India - Pakistan

India and Pakistan on 25 January 2012 agreed in New Delhi to transit fee formula for Tapi(Tajikistan, Pakistan and India) gas pipeline project. On the Transit Fee, India and Pakistan agreed that the negotiations would be conducted in a transparent manner keeping in mind the overall economics of the Project, keeping in mind the landed cost of gas, and in accordance with the relevant i n t e r n a t i o n a l practices. Since there is a need to  expedite the signing of the Gas Sale Purchase Agreement (GSPA), both sides agreed to settle the Transit Fee issue at the earliest. Pakistan agreed inprinciple that whatever fee formula is eventually settled between India and Afghanistan would also be acceptable to Pakistan subject to approval of their competent authority. The two Ministers also discussed other issues of bilateral interest such as trade in petroleum products. Jaipal Reddy offered export  of Petrol, Diesel, Aviation Turbine Fuel and Fuel Oil besides Sulphur, Polyethylene and Polypropylene since Pakistan is importing these products currently. It was pointed out that the main advantage for Pakistan will be the savings in freight cost since several refineries in India are located close to the India-Pak border. The Indian side offered to export refined petroleum and petrochemical products by road, rail and by sea. It was also mentioned that Indian refineries would be willing to look at the feasibility of constructing product pipelines to Pakistan provided long-term guarantees for product offtake can be given by Pakistan. Both sides noted that India-Pakistan Joint Working Group (JWG) on Petroleum & Petrochemical Products has been constituted recently to go into the specific details of facilitating trade in this sector, including infrastructure upgradation and augmentation in respect of railways, customs facilitation, setting up of banking channels, etc. Both Ministers agreed to advise their respective officials to hold the 1st meeting of the JWG at the earliest. Apart from G2G efforts, both sides agreed on the need to activate industry and business associations in the petroleum sector for confidence building. Jaipal Reddy informed Hussain that India’s oil companies would be participating in the India Show at Lahore on 11-13 February, 2012 being organized by the Govt of India and FICCI to showcase the strength of India’s petroleum refining sector and what India’s oil companies can offer to Pakistan.

Sixth Round of Talks Between India and Pakistan

India and Pakistan concluded their Sixth Round of Expert Level Talks on Nuclear Confidence Building Measures in Islamabad on 27 December 2011.  In this meeting, both the nations agreed to recommend to their foreign secretaries to extend the validity of the agreement on reducing the risk from accidents relating to nuclear weapons. Pakistan suggested to India that heavy artillery should be removed from the Line of Control in Jammu and Kashmir. India and Pakistan also reviewed the implementation and strengthening of CBMs in the framework of Lahore MoU. The nations also agreed to explore possibilities for mutually acceptable additional CBMs. India and Pakistan discussed a proposal seeking a cooperative mechanism to deal with a crisis like Fukushima.

India - Sri Lanka

India on 18 January 2012 announced a substantial increase in educational  assistance, being given to Sri Lanka.The funding amounting to 2.5 billion Srilankan Rupees will mark a threefold increase in the scholarships and selffinancing slots for undergraduate, masters and doctorate-level courses. The new initiative was undertaken as part of New Delhi’s commitment under the India-Sri Lanka Knowledge Initiative launched by the Prime Minister Manmohan Singh and Sri Lankan President Mahinda Rajapaksa. Two new scholarship programmes called theMaulana Azad and Rajiv Gandhi Scholarship Scheme were added to the existing list.

India - China

Ahead of border talks with India, China's Special Representative and State Councillor Dai Bingguo has called for both countries to settle their disputes “wisely, calmly and properly” to prevent them from becoming barriers to an expanding relationship. Mr. Dai, who is expected to travel to New Delhi next week for the 15th round of talks on the boundary dispute, said both countries needed to “deepen political trust.” He was speaking to Indian officials at a function held here on Wednesday to inaugurate India's new embassy building. Mr. Dai is China's top diplomat and seniormost official on foreign policy matters. He laid out a four-pronged approach to improve ties with India in a detailed address, acknowledging that gaps in understanding persisted  between the neighbours. He said both countries needed to expand “practical cooperation” in economy, trade, finance particularly highlighting information technology and strengthen peopleto- people exchanges to “encourage our people to meet each other more often” and improve “mutual understanding.” He also called for stepping up dialogue and communication to improve political trust, and for expanding cooperation in international affairs.

“We should think and act in the interest of the overall China-India relationship,” he said. “We need to handle issues between the two countries wisely, calmly and properly and prevent them from becoming barriers between the two countries and obstacles to bilateral relations.” He highlighted the rise of China, India and other emerging countries as the most important development in a global environment that was going through “profound” changes. “We must follow the call of our times for peace and development,” he said, calling for both countries to “open up new prospects for a strategic and cooperative partnership” and “forever be good neighbours, good friends and good partners.” Foreign Ministry spokesperson Liu Weimin said at a briefing both countries were still “in close communication over dates” for the boundary talks. “China values its relations with India and attaches great importance to resolving the boundary issue,” he said. “China believes this issue should be solved through equal consultation and negotiations. The boundary issue has been there for a long time, and should be solved through dialogue.” Indian Ambassador S. Jaishankar said the previous year, which also saw the launching of a Strategic Economic Dialogue and a rise in trade to a record $70 billion, reflected “the strategic direction of our ties, of what is possible between the two neighbours.” He, however, warned that both countries needed to “remain continuously sensitive to mutual concerns.”

