Indian Minister Rejects Charges Connected With Sub Deal

Jun. 19, 2012 - 11:11AM   |   By VIVEK RAGHUVANSHI

http://www.defensenews.com/article/20120619/DEFREG03/306190001/Indian-Minister-Rejects-Charges-Connected-Sub-Deal?odyssey=tab|topnews|text|FRONTPAGE

NEW DELHI — Finance Minister Pranab Mukherjee, the ruling United Progressive Alliance Party’s presidential nominee, has denied accusations from a prominent social activist who said Mukherjee has been slow to look into charges of corruption involving India’s purchase of Scorpene submarines.

Arvind Kejriwal, an associate of Anna Hazare, who has been spearheading a movement against corruption in public life here, has demanded an inquiry into the charges against Mukherjee ahead of the July 19 presidential election.

In a June 17 news conference, Kejriwal noted the Scorpene deal was contracted with France in 2005, when Mukherjee was defense minister, but Mukherjee has failed to investigate allegations of kickbacks paid to Indian officials in connection with the deal.

“The president’s post is the highest constitutional office of the country, and the person donning it must be aboveboard and free from any allegation,” Kejriwal said.

Denying the charges, Mukherjee said June 18 that the allegations were “false, self-seeking, mala-fide and made with ulterior motive and lacking any form of responsibility.”

State-owned Mazagon Docks Ltd. is building the six Scorpenes at its Mumbai shipyard under license from France’s DCNS.

The submarines were due for delivery beginning this year under a $3.9 billion agreement between India and France. However, the delivery has been delayed to 2015, and the cost of the project has gone up by nearly $1 billion.

U.S., New Zealand Sign Defense Cooperation Accord

Jun. 19, 2012 - 08:53PM   |   By AGENCE FRANCE-PRESSE   

http://www.defensenews.com/article/20120619/DEFREG02/306190010/U-S-New-Zealand-Sign-Defense-Cooperation-Accord?odyssey=tab|topnews|text|FRONTPAGE

WASHINGTON — The United States and New Zealand signed an agreement to expand defense cooperation on June 19 but the deal does not alter Auckland’s longstanding ban on port visits by nuclear-armed American warships, officials said.

The accord was the latest in a series marking U.S. attempts to shift its strategic focus to the Asia-Pacific, as Washington keeps a wary eye on China’s rising power.

New Zealand’s Defense Minister Jonathan Coleman said the accord called for a security dialogue as well as joint exercises and other collaborative efforts between the two countries’ armed forces.

“This high-level arrangement recognizes the significant security cooperation that exists between New Zealand and the U.S. within the context of our independent foreign policy, and seeks to build upon that cooperation in the years ahead,” Coleman said in a statement.

The Pentagon said the partnership “will include security cooperation in areas such as maritime security cooperation, humanitarian assistance and disaster relief, and peacekeeping support operations.”

The agreement calls for bolstering “maritime domain awareness,” a phrase that usually refers to the sharing of intelligence in monitoring naval traffic.

Senior U.S. officials have forged similar agreements with other countries in the region, including Australia, in a bid to counter China’s growing military and economic might.

The June 19 deal illustrated a thawing of once chilly military relations between the two countries.

Since 1985, New Zealand has refused to allow American nuclear-armed and nuclear-powered ships to dock at its ports.

As Washington declines to reveal whether its ships are nuclear-powered or not, New Zealand has banned entry to all American naval vessels.

A Pentagon spokeswoman said the agreement had not altered the disagreement that dates back to the Cold War era.

“As for the port visits, while we value our strong partnership, our policies regarding nuclear ships do not fall in line and remain unchanged as a result of this declaration,” Maj. Catherine Wilkinson told AFP.

“U.S. Navy and Coast Guard ships will not port into New Zealand, but we look forward to other opportunities to engage with New Zealand Defence Forces,” she said.

