Developmental problems in Algeria

Development activities may be recorded in various sectors in any given country especially in agriculture, transportation and manufacturing depending on how these sectors bring economic benefits to a country it’s easy to determine the Gross Domestic Product. Using Algeria as an example, industrial revolution and human trafficking are the two major factors that help determine the country’s economic level. It’s worth noting that, Algeria highly depends on agriculture and human labor for its development.For this reason, the government has developed several developmental theories to cope with any problems that may affect the major sectors in the country. Industrial revolution Since the early 19th century, Algeria has had significant changes in transport, manufacturing and agricultural sectors. These changes can best be said to be as a result of industrial revolution, which has brought new tools and machines to the country’s economic sector. In addition, industr ial revolution has resulted to new forms of mechanization such as textile industry and introduction of iron making techniques.The tools and machines brought about by industrial revolution have made production to be more efficient and reliable. This is because tools tend to make work easier and reduce production cost. The reason behind reduced production cost is the ability industrial revolution has on reducing human labor on the number of employees in any given production industry. However, industrial revolution has several shortcomings that a country should take note of. Agricultural sector is negatively affected by industrial revolution when pollution issues arise.In most cases, industries tend to cause air, water and land pollutions. Vegetation provides economic advantage and basic food to a nation, pollution caused by industrial revolution tends to damage them hence resulting to an unhealthy nation. Other limitations caused by industrial revolution are unemployment and reduced s ocial activities. In Algeria for example, iron melting has resulted in increased weapons and arms in the country. Researchers such as John Clapham have blamed industrial revolution for change in social activity and increased crime.Unemployment on the other hand has led to increase in the gap between the poor and the rich. Unemployment refers to the microeconomic phenomenon where by people are willing to work but not currently working, this groups of people in clued those with out work, those currently available to work and those seeking work that that particular moment. Unemployment is segmented in terms of age, sex, education, duration of unemployment and kind of work that an individual is seeking. In the United States specifically the common types of unemployment are the frictional structural and cyclically types (G.  den Broeder P 132).Industrial revolution is also leads to minimum wages in some of the jobs or occupation, research has shown that the amount of salary or wages th at employees are paid in some sectors especially the blue collar jobs the payment is too low compared to the amount of job or task performed, the solution to this according to the governmental human rights acts the incorporation of the setting of minimum wage had been suggested as the answer, this has not proven to work since minimum wage set was too low compared to the daily expenses and the expected standards of living of the workers.As a solution to the major problems caused by industrial revolution the government has formulated several developmental theories. A good example is starting up social programs which ensure the citizens are aware of the importance of unity and peace. The assumption behind these theories is that individuals are socially stable, availability of arms and weapons will not affect peace in a country greatly. Another strategy developed by the government to suppress unemployment caused by industrial revolution is reduced tax burden.Human trafficking Human traf ficking refers to harboring, transporting or recruiting people with the aim of slavery. It is quite common in many underdeveloped countries like Algeria where developmental sectors determine the countries economic and social stability. Human trafficking tends to bring about deception and fraud. This is because it’s mostly caused by abuse of power. Campaigns against human trafficking have highly been established since the activity does not comply with human rights in most countries.There are several forms of human trafficking; sexual harassment, forced labor and exploitation and servitude are the most common forms of human trafficking. In Algeria for example, children can be recruited as soldiers, the act tends to weaken the population. The fact that human trafficking brings about social mistrust, the citizens finds it hard to follow the set rules and regulations as they believe the government is dictatorship oriented.Since human trafficking is quite common in Algeria, Smith M cGregor analyzed several causes related to its increase. The most common causes are unemployment, government corruption, regional imbalances, political instability, armed conflicts and structured crimes. Clearly, most of these causes can only be controlled if the government at hand can come in. To begin with, the government should find it their duty to provide security to the public by disarming all the unauthorized persons.For the government to succeed in providing security and peace in the society, proper leadership strategies should be implemented. It is essential to eradicate human trafficking in our country as it affects stability of social and economic sectors. In regions where human trafficking is highly witnessed, essential rife activities are not considered. A good example is low educational levels resulting to high levels of illiteracy. Human trafficking also results to low developmental growth since human labor in that specific country is unavailable.When this happens, it becomes quite difficult to develop agricultural and manufacturing sectors. Human trafficking results to poor health in a society therefore it tends to be quite difficult for any developmental activities to be carried out effectively. The government and several other non governmental organizations have developed developmental theories to cope with human trafficking effects and besides eradicate it. Stating well defined international laws is one major theory developed by the government to reduce power extravagance.The Algerian government has ensured that legal courts do not oversee crimes related to violation of human rights. A counsel has also been developed based on the country’s’ laws to cope with cases related to human trafficking. In conclusion, industrial revolution and human trafficking are the major developmental problems in Algeria and they are associated with most of the financial and social problems in the country. However, in the recent past the government h as developed several developmental theories to eradicate the problems. References Russell Brown, Lester. Eco-Economy, James & James / Earthscan.ISBN 1-85383-904- (2005) Eric Hobsbawm, The Age of Revolution: Europe 1789–1848, Weidenfeld & Nicolson Ltd. ISBN 0-349-10484-0 Hudson, Pat. The Industrial Revolution, Oxford University Press US. ISBN 0-7131-6531-6 1998 Deane, Phyllis. The First Industrial Revolution, Cambridge University Press 1998

