Govt drafts policy for renewing lease of 28 oil, gas blocks

Source:, Oct 25, 2016

New Delhi: The Modi administration is set to unveil a new policy for extending the lease of 28 oil and gas blocks under terms that will add more revenue to the exchequer.An official involved in discussions over the policy said on condition of anonymity that the government wants more investments to flow into these fields, licensed prior to 1999, to recover the entire reserves for which an extension is necessary.

The terms of extension will raise the government’s take by way of an increased percentage of profit petroleum—proceeds from the sale of hydrocarbon that companies share with the government. The operators of the blocks will get certainty about continued production rights to go ahead with deploying technologies to enhance output.

When the Union cabinet approved a similar extension on 10 March for another set of pre-1999 fields, which unlike the ones currently under review, had hydrocarbon discoveries at the time of signing the contracts, it adopted a 10% increase in the government’s take of profit petroleum. The increase applies on whatever is the government’s share that is calculated as per the terms in the existing contract.

The 25-year lease period for Cairn India Ltd’s block in Barmer, Rajasthan—RJ-ON-90/1—expires in May 2020. The contract provides for a mutually-agreed 10-year extension if gas is being produced commercially. Commercial production of gas from the field commenced in 2013.

Cairn’s 30% joint venture partner Oil and Natural Gas Corp. has agreed to the extension. Last December, Cairn India approached the Delhi high court for a direction to the government to extend the contract.

A spokesperson for Cairn India said it was not in a position to comment since the matter was sub judice. The Delhi high court will hear the case again on 7 November.

“There is no dispute between Cairn India and the government on the matter. The company went to court because it wanted to expedite a decision on its contract’s renewal. We are, instead, preparing a policy for all…exploration blocks that are due for renewal in a transparent and a non-discretionary manner,” said the official cited above. Although the blocks were assigned as exploratory blocks, many of them are producing now, said the official.

To meet its target of reducing import dependence on hydrocarbons by 10 percentage points to 67% by 2022, the government wants to both add the acreage under exploration and production as well as encourage companies to deploy technology to enhance oil and gas recovery.

Drug companies step up global investments to tap biosimilars

Source: Business Standard, Oct 25, 2016

Mumbai: Indian pharmaceutical companies are stepping up their investments to tap growing opportunities in biosimilars in Europe and emerging markets.Cipla is investing Rs 600 crore to set up a manufacturing plant for biosimilars in South Africa and Ahmedabad-based Intas is spending $30 million (about Rs 200 crore) for research into and trials of biosimilars.

The interest of Indian drug companies in this segment is evident as drugs worth $90 billion will go off patent in Europe and the US in the next 10 years.

Biosimilars, which are copies of innovative drugs, are also expected to receive a boost as governments in developed markets try to reduce their healthcare budgets. On the flipside, however, growing competition is leading to price erosion and margin pressure for drug companies.

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Government plans overseas roadshows to boost textile exports

Source: The Economic Times, Oct 23, 2016

NEW DELHI: Government plans to conduct roadshows to promote the country’s textiles in non-traditional markets like Russia, South America and select countries in West Asia, at a time when shipments from the sector have been declining.

Textile exports from India remained flat in 2015-16 at $40 billion as compared to $41.4 billion in the previous year.

Moreover, Indian textile and apparel exports have been losing their competitive edge to countries like Bangladesh and Vietnam in recent years.

“We are eyeing non traditional markets like Russia, South America and some countries in West Asia which are relatively free from turmoil like Saudi Arabia, Kuwait, Qatar and the United Arab Emirates. We will hold roadshows to showcase Indian textiles in these markets,” a senior official told PTI.

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Dairy companies invest big to milk gains from rising demand

index.jpgSource: The Economic Times, Oct 24, 2016

HYDERABAD: The explosion in demand for high-profit yielding value-added products is giving dairies an impetus to spend heavily on expanding their coldchain infrastructure, both in sourcing as well as distribution.

This was not possible earlier with the low-margin liquid milk segment that dominated the product portfolio for dairy companies. Companies are now spending nearly a third of their capex in cold chain and the investments are growing at the rate of 15% year-on-year.

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India, Sri Lanka in new push to boost trade, tech tie-up

Source:, Oct 24, 2016

New Delhi: India and Sri Lanka will seek to narrow differences early next week over an ambitious pact that seeks to widen economic engagement between the two neighbours and holds the potential for increased cooperation with South-East Asia.


Indian foreign secretary S. Jaishankar, who left for Colombo on Saturday, is expected to push the early conclusion of the Economic and Technology Cooperation Agreement (ETCA), that aims to boost cooperation in technical areas, scientific expertise and research among institutions, boost standards of goods and services and improve opportunities for manpower training and human resource development.

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India Signs Guarantee Agreement with the World Bank

Source:, Oct 24, 2016

New Delhi: A Guarantee Agreement for World Bank (IBRD) lending of US$ 650 million to the Dedicated Freight Corridor Corporation of India Ltd. (DFCCIL) for Eastern Dedicated Freight Corridor-III (EDFC-III) Project has been signed between the Government of India and the World Bank here today in the national capital. This Agreement was signed by Shri Raj Kumar, Joint Secretary (MI), Department of Economic Affairs, Ministry of Finance on behalf of the Government of India and Mr. Hisham Abdo, Acting Country Director, World Bank, India on behalf of the World Bank.

The objective of the EDFC-III Project is to augment rail transport capacity, improve service quality and enhance freight carriage throughput on the 401 km Ludhiana-Khurja section of the Eastern Dedicated Freight Corridor; and develop institutional capacity of DFCCIL to build, maintain and operate the entire DFC network. This project is in continuation of Phase-I and II of the EDFC Projects being implemented by the DFCCIL with the World Bank loan of US$ 975 million and US$ 1100 million respectively on the Dadri-Khurja-Kanpur; and Kanpur-Mughal Sarai stretches of the Eastern Rail Corridor (Ludhiana-Delhi-Kolkata). The project will directly benefit the power and heavy manufacturing industries of Northern and Eastern India, which rely on railway network for transportation of their material inputs and also for the distribution of bulk processed and semi-processed commodities and consumer goods. Railway passengers will also be benefitted through decongestion of the existing passenger lines.

PM for making India global arbitration hub

index.jpgSource: Business Standard, Oct 24, 2016

New Delhi:  Prime minister Narendra Modi on Sunday batted for making India a global hub for arbitration, highlighting the need to develop cost-effective and time-bound processes in this regard.

Addressing a conference on the National Initiative Towards Strengthening Arbitration and Enforcement in India, organised by Niti Aayog, Modi said efforts to make India a preferred destination for global arbitration faced challenges in the form of availability of excellent global arbitrators, professional conduct, enforcing neutrality, timely completion of proceedings, and cost effective arbitration process.

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