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O 231239Z OCT 09
FM AMEMBASSY NEW DELHI
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UNCLAS SECTION 01 OF 02 NEW DELHI 002164 
 
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 MDELANEY/CLILIENFELD/AADLER 
TREASURY FOR OFFICE OF SOUTH ASIA MNUGENT 
TREASURY PASS TO FRB SAN FRANCISCO/TERESA CURRAN 
USDA PASS FAS/OCRA/RADLER/BEAN/FERUS 
EEB/CIP FSAEED, KDUNNE, AGIBBS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINV ENRG ETRD ECPS BEXP PHUM PINR TSPA
IN 
SUBJECT: New Delhi Weekly Econ Office Highlights for the Week of 
October 16-22, 2009 
 
¶1. Below is a compilation of economic highlights from Embassy New 
Delhi for the week of October 16-22, 2009, including the following: 
 
-- India to Launch Satellites to Monitor Climate Change 
-- New Secretaries for Space and Atomic Energy 
-- India's Outward FDI Declines, while FDI Inflows still Robust 
-- Disinvestment Moving Forward 
 
 
 
India to Launch Satellites to Monitor Climate Change 
--------------------------------------------- ------- 
 
¶2.  Madhavan Nair, Chairman of the Indian Space Research 
Organization (ISRO), announced plans on October 18 to launch two 
satellites to monitor climate change.  The first, a micro-satellite 
scheduled for launch in 2010, will study the upper atmosphere.  The 
second, scheduled for launch in 2011, will be a remote sensing 
satellite capable of monitoring emissions of green house gases.  Dr. 
Kasturi Rangan, the Director of the Indian Institute for Advanced 
Studies (a Bangalore-based think tank) told Consulate General 
Chennai that data generated from the two satellites would be used to 
inform Indian policy makers.  Rangan added that many of these policy 
makers believe that they have often been misled in the past by 
Western scientists who "doctored data" to suit their particular 
viewpoints. 
 
New Secretaries for Space and Atomic Energy 
------------------------------------------- 
 
¶3.  The Department of Space (DoS) and the Department of Atomic 
Energy (DAE) will be under new leadership effective the first of 
November, according to press reports.  Dr. K. Radhakrishnan will be 
taking over for Dr. Madhavan Nair as Secretary of DOS and Chairman 
of both the Indian Space Research Organization and Antrix. 
Radhakrishnan most recently served as Director of the Vikram 
Sarabhai Space Centre, and has also headed other ISRO organizations 
including National Remote Sensing Agency, Indian National Centre for 
Ocean Service, Regional Remote Sensing Service Centers, and ISRO's 
Budget and Economic Analysis wing.  He holds an Electrical 
Engineering degree from Kerala University (1970), a postgraduate 
management MBA from the Indian Institute of Management (1976), and a 
doctorate from Indian Institute of Technology, Kharagpur (2000). 
For the DAE, Dr. Srikumar Banerjee is expected to replace Dr. Anil 
Kakodkar as the new Secretary.  Dr. Banerjee is currently Director 
of the Bhabha Atomic Research Center in Mumbai, having begun his 
career at BARC as a trainee in 1968.  He earned his bachelor and 
doctoral degrees in engineering from the Indian Institute of 
Technology, Kharagpur. 
 
Outward FDI Declines but Inflows Still Robust 
--------------------------------------------- 
 
¶4.  After a slow start due to the global financial crisis, foreign 
direct investment (FDI) is rapidly returning to India as evidenced 
by the 40 percent increase in FDI in August as compared to the same 
month last year.  For the year, inward FDI is down 25 percent, 
mainly due to exceptionally high FDI Feb-May of last year. However, 
since May, inward FDI has increased 34 percent compared to the same 
period last year.  A survey by the UN agency also lists India as the 
third most attractive country for FDI after China and United States. 
 
 
¶5.  Leading investors were those from Mauritius, Singapore, United 
States, United Kingdom, and the Netherlands. The top recipients of 
FDI were the services sector followed by the computer software and 
hardware, telecom, and real estate. 
 
¶6.  The global financial crisis and the resultant slowdown in world 
GDP growth have adversely affected India's outward foreign direct 
investment.  Actual FDI investment by Indian companies is down 28 
percent in the first half of 2009 compared to the same period last 
year, and recently released Reserve Bank of India's data reveals 
 
NEW DELHI 00002164  002 OF 002 
 
 
that approvals in U.S. dollar terms fell 18 percent in the second 
quarter although the actual number of proposals increased by 12 
percent. 
 
¶7.  Mauritius, Singapore, and the USA were the top three 
destinations for the Indian investors during the second quarter of 
¶2009.  The manufacturing sector (telecom, transport equipment, 
plastic, rubber products, vehicles, drugs, mining and textiles ) 
accounted for 47 percent of the investment proposals, followed by 
non-financial services at 13 percent, trading  (electrical 
equipments, wood and wooden products and software packages) at four 
percent and others (civil construction projects, shipping, 
industrial tools, chemical products and mining)at 22 percent. 
 
 
Disinvestment Moving Forward 
---------------------------- 
 
¶8.  On October 19th, the Cabinet Committee on Economic Affairs 
(CCEA) approved the selling of up to five percent equity in National 
Thermal Power Corporation Limited (NTPC), India's largest power 
producer, and ten percent (through initial public offer) in Satluj 
Jal Vidyut Nigam, an unlisted power producer.  According to local 
media reports, Commerce and Industry Minister Anand Sharma commented 
that the government expects to raise $2.2 billion from the sale of 
these two public sector units.  Comment:  The government is likely 
looking specifically at divestment in the public power sector since 
sector valuations are amongst the highest and, therefore, would 
raise the most revenue.  End Comment. 
 
¶9.  Prime Minister Manmohan Singh gave further momentum to 
disinvestment when he remarked at an awards ceremony for public 
sector enterprises that the government is encouraging the listing of 
public sector enterprises as this unlocks the true value of a 
company, improves its corporate governance standards, and also helps 
it in raising resources for future expansion plans.  Media reports 
that the government plans to allow one central public sector unit to 
tap the market every month during its regime.  The opportunities 
appear significant as only 44 of the 214 operational public sector 
units are currently listed. 
 
¶10.  Visit New Delhi's Classified Website: 
http://www.state.sgov/p/sa/newdelhi. 
 
 
ROEMER