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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The State Secretary for the Ministry of Urban Development Details His Roadmap

By Chris Devonshire-Ellis, Senior Partner, Dezan Shira & Associates, Delhi

Often the first thing that is mentioned about India today � especially when compared to China � is the shocking state of much of its infrastructure. The problem is estimated to cost India about 2% of its GDP growth, and to be serious enough to potentially derail the development of the entire economy. We met with State Secretary Shri M Ramachandran, of the Ministry of Urban Development, for his views on what needs to be done, and how it is going to be achieved.

Chris Devonshire-Ellis with Shri M Ramachandran State Secretary, Ministry of Urban Development�

Ramachandran:
�Firstly, we have identified several areas of immediate concern to us in national redevelopment. These include:
Provision of drinking water
Waste management and drainage
Water management
Transportation
Housing

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The third ministerial meeting of the South Asian Association for Regional Cooperation Free Trade Agreement (SAFTA) hosted by India commenced on March 3, 2008 in New Delhi. Although SAARC - The South Asian Association for Regional Co-operation, comprising India, Nepal, Bhutan, Bangladesh, Sri Lanka, Maldives, Afghanistan�and Pakistan, hasn’t had the desired impact that NAFTA (North Atlantic Free Trade Agreement) has made, changes are clearly in the pipeline.

Business Line spoke to the Minister of State for Commerce, Jairam Ramesh, on a range of issues that have hobbled this grouping from achieving tangible gains. Ramesh had visited Bangladesh, Sri Lanka and Pakistan and is due to visit Nepal, Bhutan, Pakistan and Afghanistan before end-June 2008.

“India�s globalisation is incomplete without closer engagement in South Asia. India cannot do bypass surgery on South Asia-this notion in India that we can be a global player and couple our economy with the American economy bypassing our own neighbours - we can�t couple with America and decouple from South Asia - is not possible. We need to understand that the foundation of our globalisation rests on closer regional cooperation in goods, services and, most importantly, in investments,” Ramesh said.

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If you were planning on�climbing Mt Everest this summer, make alternative plans. In a bid to allow the Olympic torch to�safely scale the summit of the world’s highest peak,�both approach routes, to the Mt Everest peak�- from the Nepal side and the Tibetian side will be off limits.

Nepal�s tourism minister, Prithvi Subba Gurung, told the New York Times in a telephone interview on Thursday that the Chinese government had appealed to his administration to help prevent disruptions to the Olympic torch ceremony. �Expedition teams will not be allowed to ascend Mount Everest from the base camp� on the Nepal side, he said.

Nepal�s decision underscores its vulnerability to pressure from its large and powerful neighbor to the north, even if it involves forsaking lucrative earnings from expedition permits. The tourism industry is among Nepal�s most important revenue streams, and the tourism ministry says permits to scale Everest put $4 million into government coffers last year, a significant amount for one of Asia�s poorest countries.

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Four days after India, the world’s fourth largest military, raised its defence spending by 10% to $26.5 billion for 2008-09 or about 2.5% of its GDP, China, the world’s largest standing force upped its defence budget by 18% to a whopping $58.4 billion, or 1.4% of its GDP. What Beijing did not mention is that India’s military expenses at $26.18 billion (Rs 105,600 crores) is less than half of China’s expenditure in absolute terms, although it might seem higher as a percentage of GDP.

The spurt in defence spending also comes at a time when China claims parts of Arunachal Pradesh (90,000 square kms), in India’s far East to be part of China. China is now also considered a formidable force by the US, who believe that Beijing’s real military spending is two or three times the announced figure.

Justifying the jump in defence budget ‘because other countries were doing it too’, Jiang Enzhu, spokesman for the National People’s Congress, China’s legislature said “military expenses accounted for 14.1 per cent of India’s overall spending while China spent just 7.2 per cent of its total budget on defence. Developed countries spent a lot more with the United States allocating 4.6 per cent of its GDP to defence and Britain spending three per cent of its GDP, he said. The figure for France is 2 per cent and Russia 2.63 per cent of GDP.

Adding, “China’s limited armed forces are totally for the purpose of safeguarding independence, sovereignty and territorial integrity”. “China will not pose a threat to any country.”

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While upbeat talks are being held this week in Beijing between the Indian Prime Minister Dr. Manmohan Singh and the Chinese President Hu Jintao, concerning record trade figures between the two nations, the real key to the continuing development of this relationship is a resurgent Russia. Indeed, while bi-lateral talks between India and China will make the headlines, it’s really a triumvirate story that is developing � the new Trading bloc that will be made up of these three superpowers to counterbalance both the United States’ aggressive desire for oil inflicting global imbalances upon the world’s economy and the geopolitical and geographical expansion of Europe.

