VZCZCXRO5112
RR RUEHAST RUEHBI RUEHCI RUEHLH RUEHPW
DE RUEHNE #0776/01 0740933
ZNR UUUUU ZZH
R 140933Z MAR 08 VOL ZDK TO ALL
FM AMEMBASSY NEW DELHI
TO RUEHC/SECSTATE WASHDC 0879
INFO RUEHCG/AMCONSUL CHENNAI 2618
RUEHCI/AMCONSUL KOLKATA 1927
RUEHLH/AMCONSUL LAHORE 4342
RUEHBI/AMCONSUL MUMBAI 1724
RUEHPW/AMCONSUL PESHAWAR 4801
RUEHIL/AMEMBASSY ISLAMABAD 4655
RHEBAAA/DEPT OF ENERGY WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RULSDMK/DEPT OF TRANSPORTATION WASHDC
RHMFIUU/FAA NATIONAL HQ WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHDC
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE

UNCLAS SECTION 01 OF 02 NEW DELHI 000776 
 
SIPDIS 
 
SIPDIS 
 
USDOC FOR ITA/MAC/OSA/LDROKER/ASTERN/KRUDD 
DEPT OF ENERGY FOR A/S KHARBERT, TCUTLER, CZAMUDA, RLUHAR 
DEPT PASS TO USTR 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 FAS/OCRA/RADLER/BEAN/CARVER/RIKER 
 
E.O. 12958: N/A 
TAGS: EAGR EFIN EINV EPET ETRD SENV IN
SUBJECT: NEW DELHI WEEKLY ECON OFFICE HIGHLIGHTS FOR THE WEEK OF 
MARCH 10-14, 2008 
 
 
NEW DELHI 00000776  001.4 OF 002 
 
 
¶1. (U) Below is a compilation of Economic highlights from Embassy 
New Delhi for the week of March 10-14, 2008. 
 
AIRPORT STRIKE ENDS 
--- 
 
¶2. (U) What started two days back as a non-cooperation movement by 
Airport Authority of India (AAI) workers to protest against closure 
of the Hyderabad and Bangalore airports was called off yesterday 
evening (March 13).  With the exception of lack of trash cleanup, 
service at virtually all airports was little affected and most 
commentators view the results as a defeat for the workers union and 
the Left.  AAI Union President S.R. Santhanam told econoff March 14 
that the union decision to desist followed its private meeting with 
Civil Aviation Minister Praful Patel who promised that other 
airports would not be closed down without prior consultation with 
AAI employees.  Santhanam said that the Ministry of Civil Aviation 
has also agreed that modernization of the 35 non-metro airports 
would only be completed with full involvement of AAI staff.  During 
the closed-door negotiations, Santhanam said the Minister promised 
to "re-examine" the concession agreement for any shortcomings, along 
with assurances that the existing Bangalore and Hyderabad airports 
would continue to be used for general aviation, defense, and 
national emergencies, while commercial passenger service will cease 
once the two new private airports open - one this month and one in 
May. 
 
GOI NOTIFIES NEW FDI NORMS 
--- 
 
¶3. (U) On March 12, the GOI issued official notifications of the new 
FDI limits announced at the end of January in six key sectors. 
Previously, the Indian Cabinet approved the revision of the FDI 
policy, which raised FDI limits in key growth sectors like civil 
aviation, petroleum, titanium mining, industrial parks, commodity 
exchanges, and credit-information companies.  These changes relaxed 
and clarified FDI rules and were viewed as a welcome move for U.S. 
industry investing in these sectors.  The official notifications are 
available at the following: 
http://pib.nic.in/release/release.asp?relid=3 6326 
http://pib.nic.in/release/release.asp?relid=3 6325 
http://pib.nic.in/release/release.asp?relid=3 6324 
http://pib.nic.in/release/release.asp?relid=3 6323 
http://pib.nic.in/release/release.asp?relid=3 6322 
http://pib.nic.in/release/release.asp?relid=3 6321 
 
INDIA-EU HORIZONTAL AVIATION AGREEMENT 
-------------------------------------- 
 
¶4. (U) Later this month, India will hold a fifth round of 
negotiations with the European Union (EU) in Brussels to further 
discuss the "horizontal agreement" on civil aviation.  K.P. Maggon 
at the Director General of Civil Aviation's office told econoff that 
what India wants under this agreement is the following: all European 
countries would be treated as a single entity, thereby enabling 
European airlines to fly to India from any European destination.  In 
return, Indian carriers that fly to Europe would be allowed code 
sharing rights across all member states that would enable passengers 
on Indian carriers to  continue travel via train or bus via their 
airline tickets.  Per the horizontal agreement, any European carrier 
can fly to India from any destination, within the framework of the 
bilateral agreement that India has with them.  The upcoming 
negotiations are important for Indian carriers with plans to create 
a European hub.  Already, Jet Airways has a hub in Brussels, and Air 
India is considering either Munich or Vienna as its European base. 
 
BMW DOUBLES CAPACITY OF CHENNAI FACILITY 
--- 
 
¶5. (U) Boosting Chennai's reputation as the "Detroit of India," BMW 
India President Peter Kronschnabi announced plans on March 10 to 
scale up production at the company's Chennai assembly plant from 
 
NEW DELHI 00000776  002.4 OF 002 
 
 
1700 units to 3000 units per year with an additional investment of 
just under USD 1 million.  Strong local market sales prompted the 
expansion, according to Kronschnabi.  An official from Tamil Nadu's 
industrial development board told Post that BMW's expansion would 
encourage local component manufacturers to move up the value chain 
to supply higher-end models.  (Note:  BMW's current operation 
imports nearly all of the components from abroad.  End note.)  BMW's 
planned expansion follows on the heels of major expansions in 
Chennai by both Ford and Hyundai. 
 
HYDERABAD'S NEW AIRPORT OPENS MARCH 16, BANGALORE MAY 11 
--- 
 
¶6. (U) Hyderabad's new airport, the Rajiv Gandhi International 
Airport, is scheduled to begin operations on March 16.  This USD 6 
billion public-private partnership plans to handle 7 million 
passengers during its first year of operations.  Hyderabad's current 
airport will close to commercial aviation when the new airport 
opens, but will remain open for private aircraft, government use, 
and emergencies.  Meanwhile, an official at Bangalore's new airport, 
which was originally scheduled to open on March 30, told Consulate 
Chennai that the new facility will now open on May 11.  He said that 
the delay was necessary to work out air traffic control issues. 
 
ANTI-SMOKING DRUG IN INDIA DESPITE FDA WARNINGS 
--- 
 
¶7. (U) Pfizer launched its anti-smoking drug verenicline in India 
this week, branded Champix, a month after the Food and Drug 
Administration (FDA) issued additional safety warnings that 
verenicline has been associated with depression and suicidal 
feelings in recent clinical studies. The GOI does not require 
patient trials of a drug for marketing approval in India if 
sufficient data from international studies are produced, and gives 
approval to new drugs if they have been accepted by regulators in 
the US or Europe. 
 
¶8.  (U) Visit New Delhi's Classified Website: 
http://www.state.sgov/p/sa/newdelhi 
 
MULFORD