Tuesday, November 27, 2007

Those are not just power & energy sectors that will become beneficiaries of this deepening love affair


Positive Spin Offs

The spin off benefits for the power sector in India too would be tremendous. American utility AES Corporation has already inked an agreement with the government of Chattisgarh to set up a 1,000 MW coal fired power plant at a cost of $1.3 billion. Of course, analysts caution against early euphoria because none of these power projects will eventually materialise if state governments do not reform their State Electricity Boards.

It Tata and Nath: One wants to make nuclear power plants, while the other wants Indo-US tradeis not just the power and energy sectors that will become major beneficiaries of this growing and deepening love affair between the two largest democracies of the world. Trade between the two nations is poised to take a quantum leap as a result of this. Both Commerce Minister Kamal Nath and US Trade Representative Robert Portman pledged that the value of Indo-US trade will double in the next three years from the current levels of $21 billion a year. The enormous opportunity that exists for trade to flourish between the two countries can be gauged from the fact that just merchandise trade between US & China (excluding trade in services) is worth $300 billion a year currently.

A The alms dealJoint Indo-US CEO forum that was set up last July during Manmohan Singh’s visit to Washington has been given the responsibility to ‘fast track’ this process. Ratan Tata heads the forum from the Indian side, while the JPMorgan Chase Chairman, William Harrison, heads the American side. The Deputy Chairman of the Planning Commission and one of the architects of India’s reforms journey, Montek Singh Ahluwalia, has been given the specific responsibility of ensuring that there are no glitches in this exciting journey of Indo- US collaboration that lies ahead.

Of course, it is not going to be an extended honeymoon alone between the two when it comes to trade ties. The controversial WTO negotiations are still deadlocked in agriculture and other areas and the deadline to settle disputes is April 30, 2006. Says Kamal Nath: “Both of us believe that deadlines must be kept. We are working towards it. We have to see how convergence can be reached and modalities worked out before the deadline.” Though just symbolic, the decision of the US government to allow mango imports (!) from India reflects the rapidly changing perceptions in the United States.

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Source :
IIPM Editorial, 2007

IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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