VZCZCXRO2938
RR RUEHAST RUEHBI RUEHCI RUEHLH RUEHPW
DE RUEHNE #2690/01 2840736
ZNR UUUUU ZZH
R 100736Z OCT 08
FM AMEMBASSY NEW DELHI
TO RUEHC/SECSTATE WASHDC 3742
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
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

UNCLAS SECTION 01 OF 02 NEW DELHI 002690 
 
SIPDIS 
SENSITIVE 
 
STATE FOR SCA/INS AND EEB 
USDOC FOR ITA/MAC/OSA/LDROKER/ASTERN/KRUDD 
DEPT OF ENERGY FOR A/S KHARBERT, TCUTLER, CZAMUDA, RLUHAR 
DEPT PASS TO USTR CLILIENFELD/AADLER/CHINCKLEY 
DEPT PASS TO TREASURY FOR OFFICE OF SOUTH ASIA MNUGENT 
TREASURY PASS TO FRB SAN FRANCISCO/TERESA CURRAN 
USDA PASS FAS/OCRA/RADLER/BEAN/CARVER/RIKER 
EEB/CIP DAS GROSS, FSAEED, MSELINGER 
 
E.O. 12958: N/A 
TAGS: EAGR EAIR ECON ECPS EFIN EINV ENRG EPET ETRD BEXP
KIPR, KWMN, PHUM, SENV, ASEC, IN 
 
SUBJECT: NEW DELHI WEEKLY ECON OFFICE HIGHLIGHTS FOR THE WEEK OF 
OCTOBER 6 TO OCTOBER 10, 2008 
 
¶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