Wise Blood by Flannery O’Connor

Introduction to Wise Blood by Flannery O’Connor by Karen L. Enz Though a short novel, Wise Blood is a dense and complicated one with various levels of meaning. Many readers are confused and shocked by the novel as there is a distinct lack of likeable characters and there is much violence. A key element in understanding the novel’s construction and meaning is to understand the literary influences on Flannery O’Connor. Flannery O’Connor was deeply influenced by Roman Catholicism that informed her own religious sensibility which echoed in her literary voice.Her religious views envisioned a deeply flawed world that could only be redeemed by the intercession of grace. Her Southern origins brought that vision into high relief with her use of casts of grotesque characters who were often involved in violent incidents. She subjected her characters to microscopic evaluation of their religious and existential obsessions. To lighten its dark tone, Flannery O’Co nnor utilized her masterful satiric wit to increase the spectrum of the colors in her literary canvass.A second influence was O’Connor’s intense exposure to the predominant literary style, New Criticism, which was at its apex during the middle of the twentieth century. New Criticism was a complicated formulaic style that often utilized dense symbolism, paradox, irony, tension and ambiguous meaning, all hallmarks of O’Connor’s writing. New Criticism also professed that a work was to have a high degree of unity and self-containment. If we see Wise Blood through both O’Connor’s religious sensibility and its permeation in New Criticism, the structure and meaning of the novel fall more easily into place.Haze Motes, (note the symbolism of his name hazy vision and mote in the eye) is a the epitome of the religiously obsessed individual. The more he professes unbelief, the more unsure and shortsighted he becomes. The ultimate paradox occurs in his b linding, when he finally realizes his need for redemption. The text is rife with symbolism, much of it religious. The sky is permeated with clouds that look like a simplified God’s beards and curls, roadside pigs that are symbols of the devil, a shrunken man who was a symbol a false idol, an old Essex which was symbolic of a search for meaning and homecoming, and glasses that obscure vision.Some critics see the novel as a condemnation of modernity in its cult of shallow self-absorption and nihilistic pursuits. Haze is so focused on his pursuit of unbelief that he fails to see anything around him, including the needs of Enoch (who is driven by instinct â€Å"wise blood†) and Sabbath. A satiric note is sounded in Chapter 7, which can serve as a microcosm of the novel, when Sabbath receives a letter from Mary Brittle (note the symbolic nature of the name) who advises Sabbath â€Å" Perhaps you ought to re-examine your religious values to see if they meet your needs in Li fe.A religious experience can be a beautiful addition to living if you put it a proper perspective and do not let it warp you. Read some books on Ethical Culture. † Sabbath, though she is trying to seduce Haze, can be seen as a Christ figure in that mentions â€Å"I can save you, I got a church in my heart where Jesus is king. † Haze is unconvinced and he drives off leaving behind a blinding white cloud that turns into a bird with long wings that disappears in the opposite direction. Wise Blood is a complicated and multi-faceted novel that is not for the faint of heart. For those who can plumb the novel’s meaning, it can challenge and inform.

