India’s Finance Minister lays down his reasoning India will escape a US recession, plus comments of Indian Government Corruption.

The full interview with Chris Devonshire-Ellis, Senior Partner, Dezan Shira & Associates in Delhi

Meeting with India’s Finance Minister, Mr. P. Chidambaram, is always a lesson in elocution and delivery. One year ago, when we last met him in our annual series of meetings with Indian Ministers in Delhi, he was shy, somewhat reserved, yet bullish. India was doing well, with growth rates at a consistent level of between 7-9% looking sustainable, and the Prime Minister, Dr. Manmohan Singh, stating to us that as long as India could keep such growth rates, it could afford it’s massive redevelopment, infrastructure and rural expenditure needed to lift the country into a true democracy with all people able to share in it’s wealth. “As long as those rates are sustainable” both the PM and Mr. Chidambaram chorused, “India’s continued development is assumed”.

Just a year on, we are faced with a different set of issues that could impact upon the Indian, and quite possibly, other emerging market economies, especially that of China. The US sub-prime crisis has dried up liquidity and seen money vanish. The US dollar is approaching record lows. The price of gas has just exceeded USD100 a barrel, respected international financial institutions are going bankrupt, and the prices of commodities in foods and metals have doubled and tripled. A year on, it’s not just a matter of India bullishness. A large blot has appeared on the landscape.

Sitting down with Mr. Chidambaram we had just one question to ask in our hour long discussion: “Can India escape a potential US recession ?”

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India’s State Secretary for Civil Aviation, Ashok Chawla provides his blue print for development and investment

Interview with Chris Devonshire-Ellis, Senior Partner, Dezan Shira & Associates in Delhi

The number of India’s total domestic passengers has doubled in just five years, and is set to expand even more rapidly. With more airports per square mile than any other Asian nation, a legacy of the British, much however needs to be done to upgrade, improve, and rebuild Indian airport capacity as anyone who has arrived at Mumbai or Delhi international airports well knows. But beyond the surface veneer of construction in progress, shabby terminals and dodgy washrooms, a revolution is occurring.

Ashok Chawla:
India has over 450 airports nationally, of which about 90 are currently operational. In conjunction with the Ministry of Urban Development (see other interview) we are highlighting a number of domestic airports for development which have a key strategic development role to play. However, firstly let me explain that all airports were previously managed by the Airports Authority of India, and that this has now changed. The AAI is now involved in two main models for airport infrastructure development. These are:

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If you are a chronicler of history, at the stroke of noon on the 10th of January, you should have been at Pragati Maidan, New Delhi and got as close as you can to the Tata Motor’s pavilion as Ratan Tata the Chairman of the Tata empire, pulls the cover of the worlds most inexpensive car. Priced at Rs 100 thousand (USD 2,556), known worldwide as the Tata one lakh ‘people’s car’, speculated to be christened the ‘Nano’ the car is expected to break all price barriers and create automobile history.

Its currently priced to cost less that half the least expensive car on the Indian market today! With a potential market of 300 million middle class Indians, in a country that buys one million new cars a year it seems like a sure hit!

And of course it will have copy cats - international ones too - Volkswagen, Honda, Fiat, Nissan and Toyota all have plans to intoduce and ultra cheap car for the masses. This not surprising since worldwide demand for small cars is expected to grow by nearly a third over the next six years to 27 million a year!

Tata group chairman, Ratan Tata with the Nano.

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In the wake of the India’s nuclear deal, the border issue and China’s ties with Pakistan, India and China are getting ready for a new new game. Today, ending more than more than 45 years of frosty relations, the armies of India and China are holding their first joint military exercise. This is in accordance with the Memorandum of Understanding (MoU) on exchange and cooperation in the field of defence, signed between India and China in 2006.

