The protest followed the government plan to gradually phase out subsidies on diesel, and the decision to raise the prices of kerosene and cooking gas which are still highly subsidized. Despite public opposition, the government remains firm on its plan, saying that it can no longer afford the huge subsidy cost to keep fuel prices below market level, especially with the current widening deficits. “The subsidies for the petroleum products have reached a level which is not connected to sound financial management of our country,” explained Prime Minister Manmohan Singh.

Fuel protests bring India to a halt [Financial Times, 5 July 2010]
India fuel strike bites as tests resolve for reforms [Reuters, 5 July 2010]

The G20 saw the emerging Asian countries, China and India, come forward with a strong voice.  For China, the biggest obstacle to global economic recovery is Western countries shielding their producers from competition from emerging economies. “We must take concrete actions to reject all forms of protectionism and unequivocally advocate and support free trade,” President Hu Jintao said.

Agreeing with the President’s statement, the Indian PM Manmohan Singh said “growth in developing countries would be greatly helped if threats of new protectionist measures in industrialized countries are firmly resisted and existing barriers to trade, especially those affecting developing countries, are reduced.” He also added that India was well placed in handling the situation with an average growth of 7 per cent in the past two fiscals, and could halve its deficits by 2013-14.

The G20 summit held in Toronto, Canada and was the fourth meeting of the G-20 heads of government. The summit, which primarily discussed the global financial system and world economy, took place at the Metro Toronto Convention Centre during June 26-27, 2010.

Besides the 20 Core G-20 members, Canadian Prime Minister Stephen Harper,extended invitations to Ethiopia, Malawi,Nigeria, Vietnam,International Labour Organizations and the Organization for Economic Co-operation and development – being their first G-20 summit appearance.

The summit was a target of protests, which occurred in Downtown Toronto. The protests began one week ahead of the summit, and included protests against issues such as poverty, gay rights, capitalism and indigenous rights. As the summit approached, the protests turned ugly, with individuals damaging windows of particular businesses, mostly fast food chains, retail stores, banks etc. Over 900 people were arrested over the week.

Five of the six private talks President Obama held on the sidelines of the Group of 20 (G20) Toronto Summit were with leaders from Asian nations, underscoring the significance of U.S. engagement in the region.

U.S. Had the Last Word, But China Was the Winner at G20 [IPS, 2 July 2010]
PM asks rich nations to resist protectionism [Times of India, 27 June 2010]

More than 100 countries have now agreed to the Copenhagen accord, including all major economies except for Russia.

The accord states the countries’ “aim” to keep the global temperature rise since industrialization to 2 degrees Celsius. It is not a formal UN document that can be used to craft a treaty, as the discussions for the accord took place at the last minute and outside formal talks. The document emerged from meetings between U.S. President Barack Obama and leaders from Brazil, China, India and South Africa, who met on the last day of the Summit to draft an accord.

China, India Sign On to Copenhagen Accord [BusinessWeek, 9 Mar 2010]
India to be listed in Copenhagen Accord preamble [Indian Expresss, 9 Mar 2010]
Full Text of the Copenhagen Accord [U.N. Framework Convention on Climate Change]

India’s annual Economic Survey forecast predicted that the country would grow as much as 8.75% in the coming fiscal year. The country’s Finance Minister Pranab Mukherjee said that India had moved past the "despondency and gloom" of 2009, and ends the fiscal year "with confidence".

The country’s economy is expected to continue on its "high growth trajectory" that it enjoyed before the global financial crisis.

However, the government’s chief economic advisor, Kaushik Basu, warned that food inflation is a major issue which requires serious policy attention, to support the growth of the agriculture industry. The director-general of the National Council for Applied Economic Research, Suman Bery, also highlighted that India’s rosy forecast could lull policymakers into complacency.

SIIA Insights Readers:
Are you interested in business opportunities in India? You may be interested in Asia Society’s 20th Asian Corporate Conference. To find out how you can join the SIIA delegation to this conference, call us at 67349600.

Source:
India shakes off gloom to forecase 8.8% growth [Financial Times, p2, 26 Feb 2010]

Gail’s investment comes after reports that its net profits have undergone a three-fold rise in the quarter ending 31st December 2009. Profits have increased from
USD $55 million in the corresponding period in 2008 to USD $188 million in 2009 soaring 240%. This jump in profits has been attributed to a rise in the transportation of gas, and improved gains from the sale of liquid hydrocarbons, LPG and petrochemicals.

The 870 km pipeline is being constructed by the China National Petroleum Corporation in a bid to transport natural gas located off the Coast of Myanmar to consuming centres in mainland China. When built, it would “transport gas from offshore block A-1 and A-3 (in Myanmar) to China,” Gail Chairman and Managing Director B C Tripathi said.  The pipeline can be seen to be another of China’s attempts to secure more energy sources globally.

Sources:
The Economic Times, “Gail to buy 4% in Myanmar-China project”, January 19, 2010, http://economictimes.indiatimes.com/Oil-Gas/Gail-to-buy-4-in-Myanmar-China-project/articleshow/5474959.cms

The Times of India, “Gail eyes 4% in Chinese pipeline, Q3 net trebles”, January 19, 2010,  http://timesofindia.indiatimes.com/biz/india-business/GAIL-eyes-4-in-Chinese-pipeline-Q3-net-trebles/articleshow/5474653.cms

The Telegraph, “GAIL net triples to Rs 860cr”, January 18, 2010, http://www.telegraphindia.com/1100119/jsp/business/story_12001692.jsp

The details of the entire proposal have yet to be released. Clinton said only that India and the United States would establish a research and development institute for clean energy, which will have facilities in both countries.

Source: Agence France Presse, “US, India sign climate deal,” November 25, 2009, http://www.channelnewsasia.com/stories/afp_asiapacific/view/1020396/1/.html

President Barack Obama invited Singh on the first full-fledged state visit since he entered the White House in January, a sign of the rapidly warming ties between the world’s two largest democracies.

Singh was due to head on Tuesday to the White House for the pomp of a state visit, including a red-carpet welcome on the South Lawn and a black-tie dinner that is one of Washington’s most coveted invitations.

As US and Indian flags flew across Pennsylvania Avenue connecting the White House and the Capitol, Singh started his visit by meeting with business leaders – who he said were crucial to building the two countries’ ties.

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Source: AFP (through Channel NewsAsia), “Indian PM pitches for growing US ties,” November 24, 2009, http://www.channelnewsasia.com/stories/afp_asiapacific/view/1020116/1/.html