Should Banks Be Allowed in Commodity Futures Trading?

By Kavaljit Singh | Policy Brief # 1 | August 2012

It may sound surprising to some people, but it’s true that banks are not allowed to trade in commodities in India. The banks are allowed to trade in financial instruments (such as shares, bonds and currencies) in securities market but the Banking Regulation Act of 1949 strictly prohibits banks (both domestic and foreign) from trading in goods and therefore they are not allowed to trade in commodity futures market.

The Section 8 of Banking Regulation Act clearly states that no bank…

Should India Establish a Sovereign Wealth Fund?

By Kavaljit Singh | Briefing Paper # 6 | November 2011

New Delhi will soon take a final call on the issue of setting up of a sovereign wealth fund (SWF). The idea of setting up an Indian SWF has been going around since 2007 when China established its major sovereign wealth fund, China Investment Corporation (CIC), with an
initial capital fund of $200 billion. However, this time the proposal has received strong support from India’s corporate leaders who recently suggested the establishment of a state-owned SWF primarily to secure access to natural resources and pursue strategic investment opportunities overseas.

With the strong backing of corporate leaders, a SWF may soon be a reality and India will…

The Pitfalls of FDI in Multi-Brand Retailing in India

By Shekar Swamy | Briefing Paper # 3 | October 2011

There is a growing pressure on policymakers from foreign governments and big retailers to permit foreign direct investment (FDI) in multi-brand retail in India. At present, India allows 51 percent FDI in single-brand stores (e.g., Apple) and 100 percent FDI in cash & carry and wholesale trading. The retail trading by foreign multi-brand retailers (e.g., Wal-Mart Stores) is prohibited under the current regulatory regime.

The Committee of Secretaries has recently recommended that the sector be opened, with some riders that are easy to meet….

Protecting Investors’ Rights: An Assessment of EU’s New Mandate on International Investments

By Burghard Ilge and Kavaljit Singh | Briefing Paper # 4 | October 2011

On 12th September 2011, the General Affairs Council of the European Union (EU) officially approved negotiating mandate for investment protection measures under the proposed free trade agreements with India, Singapore and Canada. The secretive manner in which the negotiating mandate was approved raises several legitimate questions about the entire process.

The new negotiating mandate specifically proposes investor-to-state dispute settlement provisions (in addition to state-to-state). This remains highly contentious because it gives special rights to investors to completely bypass the domestic legal system and seek…

Why We Need a Financial Transaction Tax: A Proposal for the G20

By Kavaljit Singh | Briefing Paper # 5 | October 2011

At the forthcoming G20 Summit (Cannes, 3-4 November 2011), the summit leaders are expected to address several policy issues concerning world economy and financial markets, many of which remained unresolved since the Toronto Summit in June 2010. Against the backdrop of a weak global economy and the ongoing eurozone sovereign debt crisis, G20 leaders will have to take some hard decisions. Failure to do so would undermine the effectiveness and credibility of G20 as the “premium forum” for international economic cooperation.

One of the key policy issues to be tackled…