China’s top State-run bank launches first India-dedicated investment fund

The Industrial and Commercial Bank of China, a top State-run Chinese bank, has launched China’s first India-dedicated publicly offered investment fund, saying the Indian market offers the “best opportunity” for Chinese investors due to the prospects of double-digit growth.

The ICBC is China’s largest lender by market value.

The fund named the Industrial and Commercial Bank of China Credit Suisse India Market Fund, will “invest in exchange-traded funds listed on more than 20 exchanges in Europe and the US that are based on the Indian market.”

It is China’s first publicly offered fund for investing in India, State-run Global Times reported.

The fund will invest in the future of the Indian economy and track the distribution of the industrial structure across the Indian market, the report quoted a fund manager as saying.

The move, regarded as significant by observers to boost investments in India, comes just about a fortnight after the first ever informal summit between Prime Minister Narendra Modi and Chinese President Xi Jinping at Wuhan.

The bank while launching the fund has given an upbeat picture of India’s economic growth path.

The bank listed sectors for investments specifically, in terms of the major industries weighted distribution of the index.

The financial industry will account for the highest proportion, followed by information technology, alternative consumption, energy, essential consumption, raw materials, medicine, healthcare and other industries, it said.

For large investors, adding a low-relevant asset to the allocation tool can effectively improve the effective frontier of the investor’s asset allocation, and help the investor to better spread risks and obtain a more stable income.

In terms of small and medium-sized investors, the threshold for global asset allocation and overseas investment markets is high, which makes it difficult for them to set foot in this field, it said.

Under the current institutional framework, this is a rare opportunity to invest overseas, it said.

Recent research indicates that the Indian market has gradually become one of the best-performing markets in the world due to ongoing reforms, macroeconomic improvement, and enhanced profitability, it said.

 

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First oil cargo for India’s strategic reserve in Mangaluru sails from UAE

The first consignment of 2 million barrels of crude oil that is en route from United Arab Emirates (UAE) for India’s strategic petroleum reserve at Mangalore, will help the world’s third-largest oil importer’s energy security programme.

With India building around 39 million barrels of strategic crude oil storage facility, the 5.86 million barrels supplied by state-run Abu Dhabi National Oil Company (ADNOC)—the only one to partner with India on its crude oil reserve programme till date, can be used during an emergency.

According to a 12 May Indian government statement the loading of the first crude consignment was witnessed by petroleum minister Dharmendra Pradhan who is currently on a visit to the Gulf nation.

Indian Strategic Petroleum Reserves Ltd (ISPRL) has an agreement with ADNOC under which ADNOC will store around 5.86 million barrels of crude oil in India’s Strategic Petroleum Reserve (SPR) facility at Mangalore at its own cost. This agreement was signed during Prime Minister Narendra Modi visit to UAE in February this year.

This comes in the backdrop of a spike in oil prices with President Donald Trump pulling the US out of a 2015 historic accord with energy-rich Iran that was inked to curb the Islamic Republic’s nuclear programme in return for ending sanctions. Also, there has been a rally in international crude oil prices due to a combination of factors such as Opec and Russia cutting supplies, falling production in Venezuela and geopolitical tensions.

India’s strategic crude oil storages are located at Vizag (1.33 million tonnes), Mangalore (1.5 million tonnes) and Padur (2.5 million tonnes). The US has also evinced interest to collaborate with India on its crude oil reserve programme as part of a strategic energy partnership that covers sectors such as oil and gas, power, renewable energy, and coal.

For ADNOC, the oil storage facility will enable it to meet market demand across Asia at a time, when the global energy architecture is changing, with buyers at the centre of oil majors’ future growth plans. The development also assumes importance given that UAE supplies 8% of crude oil imports of India.

With India’s energy demand expected to grow at 4.2% over the next 25 years, energy majors are scouting for opportunities here. A case in point being world’s biggest oil producer—Saudi Arabian Oil Co., or Saudi Aramco that is planning to set up one of the largest global refinery and petrochemical complex at Ratnagiri in Maharashtra at an investment of $44 billion, in partnership with a consortium of Indian state-run companies.