Fitch lowers outlook on SBI, ICICI Bank, 9 other financial institutions

NDTV Correspondent, 20 Jun 2012 | 12:08 PM

http://profit.ndtv.com/News/Article/fitch-lowers-outlook-on-sbi-icici-bank-9-other-financial-institutions-306559?pfrom=home-otherstories

Ratings agency Fitch has revised the outlook on India's financial institutions to negative from stable, while affirming the rating. The outlook of six government banks, two private banks, two wholly owned government institutions and one infrastructure finance company has been lowered.

State Bank of India, Punjab National Bank, Bank of Baroda, Bank of Baroda (New Zealand) Limited, Canara Bank, IDBI Bank, ICICI Bank, Axis Bank, Export-Import Bank of India, Housing and Urban Development Corporation, Infrastructure Development Finance Company are the affected entities.

The rating action follows Fitch's revision of India's credit outlook to negative from stable earlier this week.

"The outlook revision of the financial institutions reflects their close linkages with the sovereign by virtue of their high exposure to domestic counterparties and holdings of domestic sovereign debt," Fitch said in its note.

The ratings agency said weakening economic and fiscal outlook, slowing business reforms and inflationary pressures could put further pressure on the future asset quality of these entities.

"Viability ratings of banks with concentrated exposures to problematic sectors could be impacted more," Fitch said in a note.

It listed high customer deposit base, established domestic franchises and adequate capitalisation as the strengths of banks, but said non-banking institutions are at greater risk because they lack the funding advantage.

S&P India view: 21 companies outlook downgraded to negative

Press Trust of India, 26 Apr 2012 | 11:34 AM

http://profit.ndtv.com/News/Article/s-p-india-view-21-companies-outlook-downgraded-to-negative-302852

Standard & Poor's downgraded the rating outlook of as many as 21 entities spanning across top banks, software exporters and public sector undertakings following the agency's revision of country's sovereign outlook.

 State Bank of India, ICICI Bank, HDFC, NTPC, SAIL, TCS, Infosys, Wipro and IIFCL are among the companies whose rating outlook has been slashed to negative from stable by S&P.

The global rating agency's move reflects the "outlook on the sovereign credit rating on India", which too has been lowered to negative, citing slow fiscal progress and deteriorating economic indicators.

 S&P has also revised downwards the rating outlook of Export-Import Bank of India, Indian Railway Finance Corp, Power Finance Corp, NHPC, Axis Bank, Bank of India, IDBI Bank, Indian Overseas Bank, Indian Bank, Syndicate Bank, Union Bank of India and IDFC.

 "We have equalised the ratings and outlooks on India EXIM, IIFCL, and IRFC with the sovereign rating and outlook.

This reflects the entities' integral linkages with, and their critical roles to, the Government of India," S&P said. According to the agency, outlook rating of NTPC, NHPC and SAIL, are highly influenced by the sovereign rating given the entities' sensitivity to government intervention in the event of financial distress.

 S&P has also affirmed the 'BBB-' long- term issuer credit ratings of all the 21 entities. Regarding banks, the agency cautioned that their rating could also be lowered if similar steps are taken for sovereign
rating.

Experts also said that S&P's move would not significantly impact the cost of resource mobilisation of the Indian banks since they raise bulk of the money from the domestic sources.

 Lowering the rating outlook of the top three software exporters -- TCS, Infosys and Wipro -- the agency said it "reflect our 'BBB+' transfer and convertibility (T&C) assessment of India.

 "We could lower the ratings on these companies if we revise downward our T&C assessment. We could lower our T&C assessment if we downgrade sovereign credit rating".

 S&P has also warned of downgrading India's rating in two years if there is no improvement in the fiscal situation and the political climate continues to worsen.

"The rating outlook of the government-owned institutions cannot be higher than the sovereign rating. So accordingly, our rating outlook has been revised," IIFCL Chairman and Managing Director S K Goel said.
IIFCL get funding from multi-lateral institutions. So, rating revision has no impact on the company, he said.

