India-Bangladesh form LPG joint venture

Source: The Economic Times, Jun 30, 2020

NEW DELHI: New Delhi: Indian Oil Corp has agreed to form an equal joint venture with Bangladesh’s Beximco LPG to set up a terminal to import liquefied petroleum gas in Bangladesh.

Indian Oil’s Dubai unit IOC Middle East FZE and Beximco’s holding company RR Holdings Ltd, Ras Al Khaimah, UAE have signed an agreement for LPG business in Bangladesh, as per a statement by Indian Oil.

The joint venture would begin with acquiring Beximco’s existing LPG assets in Bangladesh. “We intend to set up a large LPG terminal at a deep-water port in Bangladesh, which would facilitate receipt of LPG in Very Large Gas Carriers, leading to reduction in cost of imports. Reduction in cost of import would help make LPG available at an affordable price to the people of Bangladesh,” said Sanjiv Singh, Chairman, Indian Oil.

The JV also intends to diversify into other downstream oil and gas businesses such as lube blending plant, LNG, petrochemicals, LPG export to north east India through pipeline between two nations and renewable energy, the statement said.

L&T signs MoU with US-based KBR for building refineries

Source: The Economic Times, Jun 22, 2020

MUMBAI: Larsen & Toubro’s hydrocarbon arm has signed a memorandum of understanding with US-based engineering company KBR for construction of modular process plants for refinery and petrochemicals projects.

KBR and L&T Hydrocarbon Engineering (LTHE) will collaborate to develop business opportunities for refineries and petrochemical units, the Indian engineering major said Monday.

“Through this MoU with KBR, LTHE will combine its best-in-class engineering, world class modular fabrication facilities and core strength of project management and construction to offer safe, reliable, and optimized solutions to our customers,” Subramanian Sarma, managing director and chief executive officer of LTHE said.

LTHE will exclusively bid for KBR’s solid acid alkylation technology, solvent de-asphalting technology and catalytic olefins technology for global projects with special emphasis on India, South East Asia, Middle East and Africa.

L&T’s hydrocarbon business reported a 25% decline in new orders in FY20 at Rs 20,964 crore due to deferment of orders mainly in onshore vertical. Energy companies across the world have delayed petrochemical projects in view of the economic slowdown and ongoing uncertainties due to the Covid-19 pandemic.

China’s Great Wall Motor signs MoU with Maharashtra, to invest $1 bn

Source: Business Standard, Jun 16, 2020

New Delhi: Chinese auto major Great Wall Motor (GWM) on Tuesday said it has signed a memorandum of understanding with the Maharashtra government for its manufacturing facility in the state which it had acquired from General Motors (GM).

The company has committed an investment of $1 billion (about Rs 7,600 crore) in India in a phased manner with estimated employment for over 3,000 people.

“This would be a highly automated plant in Talegaon (near Pune) with advanced robotics technology integrated into many of the production processes,” Parker Shi, managing director of the Indian subsidiary of GWM, said in a statement.

“Overall we are committed to $1 billion of investment in India in a phased manner, which is directed towards manufacturing world-class intelligent and premium products, R&D centre, building supply chain and providing jobs to over 3,000 people in a phased manner,” he added.

In January this year, GWM had signed an agreement to acquire the plant from GM.

The factory has facilities like logistics distribution centre, training centre, project management building, administrative office building and public facilities centre.

GMW will produce its EV and SUV models at the plant. At the Auto Expo held in February this year, GWM had said it also planned to invest in battery research and development and manufacturing in India to reinforce and accelerate “India”s Electrification Strategy”.

Maharashtra govt signs Rs 16,000-crore investment pacts with 12 firms

Source: Business Standard, Jun 16, 2020

Mumbai: The Maharashtra government on Monday announced the signing of memoranda of understanding (MoUs) with 12 domestic and foreign companies for Rs 16,000 crore investment in the oil, chemicals, auto, electric mobility, and logistics sectors.

The agreements, part of the Magnetic Maharashtra initiative, are expected to help spur economic activities in the state reeling from the Covid-19 pandemic. The crisis has led to a sharp drop in the state’s revenues and led to an exodus of migrant labourers.

To revive the state’s economy, the government has been planning several initiatives, including fast-tracking approvals to new investors. “We will offer all assistance to new investors,” said Chief Minister Uddhav Thackeray on the occasion.

In the agreement with the government, UPL promised to invest Rs 5,000 crore in five years to manufacture pesticide ingredients in the Raigad district. Great Wall Motors, which recently acquired General Motors’ plant in Pune, will invest Rs 3,770 crore.