WHAT''S IN IT FOR ME Essay Example | Topics and Well Written Essays - 750 words

WHAT''S IN IT FOR ME - Essay Example Therefore, the necessary measure must be deployed such as setting good standard of behaviors in the workplace the managerial should ensure that cases of maltreatment are dealt with swiftly and seriously. The intimidation befallen on me when I was exactly 21 years old and I felt delighted to be employed for my first job. I have been working hard, and this probably must have led for promotion from a minor accountant to major accountant. However, my hard work was only appreciated by senior staff but my fellow colleagues used as a chase of insulting me they could pass in-front of my office altering disguising word such as â€Å"idiot†, â€Å"†¦ bustard† this hounded me so much and turned my proudness of been employed into trouble. I must sincerely confess that this contributed loss of my morale and self-esteem I once possessed towards my job. In overcoming my current challenge, I reported to the general manager who decided to help me get the transfer to another branch of the same organization. Optimism among workers is an essential thing that cannot be ignore by any corporation that has the aspiration to prosper in making its employees happier, and help them receive imperative social support. The executive, therefore, have to strive in making sure that they develop unique tactic that will help them make difficult people work with optimism (Voltaire & Adams, 1966). Some of this tactic includes: value them, respect them, try and listen to their opinion of how the workplace should look like, mandate them with responsibility of leadership for this may help them change (Hagner, 1989). Example of resiliency that could be applied in enhancing effective ways of working with a difficult person and help those individual to adapt stress, adversity and threat are: treasure social support and interaction in workplace, the manager should nature optimistic view over the employees. Difficult person are not only the subordinate staff, but it can also be reflected even to the

The Hidden Content of Artwork Adam and Eve Created by Albrecht Durer Essay

The Hidden Content of Artwork Adam and Eve Created by Albrecht Durer - Essay Example Albrecht Durer wanted to demonstrate the importance of people’s decisions; some of them may be fatal and bring a lot of problems. The same situation happened to first people. The central focus of this picture is the representation of Adam and Eva under the tree. They are painted in the foreground surrounded by different animals – birds, hares, mice, and deer. We can see the snake on the branch behind Eva. It holds an apple in its mouth, and Eva is about to take it. Adam holds a branch with a bird in his right hand. Everything is beautiful around people, and they also attract the viewers’ attention at once. In the top right corner, a viewer sees a piece of sky with the mountains. The tree behind Adam and Eva is an apple-tree. It is rich in apples; they are almost on each branch. People are shown young in the picture. Naked images and an apple tree convince us that the characters described here are the first people in Eden. No doubt that the artist wanted to show the most important moment in people’s life – the turning point in the relationship between people and God. The characters’ facial expressions may tell much about their inner world and their thoughts. Moreover, Adam and Eva have different facial expressions. It is not very difficult to see curiosity and selfishness in Eva’s face. People knew that they could not take that apple, but Eva decided that it was possible for her to be as intelligent and powerful as God. Besides, she did not think about her husband. This fact proves that she was a rather selfish woman who followed only her own interests. A gentle smile on Eva’s lips reflects her satisfaction; as only several seconds separate her from the aim she wanted to reach. Adam’s face shows his surprise and grief. He seems to be very upset because of his wife’s action. Adam’s body is bent to Eva as if he wants to stop her.  