Why India's $10 bn to Euro zone is big deal: Five facts

NDTV, 19 Jun 2012 | 11:24 AM

http://profit.ndtv.com/News/Article/why-10-bn-to-euro-zone-is-big-deal-five-facts-306482?pfrom=home-business

India has graciously committed $10 billion to the International Monetary Fund or IMF to stabilize Europe. China said it will contribute $43 billion. Russia and Brazil have also agreed to contribute $10 billion each. While there is no specific plan announced to disburse the amount, the contribution is significant when one looks at the overall government finances and the current market situation. Since the Euro zone is working on a bailout, it is possible that India may have to payout sooner than later. (Read: India to contribute $10bn to stabilise Euro zone, says Manmohan Singh)

Here is the context for the $10 billion or (Rs 55,000 crore) that India has committed:

• The Indian government spends more money than it generates. India’s fiscal deficit is expected to be at 5.1 per cent of gross domestic product or GDP, according to budget estimates for 2012-13. This is approximately $90 billion. Many pundits expect this to surge to 6 per cent or over $100 billion if the government does not cut expenditure.

• The Reserve Bank of India did not cut repo rates or benchmark interest rates that we pay for borrowing. This is because it wants the government to reduce subsidies and thereby focus on consolidating the fiscal deficit. While the growth slows, RBI needs maintain low interest rates to stimulate the economy and ease the burden on borrowing for businesses. However, due to the spiraling fiscal deficit, RBI is not able to do so.

• The quantum of total subsidies is expected to be $34.5 billion, according to budget estimates in 2012-13.

• The Indian rupee breached the Rs 56-mark today. Unlike China and Russia, India has a current account deficit. This means the country imports more goods and services than exports. India’s trade deficit in April 2012 came in at $13.48 billion on Friday, according to data from the Ministry of Trade and Commerce.  A falling currency makes thing even more difficult for importers.

• Oil imports, which account for the single largest chunk of India’s import bill, increased 7 per cent in April 2012 to $13.9 billion from the corresponding period last fiscal, while non-oil imports were $24.03 billion.

India may not inject $10 bn into IMF bailout fund immediately

Press Trust of India, 20 Jun 2012 | 09:47 AM

http://profit.ndtv.com/News/Article/india-may-not-inject-10-bn-into-imf-bailout-fund-immediately-306539?pfrom=home-otherstories

India may not be called upon to inject $10 billion (Rs 55,000 crore) it has committed to the IMF for bailing out debt-wrecked Eurozone if the global economic situation improves.

The amount we contribute is entirely liquid, in the sense that the International Monetary Fund (IMF) assures contributors that it will be available whenever needed. It will, therefore, continue to form part of our reserves," Prime Minister Manmohan Singh said in a statement.

The officials explained that the situation has not reached a point where the funds committed by Singh at the G-20 Summit yesterday would have to be transferred to the IMF.

According to R Gopalan, Secretary in the Department of Economic Affairs, "the country may not be called upon to give the money if the world situation gets better."

 India's contribution to the IMF bailout fund, Singh said, "reflects our recognition that as a responsible player in the global community, we must play our part."

 The G-20 countries, he added, have responded to the need to enhance the resources of the IMF to enable it to play its role in the current situation.

 "India has contributed $10 billion. BRICS and other countries have also contributed, taking the total commitments, including what was earlier agreed in April, to almost $460 billion," Singh added.

 According to Gopalan, "India's contribution of $10 billion as part of the $75 billion pledged by the five-nation BRICS bloc to the IMF's additional firewall is a message to the financial markets that a firepower is available to meet the contingencies and to give confidence and calm the markets."

Pointing out that the Summit has taken place at a time when the circumstances are very difficult, the Prime Minister said, "my overall assessment of the meeting is that there was general agreement that policy in all countries must shift to strengthening growth... there was also general agreement that the most urgent problem we must tackle is to reduce uncertainty about the Eurozone."

