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India, Tanzania to cooperate in counter terrorism and gas exploration

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image courtesy- www.aninews.in
image courtesy- www.aninews.in

New Delhi: India and Tanzania on Friday agreed to set up a joint working group on counter-terrorism and increase gas exploration cooperation in the east African nation, as Prime Minister Narendra Modi held talks with visiting Tanzanian President Jakaya Mrisho Kikwete.

The two sides also inked eight agreements, including for cooperation in the field of agricultural science, statistics, hydrography and tourism.

Modi, addressing the media after delegation level talks with Kikwete, also thanked Tanzania for its support to India’s candidature for a permanent seat in an expanded UN Security Council.

Modi said India is holding the 3rd India-Africa Forum Summit in October in New Delhi and has for the first time invited all the 54 African countries.

“Tanzania is an important part of India-Africa partnership. President Kikwete co-chaired the First India-Africa Forum Summit in 2008. We look forward to his participation too,” he said.

Modi said that India and Tanzania, which border the Indian Ocean, have a common interest in maritime security in the Indian Ocean and a peaceful and prosperous Africa.

“Terrorism in our respective regions is a concern for both countries. We have agreed to establish a Joint Working Group to strengthen our cooperation in counter-terrorism,” he said.

On the $4 billion bilateral trade, which is heavily skewed in India’s favour, the Prime Minister said that he has urged President Kikwete to open up more sectors for investments and exports.

He said Indian investors are ready to invest more in Tanzania that will support Tanzania’s development and trade.

Modi said he has assured Kikwete that the bilateral development partnership will continue, which is indicated in the bilateral agreements inked on Friday.

On Tanzanian nationals studying in India, the Prime Minister said there are nearly 2,000 Tanzanian students in India.

“I have informed President Kikwete that we will soon extend our e-tourist visa scheme to Tanzania,” he said.

Kikwete, who is on a five-day visit to India, said that on Thursday India and Tanzania launched the first India-Tanzania business forum.

“It was long overdue, but better late than never,” he said.

Kikwete said that he has assured Indian businesspersons that his government is working to improve the investment climate and “we will provide the necessary security”.

The Tanzanian President said he has assured Indians working in his country that the government has changed and there will not be nationalisation of assets.

“I have given the assurance that we have changed, reformed the economic system and are pursuing a market-based economy,” he said, adding that Indians can repatriate their dividends and profits.

He pushed for cooperation in the field of tourism, and in augmenting water supply in his country.

He said Tanzania reaffirms its support for India’s candidature in an expanded UN Security Council, adding “You deserve it”.

“Tanzania will continue to work with African friends for that support,” he said.

Earlier, Kikwete was accorded a ceremonial welcome at Rashtrapati Bhavan. Later, External Affairs Minister Sushma Swaraj called on him. (IANS)

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Fall Of The Currency And Increase In Oil Prices: India ‘s Turmoil

The falling rupee has given a boost to some of India’s most lucrative exports, such as software services and pharmaceuticals, which add up to billions of dollars.

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India
Rajesh Kumar, left, shares a ride to work with another employee, Dilip Swain, right, as higher petrol prices in India begin to be felt in people's pocketbooks.VOA

The fall of the currency of India to record lows and rising global oil prices have raised worries that the world’s fastest growing economy faces headwinds that could hurt the fortunes of Prime Minister Narendra Modi’s party in next year’s general elections.

From people filling fuel at gas stations to thousands of students heading out to study overseas, the impact of the slumping rupee is sparking discontent.

Having plunged by about 12 percent against the dollar this year, the rupee is one of Asia’s worst faring currencies, and as in other countries, the slide has accelerated since the crash of the Turkish lira.

“The reasons are global. We must bear in mind that in last few months, dollar has strengthened against almost every currency,” said Finance Minister Arun Jaitley recently as he tried to send out reassuring signals that India’s economy is on track.

India
The rupee has plunged by about 12 percent this year raising fears of spiraling inflation. VOA

The rupee’s sharp depreciation comes at a time when the economy had recovered from a slowdown and surged to a two-year high in the quarter that ended in June. Forecasts put growth for this year at 7.5 percent.

Economy will slow

But economists warn this momentum will be difficult to sustain as the tumbling rupee, along with rising crude oil prices, takes a toll on growth. India, the world’s third largest oil importer, gets almost 80 percent of its fuel needs overseas.

“The government needs to mellow down on growth aspirations,” said N.R. Bhanumurthy, economist with the National Institute of Public Finance and Policy. “The growth needs to come down to a little less than 7 percent.”

Even as the government faces the prospect of a slowing economy, it is under pressure to lower taxes on gas and diesel to bring down the sharp rise in prices. Fuel is one of the most heavily taxed items in India, with rates as high as nearly 50 percent. Prices vary from state to state, but they have gone up by about 14 percent this year.

Hoping to cash in on the growing disaffection over the surge in fuel prices and the sliding rupee, opposition parties led nationwide protests that shutdown offices and schools in several cities this week.

India
Discontent with spiraling fuel prices poses a challenge to Prime Minister Modi’s Bharatiya Janata Party ahead of general elections next year. VOA

The government dismissed the protests, saying that although people faced momentary difficulties, they understood they were because of factors beyond its control.

Political analysts are not so sure, pointing out that fuel prices are a politically sensitive issue in India and usually result in a spike in inflation.

“Anger is rising, there is resentment,” said Satish Misra at the Observer Research Foundation, warning the ruling party will face a backlash “Obviously that is going to have a negative impact on the electoral fortunes of the Bharatiya Janata Party, there is no doubt about that.”

Warnings from economists

Among those who are upset with the high fuel prices is Rajesh Kumar, who commutes 30 kilometers to the advertising agency where he works. Hit by the higher prices that eat into his income, he has started sharing the ride with another employee.

India
Narendra Modi. Wikimedia Commons

“I have given up the idea of buying another car,” he said despondently. “I will not be able to afford the cost of running it.”

Economists however have warned the government against giving in to populist pressures ahead of a series of state polls later this year and general elections around April next year. They say lowering taxes on fuel or taking measures to prop up the currency will strain the country’s finances and hurt the economy in the long run.

Also Read: Diverse Gathering To Be Addressed This World BioFuel Day: PM Narendra Modi

“One needs to be more careful and vigilant,” Bhanumurthy said. “It is easy for India to stay with low growth than experiencing the high deficit.”

But there is also some good news for the Indian economy. The falling rupee has given a boost to some of India’s most lucrative exports, such as software services and pharmaceuticals, which add up to billions of dollars. (VOA)