India-UAE ties moved into a new trajectory with the August 2015 visit to Abu Dhabi by Prime Minister Narendra Modi. One of the key outcomes of that visit, the first by an Indian prime minister in 34 years, was the two sides agreeing to the setting up of a multi-billion dollar fund to tap into investment opportunities in India’s infrastructure sector. Also, during Modi’s visit in February this year, a consortium of Indian state-run firms was awarded a 10% stake in Abu Dhabi’s offshore Lower Zakum oil concession.

About SPR programme:

To ensure energy security, the Government of India had decided to set up 5 million metric tons (MMT) of strategic crude oil storages at three locations namely, Visakhapatnam, Mangalore, and Padur (near Udupi). These strategic storages would be in addition to the existing storages of crude oil and petroleum products with the oil companies and would serve as a cushion during any external supply disruptions.

In the 2017-18 budget, it was announced that two more such caverns will be set up Chandikhole in Jajpur district of Odisha and Bikaner in Rajasthan as part of the second phase.

The construction of the Strategic Crude Oil Storage facilities is being managed by Indian Strategic Petroleum Reserves Limited (ISPRL), a Special Purpose Vehicle, which is a wholly owned subsidiary of Oil Industry Development Board (OIDB) under the Ministry of Petroleum & Natural Gas.

In 1990, as the Gulf war engulfed West Asia, India was in the throes of a major energy crisis. By all accounts, India’s oil reserves at the time were adequate for only three days. While India managed to avert the crisis then, the threat of energy disruption continues to present a real danger even today.

It is unlikely that India’s energy needs will dramatically move away from fossil fuels in the near future. Over 80% of these fuels come from imports, a majority of which is sourced from West Asia. This is a major strategic risk and poses a massive financial drain for an embattled economy and its growing current account deficit.

To address energy insecurity, the Atal Bihari Vajpayee government mooted the concept of strategic petroleum reserves in 1998. Today, with India consuming upwards of four million barrels of crude every day (January 2015 figures), the case for creating such reserves grows stronger.

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India, Pakistan Agree to Resolve Diplomatic Tussle

India and Pakistan agreed to solve the diplomatic tussle over the allegations of harassment of the diplomats in each other’s countries. The two countries have mutually decided to resolve matters as per the 1992 code of conduct (COC) ensuring the diplomats and their families are not harassed, the External Affairs Ministry said.

1992 Code of Conduct:

As per the 1992 code of conduct, the two countries would ensure “smooth and unhindered functioning of their diplomatic and consular officials in conformity with recognised norms of international law and practice.”

The Diplomatic Tussle:

The diplomatic ties of India and Pakistan took a hit over the harassment of the diplomats in each other’s countries. Both the countries accused each other of harassing and intimidating their diplomats. The diplomatic ties first took a hit when Pakistan’s ISI raided a residential complex under construction for Indian diplomats in Islamabad in February.

The residential complex was raided and electricity and water supply to the property were suspended. Following which the Indian high commissioner Ajay Bisaria met the Pakistan foreign secretary to protest against the harassment of their diplomats. He alleged that his car was stopped in the middle of the road and was prevented from attending an event in Pakistan.

Pakistan, on the other hand, accused India of intimidating the children of its diplomats. The Pakistan high commission had earlier alleged that the car of one of its senior diplomats was blocked on road. Another note verbale alleged that their car, with the diplomat’s children on board, was hit from behind by another car. The kids were on the way to their school.

On March 15, External Affairs Ministry spokesperson Raveesh Kumar had, at a press conference, said that the Indian High Commissioner had been facing a list of issues while in Pakistan and despite the issues being raised “in good faith through diplomatic channels and not through the media”, they have not been resolved.