Host family Essay Example | Topics and Well Written Essays - 1250 words

Host family - Essay Example This was mainly due to the fact that most of the interactions that I came to experience as well as the culture of the society within which I lived was absolutely different from the one that I was used to. In fact, when one considers my experiences in the United States, one would say that it was a completely opposite from the way of life in China, my home country. When I first learnt that I my application for foreign exchange had been approved and that I was to go to Oregon, United States, I was extremely excited. This was mainly because I had never before left my home country and I was eager to experience another place which was dissimilar from home. I found out that I had been assigned a host family and while I met this news with some apprehension, since I did not know what to expect from these people, I later came to be glad that they had been selected for me. The family that I went to live with were known as the Johnsons, and they were honest and hardworking individuals who were a lso strong in their Christian faith, a fact that I found highly impressive. In my home country, where not many of the people are religious, and the latter is often discouraged, we has often heard rumour that the people in the west only professed the Christian faith yet rarely practiced it. The Johnsons, however, proved this impression to be wrong, and by their taking me into their home and treating me as one of their own, I felt like a real part of their family. Among the things that most impressed me about this family is that they had adopted a girl from China, treating her as if she was their own biological child through their provision of their love and support. Lily, the little girl, had been adopted as a baby when her parents died and she was left an orphan. Despite this tragic beginning of her life, Lily seems to have adjusted well to her new environment, to the extent of not remembering any Chinese, a fact that I learnt from my futile attempts to address her in her native lan guage. In China, I had learnt some English but while this had been the case, when I went for exchange, I could not speak it very well. Despite the language barrier between me and my host family, the latter took in stride and they often encouraged me to express myself the best way that I could through the use of my limited vocabulary. When all attempts at communicating using English failed, and it happened often, we would resort to using signs, a factor of communication that I found to be most interesting. The experience of the Johnsons when raising Lily might have helped a lot in their communication with me since after a fortnight or so; we could communicate with almost no problem at all since we had learnt each other’s speech and sign patterns. Since I went to school with the other two older Johnson children, Josh and Mary, who were close to my age and attended almost the same classes, I found it much easier to adjust to the new school environment than if I had had to go alo ne. These two, who became very close friends and my constant companions, gave me the motivation to learn my English so that I could communicate with them better. My thirst to learn might have also played a role in my wanting to better my English and in all my attempts, the Johnsons often gave me their support. Since I am a fast learner, within a few weeks of living with my host family, I could confidently express

Comparative Design Essay Example | Topics and Well Written Essays - 2500 words - 1

Comparative Design - Essay Example enefits spread over three categories affecting customers’ services and users, the service design program, as well as the entire institution involved in the design project. A product of 1946, the classic and styling oven has cooking efficiency. A classic cooker limited secures ovens from Rayburn in the UK. The cookers are reliable with new options still applicable to date. Currently, the supplier undertakes reconditioning duties and installs new parts fully. In a style that Mark Newson adopted, Rayburn ovens of 1946 have attractive colours running on smooth lines. The design developed a classic design blending precisely with various styles those chores in the kitchen demand. It cuts across from traditional through to modern aspects. The oven comes out in various designs and sizes that clients can choose from guided by their needs. Surprisingly, a Rayburn oven carries more responsibilities besides being a cooker. The oven is extremely resourceful. The Rayburn oven developed in 1946 is sustainable as well as self-sufficient. Mark Newson introduced extraordinary creativity constituting one of the most exciting designs in the world. He applied the creativity in developing domestic appliances such as ovens. Mark Newson is the established designer at Smeg products whose work is comparable to dynamic artworks. He represents the essence of the philosophy at Smeg. At Smeg, employees believe in technology with style. The style applied by Newson in designing his ovens comes through the soft lines applicable in environmental friendly manner. Differentiated use of colour and energetic application characterises ovens designed by Mark Newson. Surfaces are stainless steel products or have glassy features. Ovens are available in prolific FP610.The ovens come in a spectacular ray of colours. The colours range from white and black finishes, stainless steel through to bright shades of yellow, blue, as well as green. Mark Newson, the designer, o ften has a special way of having

The Law of Trusts Case Study Example | Topics and Well Written Essays - 3000 words

