Full fare, no full berth? Parliamentary committee calls for refunds for RAC travellers

PLI Scheme for Textiles: Application deadline extended to March 31, 2026

SBI MF IPO by September or before: CS Setty

CBDT Unveils Draft Income-tax Rules, 2026: Fewer rules, smarter ITRs, public consultation open

Budget 2026's 0.7% tax safe harbour for component warehousing beats hubs like Vietnam, say sources

IDBI Bank Disinvestment: Kotak Mahindra Bank dismisses media reports, says no participation in bidding process

India-US Interim Trade Deal: Zero duty for gems, pharma, agri exports; farmers fully protected, says Piyush Goyal

US to levy tariffs on countries trading with Iran, Trump signs order

India–US Interim Trade Deal Framework: What’s in it for both countries?

Banganga Paper Industries Limited appoints Dr Keshav Laxminarayana Patkar as additional director (non-executive, independent) 

The National Thermal Power Corporation (NTPC) has raised $3.46 billion in international markets since 2006, but most recently, it has been doing so via masala bonds. It issued around $320 million worth of them in April, and plans to raise a similar amount again soon. The National Highways Authority of India is planning a masala bond issue too, according to Nitin Gadkari, Minister of Road Transport and Highways.

<blockquote>
Masala bonds sold to international investors are denominated in rupees. The final repayment may be in hard currencies, such as the U.S. dollar or pound sterling, but the exchange rate risk is borne by the lenders or subscribers to the bond, not the issuer.
</blockquote>

At the macro level though, the exchange rate risk still rests with the issuing economy. For example, deteriorating macroeconomic fundamentals in India or change in international interest rates or in the event of elevated global political and economic risks, foreign investors might wish to redeem their holdings of Indian masala bonds. If they do so in hordes, then the Indian rupee is likely to face depreciation pressure.

Emerging economies do experience sudden stops and surges in international capital flows, both of which can destabilise the economy through sudden depreciation or appreciation of the local currency respectively. In other words, masala bonds do not eliminate the exchange rate risk for the Indian economy as is widely perceived.&nbsp;As long as the reference currency of investors is not the Indian rupee, the exchange rate risk applies to both the issuer and the lender. Due to the rise in the issuance of masala bonds, foreign currency-denominated External Commercial Borrowings (ECB) had declined substantially to $17.4 billion in 2016-17 from $24.4 billion in 2015-16. Correspondingly, approvals for masala bond issuance was of the order of $4.6 billion in 2016-17.&nbsp;So far, so good.

The emergence of masala bonds as a funding vehicle for Indian companies could aid India’s geoeconomic goals, unstated or understated. It is a good time to be doing so because interest rates in hard currencies, such as the U.S. dollar, pound sterling, the euro and the yen, are still at very low levels. Therefore, rupee bonds are popular with investors. For example, the NTPC bond offering in April carried a coupon (interest) rate of 7.25% per annum. International investors have become that much more familiar with the Indian rupee, the Indian economy and its growth and inflation prospects, among other things. It helps to internationalise the Indian rupee although the Indian government has not articulated such a goal explicitly.

For a currency to become international, more and more trade between India and other countries and then much later, trade between third countries not involving India, should begin to be denominated in Indian rupees. Similarly, in capital markets, even non-Indian issuers should become comfortable borrowing in Indian rupees. They will do so when they trade more with India or invest heavily in India or when Indian interest rates are low enough. For these to happen, domestic macroeconomic fundamentals have to be sustainably solid. It is about high and sustained growth, low and steady inflation and the resilience of the financial system. In these areas, India has more work to do. Hence, India has sensibly refrained from talking of internationalising the rupee.

Even if internationalisation of the Indian rupee were not the goal of the Indian government, masala bonds can be very useful in economic diplomacy and it is fair to ask: is India leveraging this fully? Most of the masala bonds are listed on the London Stock Exchange (LSE). A recent press release by the Exchange&nbsp;[3]&nbsp;claims that it is the leading global listing venue for rupee-denominated bonds with 37 offshore Indian rupee bonds raising the equivalent of approximately $5.0 billion. Indian issuers of masala bonds will be listing in Singapore too shortly.

China’s slowing economy and massive credit burden have raised doubts on further debt issuance from the country in volumes seen in better days. Moreover, for Britain, its exit from the European Union has raised even more fundamental questions about the future prominence and influence of London as a global financial centre. If international financial institutions leave London and migrate to Paris or Frankfurt and if euro issuances are no longer listed in London, London will lose its top spot to other international financial centres, such as New York and Singapore. Hence, London is anxious to court India and to play up the Indian story. It fits its agenda and situation nicely. What is India gaining, in return, from the UK?

The issues could range from student visas to work visas to intelligence sharing to the Kashmir situation. Further, India should remember that helping the British government out in its desire to keep London’s pre-eminent status as a global financial centre could potentially undermine India’s desire to develop locations in the country as a regional financial centre, if not as an international financial centre immediately. Even though the Indian savings rate stagnated in recent years, it will not stay low for long. There will be enough Indian savings for Indian rupee bond issuers to tap on shore.

In short, if Indian issuers feel honoured that their bonds are being listed in the LSE, they must do some rethinking. The world has changed and so has the context. India is better placed to ensure that its interests are not sacrificed in the process of boosting and reinforcing London’s status as a financial centre. In the current circumstances in Europe and in a world of low interest rates, Indian issuers are doing Britain more favours than London bestowing an honour on them by listing their bonds in LSE. India should be aware of it. Statecraft is as much about recognising one’s strengths as it is about being aware of one’s weaknesses.

Dr. V. Anantha-Nageswaran is Adjunct Senior Fellow, Geoeconomics Studies, at Gateway House.

This feature&nbsp;was exclusively written for <a href="http://www.gatewayhouse.in" target="_blank">Gateway House: Indian Council on Global Relations</a>.

The emergence of masala bonds as a funding vehicle for Indian companies can aid India’s geoeconomic goals. Most of them are listed in the London Stock Exchange. But is India leveraging fully the rupee’s internationalisation?


Is India's masala bond diplomacy working? 

The invitation to the Crown Prince of the United Arab Emirates (UAE) to be the chief guest at our 2017 Republic Day celebrations reflects our growing attention to the Gulf countries where our interests are manifold: energy, trade, manpower, remittances and security. We have 2.6 million Indians in the UAE and remittances from there are a sizeable $12.57 billion. The UAE also provides us with 8% of our oil imports, which &nbsp;amounted to 16.11MMT in 2016, and we intend to import an additional 2.5 MMT. Our bilateral trade stood at almost $50 billion in 2015-16, making UAE our third largest trade partner. It is intended to raise trade by 60% in the next five years.

The visit of the Crown Prince not only follows the visit of Prime Minister Modi to the UAE in August 2015, but also his own earlier one to India in February 2016.

Our enhanced attention to the Gulf countries, and beyond, to West Asia as a whole, flows from our ‘Link West’ policy. The growing instability in the region can affect our vital interests and this requires us to deepen our engagement with key countries, like the UAE.

