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Mamata plans a surprise gift for Obama

Last updated on: October 12, 2010 10:27 IST

Mamata plans a surprise gift for Obama

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Rediff Business Desk

American President Barack Obama might get an unexpected gift of a few thousand jobs for Americans from a surprising source when he is in New Delhi next month.

Union Railway Minister Mamata Banerjee, say sources, plans to close deals, which would create jobs either in Erie, Pennsylvania, or in LaGrange in Obama's home state of Illinois.

Also, according to a recent report in Kolkata-based English daily, The Telegraph, negotiations, which are on, are expected to provide orders of up to $4.5 billion from Indian Railways in near future.

A lion's share of that may go to Americans firms.

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Image: Students gather next to paintings of US President Barack Obama as a child, at Obama's former elementary school in Jakarta.
Photographs: Enny Nuraheni/Reuters
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3,000 jobs to be created?

According to The Telegraph , the deals between the Indian Railways and American companies will not be a one-way street.

Besides, the railways will invite financial bids from six companies, including one from the United States, which have been shortlisted for building a Rs 500-crore (Rs 5 billion) coach factory in Kanchrapara in Bengal.

At least 3,000 jobs will be created when the new factory goes into production in Kanchrapara where more than 10,000 people are already employed in a railway workshop established in 1863.

America's General Electric is among four bidders which have been shortlisted for a Rs 860-crore (Rs 8.6-billion) electrical engine components unit in Dankuni, West Bengal.

The unit, aimed at import substitution, will supply components to the Chittaranjan Locomotive Works. The request for quotations for the project have already been completed.

Also the expansion of the Indian Railways holds out prospects of increased US exports to India.

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Photographs: Reuters
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Mamata plans a surprise gift for Obama

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New railway factories to soothe US nerves

Sources say that the prize deal which is exciting officials preparing for the Obama visit is a proposed factory in Marhowra in Bihar to manufacture diesel locomotives.

Only two American companies, ElectroMotive Diesel and GE, bid for the project with an initial investment of between Rs 1,200 and Rs 1,500 crore (Rs 12-15 billion), according to Amit Mitra, chairman of an experts committee set up by the railway minister.

Another big railway project which the Obama team will have its eyes on is a factory to manufacture electric locomotives at Madhepura in Bihar.

The Madhepura project which requires an investment of just under Rs 1,300 crore (Rs 13 billion) will manufacture 120 electric locomotives a year.

The railways are committed to buying these over a 10-year period.

These developments are sure to please Obama, say observers. For, if new jobs are not created in the US in the next one year, he might lose the chance of being re-elected for a second term.

Employment figures released recently revealed that a further 95,000 Americans became unemployed in September.

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Photographs: Reuters
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Mamata plans a surprise gift for Obama

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Singur to be an export hub?

Roughly two years after Tata Motors pulled the Nano project out of Singur, Railway Minister and Trinamool Congress chief Mamata Banerjee said at a rally recently, "I will make Singur the showpiece of Bengal."

"Let the land be given to the Railways, and industries will come up. We will give back 400 acres to the unwilling farmers and two industries will be set up on the remaining 600 acres," she said.

Grapevine has it that the railway minister plans to set up an export unit on the Singur land once she gets it.

If that happens, it will be music to the American ears.

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Image: A student with an 'Obama haircut' at Wright Middle School in Madison, Wisconsin.
Photographs: Larry Downing/Reuters
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Mamata plans a surprise gift for Obama

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Indians hate Obama's recent protectionism

Indians, too, look forward to Obama's visit -- for a different reason though. They hope the US President would relax his stand on protectionism that has come as a severe bolt to India's IT industry.

Barack Obama's recent statements on the increased importance of Indian students and the growing concern that jobs are being offshored to places like Bengaluru, have left the Indian community baffled.

While unveiling plans for tax reforms recently, Obama said that his country would 'stop letting American companies that create jobs overseas take deductions on their expenses when they do not pay any American taxes on their profits.'

Nearly 60 per cent of Indian IT-business process outsourcing industry caters to the US companies, according to latest figures. India's BPO industry employs over 17 lakh (1.7 million) professionals.

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Photographs: Reuters
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Mamata plans a surprise gift for Obama

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Pranab talks tough against US stand

Rejecting the 'protectionist policies' of the US, Finance Minister Pranab Mukherjee said in the US recently that free flow of goods, services and capital would ease the global financial crisis.

"Protectionist policies are not acceptable," Mukherjee said in New York before addressing the India Investment Forum there.

"We shall have to keep in view that if the world economy is to come out of the present crisis, then protectionism is not the answer," Mukherjee had said.

Noting that the US protectionist policies could impact India's software companies, the minister said that the financial crisis would ease if 'uninterrupted flow of goods and services and capital are allowed to take place'.

Mukherjee said India would be speaking out against protectionism at the meeting of the Finance ministers of G20 countries in South Korea later this month.

"If there be no robust demand for exports from the developed countries then our exports may suffer. . . it may affect our trade balance in the course of time," he said.

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Image: Pranab Mukherjee.
Photographs: Paresh Gandhi
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Protectionist measures stirred a hornet's nest

Measures like Ohio banning outsourcing of state IT contracts to companies in Indian cities like Bengaluru had stirred a hornet's nest in India.

The move was preceded by Washington's decision to hike fee for H-1B and L1 visas to fund a US border security fund.

This had also invited strong criticism in India. Indian software exporters fear both these measures would hit the $50 billion Indian IT industry which earn more than 50 per cent of its revenues from America.

However late last month, Republicans in the US Senate successfully blocked the passage of an anti-offshoring bill that would have denied tax breaks to US companies which move jobs overseas.

The Bill proposed a ban on government contractors from using American taxpayers' money to move jobs offshore.



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