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India inflation soars to 14-month high of 7.5 pct

India’s worrisome inflation rose to 7.52 percent in November, driven by soaring food and fuel prices, data showed Monday. The highest level in more than a year increases pressure on the central bank to raise interest rates this week. The wholesale price index was up from 7 percent in October. The sharp increase was the highest since September 2012 and was led by food prices jumping by 19.9 percent over the previous November, dashing hopes that favorable monsoon rains would slow the runaway food inflation. Prices for fuel were also up 11.1 percent. Higher prices for food and fuel hit the hundreds of millions of poor Indians living on $2 per day particularly hard because they spend roughly half of their income on the staple items. The grim inflation numbers increase the likelihood that the Reserve Bank of India will raise interest rates when it […]

Posted On : Published By : Tom Whipple
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Pakistan stands by Iranian gas pipeline

A Pakistani government minister said sanctions on Iran’s energy are curbing progress on a bilateral gas pipeline but Islamabad was committed nonetheless. Pakistani Minister for Petroleum and Natural Resources Minister Shahid Khaqan Abbasi said Iran pulled out of a $500 million finance commitment because of the sanctions constraints, the Pakistani newspaper the Express Tribune reported Friday. "The compressor equipment required [for the pipeline] would not be available due to sanctions against Iran," he was quoted as saying. "However, we are committed and will make the Iran-Pakistan gas pipeline." The Pakistani government said the aging infrastructure in the country means it needs outside help to keep up with energy demand. Iran said construction on its end of the pipeline is making progress and had offered financial support to Pakistan to help build it on its side of the border. The U.S. government supports a rival […]

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Sanctions cloud Iran, Pakistan pipeline prospects

The Pakistani government said Wednesday it was ready to move ahead with a gas pipeline from Iran but needed assurances regarding the impact of U.S. sanctions. Pakistani Minister of Petroleum and Natural Resources Shahid Khaqan Abbasi met Monday in Tehran with Iranian Oil Minister Bijan Zangeneh to discuss moving forward on a long-planned natural gas pipeline from Iran. A Pakistani government official told the Express Tribune on condition of anonymity there were concerns in Islamabad about U.S. sanctions on Iran. “We cannot move ahead with the project unless the issue of possible U.S. sanctions is resolved,” the official said. Iran got relief from Western economic sanctions in exchange for nuclear concessions after reaching an interim deal with multilateral negotiators last month. Iran’s trade in the energy sector, however, is still limited by sanctions. The Pakistani government said it needs more sources of natural gas […]

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India Considers Importing More Iranian Crude

India is exploring the possibility of increasing crude-oil imports from Iran, following a recent deal between Tehran and world powers that is expected to ease sanctions on Iranian crude, an Indian official said. While sanctions on Iran’s sales of crude oil are yet to be eased, observers say the deal is likely to lead to a gradual loosening of existing restrictions on dollar-based payments that would enable importers such as India to buy more crude from Iran. India and Iran presently have a barter trade system in place to bypass payment problems caused by the Western sanctions. Under an agreement last year, India pays for about half its crude-oil imports from Iran in Indian rupees instead of U.S. dollars. Indian and Iranian officials had detailed discussions on the possibility of increasing crude-oil imports from Iran, India’s Economic Affairs Secretary Arvind Mayaram told reporters after a meeting with an […]

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Pakistan to push forward on gas project with Iran

Pakistan will push forward with a controversial pipeline to import natural gas from neighboring Iran, Pakistan said Tuesday, a project opposed by the United States. The pipeline will link Iran’s gas fields with energy-starved Pakistan, but by going ahead with the project, Pakistan may incur U.S. and international sanctions imposed on Iran – or anyone doing business with Iran – over that country’s nuclear program. The U.S. has opposed the project and instead supported an alternative proposal to build a pipeline from the gas fields of Turkmenistan to Afghanistan, Pakistan and India. Pakistan’s Ministry of Foreign Affairs said in a statement Tuesday that petroleum ministers of the two countries met in Tehran on Monday to discuss the project, which has been beset by repeated delays. The two countries decided to fast track the pipeline and formulate a road map to work out challenges, the ministry said. […]

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Why Nuclear Rules Scare Foreign Companies