<blockquote>
The rise of the Islamic State (IS) represents a new challenge to the region and beyond, including, potentially, India.&nbsp; Some Gulf States are themselves responsible for its rise to serve the goal of ousting Syrian president Assad and countering Iran’s regional expansion.
</blockquote>

With the IS turning against the Gulf states, we now have convergence on combating terrorism. During Modi’s 2015 visit the joint statement expressed this shared interest in formulations of our choice. The two countries, it said, “condemn efforts, including by states, to use religion to justify, support and sponsor terrorism against other countries”.&nbsp; “They also deplore efforts by countries to give religious and sectarian colour to political issues and disputes, including in West and South Asia, and use terrorism to pursue their aims”, it said. In a further implicit swipe at Pakistan, it called “on all states to reject and abandon the use of terrorism against other countries, dismantle terrorism infrastructures where they exist, and bring perpetrators of terrorism to justice”.

The statement further called on “all nations to fully respect and sincerely implement their commitments to resolve disputes bilaterally and peacefully, without resorting to violence and terrorism”. The Indian proposal for a Comprehensive Convention on International Terrorism, which has languished in the UN because of Arab opposition, received the UAE’s support. Later,&nbsp; the UAE&nbsp; condemned the January 2016 terrorist attack against the Pathankot airbase.

During Modi’s visit “the start of a new and strategic partnership” between the two countries was announced, as part of which it was decided to hold a dialogue both between the National Security Advisors every six months, and additionally, between the National Security Councils of the two countries. It was further decided to together strengthen maritime security in the Gulf and the Indian Ocean region, promote inter-operability for evacuation in conflict situations, fortify defence relations, including through regular exercises and training of naval, air, land and Special Forces, and work together in coastal defence. Significantly, the UAE supported India’s candidature for permanent membership of the UN Security Council, which Pakistan strongly opposes.

The Crown Prince’s visit should build on the foundations laid during the Modi visit. The first round of the strategic dialogue between the two countries took place on January 20. A Comprehensive Strategic Partnership Agreement between India and the UAE is expected to be signed during the visit, the first such agreement signed by the UAE with any foreign country. It is expected to cover cyber security, counter-terrorism, maritime security and the Indian Ocean Rim. Progress in defence cooperation is expected by way of UAE’s participation in Make in India in defence manufacturing and procurement of some defence items from India

The UAE, like other Gulf countries, has a large sovereign fund that could be invested in India, but so far, no significant investment has taken place. The UAE private sector’s investments, such as those by Emaar and Etilsalat, have faced problems, and this has not helped create a favourable image of India as an investment destination. With &nbsp;Modi’s determination to make it easy to do business in India, the high rates of growth of the Indian economy, the slowdown of growth in China, and problems in Europe, the environment in India for the Gulf country to make investments &nbsp;&nbsp;is improving.

The UAE is currently the seventh largest investor in India, with $4.03 billion worth of investments between April 2000 and March 2016. During Modi’s 2015 visit it was agreed to set up a $75 billion UAE-India Infrastructure Investment Fund to support investment in India’s infrastructure, especially in railways, ports, roads, airports and industrial corridors and parks. In March 2016, the government cleared an MoU in this regard. The UAE side is now waiting for the Indian side to issue the bylaws, documentation and mechanisms for operating this Fund.

Modi’s 2015 visit has also announced a strategic partnership in the energy sector, including through UAE’s participation in India in the development of strategic petroleum reserves, and upstream and downstream petroleum sectors. The two sides have been working on resolving tax-related matters in this regard and some progress is expected to be announced during the Crown Prince’s visit.

<blockquote>
In sum, the Crown Prince’s visit will consolidate the remarkable progress achieved in India-UAE ties.
</blockquote>

Ambassador Kanwal Sibal&nbsp;is former Foreign Secretary to the Government of&nbsp;India and has served as India’s Ambassador to Turkey, Egypt, France and Russia. He has also been a member of India’s National Security Advisory Board.

This feature was exclusively written for <a href="http://www.gatewayhouse.in" target="_blank">Gateway House: Indian Council on Global Relations</a>.&nbsp;You can read the original feature&nbsp;<a href="http://www.gatewayhouse.in/revisiting-indias-link-west-policy/" target="_blank">here.</a>

The choice of the Crown Prince of the United Arab Emirates (UAE) to be the chief guest at India’s 2017 Republic Day celebrations is an indication of the enhanced attention that the Indian government is according the Gulf countries. Many trade interests ally India to the UAE, but a deeper engagement is called for even as instability grows in the region.


Relations with UAE key in India’s ‘Link West’ policy

Donald Trump has made it amply clear that the old rules of doing geopolitical business won’t apply in his administration. The question is: can he put a new framework in place before the uncertainties of disruption become costly?

The clues, so far, lie in the people president-elect Trump has chosen as his cabinet members and confidants, many of whom are retired generals and wealthy businessmen. Above them all is Jared Kushner, his son-in-law who has been appointed special adviser, which essentially means he can walk into any meeting.

As Trump assembles his team, there is a distinct dominance of China hardliners in the cabinet, which has wider implications for the Asia Pacific region. By courting Russia and aggravating China – the reverse of what the American establishment wants – he has already taken a sharp turn even before taking the oath of office.

<blockquote>
At the same time, Trump’s National Security Adviser Michael Flynn has been meeting key officials from Asia – he had a long meeting last month with Indian NSA Ajit Doval in Washington, where the two exchanged views on the region for more than an hour.
</blockquote>

Significantly, Pakistan prime minister’s envoy Tariq Fatemi was unable to get a single appointment with the transition team despite waiting for nine days. That was a signal, if there ever was one, that some things are about to change.

Though mostly out of the news, the push for a more robust Asia policy is apparently coming from Stephen Bannon, a former navy man and Trump’s chief strategist, who sees Narendra Modi as Reaganesque and a man of the times.

If Trump’s opening salvo against China was a telephone conversation with Taiwan’s president – a diplomatic thumbing of nose at Beijing – the nomination of Peter Navarro, a strident critic, as the head of the newly created National Trade Council is a figurative declaration of war. Navarro, a professor of economics at the University of California, Irvine, will play an important role in crafting the new Asia policy. His book&nbsp;Death by China: Confronting the Dragon-A Global Call to Action, about China’s systematic flooding of U.S. markets and use of unfair means, was apparently an eye-opener for Trump.

Now it seems that Donald Trump may appoint Ashley Tellis — another serious China critic and pre-eminent South Asia scholar – as ambassador to India. Tellis, an Indian American, along with former ambassador Robert Blackwill – both were pioneering proponents of the U.S.-India Civilian Nuclear Deal — was among the first strategists to think through the Chinese threat to American dominance during the Bush Administration.

Tellis and Blackwill have since been writing consistently on how U.S. policies need to change to actually manage China’s rise and how a strong India is necessary and integral to a stable balance of power in Asia.

If Tellis is nominated as ambassador, he would round off Trump’s Asia team well, bringing academic knowledge and diplomatic experience in the region. He called the news about his possible appointment “speculation”.

But it is likely that the “pivot” to Asia could become something more than a few hundred U.S. marines at an outpost in Australia and a few fleeting counter-moves against China in the waters. It may belatedly answer the plaintive call from a senior Indian official about the need for a louder American trumpet.

This flashing of red rags has already triggered strong reactions from China’s ultra-nationalist&nbsp;Global Times. “If Washington dares to provoke China over its core interests, Beijing won’t fear setting up a showdown with the U.S., pressuring the latter to pay respect to China,”&nbsp;the paper thundered shortly after Navarro’s appointment.

The sabre-rattling on both sides has implications for Asian countries, including India. Whether they are positive or negative will depend on the coherence of strategy, the seriousness of intent and the extent of Trump’s commitment to the idea of retaining America’s primacy.

