WEEKLY NEWS

5 Sept – 12 sept

B R I T I S H A I R W A Y S K E E N T O C O M E O N B O A R D I N I N D I A

 British airways, world’s third largest carrier, is keen to be a strategic

investor in an indian aviation company when foreign carriers are allowed to

invest in the sector.

Airline may pick up stake in domestic firm when foreign carriers are

allowed to invest in the country.

British airways ceo willie walsh announced a code-share agreement with

kingfisher airlines and introduced the latest plane from the boeing stable —

boeing 777-300er — in some select indian routes.

VEDANTA MAY BE TOLD T O R E V E A L M O R E F O R C A I R N

Sebi, will direct Vedanta Resources to inform the shareholders of oil explorer Cairn

India about the claims of state-owned ONGC on it as well as details of the recent

denial of a mining licence to its affiliated company.

Vedanta Resources, controlled by London-based billionaire Anil Agarwal, had

agreed to buy up to 60% of Scottish firm Cairn Energy Plc’s Indian unit for $9.6

billion.

The London-listed company has filed a draft letter of offer with securities

market regulator Sebi for approval to buy an additional 20% of Cairn India from

its shareholders in keeping with regulatory requirements.

Vedanta’s open offer letter to Cairn India’s shareholder for acquisition of

a further 20% shares had indicated September 7 as the cut-off date.

F I I S P R O P E L S E N S E X T O 3 1 - M T H H I G H

Indian shares rose to a

31-month high as global investors poured in their cheap funds seeking higher returns,

sparking fears that it may be causing the next asset price bubble here, reports Our

Bureau in Mumbai. The Sensex rose 1.9%, or 339 points, to 18,560, and the broader

50-share Nifty gained 1.8%, or 98 points, to 5576.9.

O hi o bans o f f shor i ng o f IT pro j ec t s by gov t .de pt s .

THE US state of Ohio has banned outsourcing of government IT and

backoffice projects to offshore locations such as India

There are pervasive service delivery problems with offshore providers,

including dissatisfaction with the quality of their services and with the fact

that services are being provided offshore.

Offshoring work to India is a $50-billion industry, and the Indian tech

industry has benefitted immensely from American firms wanting to take

advantage of its low wages and top-quality skills.

H C s a y s v o d a f o n e m u s t p a y t a x o n h u t c h b u y

 A decision by the Bombay High Court in the landmark Vodafone tax case

has tipped the equation in favour of the Indian taxman, as the court has

accepted its jurisdiction over Vodafone’s India acquisition.

The high court ruled that Vodafone must pay capital gains tax on its $11-

billion acquisition of a controlling stake in mobile phone operator

Hutchison Essar that was completed in 2007.

Estimates published prior to the judgement assign a $2-billion tax liability

on Vodafone.

 Vodafone will appeal to the Supreme Court in the next two-to-four

weeks.

 The court has given the company eight weeks.

 The final outcome of the case may influence valuations and structuring

of M&A transactions between offshore entities with underlying assets in

India.

O b a m a r a i s e s p i t c h a g a i n s t o u t s o u r c i n g

US PRESIDENT Barack Obama once again targeted the outsourcing of

jobs overseas by American companies, increasing the pressure on local

firms in an attempt to secure some benefit in the polls ahead of the crucial

November elections in his country.

Obama said he remained firm on ending tax breaks for American firms

that send jobs abroad.

One of the keys to job creation is to encourage companies to invest more

in the United States

I n d u s t r y g r o w s 1 3 . 8 % i n j u l y , r a t e h i k e l o o m s

INDIA’S industrial output beat analysts’ expectations by a huge margin in

July, strengthening the case for further monetary tightening ahead of next

week’s crucial monetary policy review.

Industrial production expanded 13.8% during the month, compared with

5.8% growth in June.

Most polls had predicted a 7-8% growth in the index of industrial

production in July.

Inflation based on the wholesale price index stood at 9.97% in July.

Manufacturing, which generates employment, is doing well,” the minister

said. Manufacturing, which has an 80% weight in IIP, grew 15%, powered

by a 63% increase in capital goods output.

The central bank has the difficult task of tackling high inflation without

upsetting the growth momentum in the economy amid doubts about the

global recovery