Indian Diamond Traders Detained in China

Twelve of the 22 Indian diamond traders, detained in China for nearly 2 years on charges of smuggling, reached India on 5 January 2012 after they were let off following deportation orders by a Chinese court. Twentytwo traders, hailing mostly from Gujarat and Mumbai, were arrested in southern China's Shenzhen city in 2010 and were charged with smuggling diamonds worth 50 million yuan or 7.3 million US Dollars. They were accused of sourcing diamonds illegally from Hong Kong for sale in the Chinese market. On 7 December 2011, the Shenzen Intermediate People's Court which heard the traders' case, found 12 of them innocent and ordered their deportation. The rest of the traders have been awarded varied prison terms ranging from six years to three and half years.

India , France and Germany

India signed a multi-lateral tax treaty with economic powers like France and Germany to check both tax evasion and avoidance. It was signed under the aegis of theOrganisation for Economic Cooperation and Development (OECD), a top global financial body, at its headquarters in Paris.The agreement, convention on mutual administrative assistance in tax matters, is a multilateral agreement of 31 other nations, which promotes international co-operation while respecting the rights of taxpayers. The members under OECD are Australia, Argentina, Belgium, Brazil, Canada, Denmark, Finland, Georgia, France, Germany, Iceland, Italy, Indonesia, Ireland, Japan, Korea, Mexico, Moldova, Netherlands, Norway, Portugal, Poland, Russia, Slovenia, Spain, South Africa, Sweden, Turkey, United Kingdom, Ukraine and the United States. The multilateral tax treaty is the single legal basis for multi-country cooperation, as against other treaties including the Double Taxation Avoidance Agreement, which are bilateral.OECD was earlier available only for members of the Organisation for Economic Cooperation and Development and the Council of Europe. It was amended in 2010 and thrown open to all countries from June 2011. The convention not only facilitates the exchange of information, but also provides for assistance in the recovery of  taxes. This will give a fillip to the efforts of the government in bringing money illegally stashed abroad. By signing the convention, India and the other 31 signatories send a strong signal that countries are acting together to ensure that individuals and multinational enterprises pay the right amount of tax, at the right time and in the right place. Many more countries are expected to sign the convention in future. The convention allows tax officials to enter into the territory of the other country to interview individuals and examine records. The information received under the convention can also be used for other purposes besides those related to tax co-operation, including the countering of money laundering with the approval of the supplying state. Out of the 31 signatories, 12 have ratified the convention so far. The signatories to the convention include Brazil, France, Germany, Indonesia, Japan, Russia, Turkey, the UK and the US. For AIR News, this is Manikant Thakur from Delhi.

India and World Bank Signed an Agreement

The Government of India and the World Bank on 20 January 2012 signed  an IDA credit of 130 million US dollars to finance the project called NERLP (North East Rural Livelihoods Project), to empower rural communities in the growth-deficient North East (NE) region to improve their livelihood opportunities. The North East Rural Livelihoods Project (NERLP) will enhance the livelihoods of the rural poor, especially women, unemployed youth and the severely disadvantaged in eight districts of the four participating states- Aizawl and Lunglei in Mizoram; Peren and Tuensang in Nagaland; South, West and 15 Panchayat wards of East District in Sikkim; and West and North Districts in Tripura. The Project seeks to develop an institutional platform for the communities, which will help them link up with the private sector, public sector, and civil society and to acquire the institutional, technical, and financial capacity needed for improving their livelihoods. Global development experience shows that absolute poverty can be overcome by equipping a member of the household (especially a youth) with employable skills. A separate activity for skills development and job placement has thus been included in the project to ensure that such opportunities are available to the rural poor. Some livelihood opportunities envisaged under the Project include natural resource management activities such as forest management, non-timber forest produce storage and processing, horticulture, preservation of riverine fishes, water harvesting and recharging of ground/surface water in the villages; community-based infrastructure activities like upgrading of small agricultural link roads, micro hydropower schemes, wind-cum-solar mills, to name a few.

The Project comprises four main components

• Social Empowerment;
• Economic Empowerment;
• Partnership Development and
• Project Management.