The Trump transition team has let it be known through media leaks that it plans to put some teeth in the “pivot,” something the Obama Administration failed to do because of its own indecision and China’s extreme reaction. Such was the pushback from China, Obama rechristened it “rebalance to Asia.”

The pivot, meant to signal a continued and determined U.S. presence in Asia Pacific, ended up confusing both allies and enemies. Judging from Trump’s talk during the election campaign and after, indications are that he wants to expand U.S. naval presence in the Pacific.

The signal should go some distance in calming the nerves of Asian allies, who have wondered aloud about President Obama’s commitment to Asian security. The Philippines and Malaysia are already under China’s sway, impressed by its promises of investment and frightened by its growing military might.

Interestingly, the first foreign leader Trump met was Japanese Prime Minister Shinzo Abe, an ally who will be critical to the success of any energised U.S. policy in Asia as would be India, Australia and South Korea. All share deep concerns about China’s influence in the region.

This meeting of minds could lead to more convergence and cooperation.

Seema Sirohi is a Washington-based analyst and a frequent contributor to Gateway House: Indian Council on Global Relations. Seema is also on Twitter, and her handle is&nbsp;@seemasirohi

This article first appeared on Gateway House and can be accessed <a href="http://www.gatewayhouse.in/a-more-robust-asia-policy-expected/" target="_blank">here</a>.

Trump’s cabinet has a preponderance of China hardliners, which has wider implications for the Asia Pacific region while some of its members view Narendra Modi as Reaganesque and a man of the times


Can India expect a more robust Asia policy from Donald Trump? 

The passage of the Constitution (122nd&nbsp;amendment) Bill, 2014, on Wednesday allows for the launch of the Goods and Services Tax (GST), a unified and pan-national tax structure. GST will create a common domestic market, remove distortions arising out of a multiplicity of levies and rates, and foster efficiency by minimizing the cascading effect of taxes in the manufacturing chain. GST will also have a beneficial impact on India’s economic diplomacy, including foreign trade.

The GST fits nicely into the Modi government’s drive to improve ease-of-doing business in the ‘Make In India’ campaign. Manifold taxes, with differential rates in different states, created hurdles for the smooth conduct of business and added costs at every stage, frustration foreign investors. Foreign Investment decisions and the expected rate of return from projects often suffered due to these distortions, occasionally even deterring fresh investment plans. Most global value chains, with the exception of Foxconn, have avoided investing in India because of regulatory and bureaucratic tangles, especially those related to the multi-layered tax regime.

The successful implementation of GST will reverse this, helping to attract new investments especially from global value chains which often aggregate inputs from different constituencies.

The other immediate beneficiary will be Indian exports which have long suffered from lack of international competitiveness due to differential taxes and the energies expended on complying with the complex tax labyrinth. A 2010 report from National Council of Applied Economic Research had found that eliminating cascading taxes on exports could increase GDP growth by 0.9-1.7 per cent.[1]

For instance, a garments manufacturer and exporter has to depend on multiple suppliers of inputs – finished cloth (processed and dyed), threads, buttons, zips, sewing machines, ironing products, packaging, labels&nbsp; – for producing his finished good.&nbsp; These suppliers in turn, source raw materials from multiple sources, located in multiple locations, each party paying multiple taxes in different tax jurisdictions. At each stage, goods get delayed in transit for assessment and payment of varied levies – sales tax, octroi, excise, service tax. This fosters inefficiency and adds costs to each additional layer for the exporter. In addition, with each state legislating separate laws, meant that exporters couldn’t &nbsp;claim full set-off on the free-on-board price, rendering exports uncompetitive.

GST will alleviate this. The Foreign Trade Policy (FTP) for 2015-20 says: “The simplification and harmonization of the indirect tax regime of the country will reduce the cost of production and lead to a seamless, integrated Indian market, thereby making Indian trade and industry more competitive.”[2]

The benefit to services exports will become clearer in the next few weeks, but right away, the travel, tourism and hospitality sector is a clear winner because of its dependence on a wide spectrum of vendors and suppliers.

As the implications and impact of this simplifiying legislation starts to make itself apparent and the GST’s advantages for incoming foreign investment and out-going exports gain momentum, it will add veracity to Prime Minister Modi’s on-going economic diplomacy efforts.

Rajrishi Singhal is Senior Geoeconomics Fellow,&nbsp;Gateway House.&nbsp;He has been a senior business journalist, and Executive Editor, The Economic Times, and served as Head, Policy and Research, at a private sector bank, before shifting to consultancy and policy analysis.

This feature was exclusively written for <a href="http://www.gatewayhouse.in/" target="_blank">Gateway House: Indian Council on Global Relations</a>.&nbsp;You can read the original article <a href="http://www.gatewayhouse.in/gst-adding-edge-to-exports/" target="_blank">here</a>.

The GST will not only advance domestic market efficiencies but also add teeth to India’s economic diplomacy by improving the ease of doing business and enhancing competitiveness for exports.


Will GST help India ramp up exports?

Earlier this week, the online business of Yahoo was bought by Verizon for $4.83 billion. The company’s total value is over $36 billion. By any measure, the story of two graduate students starting a company, which in less than 25 years is worth that much, should be considered a success story. Except it isn’t.

Jerry Yang and David Filo, the two founders, have been the focus of discussions on the many missteps they made, rather than what they successfully achieved. One of the many memes doing rounds on the subject today are Yahoo a)not buying Google in 1998 for 1 million dollars (Worth over $500 billion today); b)not buying Facebook for $1 billion in 2006 (worth $350 billion today); and finally, c)not selling itself to Microsoft in 2008 for $45 billion – and now being sold for a tenth of that sum. A&nbsp;story&nbsp;on Bloomberg on the company is titled, ‘What Sank Yahoo? Blame Its Nice Guy Founders’.

Yet, even at its current, depressed valuation, Yahoo is worth more than all but five Indian companies – the exceptions being TCS, Reliance Industries, HDFC Bank, ITC and Infosys. Yahoo is still valued at much more than Indian heavyweights like ONGC, Coal India, Sun Pharma, Indian Oil and Hindustan Unilever. If an entrepreneur could create a company as valuable as any of these, would they be considered a success or a failure? Perhaps Yahoo hasn’t done as badly as the narrative seems to suggest.&nbsp;​

To show just how badly Yahoo has done, it is being compared to Google and Facebook – perhaps the two most successful companies in the world today. In finance, this is known as the “survivorship bias.” To have a fair comparison means examining all the companies that started out – including the thousands that went belly-up and are no longer comparable.

Secondly, had Yahoo acquired Google and Facebook when it had the chance, it doesn’t mean much. Google’s management did a lot of things post-1998 which have brought the company to where it is today. Same is true for the management at Facebook. There is always the possibility that the management of Yahoo may not have done the very same things at all.

Survivor bias also explains another aspect: Invisible are the hundreds of bad bets that Yahoo passed up; visible are only the good ones. If Yahoo had indiscriminately picked up every deal that came its way so that it did not miss a potential blockbuster, it would have never had enough money or management bandwidth left to conduct its own business.

Sadly, the disasters avoided don’t make for good stories – anecdotes take precedence over averages. The one plane crash, replayed endlessly, makes travelers anxious about air travel, forgetting that road traffic is a far greater risk. Ditto with Yahoo.

Amit Bhandari is Fellow, Energy &amp; Environment Studies, Gateway House.