 The Summit, he further said, also reiterated the standstill on new protectionist measures and extended it beyond the earlier commitment upto 2013 to 2014. "This is an important statement of intent by the G-20 leaders to resist protectionist tendencies, which typically increase in periods of high unemployment and low growth," he added.

 The Los Cabos Declaration, Singh said, also reflected India's views that investment on infrastructure in developing countries could play a major role in strengthening development and in stimulating global recovery.

 "The Declaration indicates that Multilateral Development Banks should be strengthened for this purpose. We would work with G-20 countries to transform their commitment to specific action," Singh added.

 The Summit also discussed a number of other important issues including especially the progress in regulatory reform, issue of food security and agricultural productivity, anti-corruption measures and issues related to green growth, Singh said. 

Debt crisis: Spain and Italy to be bailed out in £600bn deal

By Robert Winnett, Political Editor in Los Cabos, Mexico

9:27PM BST 19 Jun 2012

http://www.telegraph.co.uk/finance/financialcrisis/9343049/Debt-crisis-Spain-and-Italy-to-be-bailed-out-in-600bn-deal.html

Two rescue funds are to be used to buy the debts of the troubled economies, the cost of which have reached record highs in recent weeks.

It is hoped that the move, which represents a substantial shift in policy for Germany’s chancellor, Angela Merkel, will send a strong signal to financial markets that Europe’s biggest economy is finally prepared to back its weaker neighbours.

Mrs Merkel and other European leaders have come under intense pressure at this week’s G20 summit to take radical action to stem the growing euro crisis which has pushed up the cost of Spanish bonds to unsustainable levels.

The communiqué issued at the end of the G20 summit, which finished in Mexico last night, said that European leaders had agreed to take action to bring down borrowing rates.

Under the proposed deal, two European rescue funds – the £400 billion (€500  billion) European Stability Mechanism (ESM) and the £200 billion (€250  billion) European Financial Stability Facility (EFSF) – will buy bonds issued by European countries.

Previously, money in these funds — which has been provided by members of the single currency — has been used to bail out smaller European countries such as Greece, Portugal and Ireland. Governments in these countries were offered money directly in return for agreeing to austerity programmes. Under the new plan, the money in these funds will not be given directly to governments but will instead be used to buy up debts on the financial markets.

The European Central Bank previously bought about £170 billion (€210 billion) of bonds in this way but stopped last year. It is hoped the new plan will drive down the cost of Spanish and Italian bonds by showing that the eurozone is prepared to stand behind the debts of its members.

President Barack Obama met David Cameron and other European leaders yesterday to discuss the proposed deal and an EU-American trade deal.

François Hollande, the French president, said that Italy had proposed using the eurozone's new permanent bailout fund to buy the debt of member states saddled with high borrowing costs and that this was an idea worth exploring.

"Italy has launched an idea which is worth looking at," he said. The proposale will be discussed at a meeting in Rome on Friday between him, Mrs Merkel, Spain's Mariano Rajoy and Italy's Mario Monti.

"We are looking for ways to use the ESM for this. At the moment it is just an idea, not a decision. It is part of the discussion," he said.

Mr Hollande said rates paid by Spain and Italy to borrow on debt markets were unacceptable. “We must show a much faster capacity for action,” he said.

Germany is reported to be willing to do more, but has not yet indicated its support for the proposal.

Experts said it was a step towards establishing shared eurobonds, where debt from across the single currency area is shared and effectively underwritten by Germany.

At a press conference to mark the end of the G20 summit, David Cameron welcomed the assurances given by eurozone leaders.

He said: "What I've sensed at this summit is that there is a fresh impetus - using all the mechanisms, institutions, firepower they have."

He added that European leaders would put the future of the euro "beyond doubt". White House sources indicated that a "new framework" to shore up the single currency would be unveiled at next week's summit in Brussels.

Timothy Geithner, the US Treasury Secretary, said the new deal would help Spain and Italy to borrow money at lower rates.

