Helsinki, October 13
Prime Minister Manmohan Singh today invited European companies to explore "expanded opportunities" in the special economic Zones (SEZs) being created in India.

Addressing the India-EU Summit here, he strongly disapproved of restrictive visa regimes, saying these can "stifle" the potential of business and trade cooperation between the two sides.

The Prime Minister assured that the interests of foreign companies with regard to further liberalisation of foreign direct investment in areas like telecommunication and retail, improvement of infrastructure, opening up India's financial sector and relaxation of labour laws was receiving the attention of his government.

"We want the EU to look at the expanded opportunities offered by our special economic zones," Dr Singh told the summit.

"We want the EU to be a partner in our ambition to increase and sustain growth rates of 10 per cent per annum in the coming years," he said.

Asking the EU to look at India as a "safe, secure and profitable" trade and investment destination, he said, "We want you to look at India as a hub for high technology R&D, manufacturing and for services.

"We want you to take advantage of the vast pool of quality scientific talent and a young skilled workforce in the manufacturing and the services sector."

Dr Singh said there were strong geo-political underpinnings for India and the EU to work together. The EU's engagement with Asia would be incomplete without India and this recognition has found expression in the recent decision to include India in the Asia Europe Meeting (ASEM) which New Delhi welcomed and appreciated, he said.

He said the successful model of Indian democracy, with high economic growth and inclusive governance, gives the country a special position as a unique partner for the EU in the region extending from Gibraltar to the Malacca Straits.— PTI

Mumbai: The Centre has proposed to set up a special economic zone (SEZ) for renewable energy device manufacturers, at a proposed investment of Rs 30,000 crore, according to Union Minister of State in charge of non-conventional energy, Mr Vilas Muttemwar.

"Six states, including Maharashtra, Tamil Nadu, Andhra Pradesh, Karnataka and Madhya Pradesh have evinced keen interest in setting up the SEZ in their respective states,"

Mr Muttemwar said, adding that the government was yet to decide in which state the SEZ would be set up.

Speaking to reporters on the sidelines of an international power conference being held here today, he said the SEZ would come up on 1,000 acres of land.

The SEZ would also generate 600 MW of renewable energy for captive purposes.

The Union government is negotiating with developers for the proposed SEZ, the construction work for which is expected to commence within six months, he added.

Helsinki, October 13
Giving a major push to their strategic partnership, India and the 25-nation European Union (EU) today decided to sign a trade and investment agreement, a comprehensive pact that will cover a vast spectrum of sectors.

The India-EU Summit, attended by Prime Minister Manmohan Singh, decided to launch negotiations on the agreement, accepting a report of the high-level group of businessmen set up last year.

"We agreed to commence negotiations on a broad-based agreement," Dr Singh told a joint press conference after the summit along with Finnish Prime Minister Matti Vanhanen, whose country is the current chair of the EU.

Describing the development as significant, Dr Singh said it would entail reduction of tariffs over a period of time which will be a win-win situation for both sides.

The aim of the agreement will be to achieve elimination of 90 per cent of tariff lines and trade volume within seven years of the entry into force of the agreement.

Mr Vanhanen said the agreement was part of efforts to expand and deepen the business and trade engagement between the two sides.

The agreement will cover trade in goods, services, investment, trade facilitation, Commerce and Industry Minister Kamal Nath told reporters after the summit.

It will also look at India's concerns with regard to tariffs, both non-tariff and technical tariff, besides looking at competitive policy, he said.

The agreement will also address the issue of dispute settlement.

The decision to sign the agreement marked overcoming of the hesitation on part of Europe to have a pact in the present form. The EU had wanted changes in the agreement but could not succeed.

The high-level group had demanded that the agreement be completed in a year but Nath said this time-frame looked like a "hard call". The outer limit for concluding the pact is two years.

About benefits of the agreement for India, Mr Nath said it would open prospects for agricultural exports to Europe, besides that of textiles, leather, gems and jewellery, chemicals and steel.

Transparency in laws and recognition of degrees will also be incorporated in the agreement.

"As EU is the largest trading partner of India, the agreement will create a large basket for commerce," Mr Nath said, adding it would send a signal to the world that the two could do business on their own.— PTI

New Delhi, October 13
The signing of an agreement between India and Kazakhstan to offer oil blocks there to ONGC Videsh Ltd (OVL) has been deferred as the Kazakhstan government is insisting to include Mittal Group in the project besides India’s support for its entry to the WTO.

Officials in the Petroleum Ministry and External Affairs were ill prepared today when, despite a long meeting between Petroleum Minister Murli Deora and the visiting official delegation of Kazakhstan led by its Minister of Energy, there was no agreement to sign even a statement of protocol regarding energy cooperation between the two countries.

Although, during the visit of former Petroleum Minister Mani Shankar Aiyar, the Kazakhstan government had offered two oil blocks to ONGC, asking it choose one of them for exploration. Now, it is insisting that the Mittal Group, which has also formed JV with ONGC, should also become a part of the project, considering its long-term investment there.

Later speaking to mediapersons, Mr Baktykozha Izmukhambetov said, “Our President wants that Mittal Group to be taken on board in the project, and we may offer 22-25 per cent to OVL and Mittal Group in the Satpaev block in the Caspian Sea. However, once the oil reserves are found the Kazakh government will like to get at least 50 per cent share and the share of other stakeholders may be decided later”.