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India gets access to strategic Oman port Duqm for military use, Chabahar-Gwadar in sight

In a strategic move to expand its footprint in the Indian Ocean region, India has secured access to the key Port of Duqm in Oman for military use and logistical support, top sources have told The Indian Express. This is part of India’s maritime strategy to counter Chinese influence and activities in the region.  This was one of the key takeaways of Prime Minister Narendra Modi’s visit to Oman over the last two days. He met Sultan of Oman Sayyid Qaboos bin Said Al Said and an annexure to the Memorandum of Understanding on Military Cooperation was signed between the two countries.  Sources said following this pact, the services of Duqm port and dry dock will be available for maintenance of Indian military vessels.

The Port of Duqm is situated on the southeastern seaboard of Oman, overlooking the Arabian Sea and the Indian Ocean. It is strategically located, in close proximity to the Chabahar port in Iran. With the Assumption Island being developed in Seychelles and Agalega in Mauritius, Duqm fits into India’s proactive maritime security roadmap.

The significance of this move:

The Port of Duqm is situated on the southeastern seaboard of Oman, overlooking the Arabian Sea and the Indian Ocean. It is strategically located, in close proximity to the Chabahar port in Iran. With the Assumption Island being developed in Seychelles and Agalega in Mauritius, Duqm fits into India’s proactive maritime security roadmap. This is also part of India’s maritime strategy to counter Chinese influence and activities in the region. The Port of Duqm also has a special economic zone, where about $1.8 billion investments are being made by some Indian companies.

The Indian Ocean is important for the following reasons:

It enjoys a privileged location at the crossroads of global trade, connecting the major engines of the international economy in the Northern Atlantic and Asia-Pacific. This is particularly important in an era in which global shipping has burgeoned.

The Indian Ocean is also rich in natural resources. 40% of the world’s offshore oil production takes place in the Indian Ocean basin. Fishing in the Indian Ocean now accounts for almost 15% of the world’s total.

Mineral resources are equally important, with nodules containing nickel, cobalt, and iron, and massive sulfide deposits of manganese, copper, iron, zinc, silver, and gold present in sizeable quantities on the seabed. Indian Ocean coastal sediments are also important sources of titanium, zirconium, tin, zinc, and copper. Additionally, various rare earth elements are present, even if their extraction is not always commercially feasible.

India’s Importance in the Indian Ocean:

The Indian Ocean holds particular importance for India, as the littoral’s most populous country. Indeed, for the rest of the Ocean’s littoral states, and even those outside the region, India’s leadership role will be important in determining the strategic future. India is geographically located at the Ocean’s center and has over 7,500 kilometers of coastline. Finally, there is a strong security dimension to India’s engagement with the Indian Ocean, beyond traditional naval considerations.

Indian Ocean region is the primary area of concern for India. Securing its position here is vital before venturing elsewhere. For India, geographically the area of concern, and so the area of focus should remain the IOR, stretching from the Gulf of Aden to the Strait of Malacca. While reiterating its commitment to upholding the established laws of the global commons, New Delhi should not go adrift in the larger Indo-Pacific. As more powers make inroads into this strategically crucial space, India must consolidate its position and not expect others to do its job, for it would only mean ceding space in the long run.

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ONGC acquires 10 percent stake in UAE’s oil offshore concession

India and the UAE  signed a concessional agreement awarding a consortium of Indian oil companies, led by the ONGC, a 10 per cent stake in Abu Dhabi’s offshore oil concession, the first such deal for the Indian oil and gas companies in the Gulf nation. Prime Minister Narendra Modi, Crown Prince of Abu Dhabi Sheikh Mohamed bin Zayed Al Nahyan and Deputy Supreme Commander of the UAE Armed Forces witnessed the signing of the historic agreement.

The MoU between Indian consortium (OVL, BPRL, and IOCL) and state-run Abu Dhabi National Oil Company (ADNOC) was signed for an acquisition of 10 per cent participating interest in the offshore Lower Zakum Concession.

The concession will be for 40 years from 2018 to 2057. Sixty per cent of the participating interest will be retained by ADNOC and remain 30 per cent will be awarded to other international oil companies.

