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UNCLAS SECTION 01 OF 03 NEW DELHI 000031 
 
SENSITIVE 
SIPDIS 
 
USDOC FOR ITA/MAC/OSA/LDROKER/ASTERN/KRUDD, USPTO 
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 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINV ECIN KIPR EIND ELTN ETRD TSPA IN JA
SUBJECT: NEW DELHI WEEKLY ECON OFFICE HIGHLIGHTS FOR THE WEEK OF 
JANUARY 04 TO JANUARY 08, 2010 
 
¶1. (U) Below is a compilation of economic highlights from Embassy 
New Delhi for the week of, January 04 TO January 08, 2010, including 
the following: 
 
-- Cabinet Clears Copyright Amendments for Introduction in 
Parliament 
-- GOI Under Fire at Economic Seminar 
-- India Ranks Eighth in Internet Piracy 
-- India Signs Agreement with Japan to Develop Industrial Corridor 
-- GOI Raises Export Duties on Iron Ore 
-- 3G Auctions to Miss Their Scheduled January 14, 2010 Start Date, 
Yet Again 
 
Cabinet Clears Copyright Amendments 
for Introduction in Parliament 
------------------------------------ 
 
¶2. (U) On December 24 the Indian Cabinet approved a bill to amend 
the Copyright Act of 1957.  The bill includes a host of changes 
including conformity with the World Intellectual Property 
Organization (WIPO) Internet Treaties, which include the WIPO 
Copyright Treaty (WCT) and the WIPO Performances and Phonograms 
Treaty (WPPT), goals long advocated by the USG.  Information and 
Broadcasting Minister Ms. Ambika Soni reportedly commented "while 
India has not yet signed these treaties it is necessary to amend 
domestic legislation to extend the copyright protection in the 
digital environment."  The GOI press release on the Cabinet decision 
can be viewed at http://www.pib.nic.in. 
¶3. (U) Besides introducing provisions to implement WIPO Internet 
treaties, the Bill proposes other amendments including making 
Producer and Principal Director as co-authors of the cinematograph 
film, extending the copyright of the cinematorgraph film from 60 to 
70 years, providing a fair deal exception for the production of 
copyrighted material in special formats that can be used by 
physically challenged people, extending the term of copyright 
protection for photographs from 60 years to life of the author plus 
sixty years and providing independent rights to authors of literary 
and musical works in a cinematograph film. The Bill also proposes to 
include certain provisions with regard to enforcement of copyright. 
The Copyright Amendment Bill of 2009 will be introduced in the next 
session of Parliament starting at the end of February 2010. 
GOI Under Fire at Economic Seminar 
---------------------------------- 
 
¶4. (U) At a January 4 economic seminar hosted by the Federation of 
Indian Chambers of Commerce and Industry (FICCI), leading economists 
and GOI officials expressed critical views on the role played by the 
central government after the global economic crisis.  Environment 
Minister Jairam Ramesh said India needed fresh thinking on the role 
of state investment.  Rather than public-private partnerships, which 
refer to private funding for public projects, Ramesh said there 
needs to be both public investment and private management on a much 
larger scale.  He pointed to the Kerala school model as a successful 
example of public funds being used for education administered by 
private institutions. 
 
¶5. (SBU) Rajiv Kumar, CEO of the Indian Council for Research on 
International Economic Relations (ICRIER), said India faces 
uncertainty from excessive government interference as well as from 
globalization.  According to Kumar, the common perception that 
Indian industry could continue to grow despite the GOI is a myth. 
Regarding globalization, Kumar did not think that India could handle 
the foreign capital inflows it is receiving and should consider a 
Tobin Tax and additional capital controls. (Note: In a December 
meeting, Anand Bajaj, Ministry of Finance Director of Capital 
Markets, told Econoff that India can handle the foreign capital it 
is receiving and the GOI does not think there is any need for a 
Tobin Tax or other capital control measures. End note.) 
 
¶6. (U) Surjit Bhalla, Chairman of Oxus Investments, said India must 
correct the excesses of the State.  Although he said there was a 
need for a central government, he rhetorically asked "who will 
regulate the regulator?"  He noted the central government is "well 
ahead of itself" and there needs to be mechanisms to "discipline" 
the central government. 
 
NEW DELHI 00000031  002 OF 003 
 
 
 
India Ranks Eighth in Internet Piracy 
------------------------------------- 
 
¶7. (U) According to a recent joint study by the Motion Picture 
Association (MPA) and Software Company Dtechnet, India ranks eighth 
in the world for the largest number of illegal Internet downloads. 
Internet piracy is widespread in peer-to-peer (P2P) data sharing 
with the highest level of film piracy.  According to the MPA study 
entitled 'Internet Piracy Landscape Audit,' the two main internet 
piracy methods used in India are web-based file hosts 'CyberLockers' 
and the file-sharing network 'BitTorrent.' 
 