PMI Electro Mobility Solutions and Foton Motors of China signed MOUs for Rs 1000 crore investment for manufacturing electric vehicles in Pune.

ExxonMobil has agreed to invest Rs 760 crore to manufacture lubricants, while Varun Beverages would put in Rs 820 crore, the government announced.

Land has been allotted to nine of the 12 companies, which had been in talks with the Maharashtra Industrial Development Corporation for the last six months.

“Three more investment projects in the steel, pulp and paper, and electronic system design sectors are in the pipeline. These would entail investments of another Rs 8000 crore. We hope to finalise them soon,” said B Venugopal Reddy, principal secretary, industries department of the state government. “We expect the investment to materialise, and manufacturing to commence in two years,” said Bhushan Gagrani, principal secretary, the Chief Minister’s Office.

Yatra terminates Rs 2,300-cr merger pact with US software firm Ebix

Source: Business Standard, Jun 08, 2020

New Delhi: Online travel company Yatra has terminated its pending merger agreement with US-based software firm Ebix and filed litigation against it in the State of Delaware, seeking “substantial damages” for alleged breaches of terms of the pact.

Ebix had signed the agreement last year to acquire Gurugram-based Yatra Online for an enterprise value of $338 million (about Rs 2,327 crore) in an all-stock deal.

“The complaint seeks to hold Ebix accountable for breaches of its representations, warranties, and covenants in the merger agreement and an ancillary extension agreement, and seeks substantial damages,” Yatra said in a statement late Friday. “Ebix’s conduct breached material terms of the agreements and frustrated Yatra’s ability to close the transaction and obtain the benefit of Yatra’s bargain for its stockholders.”

The deal was supposed to conclude in the October-December quarter after regulatory approvals but went through several extensions, according to regulatory filings with the US Securities and Exchange Commission.

“The merger agreement contains certain termination rights for Ebix and Yatra, including, among others, the right of either party to terminate the merger agreement if the merger has not been consummated on or prior to the outside date, which was previously extended to May 4, 2020,” Ebix had said in a filing on May 20.

“Pursuant to the fourth extension agreement, the outside date has been further extended to June 4, 2020, in order to provide the parties with time to determine whether they can reach mutual agreement on an amendment of certain terms of the merger agreement,” Ebix added.

After the transaction, Yatra was to become part of Ebix’s travel portfolio, EbixCash.

In its annual report filed to the US exchanges in March, Ebix had said difficulties in attracting, motivating, and retaining executives and key employees were a risk to the merger, as was exposure to risky Indian travel businesses such as the closure of Jet Airways.

Ebix did not respond to the development immediately.

Yatra in a second statement said it had implemented several cost reduction measures since April 2020 to improve profitability and efficiency. These include reducing management salaries by 50 per cent and variable reduction in salaries of 25-75 per cent across the board for the near term, freezing salary hikes, renegotiating supplier payment terms and conditions and fixed costs like rent, as well as deferring non-critical capital expenditures.

As of June 4, the company had $32.5 million (over Rs 240 crore) in total available liquidity and its current monthly run-rate operating fixed cost was approximately $1.2 million (over Rs 8 crore).
Yatra provides services such as domestic and international air ticketing, hotel bookings, homestays, holiday packages, bus ticketing, rail ticketing, activities and ancillary services

Rare earth minerals: New chapter in Indo-Australian strategic partnership

Source: The Economic Times, Jun 02, 2020

NEW DELHI: India and Australia will explore opportunities at their Thursday summit that could see Canberra supplying rare earth minerals to Delhi elevating partnership to the next level.

Australia has huge deposits of minerals including rare ores. The countries had been working on cooperation in critical and strategic minerals, sources told ET. Australia wants to diversify exports of rare earth metals to emerging partners like India.

‘Rare earth elements’ is a term applied to 17 metals used in the production of electronics. The market for rare earth elements is worth around $24.3 billion annually and Australia can increase its share in that. And amid Australia-China in the recent months since the outbreak of Covid, Canberra is eying India as a key market for rare earths.

India – Australia Virtual Leaders’ Summit is scheduled to be held on June 4. This will be the first time that Prime Minister of India would be holding a “bilateral” Virtual Summit with a foreign leader.

The Virtual Summit will be an opportunity for the two leaders to review the broad framework of the relationship in the context of their growing ties. It will also be an opportunity to discuss their respective responses to the COVID-19 pandemic. A number of MoUs and announcements are expected to be made. This includes Mutual Logistics Pact for the two navies.