Sources in the Petroleum Ministry disclosed that the Kazakh government also wanted a commitment from India that it would support its candidature at the WTO. “However, we can not make any such commitment as these issues come in the domain of Ministry of Commerce and External Affairs.”

New Delhi, October 13
The government has made it mandatory for the corporate sector to file their tax returns through electronic-filing system, though it will be optional for the time being for the individual tax payers and trusts to use this facility.

Launching the e-filing scheme today, Finance Minister P. Chidambaram said, this ‘paperless’ system would provide a major relief to the Income Tax Department and corporate sector, who are the main contributors to the state revenue.

Mr Sunil Kant Munjal of Hero Honda Group and Mr Ramadurai of TCS, who were among the first two corporates to avail of the facility, were present on the occasion. Mr Chidambaram said more "friendly initiatives are underway and will be announced in due course."

Attributing the massive 40.9 per cent increase in direct tax collection during the first half of current fiscal to the constant endeavour of tax authorities to improve relations with assesses, he said while the system was introduced for individual and personal tax payers in 2004, it is now also mandatory for corporate sector to do so.

Corporates filing returns through digital signatures need not furnish tax return papers while those filing through intermediates or who did not use digital signatures would have to supplement this through paper returns, he said. 

New Delhi, October 13
Cairn India Limited, which has found major oil reserves in Rajasthan, today filed its draft red herring prospectus with the SEBI to enter the Indian capital market with an initial public offering by December.

The company is expected to off-load 30 per cent of its stake through IPO to raise $1.2 billion to $2 billion.

The company stated that at least 60 per cent of the IPO will be allotted to qualified institutional buyers, 10 per cent to non-institutional investors and around 30 per cent to retail investors. It is learnt that the pricing could be in the range of Rs 180 to Rs 200 per share.

Cairn India is expected to focus on exploration, development and production while the UK-based unit will concentrate on exploration. 

New Delhi, October 13
Even as Cabinet Secretary B.K. Chaturvedi today reviewed the performance of Indian (airlines) for the first quarter for it running into losses, strong objections have emerged from the industry over the airlines CMD Vishwapati Trivedi projecting the insurance premium paid by it following the fleet revaluation as saving of the premium.

While the Indian officials claimed the meeting to be a “routine”, sources said the CMD gave his part of explanation to the Cabinet Secretary for the losses suffered by the airline in the first quarter of the year and for its drop in on-time performance.

At a recent meeting with the aviation correspondents, when asked about the renewal of the insurance cover for its fleet, Mr Trivedi said the carrier had succeeded in reducing the entire premium burden by as much as $5 million or 31 per cent. He said New India Assurance Company has been selected for providing the cover worth $750 million.

However, what has emerged is that the valuation of the Indian fleet has dropped drastically by $200 million in the insurance finalised for this year. The value of 29 Airbus-320 aircraft was brought down to $25 million from $40 million.

While IA officials claim that this is in line with market trends, the fact is that four of its leased A-320s remain valued at $40 million.

Meanwhile, losses for Indian in the first quarter estimated at over Rs 90 crore while on-time performance slipped below 60 per cent in September. However, the sources said the airline even in the past three years, when it had come out of the red, had made losses in the first quarter.

It is always in the other quarters that it makes up the losses and projects profits. The officials said the main reason for the losses was the increase in the ATF prices and even other airlines had suffered similar losses due to the same reason.

Shimla, October 13
The first-ever global bids for assigning hydroelectric projects in the hill state have received unexpected response with three projects with aggregate capacity of 1125 MW fetching upfront money of Rs 500 crore.

Dutch company Brakel was the highest bidder offering upfront money of Rs 36 lakh per MW for the Jhangi-Thopan (480MW) and Thopan-Powari (480MW) projects in tribal Kinnaur district, while D.S. Constructions has offered the highest upfront money of Rs 52 lakh per MW for the 260 MW Kuther project in Chamba district.

Reliance Energy had offered upfront money of Rs 30 lakh per MW and Rs 20 lakh per MW, respectively, for the two projects in Kinnaur, which was well short of the highest bid. Jaypee Industries, which is executing the 1000 MW Karcham-Wangtu project, had quoted Rs 12.5 lakh per Mw for Thopan-Powari.

The successful bidders will be required to deposit 50 per cent of the upfront amount on the allotment of award letter, 25 per cent at the time of signing the implementation agreement and 25 per cent at the time of financial closure. Thus, the government would get about Rs 485 crore five years before the projects actually start generation.

Once the projects are commissioned the government will get 12 per cent free power as royalty for the first 12 years, 18 per cent for the next 18 years and 30 per cent for the last 10 years.

The response to the bids has made a strong case for assigning the projects between 5 MW to 100 MW through global tenders instead of the present MoU route. There are about 30 such projects with aggregate capacity of more than 1800 MW, which could fetch another Rs 800 crore for the government.

New Delhi, October 13
The Finance Ministry will issue the first tranche of oil bonds worth Rs 5,000 crore on Monday to compensate oil marketing companies for incurring losses on selling petroleum products below the production cost.— PTI