This blog&nbsp;was exclusively written for <a href="http://www.gatewayhouse.in/" target="_blank">Gateway House: Indian Council on Global Relations</a>.&nbsp;You can read the original feature&nbsp;<a href="http://www.gatewayhouse.in/yahoos-sale-contrarian-view/" target="_blank">here</a>.

Popular analysis of the online business of Yahoo to Verizon dwells on the company’s missteps, missing out the enormous, long term success that it is.


Did Yahoo! actually fail?

India’s relationship with Africa has been through an unprecedented intensification in June 2016. In the first week of the month, Vice President Hamid Ansari visited Tunisia and Morocco. In the second week, President Pranab Mukherjee embarked on a tour of western and southern Africa, covering Ghana, Cote d’Ivoire, and Namibia. And in July, Prime Minister Narendra Modi is scheduled to visit Kenya, Mozambique, Tanzania, and South Africa.

The present renewed outreach is also unabashedly about business, and a good example of geo-politics combining with geo-economics. India views Africa as a promising market for Indian goods, services, and investments. So far though, any follow-up on promises had remained anaemic. Now, Indian leaders are seeking out fresh investment opportunities for Indian public and private sector companies in different African countries.

The vice president’s visits to Morocco and Tunisia are crucial because India imports phosphate—a &nbsp;critical raw material for fertiliser production—from these countries. Ansari also inaugurated an India-Morocco Chamber of Commerce during his trip to Rabat.

The president’s three-country tour provided an opportunity to further India’s business interests. At the India-Ghana Business Forum, Mukherjee said: “…the Indian Government would be ready to work with you in key sectors and areas of common interest and encourage Indian private as well as public entrepreneurs to bring more investments into Ghana.”&nbsp;India’s cumulative investments in Ghana are over $1 billion and two-way trade during 2015-16 amounted to $3 billion.

In Cote d’Ivoire, Mukherjee said: “…your country is blessed with fertile soil and abundant agricultural and mineral resources. Our public and private sectors are keen to join you in exploring these resources efficiently and in setting up agro-based industries.”

At the same time, India’s development diplomacy for the continent has been through a strategic shift. Exim Bank, for example, is now likely to focus more on service exports, rather than compete with China for infrastructure projects in Africa.

The bank is looking to disburse close to Rs. 10,000 crores in Africa over the next three years as both commercial and concessional credit.&nbsp;Service exports aim to build on India’s traditional strengths in Africa and will include healthcare, education, and information technology services. Exim inaugurated an office in Cote d’Ivoire during Mukherjee’s visit. The office is expected to widen the bank’s footprint in West Africa.

Exim Bank is also looking to sharpen its focus on another area of India’s traditional exports to Africa: project exports. It has requested the Reserve Bank of India to ease regulatory and compliance guidelines regarding minimum equity capital, leverage (the multiples—3X, 4X or 8X—of share capital that a company can borrow) and the maximum that the bank can lend to a single borrower.&nbsp;These will be necessary if the bank is to make project exports one of its thrust areas.

These actions are in line with promises made during the Third India-Africa Forum Summit (IAFS) in October 2015. The first two editions of the summit—in 2008 and 2011—made numerous pledges but fell short on follow-up and delivery. Both sides were responsible for the indifferent implementation.

The last IAFS, held in October 2015, saw a strategic shift in focus—apart from the usual rhetoric, there was a better alignment of India’s global ambitions (both political and geo-economic) and traditional strengths.&nbsp;Importantly, the third IAFS created a formal monitoring mechanism to regularly review the progress of various projects at different stages of completion.

The summit aimed high—it also sought to create a global alliance of solar-rich countries.&nbsp;Such an alliance will help create goodwill for India among Africa countries, and generate solidarity through collective bargaining when accessing IPR-protected technology from rich countries.

It’s starting with this summit that Modi has been building bridges with different African countries and soliciting support for a host of multilateral initiatives. These include backing for India’s membership of the UN Security Council along with a united front of emerging and poor economies at the World Trade Organisation.

The high-octane official Africa engagements will also help assuage concerns regarding India after recent allegedly racist incidents involving African nationals living in the country. &nbsp;But it is now up to India to ensure that its belated recognition of the critical role Africa can play in our strategic calculus, as well as in India’s trade and investment expansion plans, is not just a temporary spurt.

Rajrishi Singhal is Senior Geoeconomics Fellow,&nbsp;Gateway House.&nbsp;He has been a senior business journalist, and Executive Editor, The Economic Times, and served as Head, Policy and Research, at a private sector bank, before shifting to consultancy and policy analysis.

This feature was exclusively written for <a href="http://www.gatewayhouse.in/" target="_blank">Gateway House: Indian Council on Global Relations</a>.&nbsp;You can read the original feature&nbsp;<a href="http://www.gatewayhouse.in/new-trajectory-for-india-africa-ties/" target="_blank">here</a>.

India now sees Africa as a promising market for Indian goods, services, and investments. This is evident in the government’s recent concerted focus on the India-Africa relationship—high profile visits by top leaders to African countries, a recasting of India’s development diplomacy, and an attempt to match action to past promises


A new trajectory for India-Africa ties

The Brexit referendum on June 23 — whether the United Kingdom (U.K.) chooses to stay on in European Union (EU) or to quit the mega regional agreement — has spawned its fair share of heated and emotional debates. Equities, commodities and currency markets have tossed and turned at either prospect. Indian markets have also been agitated at the likely outcomes. An impassive view, though, shows that Indian trade and business interests might benefit from UK staying in.

While the Indian government has not taken a public position on the issue, since it doesn’t want to be seen interfering in another country’s sovereign exercises, newspaper reports says Indian ministers have conveyed to their UK counterparts against exiting.

This stand may have been informed by Indian business’s unambiguous and public support for UK staying on in EU. A statement issued by the Federation of Indian Chambers of Commerce and Industry (FICCI) says unequivocally: “…we firmly believe that leaving the EU, would create considerable uncertainty for Indian businesses engaged with UK and would possibly have an adverse impact on investment and movement of professionals to the UK.”&nbsp;While the other leading industry association, Confederation of Indian Industry, has refrained from issuing any official statements, its representatives have expressed their reservations in different interviews.

There are valid reasons for Indian business concerns.

One, Brexit supporters say the UK will be able to sign new and better trade agreements — free of EU’s restrictive rules — with its strategic partners, such as India and China. They also cite the stalled India-EU trade and investment talks to buttress their argument. However, experience shows negotiating trade and investment pacts takes a long time. For example, the India-Korea Comprehensive Economic Partnership Agreement took five years to finalise. There are concerns over the interim uncertainty for trade and investment flows.

There is another associated hassle. Assuming that Indian business tides over the interim uncertainties, it will still have to adhere to two different standards and rules when trading in the same geography. This entails additional costs.

Two, most Indian businesses use the U.K. as a springboard for their European operations, given India’s historical and cultural affinity with the country. If those favouring exit win, Indian businesses will have to install a parallel set-up on mainland Europe for conducting their operations. For instance, a portion of the Indian foreign direct investment (FDI) into the UK is to access the European markets. Now, Indian companies will have to separate their investments for the two distinct markets. This means additional costs, regulatory wrangles and legal complications. In addition, the complexity of negotiating new tax laws is likely to prove a nightmare.

Three, there are apprehensions that a Brexit success would inspire other EU members to explore a similar option. This would lead to fragmentation and the Indian government would then have to negotiate separate agreements with each country. This will add to the general confusion and add to regulatory and compliance costs for Indian business.

