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| Identifier | Created | Classification | Origin |
|---|---|---|---|
| 08NEWDELHI2690 | 2008-10-10 07:36:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy New Delhi |
Cable title:
NEW DELHI WEEKLY ECON OFFICE HIGHLIGHTS FOR THE WEEK OF
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1. (U) Below is a compilation of economic highlights from Embassy New Delhi for the week of October 6 to October 10, 2008, including the following: -- India Drafts Legislation to Protect Trade Secrets -- Foreign Workers Now Face Obligatory Pension Contributions -- Trading Commerce, Not Fire At LOC India Drafts Legislation to Protect Trade Secrets -------------------------- 2. (U) The GOI's Ministry of Science and Technology last week released a draft National Innovation Bill for public comment. The Federation of Indian Chambers of Commerce and Industry (FICCI) drafted this bill with the help of all stakeholders. The draft bill enables states to take public, private, or public-private partnership initiatives for building an "ecosystem" to encourage innovation. The draft legislation mandates an annual comprehensive presentation by the GOI on a National Integrated Science and Technology Plan. In addition, the legislation will authorize state governments to take specific measures to support innovation, including tax breaks, stamp duty waivers, and other fiscal incentives and the establishment of Special Innovation Zones. Finally, the draft law contains statutory language relating to the protection of trade secrets. Previously, trade secrets were protected under the common law in India. With an increasing number of trade secrecy cases in Indian courts, the draft language would provide more clarity and assurance in the law. The text of the draft bill can be found at http://dst.gov.in. Foreign Workers Now Face Obligatory Pension Contributions -------------------------- 3. (SBU) The Ministry of Labor and Employment this week announced the creation of a new category of "international workers" which requires that foreign workers in India pay into India's Employee Provident Fund (EPF, similar to a 401K fund) unless the foreign worker's home country has a social security agreement (SSA) with India. Previously, foreign workers could choose not to contribute to an EPF if they were paying into a social security or pension scheme in their home country. The Law Ministry claims the changes make India's social security system at par with global social security norms. The changes, issued under a notification, now require that international workers pay the 12 percent of wages that domestic workers pay, matched by an equal amount from the employer. Further, after October 1, the effective date of change, expatriates who had contributed to an EPF can no longer refund their contributions back to their home country when they leave India, absent their country's maintaining an SSA with India. 4. (U) India says it already has SSAs with France and Belgium. India and Germany signed an SSA agreement on October 8, which will exempt Indian workers in Germany from making social security contributions. The exemption will be given to people on short-term contracts for a period of four years, extendable to another one year. German workers in India will also receive similar benefits on a reciprocal basis. For short term contract up to 48 months, no social security contribution would need to be paid under the German law by the detached workers provided they continue to make social security payments in India. 5. (SBU) S.K. Verma, Director (Social Security) at the Ministry of the Labor told Econoff that the government is looking at concluding negotiations on totalization agreements with about 10 countries in the near future and is also proposing another 10 agreements. Verma stated that the change was a signal to the US to prompt it to sign an SSA with India and that he expected that a totalization agreement with the US could be signed by April 2009. The Government of India has requested an SSA with the US, saying that it estimates that approximately 80,000 Indians working in the US contribute about $1.5 billion per year to the US social security system, but cannot bring their funds back to India when they return. Verma confirmed that NEW DELHI 00002690 002 OF 002 the new notification also requires that Indian workers in the US pay into both systems. Trading Commerce, Not Fire At LOC -------------------------- 6. (U) On the eve of the Prime Minister's visit to Jammu and Kashmir, a 19-member trade delegation from Pakistan-occupied Kashmir crossed the line of control on October 9 to mark the resumption of cross-border trade in the state. This marks the resumption of official trade linkages between the two Kashmirs that had been severed since 1947. Zulfiqar Abbasi, the leader of the Muzaffarabad Chamber of Commerce and head of the delegation, said, "Right now, it is symbolic and we are not satisfied with the list of tradable items. But it is just the beginning and we hope this sapling will become a huge tree. The event is offering a chance to revive broken roads and broken hearts of over 10 million people ..." 7. (U) The event was marked by a large ceremonial gathering with over 200 traders chanting loudly "we are one." The Kanan bridge which connects the Pakistan and India occupied Kashmir territories had to be rebuilt after the 2005 earthquake. The bridge will be opened on October 21 for small trucks (and eventually be upgraded to handle heavy trucks) when the formal resumption of trade begins after the two sides agree on a set of items. The road to the bridge is currently being widened and other bridges to facilitate trade will need to be upgraded. 8. (U) Visit New Delhi's Classified Website: http://www.state.sgov/p/sa/newdelhi WHITE |