It’s a subject largely unreported and little understood in the media’s seeming unending fascination with China and the hullabaloo of an American election. Yet Russia is expected to join the WTO later this year, with just Saudi Arabia standing between them and a mandate to come aboard and fully participate in the global community. Doing so will further add strength to Russia’s already booming economy, yet with wary eyes on its borders with Europe, and strongly felt suspicions concerning the proposed American desire to place missile sites in Poland, Russia is more likely to align itself with India and China as the global balance of power settles down into a tri-polar power base of America, Europe and Asia. (more…)

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Jan. 14 - Indian Prime Minister Dr. Manmohan Singh arrived in Beijing yesterday and urged the Indian business community both in India and China to “think big” and engage China to learn to both compete and cooperate.

“Indian businesses should think big. Indian business is ready to face the brave new world of globalization. China is an important part of that brave new world of globalization. We must engage China and learn to both compete and cooperate,” Singh said.

Singh discussed with high level Indian businessmen the problems they faced in developing trade with China, including the huge surplus in commerce with India. The main thrust from the Indian side was to ask him to press Beijing for the early removal of trade and non-trade barriers, and specifically in areas such as textiles and steel. Business leaders also praised Dr. Singh on the recent trends in bilateral trade and investment flows. They also drew attention to both the opportunities as well as the challenges faced by the Indian business in China. (more…)

Its time again for some ‘Hindi-chinni bhai bhai’, and everyone’s excited to see what the two super powers do next. India’s Prime Minister Manmohan Singh is expected to visit Beijing, China from the 13-15th of January this year. The return visit (President Hu visited India in 2006) is seen as more of a bridge building, friendly effort rather than a deal striking effort before the elections in India next year. The PM’s visit is seen more as a follow-up visit to Sonia Gandhi’s (the head of the ruling Congress Party) visit a few months ago.

China’s president Hu Jintao & India’s Prime Minister�Dr. Manmohan Singh.�

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Both India and China face political problems with an increase of Islamic militants on their borders and are having to tighten border security with Pakistan as the political situation in the country continues to deterioate in the aftermath of ex-Prime Minister Nawaz Sharif, ousted by incumbent General Pervez Musharraf being arrested and subsequently deported from Pakistan earlier today. Sharif, known for his leanings towards Islamic militants, had attempted to enter the country to mount a challenge to Musharraf, who has become increasingly fragile in his political hold on the country as it faces a showdown between becoming entirely radical, and a hotbed for fanatical Islamists, and remaining a more moderate, secular society.

This breaking report from www.guardianunlimited.com:

The former Pakistani prime minister Nawaz Sharif was today deported from the country shortly after he arrived in Islamabad on his return from exile, intelligence officials said. He was returning to lead a campaign against the US-allied military ruler who ousted him eight years ago.

A tense standoff with government security officials lasted for one and a half hours on the plane after Mr Sharif arrived home.

Mr Sharif then went to the VIP lounge, where he was arrested at midday local time (0800 BST). From there, he was taken by minibus to a helicopter.

His lawyer, Amjad Malik, said Mr Sharif had been taken into custody on corruption charges revived last week by the National Accountability Bureau. “They [the security officials] swarmed him like bees,” Mr Malik said.

Police commandos entered the aircraft and surrounded the moving staircase after Mr Sharif landed on a Pakistan International Airlines flight from London. A civilian helicopter was waiting 100 metres away, its rotors spinning. (more…)

China and India are set to begin joint military exercises in October, just another example of the two nations growing bilateral relations. The decision to begin military exchanges and cooperation has�focused on two areas: counterterrorism and joint military exercises.�

In June we reported on India Army Chief of Staff General Joginder Jaswant Sigh’s visit to China and the subsequent announcement that China and India would hold the first ever joint army exercises between the two nations. Both countries hope that the joint exercises will�strengthen Sino-Indian defense ties and�build up�confidence within each�another.

Jagannath Panda comments in a report for The Jamestown Foundation’s China Brief, that�China has increasingly relied on its military diplomacy to advance its strategic ambitions overseas. Indeed, China’s military is a very active ambassador for the country abroad, supplying arms and training across the developing world. In India, the Chinese have looked to overcome a historical mistrust by increasing the breadth of the exchanges, as Panda’s report states:

Perhaps, the significance of these exchanges is their unprecedented nature; not even in the prime days of the �bhai-bhai� Sino-Indian relations did this type of relationship exist. It seems that the proposed �joint military operations� are intended to bridge the communications gap between the two militaries. Both armies are in favor of inviting observers to their exercises, which suggests a �degree of comfort� with each other more than anything else. (more…)