This is the first Indian investment in the upstream oil sector of the UAE, transforming the traditional buyer-seller relationship to a long-term investor relationship.

Lower Zakum is one of three new separate concession areas that make up the former ADMA offshore concession, namely Lower Zakum, Umm Shaif and Nasr and Sateh Al Razboot (SARB) and Umm Lulu.

Speaking at the signing of the agreement, Prime Minister Modi said, “The offshore concession in favor of the Indian consortium has taken our bilateral engagement in the oil and gas sector to a new level, which befits the comprehensive strategic partnership between our two countries.”

The agreement, which has a term of 40 years and an effective date of March 9, 2018, was signed by Sultan Ahmed Al Jaber, ADNOC Group Chief Executive Officer, and member of Abu Dhabi’s Supreme Petroleum Council and Shashi Shanker, Chairman, ONGC Group of companies.

The Indian consortium is made up of ONGC’s wholly-owned subsidiary ONGC Videsh, which has stakes in 39 oil and gas projects, in 18 countries; the Indian Oil Corporation, India’s largest commercial enterprise, encompassing the entire hydrocarbon value chain.

The ONGC caters to nearly half of India’s petroleum consumption with 11 of India’s 23 refineries a 13,000-km pipelines network and a countrywide marketing set-up of over 47,000 customer touch-points, and Bharat PetroResources, which has stakes in 23 oil and gas assets in seven countries and is a 100 per cent subsidiary of Bharat Petroleum Corporation Limited which has interests encompassing the entire hydrocarbon value chain.

Indian energy demand is forecast, by the International Energy Agency (IEA), to grow by more than any other country in the period to 2040, propelled by an economy that will grow to more than five-times its current size and by population growth that will make it the world’s most populous country. Indian energy consumption is expected to more than double by 2040, accounting for 25 per cent of the rise in global energy in the same period, and the largest absolute growth in oil consumption. Today, India is 79 per cent dependent on imports to meet it’s crude oil needs, 8 per cent of which is supplied by the UAE. Alongside the concession award, ADNOC and the Indian Strategic Petroleum Reserves Ltd (ISPRL) exchanged agreements, today, to implement the strategic crude oil storage facility, in the southern Indian city of Mangalore.

The partnership with ISPRL, an Indian government-owned company mandated to store crude oil for strategic needs, covers the storage of 5.86 million barrels of ADNOC crude oil in underground facilities, at the Karnataka facility. The oil storage facility will help ensure India’s energy security, as well as enable ADNOC to efficiently and competitively meet market demand in India and across the fast developing south-east Asian economies. The decision to establish the strategic reserve was announced, in January 2017, during a visit to India by Sheikh Mohamed bin Zayed. PTI

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Prince Charles launches education impact bond for India

Britain’s Prince Charles has launched a new 10-million-dollar Development Impact Bond (DIB) to help improve education for over 200,000 children in India.

About the Development Impact Bond:

The DIB, the largest bond of its type in South Asia, is the latest fundraising initiative by the British Asian Trust (BAT), set up by the royal 10 years ago to fight poverty in South Asia. This will be the largest bond of its type in the region. It is intended to improve literacy and numeracy learning levels for primary school students from marginalized communities in the country.

The new bond has been launched by the trust with the support of the UK government’s Department for International Development (DfID), Comic Relief, the Mittal Foundation, and the UBS Optimus Foundation.

The concept of DIB is intended as a result-oriented way to attract new capital into development projects, with a strong emphasis on data and evidence. Under the initiative, the DIB will provide funding to local not-for-profit delivery partners in India over four years, delivering a range of operational models including principal and teacher training, direct school management, and supplementary programmes.

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PM Modi to lay Foundation Stone for First Hindu Temple in Abu Dhabi

Prime Minister Narendra Modi is all set to lay the foundation stone for the first Hindu temple in Abu Dhabi, the capital of the UAE.

Temple Committee members presented the temple literature to Modi, who arrived here tonight, and Crown Prince of Abu Dhabi Mohamed bin Zayed Al Nahyan.