Last night, George Osborne, the Chancellor, indicated that he was optimistic a deal could be agreed. “We will see what the eurozone announce over the next couple of weeks, but there is no doubt that they realise that individual measures in individual countries – like recapitalising Spanish banks and getting a Greek government that is in favour of staying in the euro and doing what is necessary to stay in the euro — are not by themselves enough,” he said.

“These are systemic problems in the eurozone which require a systemic answer and we need to see measures from the eurozone that help bring borrowing costs down, that help ensure that there are common resources transferred from richer countries to poorer countries, that the whole eurozone stands behind the banks of the eurozone.”

He added: “The eurozone is inching towards solutions. Basically, we do need to see the richer countries, like Germany, like Holland, spend some of their resources in propping up the weaker countries of the eurozone.

“Obviously it is difficult for them to do that, it is not a popular thing to do but it is absolutely necessary.

“I think there are signs that the eurozone are moving towards richer countries standing behind their banks and standing behind the weaker countries.”

The emergence of an outline rescue deal for Spain and Italy comes after Spanish bond yields increased sharply to more than seven per cent after the re-run of the Greek election last weekend.

Talks continued yesterday between the main Greek political parties to form a new coalition government. The new administration, which is expected to be led by the New Democracy party, is likely to attempt to renegotiate the terms of the Greek bail-out. The new government is hoping to water down or delay the country’s austerity programme. However, this is likely to be blocked by the German government and it is feared that this may lead to renewed turmoil in Greece.

Alongside discussions of the eurozone deal at the G20 summit, world leaders agreed to increase resources to the International Monetary Fund (IMF). China offered another £27 billion, and countries including Brazil, Russia and India each pledged £6.3 billion, under a scheme to double the IMF’s fighting fund. The US refused to contribute further funds.

Christine Lagarde, the managing director of the IMF, said: “These resources are being made available for crisis prevention and resolution and to meet the potential financing needs of all IMF members.”

Leaders of major European countries meet in Rome on Friday ahead of a crucial EU-wide summit next week. Negotiations at the summit are expected to focus on plans for a European-wide banking union. However, this may prompt concerns in Britain over what safeguards will be offered to the City.

The Prime Minister will today travel to Mexico City for talks with the outgoing Mexican president. He may also meet Carlos Slim, the Mexican tycoon who is the world’s richest man.

US Navy warship captain fired after collision

Associated Press | Updated: June 20, 2012 09:53 IST

http://www.ndtv.com/article/world/us-navy-warship-captain-fired-after-collision-233710?pfrom=home-world

Washington: The Navy relieved the commanding officer of the USS Essex of his position, saying on Tuesday on that officials lost confidence in his abilities after his ship collided with a tanker at sea.

Captain Chuck Litchfield had only been the commanding officer of the amphibious assault ship for a few weeks when the crash occurred about 120 miles off the coast of Southern California on May 16. There were no injuries or fuel spills.

The Essex was approaching the oiler USNS Yukon to be refueled as part of a routine operation when they ran into each other. Both ships were damaged but were able to continue on their way to San Diego.

Navy spokeswoman, Commander Tamsen Reese, said the steering failed on the Essex, which caused the two ships to move closely together.

But the crew was able to regain control of the rudder before the collision.

The investigation determined that there were break downs in the command and control of the Essex, and in the communication between the two ships, Reese said.

Authorities also found there was a loss of situational awareness on the bridge.

All those factors, Reese said, led to the collision.

Essex was carrying 982 crew members on its way to San Diego for scheduled maintenance. It had spent the past 12 years based in Sasebo, Japan, as command ship for the Navy's Expeditionary Strike Group 7.

Litchfield was relieved on Monday of his position and has been administratively reassigned to the staff of Commander, Naval Air Force of the U.S. Pacific Fleet.

He could not be reached for comment.

Litchfield graduated with merit from the Naval Academy in 1988 and has been recognized for his achievements as a naval aviator. He was selected for major sea command in 2009.