The first component seeks to help rural communities to create sustainable  institutions so that they can manage common activities around microfinance, livelihoods and natural resource management. The second component will provide funds to the community institutions to undertake  various livelihood activities, as well as provide self-entrepreneurship opportunities to unemployed youth. To enable this, the Project with help develop partnerships with various  formal financial intermediaries - such as microfinance institutions, commercial banks, development financial institutions such as National Bank for Agriculture and Rural Development (NABARD) and Small Industries Development Bank of India (SIDBI),  and specialized funding agencies such as North East Development Finance Institution (NEDFI) – and with the private sector and civil society to allow rural communities to access technical and marketing support. The project management component facilitates the implementation, coordination, monitoring and evaluation, learning and quality enhancement efforts of the project.

India - Japan

India and Japan agreed to enhance their cooperation in the infrastructure sector. The decision was taken at a meeting between Road Transport and Highways Minister CP Joshi and his Japnese counterp art Takeshi Maeda in New Delhi on 12 January 2012. The two countries are in the concluding  phase of finalising a Memorandum of Cooperation to exchange technical knowledge and expertise in the Road Transportation and Highways sector including capacity building and advanced technology for road transport management system as well as intelligent transport system.

TAPI Project a Step Forward

In a breakthrough that will take forward the ambitious $7.6-billion TAPI (Turkmenistan, Afghanistan, India and Pakistan) pipeline project, India and Pakistan on Wednesday agreed to have a uniform transit fee to ferry natural gas from Turkmenistan. This was decided at a meeting between Petroleum and Natural Gas Minister Jaipal Reddy and visiting Pakistan Energy Minister Asim Hussain here. Under the in-principle agreement, India will pay transit fee to Pakistan and Afghanistan to get its share of 38 million standard cubic metres a day of gas through the pipeline, while Islamabad will pay ferrying charges to Afghanistan. “Pakistan agreed in principle that whatever transit fee formula is eventually settled between India and Afghanistan will also be  acceptable to it and is subject to the approval of the competent authorities,” a statement issued by India after the meeting said. Later, at a joint press conference, Mr. Reddy said: “There  can't be one transit fee for India and Afghanistan and another for Pakistan and Afghanistan. It should be the same inprinciple.” His sentiments were echoed by Mr.Hussain. He said it was among India, Pakistan and Afghanistan to agree to a uniform tariff. It was subject to the approval of the competent authorities of both the governments. The formula to fix the transit fee had not yet been arrived at. The 1,735-km-long pipeline will run from Turkmenistan's Yoloten-Osman gas field to Herat and Kandahar province of Afghanistan, before entering Pakistan. In Pakistan, it will reach Multan via Quetta before ending at Fazilka (Punjab) in India. The project envisages a total throughput of 90 million standard cubic metres a day (MSCMD) of gas, of which India is expected to receive 38 MSCMD. Fixing the transit fee that is to be paid to Afghanistan was one of the major issues. “The transit fee should be reasonable and there should be an element of predictability in it,” Petroleum Ministry Additional Secretary Sudhir Bhargava said. Referring to the security concerns pertaining to the pipeline, Mr. Reddy said, “It is only through development of common economic stakes, we can reduce tensions and suspicions. As time goes by, we are confident about dealing with security issues as the government of Afghanistan and their people are keen on this.”

India - ASEAN

India signed MoU with ASEAN (Association of Southeast Asian Nations) at Manado, Indonesia on 12 January 2012.

The main objectives of the MoU are to:

• Cooperate in facilitating travel and tourist visits.

• Further strengthen the tourism partnership.

• Enhance mutual assistance and human resource development for tourism sector

• Take necessary steps for exploring avenues of cooperation and sharing of information.

• Exchange information pertaining to statistics and development  strategies, investment opportunities and economic data in tourism, travel and hospitality sectors relevant to each other.

• Jointly organize seminars, workshops and face-to-face meetings wherever possible, with a view to exploring and discussing new opportunities and avenues for the development and promotion of tourism and

• Any other area of activity aiming at tourism cooperation.

Prime Minister of India had announced during the 9th ASEAN Summit held at Bali on 19 November, 2011 that a Memorandum of Understanding on strengthening tourism cooperation between India and ASEAN would be signed preferably at the Meeting of ASEAN-India Tourism Minister in early 2012. Consequent to the announcement made by the Prime Minister the MoU has been signed between India and ASEAN on strengthening tourism cooperation.

India - South Africa

India and South Africa on 8 January 2012 agreed to speed up talks to conclude a bilateral investment promotion and protection agreement in view of the increased trade between the  two countries. Both nations reviewed commercial and economic relations in Bloemfontein, South Africa. India and South Africa expressed satisfaction on the continued growth in two-way investments and trade.

India - Bangladesh

India's National Thermal Power Corporation(NTPC), on 29 January 2012 signed an agreement with Bangladesh Power Development Board(BPDP) for setting up a joint venture 1320 MW thermal power plant. The joint venture coal-based power plant will comprise of two units of 660 MW each and will be set up at Rampal in Khulna Division of Bangladesh. The project is the first joint venture power plant in Bangladesh. The project will be completed by 2016. The joint venture thermal power plant is one of the projects, which is part  of Bangladesh's efforts to diversify its energy production process.