By Aryaman Bhatnagar

May 23 – India has reaffirmed its willingness to develop Iran’s Port of Chabahar during the seventeenth meeting of the India-Iran Joint Commission in Tehran. With an initial investment pledge of some $100 million, the move further strengthens the emerging partnership between the two countries in Afghanistan.

The Chabahar port is critical to India’s Afghanistan policy. In the absence of direct physical access to the country and a hostile Pakistan denying Indian goods transit, the Iranian harbor is the most viable access point India has to Afghanistan and the rest of Central Asia.

India has already signed agreements with Afghanistan and Iran that grants preferential treatment and tariff reductions to Indian goods bound for Afghanistan and Central Asia at Chabahar. It has helped build the Delaram–Zaranj Highway, which connects Iran to the main Kandahar-Herat Highway in Afghanistan, as well as a road from Chabahar to the Iranian border. Continue Reading

May 22 – Chinese Premier Li Keqiang has recently met with Indian Prime Minister Manmohan Singh in New Delhi, the first trip abroad for Premier Li in an official capacity. The two world leaders discussed India-China relations, as well as penned several agreements designed to foster investment and trade between the two nations.

“The purpose of my current visit to India is three-fold; to increase mutual trust, to intensify cooperation and to face the future,” said Premier Li.

Indian officials welcomed Premier Li on his first trip oversees since taking office in March, acknowledging the importance of his visit.

“We think very highly of this gesture because it is our view that high-level political exchanges between our two countries are an important aspect and vehicle for our expanded cooperation,” said Syed Akbaruddin, India’s Ministry of External Affairs spokesman. Continue Reading

Three-fourths of China’s provinces reported GDP figures over RMB1 trillion (US$163 billion) in 2012

By Yao Lu

May 21 – According to preliminary data released by China’s National Bureau of Statistics, the country’s economy expanded 7.8 percent in 2012 amid the sluggish global economy, reaching RMB51.9 trillion (US$8.45 trillion). The growth rate, although the slowest since 1999, still beats the government’s 7.5 percent growth target. In the fourth quarter of 2012, the country’s economic growth reached 7.9 percent, putting an end to seven consecutive quarters of slowdown, up from 7.4 percent in the third quarter and 7.6 percent in the second. Continue Reading

By Rahool Gadkari

As India focuses on stimulating economic growth, it must not neglect the challenges facing its 360 million below the poverty line citizens

May 20 -India has been the topic of much discussion in the recent past. Attracting much attention from investors and corporations alike for its high growth numbers last decade, India rode the capital markets boom of the 2000s. With the influx of foreign-direct investment (FDI) that followed, India experienced unprecedented economic growth and rapid urbanization that led to the creation of a growing class of nouveau riche. But India’s growth has not been inclusive. Commentators often refer to the country’s dichotomous nature, juxtapositioning India the emerging economic giant with India the land of the impoverished. Home to about 360 million people living below the poverty line (defined as less than $1.25/day), India faces a monumental challenge in the years to come — to grow not just economically, but also socially. Continue Reading

By Gunjan Sinha, Dezan Shira & Associates, Delhi Office

May 17 – India was one of the first countries in Asia to recognize the effectiveness of the export processing zone model in promoting exports, establishing Asia’s first processing zone in Kandla in 1965. More recently, the Indian government moved to increase India’s attractiveness as a foreign direct investment destination by announcing its Special Economic Zones (SEZs) Policy in April 2000, and then followed that up with the SEZ Act 2005 and SEZ Rules, which jointly came into effect on February 10, 2006.

The new rules further simplified and streamlined the utilization of SEZs, paving the way for the popularity these zones now enjoy. Today, the SEZ is the predominant development zone type throughout India, and its goals include:

• Generating additional economic activity;
• Promoting exports of goods and services;
• Promoting investment from domestic and foreign sources;
• Creating employment opportunities; and
• Developing infrastructure facilities. Continue Reading

May 10 – The new issue of Asia Briefing Magazine, titled An Introduction to Development Zones Across Asia, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore throughout the months of May and June.

The use of development zones in their different guises has been an effective model essentially brought to prominence by China over the past 25 years to help both foreign investors and domestic companies meet in a relationship that provides tax advantages to both. Development zones typically permit the foreign investor to bring component parts into a country for assembly without having to pay import duties. Investors may then add in locally-sourced components, assemble the final product, and warehouse it all duty free before then having the option of exporting the finished product (collecting some VAT rebates on the locally sourced portion) or entering the domestic market with a product assembled at local labor costs. Continue Reading

May 9 – According to the Creative Index Report 2013, a report launched by Martin Prosperity Institute, Institute for Competitiveness and The Prosperity Institute of India, Delhi is India’s “most creative state,” or the state with the greatest economic potential in the Indian economy.

Selecting Delhi seems to be stretching the rules a bit, since it is in fact a Union Territory (UT) and not a state. The report, however, counts all seven UTs in India as states, judging 35 states in total. To determine the ranking, the report judges the “creative class” of each state by three criteria, which they refer to as the 3T system – tolerance, talent, and technology. Continue Reading