Capt. Jonathan Harnden has temporarily assumed command of the Essex until a permanent replacement is assigned. Harnden previously commanded the USS Bonhomme Richard, which Litchfield had taken command of Feb. 3 before switching over to the Essex on April 23.

Officials said the Essex will depart on Wednesday as scheduled to participate in the Rim of the Pacific exercise this summer in Hawaii

Survey Finds Widespread Spying by Indian Companies

June 19, 2012, 7:10 am

By SRUTHI GOTTIPATI

http://india.blogs.nytimes.com/2012/06/19/survey-finds-widespread-spying-by-indian-companies/

The Associated Chambers of Commerce and Industry of India, known by the zingy acronym Assocham, usually releases statements on sober topics like RBI’s midterm credit policy review or industrial production figures. But last week it released a survey on corporate espionage.

“Over 35 percent of companies operating in various sectors across India are engaged in corporate espionage to gain advantage over their competitors and are even spying on their employees via social networking Web sites,” Assocham said in its report.

While checking out people’s activity on social media sites like LinkedIn or Twitter didn’t sound too alarming, Assocham made a stronger claim that about 900 respondents said that they plant a mole in other companies, usually as receptionists, photo-copiers and other low-end jobs.

“Assocham had learned about certain unconfirmed reports of prevalence of corporate espionage from many of its members which prompted us to carry out a survey to ascertain if it really was the case,” a spokesperson for the group told India Ink, asking not to be identified because of association policy.

Assocham said it conducted the “covert” survey by meeting about 1,500 corporate executives in five major cities and roughly 200 private eye agencies and trained sleuths.

Detectives said demand from companies in sectors such as information technology, infrastructure, insurance, banking and manufacturing, is overwhelming, according to D.S. Rawat, secretary general of Assocham.

“Almost all the company representatives in these domains acknowledged the prevalence of industrial espionage to gain access to information and steal trade secrets of their competitors through private deals with sleuths and spy agencies,” the survey notes, although it does not name any companies or cite specific examples.

That’s not all. About 1,200 respondents said they use detectives and surveillance agencies to constantly monitor their employees’ activities and whereabouts, using moles and social media, according to the survey.

Many detectives say that companies working with strong labor unions hire spy agencies and plant undercover agents to monitor union leaders to ensure they were not getting paid by competitors, politicians or others to create trouble, according to the report.

“About a quarter of respondents said they have hired computer experts for installing monitoring software to hack and crack the networks, track e-mails of their rivals and perform other covert activities,” Assocham notes.

Not surprisingly, the findings have been met with skepticism.

“It sounds far-fetched to me,” said Harminder Sahni, the founder and managing director of Wazir Advisors, a management consulting firm.

Mr. Sahni acknowledged, however, that companies carry out thorough background checks and also indulge in more nefarious “spying” activities when hiring senior executives. Some companies ask headhunters to interview specific people as a ruse to get them to reveal strategies of their existing employers. Or they may get “mystery vendors” to meet employees to gauge how workers behave toward outsiders– sort of like the “mystery shoppers” used by some retail businesses.

According to the survey, respondents also said they install “spying gadgets” like close-circuit television cameras, audio and video surveillance devices, voice-recorders, and global positioning systems, in their offices to keep track of employees.

Assocham says that these gadgets are a 45 billion rupee industry in India, or $807 million, and demand has been rising about 30 percent a year.

Why the ice didn’t melt

http://www.thenews.com.pk/Todays-News-9-115405-Why-the-ice-didnt-melt

Dr Maleeha Lodhi
Tuesday, June 19, 2012

The writer is special adviser to the Jang Group/Geo and a former envoy to the US and the UK.

The anodyne joint statement said it all. No progress was made on the Siachen dispute in last week’s talks between the defence officials of Pakistan and India. The only agreement indicated by the statement issued at the conclusion of the talks was for officials to meet again. The June 11-12 defence secretaries’ talks also failed to advance discussion of what should be a non-contentious aspect of Siachen – the environmental degradation being caused by military activity on the glacier.

