NEW DELHI WEEKLY ECON OFFICE HIGHLIGHTS FOR THE WEEKs OF

UNCLAS SECTION 01 OF 02 NEW DELHI 005003

SIPDIS

SENSITIVE
SIPDIS

USDOC FOR ITA/MAC/OSA/LDROKER/ASTERN/KRUDD
DEPT OF ENERGY FOR A/S KHARBERT, TCUTLER, CZAMUDA, RLUHAR
DEPT PASS TO USTR DHARTWICK/CLILIENFELD/AADLER
DEPT PASS TO TREASURY FOR OFFICE OF SOUTH ASIA/ABAUKOL
TREASURY PASS TO FRB SAN FRANCISCO/TERESA CURRAN
STATE FOR SCA/INS AND EB/TRA JEFFREY HORWITZ AND TOM ENGLE
USDA PASS TO DUS TERPSTRA, FAS/OCRA, RADLER

E.O. 12958: N/A

TAGS: BEXP EFIN EINV ECPS EINV EPET ETRD EAGR ELTN ENRG
EAID, SENV, IN
SUBJECT: NEW DELHI WEEKLY ECON OFFICE HIGHLIGHTS FOR THE WEEKs OF
NOVEMBER 5 - 16, 2007

NEW DELHI 00005003 001.2 OF 002



1. (U) Below is a compilation of Economic highlights from Embassy
New Delhi for the weeks of November 5-16, 2007.

SUCCESSES FOR AES, VERIZON
--------------


2. (SBU) GOI Confirms Coal Field for U.S. Power Company AES: AES
received on November 6, 2007 final GOI Cabinet and Ministryof Coal
approval for the allocation of the captive Sayag Coal Block in the
Mand-Raigarh Coalfields in central/eastern India's coal-rich state
of Chhattisgarh to supply fuel to AES' planned 1,000-1,200 Megawatt
(MW) thermal power plant. AES signed an MOU with the Chhattisgarh
State Government in March 2006. AES expects coal production and
power production to start up in 2012. AES is the only major power
generation company with current (Orissa) and future (Chhattisgarh)
projects in India, and other U.S. investors and power companies are
watching the AES project to determine if India's power sector
investment climate is favorable, following on several project
failures during the 1990s. AES thanked Embassy New Delhi's Economic
and Commercial sections and Consulate General Mumbai for their
support over the last two years with the Ministry of Coal and
Ministry of Power.


3. (SBU) Verizon Wins Long Distance Licenses: U.S. Telecom company
Verizon Business announced on November 2, 2007 that India's Ministry
of Communications and Information Technology (MCIT) Department
Telecommunications (DOT) had approved Verizons' applications for an
International Long Distance (ILD) license (applied for on February
7, 2007) and for a National Long Distance (NLD) license (applied for
on May 21, 2007). AT&T also provides ILD and NLD in India. Verizon
already holds an internet service provider (ISP) license and has
various local internet protocol (IP) hubs. Upon receipt of the
ILD/NLD licenses, companies operating in India will benefit from
direct access to Verizon's advance internet protocol communications
portfolio.


4. (SBU) Embassy New Delhi's Economic and Commercial Sections had
press the MCIT/DOT for timely consideration of Verizon's license
applications, culminating in Ambassador David C. Mulford's letter of
September 18 to MCIT Minister Raja. Minister Raja had been
preoccupied with the telecom licensing and spectrum allocation
policy controversies. Verizon officials expressed their thanks for
the support rendered by U.S. Embassy New Delhi, the State
Department, and USDOC.

NOVARTIS WINS BATTLE BUT
UNLIKELY TO WIN THE WAR
--------------


5. (SBU) The Chennai High Court ruled on November 13 that a
two-member bench of the Intellectual Property Appellate Board (IPAB)
could hear Novartis's appeal against the decision of the Indian
Designs and Patents Office to refuse a patent for its anti-cancer
drug Glivec. One of the lawyers involved in the case told Consulate
Chennai that the order effectively blocked the participation of IPAB
member S. Chandrasekaran, who headed the patent office when it
rejected Glivec, before being appointed to the IPAB. Novartis was
opposed to Chandresekaran's participation as an IPAB member
reviewing the Glivec case, arguing that he would be biased since he
led the patent office that originally rejected Novartis's patent
application. The lawyer added that this judgment would also
effectively end Chandrasekaran's participation in a number of cases
before the IPAB. However, the lawyer is still pessimistic about
Novartis's chances for securing a patent for Glivec.

FALLING DOLLAR ENCOURAGES
PHARMACEUTICAL COMPANIES
TO BILL IN EUROS
--------------

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6. (U) The continued weakening of the dollar against the rupee is
encouraging some of South India's pharmaceutical companies to change
their business practices. These companies are now adopting the euro
as their favored currency when making quotes to prospective clients.
The executive director at a facility that conducts cutting-edge
research on pharmaceuticals told Consulate Chennai that his company
now charged a premium if customers insist on dollar quotes, as a
hedge against the risk of the dollar dropping even further. The
head of finance at one of India's largest bio-pharmaceutical
manufacturers told Consulate Chennai that his company had adopted
similar measures. He said that realizations from dollar payments
had dropped sharply, forcing the company to change the way it quotes
prices for its services.

TAMIL NADU ANNOUNCES
NEW INDUSTRIAL POLICY
--------------


7. (U) The Tamil Nadu (TN) government unveiled a new industrial
policy on November 5 that outlines a plan to create 2 million jobs
by 2011. The plan focuses on enhancing the manufacturing sector,
calling for it to increase to 27 percent of the state's GDP by 2011
and 30 percent by 2015, up from 21 percent at present. Seeking to
avoid land-use conflicts between industrialists and farmers, the TN
government also announced that it will develop over the next five
years a "land bank" of 10,000 acres with "quality infrastructure" to
provide space for industrial parks. The government emphasized that
it will avoid using "prime agricultural land" for this purpose.


8. (U) Visit New Delhi's Classified Website:
http://www.state.sgov/p/sa/newdelhi

WHITE