India, ASEAN to resume talks on expanding services

The services sector contributes 55% to the domestic economy, and the country is keen on opening up new trade avenues in banking, insurance, health, accountancy, architecture and engineering

Further negotiations for an India-ASEAN pact for opening trade in services, an area of immense interest to Indian professionals, will be held soon, commerce and industry minister Anand Sharma said today, reports PTI.

Officials from India and the Association of Southeast Asian Nations (ASEAN) would resume their talks to widen of the scope of a Free Trade Agreement (FTA) with the 10-nation trading bloc to cover services and investment.

“The second round of negotiations is soon going to begin,” Mr Sharma told reporters on the sidelines of an ASSOCHAM function. An official said talks are likely to take place in New Delhi.

Last month, senior officials from India and ASEAN had met in Bali. The two sides are hoping to conclude the negotiations by August this year.

India and some of the key ASEAN members like Malaysia, Singapore and Thailand have already signed the FTA in goods from January.

The services sector is of key interest to India as the sector contributes over 55% to its economy. The sector has also emerged as an important area for export earnings.

The country is looking at expanding trade with the ASEAN in several services, including banking, insurance, health, accountancy, architecture and engineering.

Both the sides are also discussing to recognise each other's educational degrees.

The two sides aim to increase their $44 billion trade to $50 billion by the end of 2010.

The ASEAN countries are Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Thailand, Singapore and Vietnam.

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    The bulls are having a field day, for now

    Positive global cues continue to prop up domestic bourses, but not all sectors will do well. As the rupee becomes stronger, it may also pull down a few heavyweight IT stocks

    The market touched a 25 month-high, taking a cue from positive global indices. The BSE Sensex ended 243 points higher (1.3%) at 17,953 points and the Nifty ended the day with a 77-point gain (1.4%) at 5,368 points.

    With Asian markets on a high and US markets ending the Thursday session with a high note on strong employment data, there was buoyancy in domestic bourses as well. The market started with a gain and retained a strong upward trend throughout the day, largely helped by intense buying in the key benchmark stocks.

    Asian markets edged higher on Monday, (5th April), as a strong US job report boosted confidence that the global economy is recovering. Key benchmark indices in Indonesia, Japan, South Korea and Singapore were up by 0.09% to 2.55%. Markets in Australia, New Zealand, China, Hong Kong and Taiwan were shut for holidays. The US market was also up on Thursday. The Dow Jones Industrial Average climbed 70.44 points (0.65%) to 10,927.07. The S&P 500 rose 8.67 points (0.74%) to 1,178.10 and the Nasdaq Composite added 4.62 points (up 0.19%) to 2,402.58.

    The US job creation data in March was at the highest rate in the past there years and US nonfarm payrolls rose 1,62,000 in March, the largest since March 2007, and only the third time payrolls have increased since the recession hit in late 2007.

    The unemployment rate held steady at 9.7% for a third straight month, the US Labor Department said on Friday. The IMF agreed that the world economy’s recovery was at a faster pace than estimated, but it was still not out of danger. The major part of the recovery is attributed to public support rather than private demand which is more important for sustained growth.

    Any correction in global markets will result in the contagion spreading rapidly to bourses in emerging markets, where the bulls have had a continuous reign for a long period now. Exporters—and IT stocks in particular—may also be hit due to the rising rupee. The Indian currency is looking up, due to strong capital inflows and a weak dollar. It rose to a 19-month high on Monday.

    The Reserve Bank of India (RBI) said that credit growth in India will be at 20% in FY11. Finance minister Pranab Mukherjee projected growth rate in FY11 to be at 8.75% in the twelve months from March reiterating a February finance ministry forecast. Foreign institutional investors were net buyers on Thursday, buying stocks worth Rs106 crore. Domestic institutional investors also bought heavily. They were net buyers of Rs452 crore.

    Tata Motors’ (up 0.6%) sales increased to 38% to 75,151 units in March 2010 over March 2009. Cement dispatches by Jaiprakash Associates (up 0.6%) rose 75% in March from the year-ago period. Aditya Birla Group’s March cement shipments rose by 75% in March to 37 lakh tonnes. Jet Airways (down 1%) has entered into a code-sharing agreement with Bahrain’s Gulf Air for flights between Bahrain and selected Indian cities. The agreement comes into effect from 12 April 2010, the airline said in a statement. The promoters of Patni Computer Systems (up 1.6%) are in talks with various domestic and global firms to sell stake.

    Reliance Capital (up 2.5%) is in talks with Swiss Re for entering the business of health insurance. Maruti Suzuki India (up 0.3%) raised the prices of several models in an attempt to pass on the increase in raw material prices and expenses related to the new emission norms. Among the models for which prices have been raised are the ‘A-Star’ hatchback, which will cost about Rs1,000 more, and the less-expensive Maruti 800, whose price will go up by about Rs3,000. NTPC (up 0.6%) intends to buy coal for its power generation directly instead of the current process of relying on NMTC and State Trading Corporation of India.

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    Steel consumption up 7.6% to 56MT in FY’10

    Imports surged 23% to 7.18MT, putting pressure on domestic prices

    Steel consumption rose 7.6% to 56.32 million tonnes (MT) in 2009-10 as against 52.35MT in the year-ago period, on account of rising demand from various sectors—including automobiles, white goods and construction.

    However, production rose only 4.2% during the reporting period at 59.57MT over 57.16MT in the same period last year, according to provisional data obtained from the steel ministry.

    Imports also surged by 23% to 7.18MT during the period, thereby further increasing the domestic availability of steel and putting pressure on local prices.

    But exports continued to slide and fell by 28.7% to 3.16MT during the period on account of slow demand recovery in the primary market for Indian goods—Western markets—which are still to recover from the economic crisis.

    Leading steel producers like Tata Steel and Rashtriya Ispat Nigam reported 10.5% provisional growth to 5.02MT, and 15.7% increase to 2.9MT, respectively, during April-March over the same period in the previous fiscal.

    SAIL’s production increased a meagre 0.9% to 10.20MT against 10.11MT during the April-March period. The figures are provisional and could not be confirmed with the companies.

    Moreover, in March alone, steel output rose 6.7% to 5.48MT over the year-ago period. Tata Steel saw output rising 6.4% at 4.6 lakh tonnes in the month against production of 4.35 lakh tonnes during the same month a year ago.

    However, state-owned SAIL and RINL saw their March production surging by 32.6% to 1.26MT and 83.3% to 3.08 lakh tonnes, respectively.

    Steel consumption in March increased by 6.8% to 5.45MT, over the same month in 2009.

    In March, imports surged 35.7% to 5.66 lakh tonnes against 4.17 lakh tonnes last March, while exports nosedived 45.5% to 2.18 lakh tonnes from about 4 lakh tonnes shipped in March 2009.

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