Since the high-level visit of PM Scott Morrison to India was in the pipeline (13-16 January and later in May 2020), the two leaders decided to continue the engagement even though it was in the form of a Virtual Meeting. This is the first time that India is holding a Virtual Summit. Australia has already done one such bilateral virtual summit with Singapore in March 2020.

The focus would be on the positive trajectory in bilateral relations during discussions between the two Prime Ministers, who have already met on four occasions on the sidelines of multilateral meetings. [PM Modi and PM Morrison have met four times during the last one and a half years – on the sidelines of EAS in Singapore (14 November 2018), on the sidelines of G20 in Osaka (29 June 2019), on the margins of G7 Summit in Biarritz (25 August 2019) and on the margins of EAS in Bangkok (04 November 2019).]

The two nations have much in common, underpinned by shared values of pluralistic, Westminster-style democracies, Commonwealth traditions, the long-standing people-to-people ties, and sporting links, sources pointed out as they recalled that relationship between the two nations was upgraded to a ‘Strategic Partnership’ in 2009.

“As two democratic nations, India and Australia have developed an understanding of each other’s perspectives on regional and global issues. We have a shared approach to a free open, inclusive, and prosperous Indo-Pacific. This has led to convergence of mutual interest in many areas. The relations are strong not only at the bilateral level, but also at the plurilateral level,” a senior source noted.

Australia has supported India’s global initiatives such as ISA, CDRI and Indo-Pacific Oceans Initiative. Australia supports India’s membership of an expanded UNSC. In the recent past, Australia supported our membership for Australia Group, and Wassenaar Arrangement and favours India’s membership of NSG.

Australia has been supportive of India’s position on cross-border terrorism and on asking Pakistan to take meaningful action against terrorist groups operating from its soil. Australia also co-sponsored UNSC resolution to declare Azhar Masood a global terrorist. Australia values India’s diversity and inclusiveness and has holds the view that recent developments with regard to J&K are India’s internal matters, sources pointed out.

The two-way Prime Ministerial visits in 2014 added momentum to the strategic partnership (Tony Abbott’s visit in September 2014 followed by PM visit in November 2014). This was followed by the visits of then Prime Minister Malcolm Turnbull in April 2017 and the Governor General of Australia in March 2018 to attend the founding Summit of the International Solar Alliance. President Ram Na made an historic visit to Australia in November 2018 – the first ever visit by the President of India to Australia.

Australia, in its White Paper on Foreign Policy -2017, recognised India as the “pre-eminent maritime power among Indian Ocean countries” and a “front-rank partner of Australia”.

During the last five years, bilateral relations between both countries have strengthened and expanded, sources pointed out.

Framework for Security Cooperation between Australia and India signed in November 2014 during the visit of Modi to Australia laid an action plan on Foreign, Defence and Security Policy Exchanges & Coordination. Several new initiatives and bilateral/trilateral mechanisms such as Foreign Secretaries and Defence Secretaries 2+ 2 Dialogue, India-Australia-Indonesia Trilateral Dialogue, India-Australia-Japan Trilateral Dialogue have been established since then. These new platforms have provided greater momentum to strengthen strategic cooperation and added momentum to the partnership in Indo-Pacific region.

India and Australia commenced their first bilateral naval exercise ‘AUSINDEX’ in 2015 focussed at deepening defence and maritime cooperation especially in the Indian Ocean. The third iteration of AUSINDEX – 2019 was held in the Bay of Bengal in April 2019. AUSTRAHIND, bilateral Army exercises conducted between two countries, also started in 2016. The fourth iteration of AUSTRAHIND was held in September 2019 in Australia. There is regular staff to staff talks between the three wings of the Armed Forces.

Bilateral economic engagement has been growing. The current trade levels are $ 20.92 (2018-19). India exported goods and services worth $ 5.17 billion and imported goods and services worth $ 15.75 in 2018-19. Australia’s cumulative investment in India is about $ 10.74 billion whereas India’s total investment in Australia is $ 10.45 billion. Australian Pension Fund has invested $ 1 billion in India’s National Investment and Infrastructure Fund. The two countries are looking at stepping up investments and trade with each other.

There is a 700,000 strong Indian diaspora in Australia. There are about 1,06,000 students studying in Australia. Under the Mission Vande Bharat, 1560 Indian nationals and five OCI card holders were evacuated from Australia in seven flights in the second phase of the exercise last month. Total Australians evacuated from India by these flights: were 1096. (03 flights from Sydney to Delhi, Amritsar and Ahmedabad; 04 flights from Melbourne to Amritsar, Bengaluru, Kochi and Hyderabad).