The Law of Trusts - Case Study Example In 2004 Brian entered into a covenant under a trust deed with his children Pat and Richard. Pat and Richard can sue against Brian at law for damages to compensate Pat and Richard for their loss of expectation if Brian does not perform his promise. In Cannon v Harley1 a father promised his daughter by deed that he would pay her any sum exceeding 1,000 which he received under his own father's will. When he failed to do so, she successfully sued him at law for the amount she would have obtained had his promise been performed. It is important to note, however, that the same promise was not enforceable in equity. Equity will enforce promises made for consideration, but not ones whose only claim to enforcement is that they are contained in a deed. None of the property referred to in the 2004 covenant has been transferred to Pat and Richard. Brian appointed Tony and Nathan as his executors and trustees under his will. Now the question arises who can enforce the covenant. If the Contract (Ri ghts of Third Parties) Act 1999 were to apply to covenants (which is doubtful) then assuming the requirements of the Act were satisfied, Pat and Richard would be able to enforce the covenant at law and obtain damages for lost expectation. It can be argued that they hold the benefit of the right to sue on the covenant on trust for Pat and Richard. If this argument, the 'trust of the covenant' argument, can be made out, then Pat and Richard can compel Tony and Nathan to sue Brain. The assumption is that Tony and Nathan would recover substantial damages, which they would then hold on trust for Pat and Richard. There are three difficulties, which stand in the way of this argument succeeding. To be a valid trust, it is necessary three certainties, formalities, and perfect constitution. A trust will be perfectly constituted where the rights, which are to form the subject matter of the trust, are vested in the intended trustee. The principle laid down in the case Milroy v Lord2, Lord Turne r LJ explained three ways of benefiting third parties. The easiest way to benefit the third party is by an outright gift. If the Beneficiary is minor and a gift is a real property then it is not possible. In this situation, he needs to create a trust or declare himself as a trustee. The transfer to the trustees must accord with the rules applicable to the property concerned. Legal estates in land must transferee by deed, equitable interest, and copyright by writing (which may include an electronic document), chattels by deed of gift or by an intention to give coupled with a delivery of possessions, a bill of exchange by endorsement, and shares by the appropriate form of transfer followed by registration.   The traditional approach also adopted in subsequent cases like Re Fry3, required all stage should be completed. However, if the settlor wants to become a trustee himself he must declare it in clear and unequivocal terms, which carry out man's intention.  

How can the planning system encourage more sustainable patterns of new Essay

How can the planning system encourage more sustainable patterns of new housing development urban design - Essay Example Planning of homes has major impact on functioning level within societies. The planning and design of homes should consider various factors such as access to jobs, community facilities and access to transport. Well organized and planned housing development assist in the creation of unity hence contribute towards reduction in anti-social behavior. Development of cities, towns and leisure centers should consider various development policies such as environmental policies. Various destinations all over the world should consider creation of barrier-free movement within cities which would accommodate people of all walks of life (Scott 2000). Urban planning is defined as the art involved in designing places for the purpose of settling people. Such designs should consider accommodating more sustainable patterns of new housing development. New housing design method presents one of the most important elements of urban planning. The planning process entails various aspects such as aesthetic value of building masses based on the intended functions. In addition enough passage areas are constructed to enhance easy movement of both people and vehicle traffic. This would improve communication links within towns. Urban planning and design incorporates visionary frameworks which projects quality outlook of the development formats capable of accommodating vast developmental activities and at the same time maintains socio-cultural activities (Susan and John 2004). Development of modern quality housing requires the use of upgraded technology capable of producing modern designs and at the same time maintaining a sustainable environment. Infrastructural development does not entirely define an urban metropolis; it is also defined by the expectations and ambitions of its habitants and characterized by its upsides and downsides. The Cities background, practices and communal set up, form the core of city’s existence. There is need to effectively administer

Lending Decision Case Study Example | Topics and Well Written Essays - 500 words

Lending Decision - Case Study Example It has tremendous staying power. But it is time to change. It has to take a good look at how others in the same field are doing business and catch up with them. There is nothing wrong in the figures. The figures are only representative of the facts. Past performance of Coles is not going to help its future prospects unless the causes of the dismal figures are rectified. The company's accounts department is doing its job well. Problem is somewhere in the communications system and customer relations policies. Not enough seems to be happening to attract better customer base. Painting rosy pictures year after year cannot be a solution. The company must look lean and handsome in the sight of its patrons. Good advertisements, sponsorship of popular events, forays into new areas of business or expansion of good, existing ones must seen to be happening every now and then to build customers and investors confidence. Make a list of large potential customers like hotels, restaurants and other eating joints. Marketing strategies must go hand in hand with understanding and catering to the needs of individual as well as corporate clients. Concentrate on products that yield better profit margin location-wise. Product A may rake in higher profit margin in one location, whereas Product B may show similar margin in another location.