Modi will hold a meeting with the Indian community at Dubai Opera House, he said, adding that representatives of all major organizations and a number of Indian professionals have been invited.

The temple will be hand-carved by Indian temple artisans and assembled in the UAE. It will be completed by 2020, and open to people of all religious backgrounds.

It will be the first traditional Hindu stone temple in the Middle East, said a spokesperson from the BAPS.

Bochasanwasi Shri Akshar Purushottam Swaminarayan Sanstha (BAPS), is a socio-spiritual Hindu organization set up in 1907 that runs more than 1,100 temples and cultural compounds around the world.

The temple will incorporate all aspects and features of a traditional Hindu temple as part of a fully functional, social, cultural and spiritual complex.

It will replicate the BAPS temple in New Delhi and the one under construction in New Jersey, a trusted member told Khaleej Times.

The investment from the UAE to India exceeds USD 11 billion.

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Kailash Manasarovar Yatra:

China has agreed to allow Indian pilgrims to Kailash-Mansarovar through Nathu La in Sikkim after the route was closed last year in the wake of the Doklam stand-off.

Kailash Manasarovar Yatra:

Kailash Mansarovar Yatra (KMY) is known for its religious importance, cultural significance and arduous nature. The annual pilgrimage holds religious importance for Hindus, Jains, and Buddhists. The Yatra is organized by the government of India in close cooperation with the Government of the People’s Republic of China. State Governments of Uttarakhand, Sikkim, and Delhi, and Indo-Tibetan Border Police (ITBP) and Kumaon Mandal Vikas Nigam Limited (KMVN) are other major Indian partners of the Ministry in organizing the Yatra.

Mansarovar Lake is located at an altitude of 14,950 ft (4,558 m) is said to be the highest freshwater lake in the world. It is located in the Tibet Autonomous Region, China, 940 kilometers from Lhasa. To the west of it is Lake Rakshastal and to the north is Mount Kailash.

Nathu La is a mountain pass in the Himalayas. It connects the Indian state of Sikkim with China’s Tibet Autonomous Region. It is also one of the four officially agreed BPM (Border Personnel Meeting) points between the Indian Army and People’s Liberation Army of China for regular consultations and interactions between the two armies, which helps in defusing stand-offs.

The four BPM are Chushul in Ladakh, Nathu La in Sikkim, Bum La Pass in Tawang district of Arunachal Pradesh, and Lipulekh Pass in Uttarakhand.

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Maldives’ ongoing political crisis

The Maldives is engulfed in a deepening political crisis, as the introduction of a state of emergency decree across the holiday islands prompted heavily-armed troops to storm the country’s top court and arrest a former president.

Ever since President Yameen came to power in 2013, he has been jailing almost all the political opposition. The island nation has been witnessing political unrest and street protests since former president Nasheed was convicted in 2015 on terror charges and sentenced to 13 years in jail. He was later allowed to go to Britain for medical treatment in January 2016. He has lived in exile since and is currently in Sri Lanka.

The Maldivian Supreme Court had last week ordered the immediate release of former president Mohamed Nasheed and other opposition leaders. The Court had also ordered the government to restore the seats of 12 legislators sacked for defecting from Mr Yameen’s party, giving the opposition the majority in the assembly which would mean that they could potentially impeach the president.

However, President Yameen refused to comply the top court’s orders, despite growing international pressure and concern, leading to declaration of Emergency in Maldives.

Both former leaders of the Maldives, Nasheed and Gayoom, have called on India to force Yameen to release the recently jailed high court judges and political prisoners. While intervention from New Delhi would certainly be unusual, it is not unprecedented. India sent troops to the Maldives in 1988 to foil a coup.

Alongside India, the U.S. and the U.K. have both urged Yameen to honor the rule of law and free the detainees. Meanwhile, the United Nations (UN) human rights chief has warned that Yameen’s state of emergency decree, which had been used to imprison perceived political opponents, was undermining the checks and balances necessary in any functioning democracy.

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