Tamil Nadu inks deals for over Rs 15,100 crore investment, to create 47,000 plus jobs

Source: The Economic Times, May 28, 2020

CHENNAI: The Tamil Nadu government on Wednesday said it has inked pacts with 17 companies for bringing in fresh investments of over Rs 15,100 crore that will create job opportunities for about 47,150 people in the State.

The investments, to the tune of Rs 15,128 crore will be in diverse sectors including manufacturing of commercial vehicles and energy, the government said adding nine pacts were signed at the Secretariat in the presence of Chief Minister K Palaniswami and eight other companies firmed up the deals via a virtual link.

Finland-based Salcomp will invest Rs 1,300 crore for an expansion project that is set to provide jobs for 10,000 people, the government said in an official release.

Salcomp, which had last year entered into a Memorandum of Understanding with the government at the Global Investors Meet for Rs 500 crore investment, has gone in for an expansion within a year in view of the conducive environment for industrial growth, it added.

The Finnish firm, a leading manufacturer of components like chargers had acquired Nokia’s mobile manufacturing facility at Sriperumbudur near here that was closed down.

Chennai Power Generation Limited, a Indo-UK joint initiative will invest Rs 3,000 crore for a 750 MW natural gas based power plant at Tiruvallur district’s Ponneri near here opening up job opportunities to 3,000 people.
Japanese firm Polymatech Electronics shall infuse Rs 900 crore for a semiconductor chip manufacturing project in the SIPCOT (State Industries Promotion Corporation of Tamil Nadu) Industrial Park at Oragadam near here and the move would create 600 jobs, the government said.

Daimler India Commercial Vehicles will embark on a Rs 2,277 crore expansion project in the SIPCOT Park and it will provide jobs for 400 people.

A Chung Jye Company Limited and Aston Shoes Private Limited joint venture initiative to manufacture shoe/sandals at Rs 350 crore investment is set to see 25,000 people get jobs, the government said.

Australia seeks to strengthen ties with India in strategic sectors

Source: Business Standard, May 21, 2020

Australian Prime Minister Scott Morrison and his Indian counterpart, Narendra Modi, are looking forward to deepening the countries’ strategic relationship, with both sides expected to sign a range of pacts from defence to trade in strategic sectors amid heightened tensions with China over Beijing’s response to coronavirus pandemic.

During a virtual summit, scheduled to take place on June 4, both leaders are expected to ramp up efforts to diversify Australia’s export markets and find trusted suppliers of vital products and components, a local newspaper, The Australian reported on Tuesday.

The new agreements will focus on reliable supply chains in key strategic sectors, including medical goods, technology and critical minerals, amid heightened tensions with China over Beijing’s response to coronavirus pandemic.

The leaders will seal a new defence agreement allowing reciprocal access to bases and co-operation on military technology projects, while a new education partnership will be on the table to help overcome Australian university reliance on Chinese students.

The talks in terms of strategic convergence, now have greater significance as Covid-19 exacerbates the strategic contest between the US and China, and forces like-minded countries to seek out reliable partners.

Australian farmers could also benefit, with talks underway on expanding agricultural exports to India, including barley, as China throws up new trade barriers, media reports stated.

The virtual summit follows the cancellation of Morrison’s planned state visit to India in January due to the bushfires.

Morrison said last year, ahead of his planned visit, that India was “a natural partner for Australia”, referring to the countries’ “shared values” — a point of differentiation with China.

Former Department of Foreign Affairs and Trade secretary Peter Varghese, who wrote a landmark report on the bilateral relationship in 2018, was quoted by the newspaper as saying that India would be even more important to Australia in the post-Covid world. “If one of the lessons from Covid is that countries need to spread their risk, then finding new markets or building up existing markets is a crucial part of that,” he added.

Varghese noted that India, a member of the Quadrilateral Security Dialogue along with Australia, Japan and the US, was a vital strategic partner to Australia in helping “constrain China’s ambitions to be the predominant power”.

“That shared objective between Australia and India of not wanting to see the region dominated by China is a key component of building up our geopolitical relationship,” he told The Australian.

The summit also follows recent talks between Australian Foreign Minister Marise Payne and Indian counterpart Subrahmanyam Jaishankar on the pandemic response and Australia’s call for an independent inquiry, which was overwhelmingly backed at the World Health Assembly on Tuesday.