Health and Social Care Level 3 Essay Example for Free

Health and Social Care Level 3 Essay Objectives: All learners should be able to define basis of discrimination. All learners should be able to explain basis of discrimination Most learners should be able to demonstrate discriminatory practice Some learners should be able to describe effects of discriminatory practice. Basis of discriminatory Culture A person’s culture is important to them and identifies who they are in the world. In health and social care profession, respecting a person’s culture is important for all concerned. It also important to health and social care professionals because they see the benefits of their care value base which underlines respecting and individual’s culture Disability In health and social care you will work or support people with various disability. This disability Act status it unlawful to discriminate against someone has disability. Are covered include: employment, access to goods, facilities and services of organisation, education etc. Age Age discrimination happens when someone is treated unfavourably because of their age without justification or harassed because of their age. Controversies regarding dispensing of expensive drugs to older people because of shorter life expectancy. Denying a person a drug is illegal. Social class Our social class is apparent from where we live. The higher the class the better place is kept and maintained. The poor are more likely to get cancer than the rich and their chances of survival are poor. Human rights emphasises that everyone should be treated equally and with dignity no matter of their circumstances. Gender A person cannot be discriminated because of their gender. Health and social service should not discriminate unfairly due to a person’s gender. Equality rights of access, health and social care rights must be adhered to. Sexuality Sexual orientation can be referring to a person who is attracted to another person of the same sex. E.g. gay and lesbian. Discrimination against someone due to their sexual orientations against the law. Health status Taking into account the cost of treatment and the expected quality of life after treatment and overall life expectancy, people taking these decisions should always keep their own assumptions and prejudices. Family status This is lead to a variety of discriminations: against gay/lesbian parents, single parents, parents of different genders, parents from different race with mix race children and other family grouping

Impact of Credit Default Swaps (CDS)