India wants to boost its nuclear power-generation by more than ten times over the next two decades to cut dependence on imported fossil fuels, but there’s one problem: global companies don’t want to sell India the equipment it needs to run nuclear power-plants under existing rules. Foreign equipment-makers are worried about an Indian law, passed in 2010, which would make them liable to pay compensation in the event of an accident, says Dipankar Bandyopadhyay, a Mumbai-based partner at Indian law firm Verus, and one of the few lawyers in the country who specialize in India’s nuclear liability law. Mr. Bandyopadhyay says that in most other countries, if there is a nuclear accident, the damages are borne only by the company which runs the nuclear plant, not companies which supplied equipment to the plant. Still, given the large size of India’s market for nuclear power, some equipment-makers are negotiating with […]

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Cairn Seeks Oil Swaps to Circumvent Export Ban: Corporate India

Cairn India Ltd., the nation’s biggest onshore crude oil producer, is proposing swap deals in the commodity to help skirt the government’s ban on exports that yield higher margins. Some Japanese utilities and Singapore-based refiners are interested in the high-wax crude extracted from Cairn’s fields in the northwestern state of Rajasthan, Chief Executive Officer P. Elango said in an interview. The company has sought India ’s approval for a tripartite agreement that would replenish the exported volume with no loss to any of the parties including the government, he said. Billionaire Anil Agarwal , who controls Cairn India, is seeking to increase the best profit margin among the biggest Asian oil companies as his metals and mining businesses founder in the South Asian country. Shipping to customers who are best equipped to process the low-sulfur crude may help the company command a premium versus a 15 percent discount on […]

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India needs $2.1 trillion investment for energy: IEA

India’s energy demand will double by 2035 on back of economic growth and increased population, the head of the International Energy Agency predicted. “When we look at India, we see that in 2035, India will be the largest importer of coal, will be the second [largest] importer of oil after China and will be No. 4 in importing gas after [the] European Union, China and Japan,” IEA Executive Director Maria van der Hoeven told reporters Wednesday on the sidelines of the Eighth Asia Gas Partnership Summit in New Delhi Wednesday, Press Trust of India reported. Although India’s energy demand will double, its per capita consumption will still be a fourth of the OECD average, she said. Van der Hoeven said India would need $2.1 trillion investment in its energy sector by 2035. Speaking Tuesday at the opening of the summit, Indian Prime Minister […]

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Power Outages Hobble Pakistan's Biggest Exporters

Muhammad Latif stays in his neat office these days, upstairs from the vast textile factory he founded in 1975. Until a few years ago, he says, his business, Chenab Ltd., made high-end sportswear and bed linen for some of America’s best-known retailers, from Macy’s to Tommy Hilfiger to Victoria’s Secret, in this industrial city in central Pakistan. A workforce that peaked at 14,000 fed rolls of cloth into state-of-the art Italian and German machines or sewed garments on sprawling automated production lines. Today, crippled by the shortages of electricity that have paralyzed this country in the past five years, most of the machinery stands idle, and the staff has shrunk to 4,500. Sales for the year ended in June are down nearly 75% to 2.17 billion Pakistani rupees, or about $20 million, from 2008, according to the company. “I don’t go downstairs. I get depressed there,” Mr. […]

Posted On : Published By : Tom Whipple
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Power Outages Hobble Pakistan’s Biggest Exporters

Muhammad Latif stays in his neat office these days, upstairs from the vast textile factory he founded in 1975. Until a few years ago, he says, his business, Chenab Ltd., made high-end sportswear and bed linen for some of America’s best-known retailers, from Macy’s to Tommy Hilfiger to Victoria’s Secret, in this industrial city in central Pakistan. A workforce that peaked at 14,000 fed rolls of cloth into state-of-the art Italian and German machines or sewed garments on sprawling automated production lines. Today, crippled by the shortages of electricity that have paralyzed this country in the past five years, most of the machinery stands idle, and the staff has shrunk to 4,500. Sales for the year ended in June are down nearly 75% to 2.17 billion Pakistani rupees, or about $20 million, from 2008, according to the company. “I don’t go downstairs. I get depressed there,” Mr. […]

Posted On : Published By : Tom Whipple