Australia wants to support India to develop a domestic critical minerals processing industry, which would provide Western nations with an alternative to sourcing the materials from China. Meanwhile, India has strong expertise as a manufacturer of drugs and medical equipment, while Australia is a centre of biomedical research, opening the possibility for closer co-operation in the key sector, the media reported further.

India, Bangladesh open new chapter in regional connectivity mechanism

Source: The Economic Times, May 20, 2020

New Delhi: India and Bangladesh have opened a new chapter in regional connectivity by expanding scope of inland water transport mechanism that would enable to boost trade in region.

High Commissioner of India to Bangladesh Riva Ganguly Das and Secretary, Ministry of Shipping government of Bangladesh Mohammad Mezbah Uddin Chowdhury signed the addendum to the Protocol on Inland Water Transit and Trade in Dhaka on Wednesday.

According to a press release issued by the High Commission of India in Bangladesh on Wednesday, the number of Indo-Bangladesh Protocol (IBP) routes are being increased from eight to ten. This includes the Sonamura- Daudkhandi stretch of Gumti river and the operationalisation of the Rajshahi-Dhulian-Rajshahi routes with the extension up to Aricha.

The Sonamura-Daudkhandi route will improve the connectivity of Tripura and adjoining states.

The Rajshahi-Dhulian route will augment infrastructure in Bangladesh and reduce transportation cost of stone chips to Bangladesh.

The agreement also operationalises five new ports of call between Indian and Bangladesh.

Among the newly added ports of call, Dhulian, Maia, Kolaghat, Sonamura and Jogigopha are on the Indian side while Rajshahi, Sultanganj, Chilmari, Daudkandi and Bahadurabad are on Bangladesh side.

Further, two more extended Ports of Call – Tribeli (Bandel) and Badarpur on Indian side and Ghorasal and Muktarpur on Bangladesh side – have been included through this addendum.

With this the total number of ports of call is now eleven and two extended Ports of Call in both the countries.

Inclusion of Jogigopha in India and Bahadurabad in Bangladesh as new Port of Call will provide connectivity to Meghalaya, Assam and Bhutan.

Currently there are six ports of call each in Bangladesh and India.

The two countries have also agreed to introduce trade between Chilmari in Bangladesh and Dhubri in India through the use of shallow draft mechanized vessels.

This initiative will allow export of stone chips and other Bhutanese and North East cargo to Bangladesh and easy access for the traders to the hinterland of Bangladesh.

The agreement will allow Inland vessels of both the countries to ply on the designated protocol route and dock at Ports of Call in each country, notified for loading and unloading of cargo. It will help boost bilateral trade and connectivity between the two countries.

The decision to add new protocol routes and inclusion of new routes and addition of new ports of call to facilitate trade between the two countries was taken in October 2018 which has now been operationalised.

CBDT amends rule for speedy resolution of tax disputes under treaties

Source: Business Standard, May 08, 2020

New Delhi: The Central Board of Direct Taxes (CBDT) has amended a rule to settle disputes expeditiously under the mutual agreement procedure (MAP), which is a dispute resolution process under tax treaties. It has also revised form 34F, which is used to make an application to invoke the MAP.

The direct tax board has amended rule 44G of MAP in this regard. The amended rule states that the competent authority in India will endeavour to arrive at a mutually agreeable resolution of tax disputes, in accordance with the agreement between the country and others, within an average of 24 months.

The amended rule further states that once a resolution is arrived at, the assessee concerned should communicate his acceptance or non-acceptance within 30 days of receiving the communication.

Upon acceptance, the assessee will withdraw any appeal filed in this regard and pay the tax determined by the assessing officer.

The amended rule requires the competent authority in India to call for relevant records from the income tax authorities, assessee in the country, and also understand the action taken by authorities that are not in accordance with the terms of the agreements between New Delhi and that country.

The revised form 34F seeks details of remedy sought along with documentary evidence, in addition to assessee-specific information contained in the earlier form.

MAP is an alternative dispute resolution process under the tax treaties. Under it, competent authorities of respective countries enter into discussions to resolve the dispute, which has arisen due to any action of a tax authority not in accordance with the treaty.

Sudin Sabnis, director at Nangia Andersen, said: “The indicative timeframe of an average 24 months to resolve the dispute under MAP would encourage taxpayers to hope for a speedy dispute resolution mechanism.”

Amit Maheshwari, tax partner at AKM Global, said the MAP proceedings are increasingly becoming popular with MNCs, even as the time taken to complete them is an issue.

“Post this amendment, MAP will increasingly be used by MNCs to resolve contentious issues.”