Finally, Brexit might raise myriad central banking problems. First, Reserve Bank of India (RBI) will have to re-calibrate its monetary policies to cope with the currency markets volatility. Additional liquidity measures might have to be implemented to stave off rupee volatility; this might temporarily derail the central’s banks monetary policy objectives for 2016-17.

But more importantly, if Brexit goes through, expect prolonged volatility in the currency markets and a sharp drop in both pound and euro values. This will not only mean a downward revision in valuation of RBI’s currency reserves, it will also require the central bank to re-adjust the composition of its ForEx reserves. Though not substantial, RBI’s volume of euro and sterling pound holdings are also not exactly negligible.

Rajrishi Singhal is Senior Geoeconomics Fellow,&nbsp;Gateway House.&nbsp;He has been a senior business journalist, and Executive Editor, The Economic Times, and served as Head, Policy and Research, at a private sector bank, before shifting to consultancy and policy analysis.

This feature was exclusively written for <a href="http://www.gatewayhouse.in/" target="_blank">Gateway House: Indian Council on Global Relations</a>.&nbsp;You can read the original article <a href="http://www.gatewayhouse.in/brexit-mean-india/" target="_blank">here</a>.

On June 23, the United Kingdom will vote on whether they wish to remain a part of the European Union through the Brexit vote. The debate surrounding the vote has spurred many a heated and emotional debate. While the Indian government has not declared anything publicly - remaining in the EU would be beneficial to Indian businesses.


What does Brexit mean for India?

The Nuclear Suppliers Group (NSG) formed to control the transfer of nuclear technology and materials may decide to admit India into the club at its ‘extraordinary’ plenary meeting on June 9—10.&nbsp;Entry into the NSG will allow India to freely trade nuclear technology and materials, and thereby get foreign assistance for its nuclear power programme. A target has been set of 63,000 megawatts (MW) of nuclear power by 2032, up from 5,780 mw at present,&nbsp;and including four power plants to be built in collaboration with Westinghouse and G.E.-Hitachi of the United States, Areva of France, and Atomstroyexport of Russia. Of these, the Russian project is already under execution while the others are still at proposal stage.

They projects may not take off if India does not get into the NSG as it will be difficult to buy technology and equipment without the treaty in place. Still, India can continue building its indigenous power reactors as the technology is indigenous.

Multiple news reports, however, indicate that China, an NSG member, is opposed to India’s entry and may block India’s application.&nbsp;Yet, if this were to happen, it will not be a major setback. The primary attraction of nuclear power is that it is a largescale source of carbon-free electricity. However, the drop in price of renewable energy over the past few years means nuclear power is past its sell by date as a source of carbon-free energy.

<h2>Nuclear power: high prices, long gestation</h2>

In November 2015, U.S.- based SunEdison offered to supply solar power in India at Rs. 4.63/kilowatt-hour (kWh), a record low price at the time.&nbsp;In January 2016, Fortum Finnsurya also offered to supply solar power at a record low price of Rs. 4.34/kWh.These were not isolated bids – several other bidders have offered to supply solar power at less than Rs. 5/kWh.

The wind energy tariff in India, on the other hand, ranges from Rs. 4.13–Rs. 6.60/kWh, depending upon the location, with the cost of wind energy generated from new installations at the lower end of the band.

In comparison, the cost of electricity generated from units 3 and 4 of the Kudankulam Atomic Power Plant, if the project is completed without cost and time overruns, will be Rs. 6.3/kWh.

Past experience, however, suggests timely completion is unlikely: Unit 1 of the power plant was projected to be completed by 2007 but commercial electricity production only began in December 2014. Work on Unit 2 started in 2001, and it is still not fully functional after 15 years.

The cost of the newly-sanctioned units of Russian design at Kudankulam works out to $2.9 million/MW capacity,&nbsp;but the cost of electricity for Westinghouse and Areva reactors in the country may be even higher as the cost of designs Westinghouse&nbsp;and Areva&nbsp;want to sell India works out to $7.5 million/MW and $6 million/MW, respectively, going by the cost of ongoing projects. Higher upfront costs will, of course, mean much higher prices for electricity.

The long cycle time also keeps, and has kept billions of dollars of investment stuck for over a decade, with no returns. In contrast, grid-scale renewable projects, which are usually completed in 12 months–18 months are a far more efficient use of capital.

In the aftermath of the 2011 Fukushima disaster, there are safety concerns as well about nuclear power. The issue of nuclear waste, which has to carefully handled and stored for long durations, is another critical issue&nbsp;whereas renewable energy gives rise to no such grave concerns.

<h2>Renewable energy races ahead of nuclear energy</h2>

The advantages of renewable energy over nuclear power are evident on the ground:renewable&nbsp;energy generation was 65.8 billion kWh in India during 2015–16, against 37.4 billion kWh of&nbsp;nuclear&nbsp;power generated for the same period.&nbsp;India added 7,060 MW of renewable capacity in this period and has set a target of 16,660 MW for 2016—17&nbsp;while there was zero addition of nuclear power and 1,000 MW may only be added in 2016–17 if Kudankulam Unit-2 starts.

The lower costs and faster adoption process of renewable energy clearly demonstrate that nuclear power is no longer the best bet for carbon-free electricity. This reality is already being felt on the ground, and it only goes to show that India’s clean energy targets are not hostage to China’s tactics.

Amit Bhandari is Fellow, Energy &amp; Environment Studies, Gateway House.

This feature&nbsp;was written exclusively for <a href="http://www.gatewayhouse.in/" target="_blank">Gateway House: Indian Council on Global Relations</a>. You can read the original article <a href="http://www.gatewayhouse.in/nuclear-exclusion-no-big-deal/" target="_blank">here</a>.

India has applied to be a member of the Nuclear Suppliers Group, but its ambition is being thwarted by China. However, developments in renewable energy mean China’s veto will have little impact on India’s clean energy push.


Does India really need to be a part of the NSG?

Prime Minister Narendra Modi’s fourth visit to the United States next month will primarily be aimed at consolidating the gains made under President Barack Obama while stanching the negativity in the U.S. Congress.

Engagement with both branches of the U.S. government is important for a successful relationship as any leader dealing with Washington knows because the mile-long distance between the White House and Capitol Hill can often have speed breakers.

The two-day visit will take Modi to Capitol Hill for an address to a joint meeting of the U.S. Congress, where he will speak directly to the legislature about the evolving India-U.S. story – progress already made and yet to be made. It would be an opportunity to address all concerns, be they on policy or polity.

Indian and U.S. officials are working on “deliverables” to showcase the visit. There is expectation that the two sides will sign the Logistics Exchange Memorandum of Agreement to provide supplies and fuel to each other’s armed forces after more than a decade of negotiations and doubt.

Obama personally invited Modi when the two met for the Nuclear Security Summit in Washington two months ago. The idea was to lock in the progress made on climate change and defence relations – the two areas that immediately stand out – for the next administration to build upon.

The Obama administration is believed to be working hard on getting India into the Nuclear Suppliers Group in the face of Chinese opposition and despite objections from Washington’s non-proliferation community. It would be a solid marker of progress.

India was a rare positive legacy Obama inherited from the Bush Administration and it’s been a continuing success story for the most part. He wants to leave it that way.

Markers are important because of the unpredictability of this American election. A Donald Trump victory could possibly throw U.S. foreign policy into chaos and the more Obama can put things are in place, and the Congress enshrine them in law, the better. He understands the stakes – he has been inserting himself into the presidential election process by speaking about how Trump “rattles” foreign leaders.

