VZCZCXRO2492
RR RUEHAST RUEHBI RUEHCI RUEHDBU RUEHLH RUEHNEH RUEHPW
DE RUEHNE #0770/01 1071216
ZNR UUUUU ZZH
R 171216Z APR 09
FM AMEMBASSY NEW DELHI
TO RUEHC/SECSTATE WASHDC 6232
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 000770 
 
SENSITIVE 
SIPDIS 
 
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: ECON EAGR EAIR ECPS EFIN EINV EMIN ENRG EPET ETRD
BEXP, KBIO, KIPR, KWMN, IN 
 
SUBJECT: NEW DELHI WEEKLY ECON OFFICE HIGHLIGHTS FOR THE WEEK OF 
APRIL 13 TO APRIL 17, 2009 
 
¶1.  (U) Below is a compilation of economic highlights from Embassy 
New Delhi for the week of April 13-17, 2009, including the 
following: 
 
-- India Misses Export Target 
-- Inflation Declines, Food Still Expensive 
-- Domestic Steel Users Oppose Antidumping Duty 
-- Company Expects Approval of First 
Biotech Edible Crop by Year-End 
-- New Models of Corporate Social Responsibility in India 
 
 
India Misses Export Target 
-------------------------- 
 
¶2.  (U) Continuing a downward trend since October 2008, India's 
exports, according to provisional figures, dropped 31 percent year 
on year to approximately $12 billion during the last month of the 
Indian fiscal year (IFY) - March 2009 - compared with the same 
period in the previous year.  India's total exports for the fiscal 
year 2008-09 are approximately $170 billion, in contrast to the 
original target of $200 billion and compared with last year's $160 
billion, representing annual growth of 6 percent.  Government 
officials and industry representatives continue to cite low demand 
for Indian products in the U.S. and EU, resulting from the global 
recession.  Commerce Secretary G.K. Pillai predicted that the 
negative trend in exports will continue in the first half of the 
current fiscal 2009-10 (until September 2009).  To help boost 
demand, the UPA government has announced three stimulus packages 
since October 2008, including a reduction in indirect taxes on 
consumer products and services, cheaper credit, and higher spending 
on infrastructure to facilitate trade. 
 
¶3.  (U) On the import side, while the government has yet to release 
official March trade figures, the Commerce Secretary estimated that 
growth decelerated during the last two months.  With lower 
industrial activity during the last six months, India is likely to 
register lower import growth during IFY 2008-09, compared with 
average growth of 30 percent over the last five years. 
 
Inflation Declines, Food Still Expensive 
---------------------------------------- 
 
¶4.  (U) Wholesale price index (WPI) inflation year-on-year for the 
week ending April 4 fell to a 20 year low of 0.18 percent.  It was 
7.7 percent in the corresponding week a year ago.  The dip in 
inflation during the review week was despite a 7.3 percent rise in 
prices of food articles such as vegetables, fish, liquor, soft 
drinks tea, coffee, pulses and cereals.  Prices of vegetables rose 
by 25 percent and sugar by 18 percent.  Fuels prices also rose 
during the week and are expected to go up further in the coming 
weeks.  The disconnect between WPI inflation and prices of food 
items is due to the high base effect and a simultaneous fall in 
prices of some manufactured items, particularly metals and alloys. 
The Consumer Price Index for industrial workers, which is more 
representative of an urban household consumption basket, but whose 
data collection is less comprehensive than for the WPI and lags the 
WPI dates, was last recorded at 9.6 percent for February 2009, 
indicating that retail price inflation faced by consumers has not 
fallen as fast as the WPI.  The RBI's annual monetary policy review 
is due on April 21 and many economists expect the RBI to reduce 
interest rates further, although the RBI has not used planned policy 
reviews for interest rate cuts in recent months. 
 
Domestic Steel Users Oppose Antidumping Duty 
-------------------------------------------- 
 
¶5.  (U) Domestic end users of high grade stainless steel (pesticides 
and chemicals, refinery, auto components, utensil manufacturers, 
plant and machinery manufacturers and kitchen equipment makers) have 
reportedly protested the government's move to levy an anti-dumping 
duty on the import of stainless steel from China, the European 
Union, the US, Japan, South Korea, Taiwan, South Africa and 
 
NEW DELHI 00000770  002 OF 002 
 
 
Thailand.  The Indian Commerce Ministry on March 27, 2009 
recommended an antidumping duty for this product following a 
petition by Jindal Stainless. 
 
¶6.  (U) Arguing that certain special grades and wider sizes of 
stainless flat steel are not readily available within the country, 
nearly 225 manufacturers have reportedly written a letter to Prime 
Minister Manmohan Singh asking that antidumping duties not be 
imposed.  However, the Indian Stainless Steel Development 
Association (ISSDA) says that production of stainless steel is 
sufficient to meet domestic consumption. 
 
Company Expects Approval of First 
Biotech Edible Crop by Year-End 
------------------------------- 
 
¶7.  (U) Developed by Maharashtra-based biotech major Mahyco, India's 
first biotech edible crop - Bt brinjal (a type of eggplant) - is all 
set to be cleared by the Genetic Engineering Approval Committee 
(GEAC), the biotechnology regulatory body of the Government of India 
(GOI).  Mahyco has reportedly completed field trials recently and 
applied to the GEAC for the commercial release of Bt brinjal seeds 
after addressing all health and safety concerns.  A company 
spokesperson has told the media that the seed has been tested for 
safety and GEAC approval is expected by the end of 2009. [Note: 
Other industry sources are less optimistic that Bt brinjal will be 
approved by the end of the year.  Any eventual approval would be a 
huge milestone.  End note.]  Mahyco had earlier introduced Bt cotton 
seeds in the Indian market successfully but its proposed brinjal 
project ran into trouble last year when the health ministry and 
consumer organizations raised questions about its safety. 
Introduction of Bt brinjal is expected to increase productivity 
while drastically cutting losses due to pest-related damage.  In 
India, brinjal is cultivated on 550,000 hectares. 
 
New Models of Corporate Social Responsibility in India 
------------------------------------------ 
 
¶8.  (U) The US-India Business Council held a roundtable in New Delhi 
recently to discuss the role of corporate social responsibility 
(CSR) in a challenging economy.  Ms. Teresa Bartels, President and 
Chief Executive Officer of United Way International was the featured 
speaker and representatives from forty-two companies attended the 
event.  Bartels presented the group with strong rationales for 
engaging in corporate social responsibility during the current 
challenging economic environment and presented United Way as a 
platform to engage their communities in an effective and sustainable 
way.  The participants then discussed challenges they had faced, 
their concerns about how CSR programs could be more effective and 
shared stories about past successes and failures.  The consensus was 
that corporate social responsibility made sense even in economically 
challenging times but had to be designed and implemented in new ways 
so that optimum results were achieved for all stakeholders. 
 
¶9.  (U) Visit New Delhi's Classified Website: 
http://www.state.sgov/p/sa/newdelhi. 
 
BURLEIGH