¶8. (U) The study reportedly lists India as the world's fourth 
largest downloader after the US, the UK, and Canada, accounting for 
about 6.5 percent of total downloads.  Media reports have quoted MPA 
President Michael Ellis as saying that this is alarming in view of 
the fact that India has a very low base of Internet penetration 
compared to the US and the UK.  The study further suggests that 
India's metro cities (Delhi, Mumbai and Bangalore) are the hub of 
downloading activities where popular Bollywood movies get the 
maximum number of downloads.  According to domestic film industry 
observers, the rate of internet piracy for films can go up even 
higher with broadband penetration rising within the country.  MPA is 
reportedly in touch with some Internet Service Providers in order to 
curb the illegal downloading by locating the downloader. 
 
India Signs Agreement with Japan 
to Develop Industrial Corridor 
-------------------------------- 
 
¶9. (U) The Delhi-Mumbai Industrial Corridor (DMIC) is an ambitious 
Government of India project to bring in global investment and 
promote the region as a manufacturing destination.  The six initial 
sites identified for development in the corridor include 
Dadri-Noida-Ghaziabad in Uttar Pradesh, Manesar-Bawal in Haryana, 
Khushkhera-Bhiwadi-Neemrana in Rajasthan, Pitampura-Dhar-Mhow in 
Madhya Pradesh and Bharuch-Dahej in Gujarat. On December 28, the 
DMIC Development Corporation signed an agreement with the Japan 
External Trade Organization for collaborating on the project and for 
the transfer of Japanese expertise in developing and promoting 
'smart communities' (eco-cities) around the DMIC project area.  The 
DMIC Project Development Fund will be funded by equal contributions 
from India and Japan.  A USD 75 million loan from the Japan Bank for 
International Cooperation (JBIC) has established the fund which will 
be routed through India Infrastructure Finance Company Limited 
(IIFCL).  The Indian Government has also approved a grant of USD 75 
million as its contribution to the fund.  The estimated total 
project cost is about USD 90 billion. 
 
GOI Raises Export Duty on Iron Ore 
---------------------------------- 
 
¶10. (U) On December 24, in a bid to curb iron ore exports and to 
encourage domestic steel production, the GOI raised export duties on 
two categories of iron ore.  Effective immediately, the government 
raised the duty on iron ore lumps from five percent to ten percent 
and on iron ore fines from zero to five percent.  Industry experts 
and mining sector observers have reportedly stated that the move 
will adversely affect the mining sector.  In June 2008, India 
initially imposed export duties of 15 percent on iron ore products. 
However, in November 2008, the GOI reduced export duty on iron ore 
fines to eight percent, and a month later, in December, abolished 
the duty on iron ore fines altogether.  At the same time, the GOI 
reduced export duties on all other varieties of iron ore to five 
percent.  The Finance Ministry notifications for the latest decision 
are available at http://www.taxindiaonline.com. 
¶11. (U) Earlier, Steel Minister Virbhadra Singh was quoted as saying 
the competitiveness of the Indian steel industry would be seriously 
jeopardized if iron ore exports continue unabated, since Indian 
steel makers face an acute shortage of quality iron ore.  The Steel 
Ministry reportedly asked the Finance Ministry to impose a ten 
percent tax on export of all grades of iron ore.  The mining 
industry, on the other hand, had been lobbying for the removal of 
export duties on iron lumps altogether.  According to the Secretary 
 
NEW DELHI 00000031  003 OF 003 
 
 
General of the Federation of Indian Mining Industry, the increase in 
export tax will have a negative impact on the Indian steel industry 
and the GOI should have allowed the steel industry to recover from 
the global economic recession before imposing export duties. 
Moreover, domestic industry does not consume iron ore fines, he 
added.  India is currently the third largest exporter of iron ore in 
the world after Australia and Brazil, exporting almost 50 percent of 
its total ore production. 
3G Auctions to Miss Their Scheduled 
January 14, 2010 Start Date, Yet Again 
-------------------------------------- 
 
¶12. (U) The auction for third generation (3G) spectrum, which has 
been repeatedly rescheduled over the past two years, is once again 
going to miss the January 14, 2010 start date.  The auction may now 
be rescheduled for the end of February 2010.  In December 2009, A. 
Raja, the Indian Minister for Communication, had confidently 
announced that the auctions were on schedule for a January 14 start 
and were to culminate with the allocation of spectrum to winning 
bidders by August 2010.  The Department of Telecom (DOT) was going 
to issue a notice inviting applications on December 8, 2009 with 
December 21 as the last date for the receipt of applications.  To 
date, no action has been taken by the DOT and there is a noticeable 
absence of clarification on next steps.  The Ministry of Finance has 
lowered its expectations for the likely revenues generated from the 
auction and conflicting information exists on the modalities of the 
auction.  Even though the refusal to vacate the spectrum by the 
Indian Ministry of Defense is cited as the reason for the delay, 
other reasons, such as lower revenues among telecom service 
providers and anticipated heavy investment requirements for the 3G 
infrastructure, also may be playing a role in the auction's delay. 
 
¶13. (U) Visit New Delhi's Classified Website: 
http://www.state.sgov/p/sa/newdelhi. 
 
ROEMER