporter the equivalent amount in Indian currency.   To pare down India's import bill, Anup said, India will mount a big delegation to Iran during theend of this month. Incidentally, the New York Times in its edition dated February 9 has referredto Union commerce secretary Rahul Khullar statement on this. It is our endeavour to increaseexports to Iran. Out of the total amount of oil that we get from them, only 20-25% will beenough for all our exports, he said underlying the need to further boost exports.Noting that Iranian government for a long time was not allowing import of items from India,Anup said the foreign delegation that India mounts will have the opportunity to sell rice, cashew,carpets and whole range of items that do not fall under the purview of the sanctions. Since wehave to anyway import oil from Iran, Anup said, exports to that nation will ensure that 25% of that bill (kept in Indian bank) will anyhow be negotiated.For 2010-11, India's total trade with Iran was equal to $13.67 billion, which included importsworth $10.92 billion and exports worth $2.74 billion. The balance of trade is in favour of Iranand the total growth witnessed during the year was around 2.07 per cent, according to the India'sministry of commerce and industry data. India's exports to Iran include petroleum products, rice,machinery and instruments, manufactures of metals, and other items.Source:- http://timesofindia.indiatimes.com/business/india-business/Oil-imports-India-Iran-work-out-rupee-trade-mechanism/pmarticleshow/11873283.cms?prtpage=1   Sino-Indian strategic ties to be determined by future 'bilateral trade' (24 feb)   The beneficial impact of international trade on economic growth is widely accepted. But whether tradecan improve political relations among nations is debatable. A new book by Pakistani writer AhmedRashid, Pakistan on the Brink: The Future of America, Pakistan and Afghanistan, has reopened thisdebate by positing that China no longer treats India as its enemy owing to the $74 billion worth of bilateral trade between the two.Rashid ridicules delusions in Pakistan that China will continue to offer unconditional support to it againstIndia. Beijing was an 'all-weather ally' of Islamabad in the past owing to geopolitical compulsions of checking New Delhi in south Asia, but Rashid's argument is that this calculus has been irreversiblyaltered by freer trade between China and India in the last decade. Contrast this with the $9-billion Sino-Pakistani trade, which has not transcended the defence sector.Sino-Pakistani trade's lack of a private sector dimension means there are no strong constituencies ineither country that root for closer integration and foreign policy consonance. Outside state elite circles,reminds Rashid, China is an unfamiliar abstraction for Pakistanis, who have little contact with Chinesecounterparts. Burgeoning Sino-Indian trade with private sector involvement, on the other hand, leads tofrequent travel, collegiality and even commonality of interests between exporting and importing firms onboth sides.That trade generates interdependence and peace between states is axiomatic. Cordell Hull, the USSecretary of State during World War-II and a champion of commercial liberalism, said famously that if goods do not cross borders, then armies will . His intellectual inspiration, the 19th-century British freetrade campaigner Richard Cobden, also believed that peace and mitigation of arms races between greatpowers could be achieved through reduction of tariff barriers.One of the big puzzles of our times is how China and India are simultaneously growing at a fast clip,competing for global influence and power, and yet avoiding the prophesied wars that have recurredthroughout European history among rising rival contenders. Is it trade, however lopsided in China'sfavour, which is keeping Beijing and New Delhi on a non-confrontational track? Are business intereststrumping military and strategic unease?Critics point out, however, that trade flourished pre-World War-I among Europeanpowers. The fact thattariffshad been dramatically reduced across Europe since the 1860s through a series of bilateral free tradetreaties did not save the continent from a destructive naval counterbalancing race, culminating in a terribleworld war.How did liberal interdependence fail to produce the positive externalities of security and peace in thiscase? Citing this instance, anti-liberal writers warn against blind faith in the political miracles that tradeallegedly delivers.However, Dale Copeland, a professor at the University of Virginia, has explained the pre-World War-Ibreakdown of cooperation and understanding among European powers as actually a vindication of liberalinterdependence. The key for animus-free foreign relations, according to him, is not the past or presentvalue of bilateral trade but the 'expectations for future trade'. Germany did have thick past and presenttrade relations with its European neighbours, but by the mid-1890s, it had become wary about trade  protectionism from Britain, France and Russia. The idea of a 'central European economic area' seemeddoomed by the early 1900s, as other European powers began to work in tandem to check the Germanindustrial and exporting colossus.If Copeland got it right, the direction of Sino-Indian strategic ties will be determined by whether or notboth parties believe that future bilateral trade is on a rosy path. Foreign minister S M Krishna recentlyexuded confidence that the two countries were on course to achieve a trade volume of $100 billion by2015. Chinese diplomats project this figure to cross $120 billion even earlier. The 'future expectations' of trade are, hence, quite optimistic, even though New Delhi is dissatisfied with the massive trade deficit it isrunning with Beijing at the moment.So, has Pakistan's legendary 'special relationship' with China aimed at weakening India been buried bythe avalanche of Sino-Indian trade and does this mean perpetual peace across the McMahon line? Such aconclusion is premature