Tatas pull out Nano project from Singur

Tatas pulled out of West Bengal for its Rs one-lakh car Nano project, blaming it on continuing agitation by the opposition parties, spearheaded by Trinamool Congress leader Mamata Banerjee.


Addressing the media after meeting with Chief Minister Budhadeb Bhattacharjee, Ratan Tata, however, said that Nano will come out as per the committed time.

"Nano will come on time. We will make make-shift arrangement to meet deadline," Tata said in Kolkata on Friday.

"There was little choice but move out of Singur, he said.

The move has been prompted after taking into account issues such as well-being of its employees at the project and safety of contractors as well as that of its vendors.

The persisting agitation by the opposition parties has been the sole reason behind the decision to pull out the project, he said.

The company is exploring offers from three-four states about the new site of the project and the new location would be announced soon, Tata said.



"I am extremely pained. It has been an extremely painful decision. It has been a great disappointment for the people working on the ground, more than me," Tata said.

Talking about the vendors of the project, he said, "I think vendors will also move with us. They are an integral part of the project. We will try to protect the interest of the vendors."

On the question of process of acquiring land for the Nano project, he said, "To the best of my knowledge, the land was acquired legally... it was done transparently and the compensation was based fairly."

"We have not been a party to any land dispute. It is between West Bengal government and Trinamool Congress," he added.

Talking about the future association of Tatas with the state, he said the group already has considerable presence in the state and would open a cancer hospital in the next few months.

"I hope West Bengal prosper in the future. In the future we will be here again. We don't believe that we have lost our enthusiasm in investing in West Bengal and assure that we will invest in the state for new projects," he said, adding that he has assured the chief minister that as far as further investment in the state is concerned, this project would have no bearing.

Rice arrives in New Delhi; 123 pact not to be signed

US Secretary of State Condoleezza Rice arrived in New Delhi on Saturday on a day-long visit but the 123 Agreement will not be signed during her stay.


Rice will meet Prime Minister Manmohan Singh and hold talks with External Affairs Minister Pranab Mukherjee, on a wide range of issues, including the civil nuclear initiative.

The two sides had initially earmarked 2 pm as the tentative time for signing of the 123 Agreement, but procedural issues like delay in US President George W Bush signing the legislation passed by the Congress into law, forced the signing of the deal to be called off.



India wants to see Bush first sign the legislation into law as it expects the US President's accompanying statement to clarify certain aspects, particularly assurance of fuel supply, that have created apprehensions in New Delhi.


The US side which was keen to sign the agreement during this visit has said that it was not necessary for Bush to sign the legislation before the two countries ink the agreement and that he can do so later also.



Rice and Mukherjee will also discuss trade and counter-terrorism besides issues related to the region.



Rice will also meet BJP leader L K Advani.

Rupee falls to 47.11 against US dollar in early trade

The Indian rupee plunged by 49 paise to a five-year low of 47.11 against the US dollar in opening trade on Friday following increased demand for the greenback from importers.


At the Interbank Foreign Exchange market (Forex), the domestic currency, which touched a five-year low of 47.25 on Wednesday but closed the day stronger by 34 paise at 46.62/63, depreciated by 49 paise to 47.11 against the greenback.

The currency market was closed on Thursday on account of Gandhi Jayanti and Id-ur-Fitr.

Rice to travel to India today

US Secretary of State Condoleezza Rice will travel to India on Friday for a two-day visit, during which the 123 agreement may be signed.


The State Department said she will meet Prime Minister Manmohan Singh and hold talks with External Affairs Minister Pranab Mukherjee, discussing a wide range of issues, including the civil nuclear initiative.


"They (Rice and Indian leaders) are obviously going to talk about the (civil nuclear)agreement and what it means for the relationship," Department Spokesman McCormack said.



He, however, refused to say categorically whether the 123 agreement, which has been approved by the US Congress, would be signed during Rice's visit.



Sources in New Delhi, however, said the signing of the agreement was high on the agenda of the visit.



"The President has to sign it... I would expect that there will be a number of other administrative or bureaucratic steps along the way... If there are any further events, you know, signings or anything else around this agreement in India, we'll let you know.... Right now I don't have anything to announce," the Spokesman said.