While support for India-U.S. relations remains strong and bipartisan, the U.S. Congress has begun voicing complaints on several issues, ranging from trade to human rights. The negatives are largely driven by constituent pressure, be it U.S. companies demanding better intellectual property protection and market access or Christian organizations raising concerns about religious intolerance.

At the same time, several good bills and amendments offered by India-friendly senators and congressmen are currently in the legislative process that recognize India as a special defence partner and enshrine in law what the Obama Administration has been doing through the Defence Technology and Trade Initiative. The hope is to pass at least one bill or amendment in both houses in time for Modi’s visit or shortly after.

But the anti-India sentiment has to be addressed. At a hearing of the Senate Foreign Relations Committee (SFRC) on May 24 designed to take stock of bilateral relations senators were particularly vociferous about India’s high tariffs, limits on foreign investment, red tape, lack of adequate IP protection, localization requirements and the lack of a bilateral investment treaty despite years of negotiations.

Above all, they questioned why there was still no contract for U.S. companies to build nuclear reactors in India as envisaged under the 2008 Civil Nuclear agreement. Bob Corker, Republican chairman of the SFRC who is not seen as a friend of India, was especially angry at the lack of a nuclear reactor deal.

Even though significant progress has been made by the Modi government through the “contact group” in working out the insurance pool, resolving liability issues in case of an accident and ratifying the international Convention on Supplementary Compensation – all thorny issues left over by the UPA government – Corker seemed unimpressed. Either he was unaware of the distance travelled in two years or he didn’t want to acknowledge it.

His bottomline: “hopeful rhetoric has far exceeded actual tangible achievements” and there is a “widening expectations gap.” The blanket criticism and the harsh tone of the hearing was a surprise.

Corker even accused India of harbouring 12 to 14 million “slaves,” a charge that shook India watchers because the stark term had never been used before. Apparently, the figure of 12 million includes every oppressed group in India from child labour to trafficked women to bonded labour and anyone earning less than a dollar per day.

Other senators brought up particular U.S.-based Christian groups that have been denied visas or faced income tax raids and talked about growing religious intolerance. The denial of visas to members of the U.S. Commission on International Religious Freedom, a quasi government body, was also noted.

There is no denying that perception has grown in Washington that India under Modi has seen an increase in cases of communal violence even as the government dismisses all incidents as “stray” and its supporters in the media find new ways to explain the climate. Unless addressed intelligently, it can have a corrosive effect on bilateral relations, making Indian diplomats defensive and the human rights activists here more aggressive.

This very public attack covering India’s inadequacies two weeks before Modi’s visit didn’t come from left field as one might think. Anger has been bubbling for some time ever since the Ford Foundation came under scrutiny in India. Human rights groups were activated and old constituencies against India came into play. The public airing was a result of this pressure on various senators and congressmen. In Corker they found a willing ally since he is believed to be passionate about ending “modern day slavery.”

In the end, the disillusionment with India reflects badly on the Indian government’s messaging and outreach, according to a long-time friend of India in Washington. Corker, a key senator who blocked funding for Pakistan’s F-16s, has apparently not visited India. Incidentally, the intense lobbying by India against the F-16s irked some key senators.

Modi’s skills will be tested this time more than they were on his first visit in September 2014, when hype and expectations were the order of the day. Now the pendulum has swung a little from that happy place.

Seema Sirohi is a Washington-based analyst and a frequent contributor to Gateway House: Indian Council on Global Relations.

This feature was exclusively written for <a href="http://www.gatewayhouse.in/" target="_blank">Gateway House: Indian Council on Global Relations</a>.&nbsp;You can read the original article <a href="http://www.gatewayhouse.in/modi-u-s-facing-changed-landscape/" target="_blank">here</a>.

Prime Minister Modi’s skills will be tested on his upcoming visit to the United States. The challenge comes in light of recent anti-India sentiments voiced at a U.S. Senate Foreign Relations Committee hearing. With Modi set to address a joint session of the U.S. Congress, this is an opportunity to address all concerns, be it on policy or polity.


Can PM Modi allay American concerns on policy or polity?

India has a new national intellectual property rights (IPR) policy. The 28-page document aims to be “an all-encompassing IPR Policy” that will “promote a holistic and conducive ecosystem to catalyse the full potential of intellectual property for India’s economic growth and socio-cultural development, while protecting public interest.”

The buzz words in the document are creativity and innovation. The policy has seven broad objectives and offers a range of prescriptions. The first objective is “IPR awareness, outreach and promotion” as a key goal is to get India to generate more IPR.

What will it change on the ground? The short answer to this critical question is it is complicated as a policy is not a law.

However, it offers important signals in critical sectors like pharmaceuticals, about possible changes in the future. How one interprets these signals depends on how one is positioned in key debates in the health sector.

Sections of the Indian industry are happy. Kiran Mazumdar Shaw, chair and managing director of Biocon Limited, a biopharmaceutical company, lauded India for standing its ground on the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) while respecting genuine innovators and start-ups. The new policy says India shall remain committed to the Doha Declaration on the TRIPS Agreement and Public Health, which simultaneously recognises that intellectual property protection is important for the development of new medicines and concerns about its effects on prices.

Yet, as Biswajit Dhar, professor of economics at Jawaharlal Nehru University, New Delhi, points out,“commitment to TRIPS flexibilities is not enough. It is vital to simultaneously strengthen the generic industry so that it is equipped and able to take advantage of these flexibilities.”

The new policy comes at a time when India is facing strong pressure over patent protection. The United States Trade Representative (USTR) has kept India in its annual list of countries which, in its view, does not sufficiently enforce patent rights. India vigorously contests this and has publicly stated that its patent regime is compliant with TRIPS. This has led to numerous verbal jousts between developed countries—-home to many innovator companies—and India, known worldwide for its low-cost generic drugs.

Will India’s new IPR policy ease this tension?

G. Shah, secretary general of the Indian Pharmaceutical Alliance, an umbrella body of domestic generic drug makers, says: “This is a mere statement of policy. It has no impact on various legislations governing patent, copyright, etc.”

Shah asserts that the policy is intended to be a “balancing act” and, like many others, does not think that the Modi government is likely, in the foreseeable future, to amend India’s patent legislation concerning medicines.

It is clear, however, that in performing this balancing act and trying to please everyone, India may have landed up pleasing neither the USTR nor U.S. business while making India’s civil society and many in the domestic industry unhappy.

The statement by the U.S. Chamber of Commerce’s Global Intellectual Property Center (GIPC) Executive Director of International Intellectual Property, Patrick Kilbride, is an indicator of the cautious optimism with which U.S. industry responded to the release of India’s new IPR Policy.

“We hope today’s announcement is a precursor to the concrete, structural changes that are necessary if India is to implement a strong IP-led innovation model” said Mr. Kilbride in his official statement.

India’s new IPR policy will not put a lid on the polarising discourse on pharma and patents in this country, where the vast majority have to pay for medical treatment out of their own pockets and rights of patent-holders are often pitted against the rights of patients.

Consider objective 3 of the new policy,&nbsp;which deals with legal and legislative framework. It refers to the possibility of steps which include a review of existing IP laws where necessary, to update and improve them or to remove anomalies and inconsistencies, if any, in consultation with stakeholders. Taken on face value, the new policy shows the Modi government has successfully resisted demands from developed countries for stronger protection for patents through provisions like data exclusivity, patent linkage, and patent-term extension.

