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U.S. business questions Modi's reform credentials ahead of visit

(Reuters) - The U.S. business lobby on Thursday questioned the reformist credentials of Prime Minister Narendra Modi, on the eve of his visit to the United States in which he will encourage investment and declare India open for business.

The U.S. Chamber of Commerce and 15 other U.S. business associations representing sectors ranging from agriculture to movie making, pharmaceuticals and telecoms, called on President Barack Obama to press Modi to remove barriers to fair trade when the two leaders meet in Washington on Monday and Tuesday.

"Since taking office, Prime Minister Modi has declared India 'open for business' and promised to incentivize investment and 'give the world a favorable opportunity to trade with and produce in India,'" the Alliance for Fair Trade with India said in a letter to Obama.

"Thus far, however, the new Indian government has produced troubling policies of its own," the group said, adding: "These actions send perplexing and contradictory new signals about India’s role in the global marketplace."

The letter highlighted India's blockage of a key World Trade Organization agreement reached in Bali last year, which overshadowed a July 30-Aug. 1 visit to India by U.S. Secretary of State John Kerry.

The business alliance also complained about India's raised tariffs and "burdensome" new testing requirements on imported information and communication technology products.

U.S. officials say the United States will press Modi to end the WTO blockage during his visit, something that could dampen the mood of a trip aimed at revitalizing a strategic relationship Washington sees as a key counterbalance in Asia to an increasingly assertive China.

Also on Thursday, U.S. Congressional leaders dealing with trade and finance wrote to the U.S. International Trade Commission calling for a second investigation into India’s "unfair" trade practices, detailing any changes under Modi. They called for the ITC to deliver a report to Congress on Sept. 24, 2015, a statement said.

A report requested in August last year is due to be delivered to Congress on Dec. 15 this year.

Stephen Ezell, senior trade policy analyst at the Washington based Information Technology & Innovation Foundation, told a teleconference that Modi had taken some positive steps, including an easing of some restrictions on investment in the defense, insurance and railway sectors.

"However ... we’ve also seen the continuation of existing — and even the promulgation of some new — trade-distorting policies that do give us some pause," he said.

Chris Moore, of the National Association of Manufacturers, said Modi and his administration were "saying positive things."

"But their actions tell a different story."

Patrick Kilbride, of the U.S. Chamber of Commerce, welcomed the Indian government's plans to review the environment for intellectual property rights, but said it remained "very poor."

The chamber would take the pledges at face value, he said, but added: "Recent history has given us many reasons to be wary."

Modi is due to arrive in the United States on Friday for his first visit as prime minister and has meetings scheduled with 17 U.S. corporate chiefs including those of Google, IBM, GE, Goldman Sachs and Boeing.

Analysts say maintaining a positive mood will be important during the visit, given that Modi was denied a U.S. visa in 2005 after more than 1,000 people, most of them Muslims, were killed in riots in Gujarat.

There was no immediate comment from the Indian embassy in Washington on the letter from the U.S. business lobby.

 

 

S&P upgrades India's sovereign credit outlook to stable from negative

MUMBAI: Rating agency Standard & Poors has reversed its opinion about the Indian economy and upgraded the rating outlook to stable from negative while maintaining the credit rating at BBB-.

This is a major change from its position last year when it said India faces one in three chances of a downgrade.

In a huge sentiment boost for India, S&P on Friday revised India's credit outlook up to 'stable' from 'negative'. While the agency maintained India's rating at BBB-, the revision in outlook is good news for the Indian economy as raising debt will become cheaper for Indian companies and it will also encourage foreign institutional investors.

Could Thackeray + Thackeray create a political earthquake in Maharashtra?

Zee Media Bureau

Mumbai: A day after the 25-year-old Shiv Sena, BJP alliance came to an end, another big possibility that holds the potential to create the biggest political earthquake in Maharashtra is being talked about – the Thackerays coming together.

If such a scenario were to play out, the estranged Thackeray brothers could arrive at an understanding so as to minimise collateral damage from the split in the saffron alliance.

It is being speculated that leaders on the two sides are alive to the positive outcome of such an potential alliance.

The Sena has reasons to worry about politics without the BJP, at least in the short term, as the party is in power in 12 municipal corporations with support from the BJP, including in Mumbai and Thane.

In the new arrangement, the MNS could possibly extended support to Shiv Sena wherever it can make a difference and the MNS in turn will get support from Sena in Nashik where it is in power.

However, the bigger import of the developing alliance can't be missed. Raj Thackeray had walked out of the Shiv Sena after party patriarch Bal Thackeray anointed his son Uddhav as his political hier.

Since then both Raj and Uddhav have fought a battle of one-upmanship. While Raj got to play the role of spoiler in 2009 assembly elections when his party weaned away enough votes to ensure defeat of the Sena-BJP combine, Uddhav came back in the game after a splendid outing in the Lok Sabha polls.

Meanwhile, the buzz in political circles also point to the possibility of the Sena and the BJP joining hands post elections even if it is in the form of outside support. However, for the record both sides are saying that the split is final and for real.

"Our other (mahayuti) alliance parties wanted the Sena-BJP combine to continue. More than that, it was what the 11 crore people of Maharashtra wanted. Those who trampled these sentiments are enemies of Maharashtra," an editorial in Sena mouthpiece Saamna said.

"This (breaking of alliance) is an insult to the 105 Marathi martyrs of the Samyukta Maharashtra movement," Sena said, adding, "It is unfortunate that the Sena-BJP alliance which for the last 25 years was bound by the Hindutva ideology has ended."

"Those who till yesterday were praying in this tent are now offering namaz in the other tent."

In the edit, the Sena proclaimed itself as "the real protector of Maharasthra" through its army of Shiv sainiks (soldiers).

"Now, Pitru Paksh is over... Everybody's ancestors came in the form of crows and feasted on food and sweets before leaving happily... Only the political descendents were not ready to make any adjustments in the matter of seat-sharing."

The BJP has also announced that the party would not criticize Shiv Sena during the campaign and remain friends. “Our aim is to prevent the corrupt Congress-NCP government from coming to power. We will not criticize Shiv Sena during the campaign, we don’t want any bitterness with our ally of 25 years,” Eknath Khadse,

BJP demands President's Rule

A delegation of state BJP leaders met Maharashtra Governor CV Rao on Friday to urge him to impose President's Rule in the state.

The delegation was led by senior party leader Eknath Khadse. Party leaders told the Governor that in view of the Nationalist Congress Party (NCP) withdrawing support to the Congress, the Prithiviraj Chavan government is now in a minority hence should be dismissed.