The thirteenth round of talks on the 28-year old dispute turned out to be a virtual replay of the previous round of May 2011. Both sides restated their well-rehearsed positions. The main obstacle remained India’s insistence that before demilitarisation Pakistan should agree on authentication of present troop positions and demarcation of the Actual Ground Position Line (AGPL). The Indian delegation also dismissed Pakistan’s non-paper handed over last year as containing “nothing new”.

This unedifying outcome was foretold well before the talks by statements from top Indian leaders in the weeks and days leading up to the negotiations. Some of these were prompted by public remarks made by Pakistan’s army chief General Ashfaq Parvez Kayani in April when he visited Gayari sector after the avalanche tragedy that claimed the lives of 139 soldiers and civilians. He called for demilitarisation of the Siachen glacier and “peaceful resolution” of all disputes between Pakistan and India.

This evoked a lively media debate in both countries. But it drew a tepid response from Delhi. India’s junior Defence Minister Pallam Raju avoided comment on the need to resolve the dispute making only a perfunctory statement about the challenge of maintaining troops on the glacier.

More significantly Defence Minister AK Antony told the Rajya Sabha that authentication of present (Indian) troop positions was a pre-requisite for any progress in negotiations.

India’s chief of army staff, VK Singh went further. In an interview he cast General Kayani’s call for a peaceful resolution as “nothing new”, ruled out any pullback by the Indian army from Siachen, and gratuitously added “all of Jammu and Kashmir belongs to India”.

He also made light of the hope expressed by Prime Minister Manmohan Singh when he visited Siachen some years ago to make the glacier “a mountain of peace”. “We should not”, said General Singh, “succumb to these bouts of thinking about peace mountains”.

Meanwhile a flood of articles in the Indian press ahead of the Rawalpindi talks urged Delhi not ‘give away’ India’s hard won military gains on the negotiating table.

A common refrain of many in India’s strategic community was that if India did not retain the Saltoro ridge, a ‘Pakistan-China axis’ would bring the Karakorum Pass under its control and jeopardise the security of Ladakh.

Minister Antony declared on the eve of the talks not to “expect (any) dramatic announcement or decision on an issue which is very important for (our) national security.” A day before, a meeting of India’s cabinet committee on security apparently decided – and then leaked to the media – that Delhi would not give up its tactical and strategic advantage in the glacier area.

This was a repeat of what preceded last year’s talks. On the eve of the twelfth round India’s top national security official told Pakistan’s High Commissioner in Delhi not to “expect anything” from the parleys.

In this unpromising backdrop, two days of talks in Rawalpindi went according to the script. Pakistan’s effort to elicit an Indian response to the constructive ideas contained in its 2011 non-paper came to naught. The Indian delegation saw nothing in these proposals to provide a basis to move forward.

In the non-paper, Islamabad had reiterated the principles for a settlement agreed to by the two countries in 1989 – redeployment outside the zone of conflict, a monitoring and verification mechanism to be determined by military experts, and demarcation of the Line of Control beyond NJ 9842 thereafter. In an important demonstration of flexibility Pakistan also offered that when a schedule of withdrawal was drawn up it could consist of lists of both “present” and “future” positions. This would be subject to the stipulation that these would exclusively be for monitoring purposes and not to stake any moral or legal claim at the time of a final settlement of the dispute.

The Indian side rejected this, offered no new ideas, and reiterated its familiar position of authentication and demarcation of present positions on the ground and on the map, with demilitarisation and “future positions” to follow later.

To bridge differences on sequencing the steps needed for demilitarisation and address India’s how-can-we-trust-you argument, the Pakistani delegation suggested that agreed steps could be undertaken simultaneously. But the Indian side refused to budge from its position.

When Pakistani negotiators said a solution to Siachen was important for peace and security in South Asia, this was met by the familiar Indian argument that Delhi had larger concerns beyond South Asia -an obvious reference to China.

