In the light of several notices invoking provisions of India’s bilateral investment agreements and demanding billions of dollars in compensation, the Indian government decided to put ongoing BIPA negotiations on hold and initiated a review of its model BIPA. The briefing paper critically examines the ongoing review process conducted by bureaucrats with no transparency and wider public consultation. The paper suggests a number of key policy recommendations concerning the design and implementation of a model BIPA. India needs to learn lessons from South Africa which has fundamentally changed its…

On October 12, Raghuram Rajan announced that the Reserve Bank of India will soon issue new rules allowing a more liberal entry of foreign banks in India. While examining the past performance of foreign banks in India, the author contends that the key issue is not xenophobic hostility towards foreign banks but their niche business model devoid of social and developmental banking. Several big international banks including JPMorgan, HSBC and UBS have recently paid billions of dollars in regulatory fines for their alleged role in Libor rate fixing, money…

The nearly $1 billion payment crisis at the unregulated National Spot Exchange Ltd is possibly the biggest scandal in the Indian commodity markets of this decade spawned by the combination of a lackadaisical regulatory regime, greedy promoters and easily pliable bureaucrats and politicians. The NSEL payment scandal is a classic case of the failure of regulation and supervision of Indian commodity markets, argue the authors.

Surprisingly, the NSEL has been functioning as an unregulated commodity exchange for the past many years. It is only after the crisis that the commodity…

The Indian rupee touched a lifetime low of 68.85 against the US dollar on August 28, 2013. The rupee plunged by 3.7 percent on the day in its biggest single-day percentage fall in more than two decades. Since January 2013, the rupee has lost more than 20 percent of its value, the biggest loser among the Asian currencies. There is no denying that India is not the only emerging market experiencing a rapid decline in its currency’s value. Several emerging market currencies are also experiencing sharp depreciation over the prospect…

On 28th February 2013, India’s Finance Minister P Chidambaram proposed a transaction tax on the commodity futures trading under the direct tax provisions in the Union Budget 2013-14. The commodity transaction tax (CTT) would be levied at 0.01 percent (Rs.10 for transaction worth Rs.100000). The CTT would be levied only on non-agricultural commodities futures contracts (e.g., gold, copper and oil) traded in the Indian markets. While the agricultural futures contracts would be exempted from CTT. The tax will be payable by the seller of futures contract.