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Today's Hot Stories - April 12, 2010

10 Headlines for Today

(1) Fearing CRPF backlash, villagers abandon homes for the forests
(2) Thai protesters reject talks after deadly clashes
(3) All bets off if U.S. comes under biological attack
(4) MTNL eyes Rs 5,250-cr revenue in 2011 fiscal
(5) Flat start for equities; Capital goods, IT down
(6) US retail sales, home stats, jobs all firming up
(7) Tendulkar leads Mumbai Indians to IPL 3 semis
(8) Yuvraj may exit Kings XI after IPL 3
(9) Emotions run high as Mickelson wins US Masters
(10) No October election plan: Thai government

5 Stories for Today

(1) Trinamool's support to Maoist threat to country: Yechury
(2) AFPak dominates PM Manmohan Singh-Obama talks
(3) Multi-brand retail FDI out of deep freeze
(4) IMF offers to help Greece, loan arrangement talks set for April 12
(5) Oil rises to $85 as Europe offers Greece bailout

(1) Trinamool's support to Maoist threat to country: Yechury

Communist Party of India (Marxist) politburo member Sitaram Yechury on Sunday alleged that the Trinamool Congress was posing a threat to the country's internal security by “providing support” to the Maoists.

“The Prime Minister has identified Maoist menace as the greatest internal security threat before the country at present. Trinamool Congress is acting against the interests of the country by providing support to the Maoists,” Mr. Yechury said.He expressed confidence that the Left Front would do well in the civic elections to 82 municipalities next month, notwithstanding the chances of Trinamool Congress and Congress coming together to take on the Left.

On the possibility of the Congress and Trinamool Congress forming a ‘mahajot' (grand alliance) to fight the civic polls, he said, “The Left has faced such a mahajot before. It would do well in the coming municipal polls. The Front has already started preparation for the polls.”

(2) AFPak dominates PM Manmohan Singh-Obama talks

US-India ties appear to be back on track after President Barack Obama assured Prime Minister Manmohan Singh that Washington fully recognized India's security concerns arising from the AfPak region and wouldn't do anything inimical to it since it valued the prospect of a strong strategic partnership with New Delhi.

Relief, satisfaction, and a renewed confidence was palpable among Indian officials as they briefed the media on a 50-minute meeting between Obama and Singh on a beautiful spring afternoon that brought hordes of people to the vicinity of the White House to see the finale of the cherry blossom festival. It also brought back color to US-India ties with Obama's assertion of support on various issues after a rather bleak run-up that called into question that state of play between the two countries.

Among the assurances that the Indian side reported receiving from Obama was that the US would work through the legal process to provide access to LeT terrorist David Headley (a sore point with New Delhi) and also seek continued Indian support in the developmental efforts in Afghanistan.

Foreign Secretary Nirupama Rao, who briefed the on the Obama-Singh meeting said the US President told Prime Minister Singh that he fully understood India's concerns about the security situation in the region and assured him that "there is no country in the world where the opportunities for a strong strategic partnership are greater and more important to him and the United States" than the one with India.

Obama's assurance came after Prime Minister Singh strongly raised India's concern with him about Pakistan's relentless pursuit of terrorism as a policy option. "India's interests are constantly on the US mind," Rao, who was part of the Indian delegation at the meeting, quoted President Obama as saying.

A Prime Minister who has gained the reputation of being the most pro-American leader to occupy high office in India stepped up to a Sunday meeting with the US President to convey to him that New Delhi cannot forgo its strategic and security interests to US prevarication or Pakistani pressure in AfPak region, especially as both US and India desired the same end result – the defeat of terrorism.

The future of South Asia will be determined by the way the menace of terrorism is tackled, Singh said, adding this is where the partnership between India and the US would help. Implicit in his presentation was a call greater pressure from Washington on Pakistan to crack down on its home-grown and fostered jihadi groups such as LeT.

Rao told that the 50 minute meeting was “extremely positive and constructive” although the media scrum before the meeting began made much of the stolid body language on a warm spring day. It was the first meeting between the two leaders after the Singh State visit last November when Obama hosted an elegant dinner banquet for him at the White House.

Pakistan wants Washington to press India to downsize its growing presence and influence in Afghanistan because it fears being caught in a pincer. New Delhi believes its interests in Kabul pre-date the formation of Pakistan; Afghanistan was India’s neighbour before Pakistan was even a glimmer in its founder’s eye.

Singh conveyed this to Obama, along with the Indian position on various other issues the two sides don’t see eye to eye, including Washington pandering to Pakistan’s insatiable hunger for military hardware, and differing perceptions on Iran.

Perhaps aware of the Indian agitation, the White House blocked an hour and 15 minutes for the meeting (from 1.45 p.m to 3 p.m; although the one-on-one was allotted 45 minutes) more time than for any of the other five meetings scheduled for the day (with leaders of Kazakhstan, South Africa, Pakistan, and Nigeria).