Health activists are happy that the policy does not yield ground on&nbsp;Section 3(d) of the Indian Patent Act, 1970, which states that inventions that are a mere “discovery” of a “new form” of “known substance” and do not result in increased efficacy of that substance are not patentable. Novartis’s cancer drug Glivec and GSK’s breast cancer drug Tykerb were denied patents by Indian courts on these grounds.

Another long-standing bone of contention is the compulsory licencing mechanism that allows government to authorise a party, other than the patent- owner, to produce the patented product or process without the patent-owner’s consent. Big Pharma is wary of Compulsory Licensing.

One of the key weaknesses of the new IPR policy is that it does not explicitly lays out the steps that will be undertaken to protect India’s generic industry.

The IPR &nbsp;policy talks about encouraging &nbsp;proper documentation of traditional knowledge but many activists are sceptical. They say India has to first come up with a strong domestic law on all forms of traditional knowledge before tossing it into the IPR policy.

Finance Minister Arun Jaitley has publicly said: “We believe that our existing laws are all WTO compliant, and as and when global trends move forward, a continuous evolution of these laws will always be required.”

India’s generic drugmakers view the word “evolution” with some concern. They argue that unless the government is ready with funding and programmes to ensure access to medicines for all, any change in the legislative framework will hurt not only the generic industry, but the people of India.

Patralekha Chatterjee is a Delhi-based journalist; she writes on health and intellectual property rights.

This feature&nbsp;was written exclusively for Gateway House: Indian Council on Global Relations. You can read it <a href="http://www.gatewayhouse.in/please-ipr-policy-pleases-none/" target="_blank">here</a>.&nbsp;

The buzz words in the document are creativity and innovation. The policy has seven broad objectives and offers a range of prescriptions. The first objective is “IPR awareness, outreach and promotion” as a key goal is to get India to generate more IPR.


Will India’s new IPR policy put a lid on the polarising discourse on pharma and patents? 

As Iran and the six world powers gear up for the implementation of the&nbsp;historic agreement&nbsp;over the Tehran’s nuclear program concluded earlier on 14 July, Indian leaders and businesspeople share an equal, authentic concern: how to win the lion’s share of Iran’s lucrative market of 80 million consumers, surpass the avaricious international competitors eyeing the country’s energy industry and forge closer ties with a nation that is expected to emerge strong from more than a decade of paralyzing economic sanctions.

Iran and India have historic, cordial and untroubled relations, despite some hiccups during the U.S. and European Union economic sanctions of the past 12 years. The bilateral is now stepping up – hopefully to potential.

Till 19 August, 2015, Iran was on India’s restricted visa list, and its citizens were required to go through prior referral category (PRC) security and intelligence checks before being granted visas. &nbsp;The P5+1 comprehensive nuclear agreement of 15 October, 2015, gave India room to&nbsp;lift the visa restriction&nbsp;and give Iranians more leeway. Around40,000 Iranians&nbsp;visit India annually and hopefully this number will now increase.

Beyond tourism, Tehran and Delhi are gearing up for a serious shift in strategic trade and diplomatic ties. Prior to the European Union oil embargo of July 2012, India was Iran’s&nbsp;second largest&nbsp;crude client after China, preceding Japan and South Korea. From January to June 2011, India imported 13% of Iran’s oil, temporarily becoming Iran’s largest oil customer in&nbsp;January 2012. But the oil embargo and additional U.S. sanctions caused India to reduce its crude imports by 11%, to&nbsp;113.6 million barrels per year,

Since July 2015, a number of high-ranking Indian politicians have been making tracks to Tehran, and these visits were reciprocated by Iranian officials traveling to Delhi to convey Iran’s willingness to embrace India as a reliable, strong ally.

First off the tarmac in Tehran was Nitin Gadkari, Indian Minister of Road Transport, Highways and Shipping who came in May, before the signing of the nuclear deal, to discuss the development of the strategic Chabahar Port in southeastern Iran. He said that India is primed to&nbsp;invest $15.2 billion&nbsp;in major projects in Iran, including the full-scale development of Chabahar, regarded by India as&nbsp;vital&nbsp;&nbsp;To counterbalance the Chinese presence in the Pakistani port of Gwadar, connect India to Afghanistan through a railway line (to be built by Ircon International) and most importantly, open up a route for India to link to the International North-South Transport Corridor –&nbsp;a ship, rail and road route&nbsp;that connects India, Russia, Iran, Europe and Central Asia – and scope out new ties with Central Asia.

Gadkari was followed by former Finance Secretary&nbsp;Rajiv Mehrishi, (now Home Secretary) who led a delegation of Indian businesspeople and banking executives from 25-27 July to discuss new avenues for reviving trade and banking connections between the two nations. Indian refineries owe around $6.5 billion to Iran, an OPEC member state, for the oil imports they haven’t been able to liquidate due to the international banking sanctions. Settling these dues legally was a priority for Mehrishi. Iran has cut India some slack; the Iranian Ambassador to India Gholamreza Ansari said&nbsp;on 22 July, 2015&nbsp;that there’s no “emergency or urgency” in getting back this corpus, which accounts for about 2.2% of Iran’s annual budget in the fiscal year 2014.

India also relies on Iran, a major Muslim power, to withstand the potential threat posed by the Islamic State. New Delhi believes that Iran, with its close links to Pakistan and its clout over Syria can – at least partially – repel terrorism before it reaches its borders. So when Iranian President Hassan Rouhani and the Indian Prime Minister Narendra Modi&nbsp;met on 9 July&nbsp;on the sidelines of the BRICS/SCO summit in Ufa, Russia, Modi named “connectivity, energy, trade and investment and terrorism” as the main priorities discussed by the two leaders.

In what signaled Iran and India’s growing mutual willingness to quickly race towards realizing their potential for the strengthening of trade and commercial ties, the two nations held the 18th&nbsp;session of the India-Iran Joint Commission in New Delhi on 28 December, 2015. The session was chaired by the Indian Minister of External Affairs Sushma Swaraj and Iran’s Minister of Economic Affairs and Finance Ali Tayebnia. A major area of discussion was India’s involvement in the development of Chabahar Port and Chabahar Free Trade Zone, a high priority for both governments.

India finds itself in the long queue of global economic powerhouses such as Australia, Britain, France, Germany, Italy, Japan, South Africa and South Korea that wish to avail the new opening between Iran and the international community and foster trade, commercial, cultural and political relations. But India’s proximity and mutual interests of the two countries indicates that the time is ripe for a fundamentally new beginning in Tehran-Delhi relations.

Kourosh Ziabari is an award-winning Iranian journalist, media correspondent and peace activist.

This article was first published on Gateway House. You can read the original article <a href="http://www.gatewayhouse.in/india-iran-a-fundamental-renewal/" target="_blank">here</a>.&nbsp;

India finds itself in the long queue of global economic powerhouses that wish to avail the new opening between Iran and the international community. But India’s proximity and mutual interests of the two countries indicates that the time is ripe for a fundamentally new beginning in Tehran-Delhi relations.


India-Iran: a fundamental renewal

It was a V.I.P. ticket I had picked up for the over five-hour bus journey from Isfahan to Tehran, including small eats and unlimited water for below $10. The bus glided smoothly on impeccable roads for the 450km drive. Typically a Benz or Volvo, these buses are not fully packed, yet they are quite popular, leaving every few minutes.

Passengers appear to be slowly getting used to seeing alien faces in their midst. With typical Iranian politeness, they are all attention and helpfulness – you just have to ask.