Indian and Chinese army officers ‘hand in hand’

Although security issues do exist and both India and China view eachother with suspicion, it was nice to come across news of the two armies taking part in joint exercies aptly code named ‘exercise hand in hand’ to practice counter terrorism and counter-insurgency drills.For the Asian giants, it’s a significant event especially since the two nations are regarded as competitors if not adversaries in Asia. Led by Brigadier DS Dadwal, the 100-strong Indian army team will conduct a week-long counter-insurgency and counter-terrorism exercise along with troops of the Chinese People’s Liberation Army in the Yunnan province bordering Myanmar.

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In a recent development to strengthening bi-lateral ties in the region, the Indian government has set up a consulate general office in Guangzhou, South China. In a reciprocal measure, the Chinese government started a consulate general office in Kolkata, in East India. Both consulates have a visa, consular affairs, commerce and cultural affairs section, even as they’ve vowed to commit themselves to simplifying visa application procedures.

Both India and China are also in talks to open direct flights from Guangzhou to Kolkata in the recent future. The move comes at a time when the governments are thawing hostilities since their cold war in 1962, when Chinese and Indian consulate generals did exist in both Kolkata and Guangzhou.

The move comes at a time when India China trade is heating up. The two major port cities both have a prime role to play in India-China trade. With sea routes having taken the place of the ancient silk route, both Kolkata and Guangzhou as big, bustling port cities have a significant role to play in changing trade dynamics in the region.

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The new September issues of India Briefing and China Briefing from Dezan Shira & Associates are now online and available to read. Monthly subscriptions to both is complimentary and can be obtained from the homepage of each site.

India Briefing this month is about setting up in India and contains details of permitted areas for foreign direct investment, an introduction to the types of legal entity that may be used as investment vehicles, and breakdowns of corporate taxes and human resources costs.

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China Briefing features articles on establishing trading companies in China, obtaining import / export licenses, as well as regional updates from around the country.

Both monthly magazines are produced by the India-China foreign direct investment firm, Dezan Shira & Associates. Legal and tax enquiries concerning investment into both China and India can be made to Sheetal Guliani, head of the firm’s India desk.

Theme:- promoting Shenzhen – Hong Kong as the gateway to investments in China.

Date & Time : Monday, the September 10th, 2007, at 3 PM

Venue: Hotel Le Meridian, New Delhi

This special business forum is being jointly hosted by the Shenzhen government and the Hong Kong Trade Development Council (HKTDC), organized by Shenzhen Bureau of Trade & Industry and co-organized by ASSOCHAM.

For more information read

The main areas of discussion will be:

-Hi-tech industry development in Shenzhen
-Hong Kong as a gateway for entering the China market

The event is expected to have about 50 delegates representing Shenzhen and Hong Kong Government, HKTDC, Industry and enterprises.

About 150 VIPs from the central government of India and top Indian companies are going to participate.

The event will begin with a welcome speech by the president of ASSOCHAM, Mr. V.N. Dhoot, key note speakers include:

1. Mr. Xu Zongheng, Mayor, Shenzhen Municipal Government of PR China

2. Mr. Fred Lam, Executive Director, Hong Kong Trade Development Council

Sheetal Guliani, heading up the India Desk of Dezan Shira & Associates - the China-India FDI advisory practice - will be representing the firm at the event. She can be contacted at sheetal.guliani at dezshira.com

A summary of the event will be posted here on 2point6billion.com directly after.

Dear 2point6billion blog reader;

As you are aware, 2point6billion has been entered in the business category for Chinalysts China blog awards. Now is your last chance to vote for us - please click HERE - it will only take 20 seconds.

For those of you who have voted thanks - and please lets help get 2point6billion the recognition it deserves as the only China-India blog. We’d really appreciate it ! Your support is really helpful.

Many thanks

Best regards

Sheetal Guliani
2point6billion.com

Please click on the photo at right to see the first issue of “Ergo” – an Indian securities newsletter produced by the law firm Khaitan & Co., one of India’s most prestigious and oldest practices, with four offices nationally. They are good friends of 2point6billion and provide India legal, patent and trademark advice.