Electronically Yours

Bulletin No.19	March, 2006
Monthly News Update of IACC- H.O.
From President's Desk
B Prabhakar National President, IACC	President Bush's visit to India and signing of the civil use of nuclear energy are hailed as historic. Why is it so? Foremost is the economic reason. India, on its march towards economic prosperity, is dragged by many imponderables and one such is the acute power shortage from traditional sources like thermal, hydro etc. Civil use of nuclear power is not a major source of energy because of obvious reasons. India's campaign as a strong manufacturing hub, close on the heels of her remarkable success as an IT destination, needs many empowering paradigms and important among them is availability of quality power in abundant measures. Since the traditional supply side is constrained, new avenues have to be tapped and the nuclear power is most promising among them. Therefore, the agreement has been entered into at the most appropriate time. Hopefully, the US Congress would ratify the agreement; the sooner the better. By sheer coincidence, during President Bush's visit to India, a strong IACC delegation led by me was in US. The positive response that we had received both from the industry and the US Administration was overwhelming. I shall give a vivid description of our meetings and discussions shortly. From IACC point of view, President Bush's visit was a trendsetter in many ways. IACC participation at President Bush's meeting with eminent people at Delhi was enthusiastic. We also had a considerable visibility in the media both, in the print and electronic, in various newspaper columns. Friends, I perceive that a new chapter in the Indo-Economic relations is opening up, where organizations like ours have a significant role in fostering relationships.
Policy framework
Entry of FCV tobacco to US Sought	The domestic tobacco industry, particularly the exports segment feels being put into a piquant situation by what it calls restrictive import regime of the US for flue cure Virginia tobacco. India remains the third largest producer and the fourth largest exporter of unmanufactured tobacco in the world. For India, FCV tobacco is the major export variety, as it constitutes about 70 per cent to the total unmanufactured tobacco exports. Lat year, the country's export of tobacco products amounted to Rs 136.18 crore from 1.63 lakh tons. During the first nine months of current fiscal, the country exported 1.21 lakh tons at Rs 1006.48 crore. The FCV tobacco is grown principally in Andhra Pradesh (70 per cent), Karnataka (20 per cent) and Maharashtra and Orissa (below one per cent) (Business Line, 23rd March 2006)
Trade With US to Cross US$ 120 Billion	An industry body has projected that trade between India and the US is likely to go up to US$ 120 B by 2010 from the current levels of US$ 40 Billion. The areas identified for mutual economic gains include pharmaceutical and healthcare, retailing, real estate, automotive industry, media and entertainment etc (Financial Express, March 22, 2006)
Policy framework
Indo-US Nuclear Deal	According to the US-India Political Action Committee, a group involved in lobbying members of the Congress, key senators have come out in support of the nuclear agreement with India, though there are marked reservations against the agreement, within the Congress. Sharing the logic of the civilian nuclear agreement, President Bush pointed out that the global demand for fossil fuels in one part of the world affects the price of gasoline. " We are connected. Whether people like it or not, there is an interconnectedness today that affects our economy," he added. He said unlike Iran, India is willing to join the International Atomic Energy Agency He stressed that he felt very comfortable recommending the accord with India. (Internet)
Indo- CEO Forum	Indo-US CEO forum has come out with a far-reaching reform agenda including opening up of retail sector and raising FDI caps in insurance, banking, print media and broadcasting (Internet)
Facility for Importers to Access US Companies	The US Commercial Service, the export promotion agency of the US Department of Commerce, has launched a better access sourcing from America program for Indian importers. The program enables importers to source their requirements in the US more effectively and efficiently. (Internet)
Corporate Updates
Launch of ITC's Sunfeast in US	ITC Foods will launch its biscuit brand Sunfeast across the US. With these Indian biscuit majors foraying into international markets with homegrown brands is becoming increasingly commonplace. Why the Indian biscuit companies are going abroad? Analysts say it is mainly to enhance their value and volume growth. The Rs 4000 crore branded biscuits market will witness a lot of action this year as major players are expanding their reach both in Indian global markets. (Financial Express, 23rd March 2006)
US Fund to Invest Hexaware	US based private equity investor general Atlantic (GA) will invest Rs 300 crore in Hexaware technologies to acquire a 14.99 per cent post conversion stake through the preferential allotment route. The allotment will be in the form of 10.57 million equity shares and 1.056 million optionally convertible preference shares, amounting to Rs 150.20 crore and Rs. 150 crore respectively. (The Telegraph, 21st March 2006)
US Developers to Pump in US$ one Billion	Fresh investment of US$ one Billion is heading for India, this time from US developers. The investment expected to come in three tranches of US $ 350 million, US$ 750 million and US$ 50 million. The first tranche is likely to be closed by April. The major San Francisco based developer is coming into the country through the fund with plans for developing tech parks on its own. (Business Standard, 21st March 2006)
People to People
Gates Calls for Hike in H-B Visa Cap	Microsoft Chairman Bill Gates is once again lobbying for increase in the H-B visas issued every day. He supported Senator Arien Specter's Immigration Reform Bill, which proposes to increase annual cap of H-B Visas to 115,000 from the present level of 65,000. Mr. Gates said that it was an irony that Indians had to go back due to visa shortages despite graduating from American Institutions. (Internet)