In fact, the large time slot suggested the agenda for the meeting extended beyond the nuclear security summit which is the backdrop for some 45 world leaders to convene here. In many cases, certainly in the case of India, bilateral issues have threatened to upstage the summit.

The tough language used ahead of the meeting – and the litany of grievances conveyed by Singh to Obama -- was unusual for New Delhi which has preferred to play a rather muted role even as Washington has ignored India’s concerns over growing Pakistani belligerence built on U.S dependence on it for the war in Afghanistan.

But it reflected the frustration in the Indian establishment over US prevarication in Afghanistan and its pandering to Pakistan’s toxic policies that include backing selective Taliban factions that remain its proxies. Washington has winked at this, and sometimes endorsed it, continuing its efforts to get a handle on the situation.

Obama’s schedule for the day suggested the U.S President will convey India’s position to Pakistan’s Prime Minister Yousuf Raza Gilani who he met some two hours after his meeting with Singh. Incidentally, the last time a Pakistani Prime Minister met the US President on a Sunday in Blair House, he was forced to sue for peace – that was Nawaz Sharief with Bill Clinton on July 3, 1999 during the Kargil War.

(3) Multi-brand retail FDI out of deep freeze

The government has launched discussions between ministries about opening multi-brand retail to foreign direct investment (FDI), stepping gingerly into an issue that has been gathering dust for fear of triggering a political whiplash.

The department of industrial policy and promotion (DIPP), the government body responsible for framing foreign investment policy, has written to the finance ministry on the issue and is also in talks with the agriculture ministry about the pros and cons of the move.

"The move to open up retail is part of the government's strategy to plug gaps in the food supply chain and more importantly, help bring down the difference between farm-gate prices and retail prices.The department, a key offshoot of the commerce and industry ministry, has also floated a proposal to allow 100% FDI in defence production.

The government allows up to 51% foreign investment in single-brand retail, but has so far been skittish about opening up multi-brand retail. The rules allow foreign multi-brand retailers only through franchise agreements with local players.

To address the concerns of retail FDI critics, the government is likely to insist that control remains in Indian hands.The proposed cap will be decided after consultations with the agriculture ministry but it is likely to be at 49%.Big retailers such as US-based Wal-Mart and Germany's Metro AG that operate in the so-called cash-and-carry ventures in India have long been clamouring for opening up front-end retail.

(4) IMF offers to help Greece, loan arrangement talks set for April 12

The International Monetary Fund is ready to contribute financing for Greece through a multi-year stand-by loan arrangement and will hold talks on the matter in Brussels on April 12, IMF Managing Director Dominique Strauss-Kahn said on Sunday.

He said an earlier announcement by euro zone member countries to provide debt-strapped Greece with emergency financing if needed marked "an important step" and will also safeguard financial stability in the euro area as a whole.

"The IMF stands ready to join the effort, including through a multi-year stand-by arrangement, to the extent needed and requested by the Greek authorities," Strauss-Kahn said in a statement.

"An IMF team will hold discussions in Brussels on April 12 with the Greek authorities, the European Commission and the ECB."

Euro zone finance ministers earlier agreed on a giant 30 billion euro ($40 billion) emergency aid package for Greece but stressed that Athens had not asked for the plan to be activated yet.

(5) Oil rises to $85 as Europe offers Greece bailout

Oil prices rose above $85 a barrel on Monday in Asia after a massive loan offer to Greece by European countries helped weaken the dollar, making crude cheaper for investors holding euros.

Benchmark crude for May delivery was up 50 cents to $85.42 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract lost 47 cents to settle at $84.92 on Friday.

The finance ministers of the 15 eurozone nations agreed Sunday to offer euro 30 billion ($40 billion) in loans to Greece this year if Athens asks for the money.

The promise filling in details of a March 25 pledge of joint eurozone-IMF help was another attempt to calm markets that have been selling off Greek bonds in recent days.

The euro rose to $1.3657 on Monday from $1.3322 on Friday while the dollar fell slightly to 93.10 yen.

Oil was down the previous three days on investor concern that slowly recovering U.S. crude demand doesn't justify further gains. Crude jumped 25 percent to above $87 last week from $69 in early February.

If oil markets continue to take cues from supply and demand in preference to the dollar, equities or economic data we cannot paint a picture that includes higher prices.

In other Nymex trading in May contracts, heating oil added 1.17 cents to $2.2377 a gallon, and gasoline gained 1.17 cents to $2.3010 a gallon. Natural gas rose 3.0 cents to $4.100 per 1,000 cubic feet.

In London, Brent crude was up 64 cents at $85.47 on the ICE futures exchange.

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