"I'm sure that there are going to be other things that, you know -- for example, enrolling a bill for the president... to sign legislation."



"And I'm sure on the Indian side perhaps there are other such things. But, again, I'm not going to concern myself with those kind of bureaucratic things. It's not a question whether they are going to happen, but, you know, but when, and it's a matter of people doing those things. So I'm not trying to indicate any obstacles to this," McCormack said.



On the nuclear deal, he said, "It, in our view, will mean a different kind of relationship between the United States and India for decades to come."

EU leaders to discuss bank crisis

A European financial summit to discuss the current global crisis is set to take place in Paris on Saturday.

Leaders from Britain, Germany and Italy, together with the president of the European Commission and European Central Bank chief, will be attending.

President Nicolas Sarkozy hopes it will lead to a world summit later this year.

Rumours of a 300bn euros (£237bn, $417bn) EU-wide rescue similar to the plan being discussed by the US Congress have been denied by Sarkozy's office.

Calls for European action follow the bail-out of both Bradford and Bingley, which cost the UK government around £14bn, and Fortis Bank, which cost the governments of Belgium, Luxembourg and the Netherlands around £9bn.

Disadvantage

European leaders are keen to agree a co-ordinated response ahead of next week's meeting of the G8 finance ministers and central bank governors in Washington.

Meanwhile, the Irish government's unilateral move to safeguard all deposits, bonds and debts in the Republic of Ireland's biggest banks and building societies for the next two years has raised concerns about competitive disadvantage among UK banks.

However, according to Karel Lannoo from Brussels think tank the Centre for European Policy Studies, it is a mistake to allow individual European countries to deal with their own banks.

"Most of these banks, certainly the 50 largest European banks have outgrown their national boundaries," he said.

"They are no longer a Belgian or a French or a German bank - they have in many cases the majority of their employees outside their home country."

'Nation-by-nation'

However, the BBC's Emma Jane Kirby in Paris said there is little agreement on how the Paris talks should proceed.

Germany has made its opposition to any coordinated European bail-out plan known ahead of the meeting, while the chairman of eurozone finance ministers has also rejected any need for a European rescue fund for distressed banks.

Eurogroup chairman Jean-Claude Juncker said Europe did not need a similar programme to the US's $700bn (£396bn) plan to take so-called toxic assets off banks' balance sheets.

British Prime Minister Gordon Brown is also sceptical of the need for any Europe-wide plan.

According to the BBC's Europe correspondent, Mark Mardell: "Downing Street prefers the case-by-case, nation-by-nation solutions that have been happening so far."

However, a French civil servant is reported to have proposed a 300bn euro bail-out fund, and the Netherlands has proposed the creation of a European reserve fund to come to the aid of ailing banks before they fail.

Despite the differing views, Gordon Brown's spokesman said he did not expect discussion of an EU-wide bank fund at the meeting.

"The purpose of the meeting will be to discuss how each of the four major economies in Europe are responding to the global financial crisis," he said.

Bail-out doubts send shares lower

Shares of Asian firms have dropped, echoing steep falls on Wall Street due to uncertainty about the future of the $700bn (£395bn) bail-out plan.

While the Senate has backed a new version of the bill, it must go back to the House of Representatives, to gain approval. A vote is expected on Friday.

Hong Kong's Hang Seng index fell 2.3% while Japan's Nikkei index shed 1.6%. Leading US stocks had ended 3.2% down.

Even if the bail-out plan is passed, concerns over the world economy remain.

"The bail-out could move us toward a solution, but there are many unresolved issues," said Tim Rocks, Asia strategist at Macquarie Securities in Hong Kong.

"We're starting to suffer and this will have an impact on Asia exports through next year".

The US is a major customer for Asian countries, whose economies rely heavily on exports.

Economic figures released on Thursday were an example of the US slowdown. US factory orders slipped 4% in August compared with July, a greater fall than forecast.

While the rescue package has met fierce criticism from both Democrats and Republicans, there are concerns that the uncertainty has aggravated market volatility.