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INDIA & THE WORLD

AGREEMENT BETWEEN SAUDI ARABIA INDIA ON HAJ PILGRIMEGE

The Kingdom of Saudi Arabia has announced additional quota of 10000 seats for the Haj Season 2011 for use by India. The entire lot of these 10000 seats have been transferred to Haj Committee of India, Mumbai. The seats will be distributed to the States/ Union Territories that have received applications in excess of originally allotted quota on the basis of proportionate Muslim population of the State/ UT concerned. Saudi Arabia is the largest country in the Middle East by land area, constituting the bulk of the Arabian Peninsula, and the third-largest Arab country. It is bordered by Jordan and Iraq on the north and northeast, Kuwait, Qatar and the United Arab Emirates on the east, ,Yemen on the south and Oman on the southeast.

DOUBLE TAXATION AVOIDANCE AGREEMENT BETWEEN INDIA & GEORGIA

The Government of India signed an Agreement for Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital (DTAA) with Government of Georgia. The Agreement was signed by M.C. Joshi, Chairman, Central Board of Direct Taxes (CBDT) on behalf of the Government of India and Zurab Katchkatchishvili, Ambassador of Georgia to India on behalf of the Government of Georgia. The DTAA provides that business profits will be taxable in the source state if the activities of an enterprise constitute a Permanent Establishment (PE) in the source state. The Agreement

provides for fixed place PE, building site, construction & installation PE, service PE, insurance PE and agency PE. The Agreement incorporates para 2 in Article concerning Associated Enterprises. This would enhance recourse to Mutual Agreement Procedure to relieve double taxation in cases involving transfer pricing adjustments. Dividends, interest and royalties & fees for technical services income will be taxed both in the country of residence and in the country of source. The low level of withholding rates of taxation for dividend (10%), interest (10%) and royalties & fess for technical services (10%) will promote greater investments, flow of technology and technical services between the two countries. The Agreement incorporates provisions for effective exchange of information between tax authorities of the two countries in line with best international standards, including exchange of banking information and supplying of information without recourse to domestic interest. The Agreement also provides for sharing of information to other agencies with the consent of supplying state.

MOU SIGNED BETWEEN UGC & BRITISH COUNCIL

Chairman of University Grants Commission Ved Prakash and Director of British Council Rob Lynesformally signed a Memorandum of Understanding (MoU) to support all activities and programmes agreed under Phase Two of the UKIERI programme relating to the University sector across the four strands. The MoU was signed in the presence of 33

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Kapil Sibal, Union Minister for Human Resource Development and Sir Richard Stagg, British High Commissioner to India. This MoU aims to work with UGC for implementation of strand programmes and activities in the Higher Education Institutions in India. This MoU is in continuation to the MoU signed between Ministry of Human Resource Development of the Government of India and the Department for Business, Innovation and Skills on behalf of the Government and the Devolved Administrations of the UK including Northern Ireland, which sets out the framework for UKIERI from 2011-2016. The UGC British Council MoU will be the guiding document for overall collaboration and the following type of activities will be supported

Collaboration between Higher Education

Institutions in India and the UK to work with key partners and stakeholders in both countries with the aim of providing opportunities to teachers, faculty members, senior staff and students from universities, colleges and other educational institutions to build capacity. Programmes that aim to provide opportunities for the UK and Indian universities to collaborate on thematic partnerships on mutually agreed areas. Activities and strand programmes that aim to foster mobility of students across the two countries.

Activities and programmes that work towards

the transferability and equivalence of qualifications through recognition of learning and achievements between the two countries.

Activities and strand programmes for jointly

supported scholarships and fellowships.

AGREEMENT BETWEEN IRCON AND SRI LANKA RAILWAYS

IRCON and Sri Lanka railways signed an agreement for supply and installation of the signaling and telecommunication system for railway network in 34

Northern Province of Sri Lanka. The cost of the project is 86.5 million dollars.The project will cover the Anuradhapura-Medawachchiya and Kankasanthurai-Tallai Mannar sections. The total route length will be 341 km and the project will have 28 stations. The signaling work includes provision of centralized control panel, interlocking colour light system with electrically operated points and track detection system. All the level crossings will be interlocked with new signaling system, which would ensure safety at level crossings. The work on telecommunication comprises provision of optical fiber communication system throughout the section. Besides, public address system will also be provided at major stations. The project is a part of Indian Line of Credit of 800 million dollars, which was extended by India at concessional terms. Moreover, the credit line was extended at an interest rate of LIBOR plus 0.5 percent with LIBOR capped at 3 percent. The repayment period is 20 years with a five year moratorium. IRCON is a specialized Constructions organization covering the entire spectrum of construction activities and services in the infrastructure sector. India Should Take Lead in Energizing BIMSTEC With a gloomy economic scenario in the United States and the European Union, India should take lead and provide a new meaning to the BIMSTEC engagement that has potential of generating trade worth 43 to 59 billion dollars under a proposed free trade agreement (FTA), apex chamber ASSOCHAM .The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) brings together 1.3 billion people or 21 percent of the world population, a combined GDP of 750 billion dollars and a considerable amount of comple-mentarities, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM). The sub-regional group comprises of India, Bangladesh, Sri Lanka, Thailand, Myanmar, Nepal and Bhutan. BIMSTEC has a trade negotiating committee which is working on the list of goods regarding a framework agreement signed in

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2004. An FTA is yet to be finalised.India is required to play a lead role by integrating trade and investments while promoting economic cooperation,. The BIMSTEC member countries could jointly develop infrastructure and technology in enhancing renewable energy. Financial cooperation through currency swap agreements, pooling of reserves among central banks and evolving an exchange rate coordination mechanism are essential requirements for enhancing regional trade and investments. In the era of competitive globalisation, innovative trade and business strategies are required to lock in consumers. India needs to give new meaning to the BIMSTEC economic engagement at three levels.One, the country could adopt a philosophy of preferential sourcing from the BIMSTEC region. Two, Indian investment proposals need to project counter-trade in the form of buybacks and export obligations, switching or transfer of export obligations. Three, the country may promote value neutral transactions (swap trade / switch export obligations) which encourage bilateral and multi-lateral trade and significant reduction in

transportation costs.Seven members of the BIMSTEC zone cover 13 priority sectors trade and investment, technology, energy, transport and communication, tourism, fisheries, agriculture, cultural cooperation, environment and disaster management, public health, people-to-people contacts, poverty alleviation, and counter-terrorism and transnational crimes.In Myanmar, India can focus on agriculture and allied activities, mining and related products, hydro power, chemicals, upstream and downstream oil and gas operations, renewable energy, gems and jewellery. In Bangladesh, Sri Lanka and Bhutan, it can aim at skill intensive sectors like light engineering goods, consumer durables, food processing and information technology. In Thailand, India can focus on knowledge intensive sectors like bioscience and nano science applications in agriculture, industry and construction, automobiles and parts, renewable energy, fashion industry, multimedia, petrochemicals, engineering plastics and speciality chemicals. Focusing in these areas, India will need a single market plan by developing a regional production network through backward and forward integration.

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