due to the pitfalls of economic determinism and reductionism. Insecurities andbalance-of-power manoeuvres persist among major trading partners and they may even be necessary toprevent a slide into armed conflicts. But contrary to doomsday predictions that a second war betweenChina and India is imminent any day, the expectation of deeper bilateral trade is helping to banish thatprospect.However, Dale Copeland, a professor at the University of Virginia, has explained the pre-World War-Ibreakdown of cooperation and understanding among European powers as actually a vindication of liberalinterdependence. The key for animus-free foreign relations, according to him, is not the past or presentvalue of bilateral trade but the 'expectations for future trade'. Germany did have thick past and presenttrade relations with its European neighbours, but by the mid-1890s, it had become wary about tradeprotectionism from Britain, France and Russia. The idea of a 'central European economic area' seemeddoomed by the early 1900s, as other European powers began to work in tandem to check the Germanindustrial and exporting colossus.If Copeland got it right, the direction of Sino-Indian strategic ties will be determined by whether or notboth parties believe that future bilateral trade is on a rosy path. Foreign minister S M Krishna recentlyexuded confidence that the two countries were on course to achieve a trade volume of $100 billion by2015. Chinese diplomats project this figure to cross $120 billion even earlier. The 'future expectations' of trade are, hence, quite optimistic, even though New Delhi is dissatisfied with the massive trade deficit it isrunning with Beijing at the moment.So, has Pakistan's legendary 'special relationship' with China aimed at weakening India been buried bythe avalanche of Sino-Indian trade and does this mean perpetual peace across the McMahon line? Such aconclusion is premature due to the pitfalls of economic determinism and reductionism. Insecurities andbalance-of-power manoeuvres persist among major trading partners and they may even be necessary toprevent a slide into armed conflicts. But contrary to doomsday predictions that a second war betweenChina and India is imminent any day, the expectation of deeper bilateral trade is helping to banish thatprospect. Source:- http://economictimes.indiatimes.com/opinion/guest-writer/sino-indian-strategic-ties-to-be-determined-by-future-bilateral-trade/articleshow/12012542.cms?curpg=2    India pitches for more trade, investment in SAARC (30 jan)   NEW DELHI: Pitching for greater free trade and investment among South Asian countries, India hasstressed that the current challenging international economic environment can provide SAARC a once-in-a-generation opportunity to catalyze the potential within the region . We stand at an important juncture in the evolution of a more integrated South Asian economiccommunity, Foreign Secretary Ranjan Mathai said at the SAARC (South Asia Association for RegionalCooperation) Business Summit here last week, which brought business leaders from the region to exploreways to deepen trade and investment linkages in the region. We need now to speak more on the stepsneeded to achieve this objective, he said while alluding to the burgeoning intra-regional trade.In the nearly six years since the South Asian Free Trade Area Agreement's (SAFTA) entry into force,intra-regional trade under SAFTA has touched US$1.4 billion - some 10 per cent of intra-regional trade -but growth has been extraordinarily fast. There is potential for more, he said. Conjuring up an upbeatpicture of the prospects of South Asia, Mathai said: The South Asia region could emerge as a locomotivefor the world economy if we ensure an environment for rapid growth, as also build on ourcomplementarities to make the region a magnet for greater trade, investment and financial flows. He called for fast-tracking a regional investment treaty and creation of regional production chains todeepen economic linkages in the SAARC region that is home to nearly one-fifth of the humanity. Thisprocess must be accompanied by an effort to enhance free trade in services, and to step up financial flowswithin the region, in particular, investment, said Mathai. A SAARC Investment Promotion and Protection Agreement is pending finalisation since 2007. There isneed also for policy measures that make it possible - and indeed advantageous - for our businessmen toinvest in each other's economies, he stressed. In conclusion, the current challenging international economic environment could also provide SAARC aonce-in-a-generation opportunity to catalyze the potential within the region, Mathai emphasised. Wecould set the standard as a region that manages the transition from emphasizing tariff and restrictivemeasures as mechanisms for raising resources, to one in which economic development and infrastructure-creation generate significantly-enhanced employment, human capacity and state-of-the-art infrastructure, he said. This has to be a public-private-partnership in the general meaning of that term, he added.At the 17th SAARC summit in the Maldives held in November last year, Prime Minister ManmohanSingh had announced virtual elimination of India's Sensitive List for Least Developed Countries in theSAARC region. By slashing this Sensitive List to just 25 tariff lines, we ensured that zero basic duty willnow apply on almost all goods from the five SAARC LDCs, said Mathai.A week ago, India assumed presidency of the business chamber of the eight-member South AsiaAssociation for Regional Cooperation (Saarc) after a gap of 12 years and stressed it would liberalisebusiness visa norms to boost cross-border trade and investment in the region. Vikramjit Singh Sahney,corporate president of Sun Group, took over the presidency of the Saarc Chamber of Commerce andIndustry from Bangladesh's Annisul Haq for a period of two years. Source:- http://economictimes.indiatimes.com/articleshow/11688625.cms?prtpage=1 
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