The Pakistani delegation’s effort to engage the Indian side in a discussion on environmental degradation due to human activity on the glacier elicited no response. The Indian side declined to accept that any degradation was in progress and instead referred to reports suggesting there had been no negative environmental impact. It was also unwilling to include any reference to this issue in the joint statement or to pursue further discussions on this.

Pakistan’s desire for a speedy solution was conveyed by the proposal to convene another round of talks quickly without waiting for another year to go by. This too got little traction. The Indian emphasis was on first creating an environment of trust and confidence before looking for solutions to disputes, an echo of its characteristic position in previous rounds. In this context the Indian delegation emphasised instituting new CBMs including visits between military institutions and exchange of military bands. The Pakistani side read this as sidestepping the real issue.

With no progress accomplished in the thirteenth round and little prospect of Delhi showing the flexibility needed to overcome the impasse, the dialogue on Siachen has increasingly become more about process than outcome.

Among the broader signals sent by the Indian stance three are noteworthy.

One, India wants normalisation of relations between the two countries to proceed only in areas on its priority list – trade, people-to-people contact, economic and cultural ties, and not resolution of long-standing disputes, which top Pakistan’s priorities.

Two, little or no progress can be expected in the dialogue on various disputes because – for now – Delhi perceives no need to make compromises. With diminished interest by the international community to nudge Delhi in this direction and the US wooing India in its strategic aim to contain China, Delhi sees no pressure or incentive to show the accommodation needed to settle disputes with Pakistan.

Three, emphasising confidence building measures enables Delhi to postpone or deflect addressing the substance of disputes and even serve as an alibi to avoid finding solutions to disputes. It is interesting to note in this regard that while India ‘trusts’ Pakistan enough to open up and expand trade, that trust evaporates when it comes to addressing outstanding disputes.

The key question this raises is whether Pakistan-India normalisation can be sustainable without solving the disputes that lie at the root of long-standing tensions?

Surely a diplomatic dance around the real issues – with a focus on process not progress – can hardly establish the basis for enduring peace.

India Scraps Domestic Jet Engine Plan

Jun. 17, 2012 - 01:46PM   |   By VIVEK RAGHUVANSHI  

http://www.defensenews.com/article/20120617/DEFREG03/306170005/India-Scraps-Domestic-Jet-Engine-Plan?odyssey=mod|newswell|text|World News|s

NEW DELHI — India has abandoned its efforts to build its own engine to power the Light Combat Aircraft (LCA) Mark-2, according to Indian Defence Ministry sources.

The Kaveri engine, which Indian defense scientists are trying to build, has failed to meet Indian Air Force requirements two decades after the project began, the MoD sources said.

This means the LCA Mark-2 will be powered only by U.S. company General Electric’s GE-414 engine, which was short-listed earlier over Germany’s Eurojet to power the LCA Mark-2. The aircraft, under development at Bangalore’s Aeronautical Development Agency, is expected to be ready around 2017.

While an MoD official would not say that the engine project has been abandoned for the aircraft, he did say that the Kaveri engine does not fully meet the Air Force’s thrust requirements. The MoD has now decided to use the Kaveri engine to power only UAVs, the official added.

India’s Defence Research and Development Organization (DRDO), the agency that is building the Kaveri, had been in consultation with French company Snecma for the past three years to help complete the engine.

DRDO and Snecma had been negotiating to co-develop and co-produce the engine, but they have yet to sign an agreement, the MoD official said.

While the official would not say why the negotiations failed, an Indian Air Force source said the Kaveri project to power the LCA has been all but abandoned. Beyond powering UAVs, the engine also will be a technology demonstration project.

The Air Force source added that besides the failure to meet the thrust level, the Kaveri also has technical problems with its compressor, turbine and engine control system.

Meanwhile, the LCA Mark-1 is readying for induction by 2014, nearly 15 years behind schedule. It will be powered by the GE-404 engine, also from General Electric.

For the LCA Mark-2 program, ADA will order 99 GE-414 engines and the rest will be manufactured in India under technology transfer arrangements.