It need not have been an experience with just this bus.&nbsp; Five days earlier, I had had virtually the same experience on the flight from Tehran to Yazd, just as it had been a few days earlier, on another 325km–three-hour bus journey from Yazd to Isfahan.

If one phrase can sum up the current sentiment on the ground, it would be ‘dignified resignation':&nbsp; the lifting of nuclear-related sanctions has not led to a real flow of investments and funds into Iran, which has complied fully with its part of the bargain.&nbsp; While the nuclear-related sanctions have been lifted, the <a href="http://www.economist.com/news/business/21697276-it-proving-harder-expected-investors-make-start-over-promised-land" rel="nofollow" target="_blank">United States’ trade embargoes remain in place</a>.&nbsp; The world banking system, so deeply dependent on the United States, is fearful of the U.S. Treasury’s sanctions enforcer – the Office of Foreign Assets Control—which has extracted an estimated $14 billion from banks by levelling allegations of trading—in <a href="http://iranprimer.usip.org/resource/us-sanctions" rel="nofollow" target="_blank">violation of the sanctions</a>–since 2009.

Even non-federal, state-level banking regulators have flexed their muscles: New York State’s Department of Financial Services extracted a<a href="http://www.reuters.com/article/us-standardchartered-settlement-idUSBRE88K10420120921" rel="nofollow" target="_blank"> civil penalty of $340 million from Standard Chartered Bank</a> for allegedly transacting an estimated $250 billion with Iran,using the American banking system. That year,&nbsp;The Economist&nbsp;would go on to cite similar ‘settlement’ extractions as evidence of its charge that the <a href="http://www.economist.com/news/leaders/21614138-companies-must-be-punished-when-they-do-wrong-legal-system-has-become-extortion" rel="nofollow" target="_blank">U.S. legal system is an “extortion racket”</a>.

In the U.K., Bank Mellat, an Iranian bank whose assets had been frozen by Her Majesty’s Treasury, fought a long and hard battle all the way to the Supreme Court, which <a href="https://www.supremecourt.uk/decided-cases/docs/UKSC_2011_0040_Judgment.pdf" rel="nofollow" target="_blank">ruled resoundingly in favour of the bank</a>, holding that the freeze was illegal and wrongful. <a href="http://www.bailii.org/ew/cases/EWCA/Civ/2016/452.html" rel="nofollow" target="_blank">Legal proceedings</a> over the bank’s consequent claim for damages are now underway.

With foreign banks fearful of U.S. regulators, and Iranian banks still being hassled outside Iran, access to finance—the lifeblood of economic growth—remains stymied.&nbsp; Large deals announced by global corporates, including U.S. and British interests since the lifting of the nuclear sanctions, remain on paper.

It is against this backdrop that Prime Minister Narendra Modi is visiting a republic proud of its ancient history.&nbsp; Iran ranks 118th&nbsp;in the <a href="http://data.worldbank.org/indicator/IC.BUS.EASE.XQ" rel="nofollow" target="_blank">World Bank’s “Ease of Doing Business” survey of 2015</a> – ahead of India’s ranking of 130. While the bus network connecting Iran’s cities and towns is very popular, perhaps mindfully not wanting to become too dependent on its domestic oil production, Iran is investing heavily in railways.&nbsp; Its internal 10,000-km long rail network is planned to double in length over the next 10 years. In February 2016, a <a href="http://economictimes.indiatimes.com/news/international/business/first-silk-road-train-arrives-in-tehran-from-china/articleshow/50996514.cms" rel="nofollow" target="_blank">train link was established by Tehran with China</a>, with a train that actually traversed 10,500 km from eastern China—through Kazakhstan, Kyrghystan, Uzbekistan, and Turkmenistan—before pulling into Tehran at the end of a 14-day journey.&nbsp;China’s state-owned banks are opening up their purse strings to enable Chinese firms to trade with Iran and reap the benefits.

Modi would need to step up India’s competitive pace in tapping the legacy of a deep strategic relationship with Tehran.&nbsp; Indian contractors would stand to gain from helping Iran build its intended rail network.

Iran is investing in bolstering her institutions in the financial sector.&nbsp; The overhang of historical antipathy over Iran’s financial sector from the United States and the U.K. presents an opportunity for India to move in:&nbsp; India could help Iran strengthen her regulatory and self-regulatory agencies in the securities markets and the banking sector. Being part of the global&nbsp;<a href="http://www.fatf-gafi.org/about/">Financial Action Task Force</a>, a legacy of the antipathy towards Iran could occupy India’s financial sector regulatory thinking unless a clear sovereign choice is expressed by the leader of the Indian republic.

There are “softer” avenues too, to build up serious business interests for the two nations.&nbsp; Bollywood’s soft power captivates Iranians as much as it does them and others elsewhere in the world:&nbsp; the quality of <a href="http://www.imdb.com/title/tt5460658/" rel="nofollow" target="_blank">Iranian cinema</a>&nbsp;is world-class.

The sentiment on the ground in cafes and bazaars is not yet one of emotional unrest.&nbsp; The mood reflects disappointment at the pace of progress since compliance with the nuclear deal, but Iranians are mindful that Rome was not built in a day.&nbsp; Both Iran and the United States have their internal constituencies that cannot easily move on from the past.&nbsp; They have to be politically catered to in order that, for example, Boeing may deliver aircraft to Iran. But India has no such baggage and, therefore, strategic thinking in collaborating with Iran is key.&nbsp; France, Germany, and even South Korea have made big splash inroads and it would be a shame for India to miss the action. Modi would do well to explore <a href="http://www.reuters.com/article/us-india-iran-imports-idUSBREA2A0TU20140311" rel="nofollow" target="_blank">re-opening the visa-on-arrival benefit the two countries</a> shared before each of the proud republics did away with it in what looks like a petty squabble.

Keeping me company on the trip within Iran was the book&nbsp;<a href="http://www.amazon.in/Patriot-Persia-Muhammad-Mossadegh-Anglo-American/dp/0061844713">Patriot of Persia</a>&nbsp;by Christophe Bellaigue, an amazingly objective account of the political life of Muhammad Mossadegh, the non-republican, politically-elected leader of Iran’s parliament in the late 1940s.&nbsp;It is a great read of history, particularly after reading&nbsp;<a href="http://www.gatewayhouse.in/book-excerpt-going-to-tehran/" rel="nofollow" target="_blank">Going to Tehran</a>&nbsp;—and a blog by the same name–by authors Flynt and Hillary Mann Leverett.&nbsp; Even today, Mossadegh inspires as much “what if” speculation about how Iran would have been under him as we have speculation as to how India would have been under Sardar Patel. Mossadegh’s ouster by hoodlums hired by British and US intelligence operatives, and his own weak handling of the situation by espousing libertarian values when his government was being burnt by anarchists, led to his downfall although the Iranian army had, in fact, initially overcome the coup.

Modi, himself a nationalistic and patriotic Indian who invokes Sardar Patel, is no Mossadegh when it comes to protecting his interests. He would do well to firmly drive India’s strategic interests for the mutual benefit of both India and Iran.

This article was originally published by&nbsp;<a href="http://www.gatewayhouse.in/" rel="nofollow" target="_blank">Gateway House</a>. To see the original piece, <a href="http://www.gatewayhouse.in/time-for-modi-to-capitalise-on-iran/#_edn1" rel="nofollow" target="_blank">click here</a>.&nbsp;

Gateway House