Impact of Credit Default Swaps (CDS) Chapter 1 : Introduction A Swap is a derivative in which two counterparties agree to exchange one stream of cash flow against another stream. Swaps can be used to create unfunded exposures to an underlying asset, since counterparties can earn the profit or loss from movements in price without having to post the notional amount in cash or collateral. It can be used to hedge certain risks such as interest rate risk, or to speculate on changes in the expected direction of underlying prices. The main objective of the project is to understand about Credit Default Swaps (CDS), its global footprint, its role in subprime crisis, its settlement in global arena and to check the feasible settlement of CDS in India, after its introduction in India, by understanding about Indian Credit Derivatives market. Research is concerned with the systematic and objective collection, analysis and evaluation of information about specific aspects to check the feasible settlement of CDSs in India. The development of financial derivatives in recent past is astounding when we consider its volume globally. But at the same time the product once created for hedging the risk currently allows you to bear more risk sometimes making the whole financial system to tremble. May be thats why Warren Buffet called it a financial weapon of mass destruction. Whatever it may be but derivatives have grown exponentially and are necessary for the market to flourish. The credit derivatives are nothing but the logical extension to the family of derivatives and have already made its presence felt globally. The credit derivatives have played a significant role in the development of debt market but also share a blame for the proliferation of subprime crisis. A credit default swap which constitutes the major portion of credit derivatives is similar to an insurance contract which allows you to transfer your risk to third party in exchange of a premium. Right from its origin as plain vanilla product for hedging purpose it has grown to very complex products and now has posed a question mark on its credibility. The subprime crisis started in what were regarded as the worlds safest and most sophisticated markets and spread globally, carried by securities and derivatives that were thought to make the financial system safer. The subprime crisis brings the complexity of securitized products and derivatives products, the human greedy nature, inability of rating agencies to gauge the risk, inefficiency of regulatory bodies, etc. to the fore. Although CDS was not the cause of the subprime crisis but it had cascading effect on the market and was considered as the reason for the collapse of American International Group (AIG). The lessons from the consequences of subprime crisis have helped in creating awareness about the regulatory frameworks to be in place which has increased the transparency, standardization, and soundness in the market. The various measures include formation of central counterparty for CDS, hardwiring of auction protocol and ISDA determination committee. On the backdrop of global crisis the movement of CDS is being watched carefully. The various data sources now provide data even on weekly basis. The efforts are being paid off and the market size of CDS has reduced considerably. And now with the central counterparties in place the CDS market will have more transparency and better control. After opening up of the economy the equity market of India have grown significantly bringing in more transparency. But the corporate bond market is still in undeveloped mode and the efforts being taken on developing it have not provided expected returns. Under this light, India is now all set to launch Credit Default Swaps which are expected to ignite the spark which will flourish the corporate bond market. Considering the cautious nature of RBI and the havoc created by CDS in global market the move by RBI is significant. From the move of RBI one can say as the knife itself is not harmful but it depends whether its in doctors hand or a robbers hand. Similarly CDS as a product is certainly not harmful but its utility will depend on the judicious use of the same. Chapter 2: Literature Review Derivatives The global economic order that emerged after World War II was a system where many less developed countries administered prices and centrally allocated resources. Even the developed economies operated under the Bretton Woods system of fixed exchange rates. The system of fixed prices came under stress from the 1970s onwards. High inflation and unemployment rates made interest rates more volatile. The Bretton Woods system was dismantled in 1971, freeing exchange rates to fluctuate. Less developed countries like India began opening up their economies and allowing prices to vary with market conditions. Price fluctuations made it hard for businesses to estimate their future production costs and revenues. Derivative securities provide them with a valuable set of tools for managing this risk. Financial markets are, by nature, extremely volatile and hence, the risk factor is an Important concern for financial agents. To reduce this risk, the concept of derivatives comes into the picture. Derivatives are products whose values are derived from one or more basic variables called bases. These bases can be underlying assets (for example forex, equity, etc), bases or reference rates. It is afinancial instrument(or more simply, an agreement between two people/two parties) that has a value determined by the future price of something else. Derivatives can be thought of as bets on the price of something.Itis the collective name used for a broad class offinancial instrumentsthatderivetheir value from other financial instruments (known as the underlying), events or conditions. Essentially, a derivative is a contract between two parties where the value of the contract is linked to the price of another financial instrument or by a specified event or condition. Asecurity whose price is dependent upon or derived fromone or more underlying assets.The derivative itself is merely a contract between two or more parties. Itsvalue is determinedby fluctuationsin the underlying asset.The most common underlying assets includestocks, bonds,commodities,currencies, interest rates and market indexes. Most derivatives are characterized by high leverage.Derivatives are generally used as an instrument to hedgerisk, but can also be used forspeculative purposes. For example, wheat farmers may wish to sell their harvest at a future date to eliminate the risk of a change in prices by that date. The transaction in this case would be the derivative, while the spot price of wheat would be the underlying asset. Derivatives have probably been around for as long as people have been trading with one another. Forward contracting dates back at least to the 12th century, and may well have been around before then. Merchants entered into contracts with one another for future delivery of specified amount of commodities at specified price. A primary motivation for pre-arranging a buyer or seller for a stock of commodities in early forward contracts was to lessen the possibility that large swings would inhibit marketing the commodity after a harvest. The need for a derivatives market The derivatives market performs a number of economic functions: They help in transferring risks from risk averse people to risk oriented people They help in the discovery of future as well as current prices They catalyze entrepreneurial activity They increase the volume traded in markets because of participation of risk averse people in greater numbers They increase savings and investment in the long run The participants in a derivatives market Hedgers use futures or options markets to reduce or eliminate the risk associated with price of an asset. Speculators use futures and options contracts to get extra leverage in betting on future movements in the price of an asset. They can increase both the potential gains and potential losses by usage of derivatives in a speculative venture. Arbitrageurs are in business to take advantage of a discrepancy between prices in two different markets. If, for example, they see the futures price of an asset getting out of line with the cash price, they will take offsetting positions in the two markets to lock in a profit. Types of Derivatives Forwards: A forward contract is a customized contract between two entities, where settlement takes place on a specific date in the future at todays pre-agreed price. Futures: A futures contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. Futures contracts are special types of forward contracts in the sense that the former are standardized exchange-traded contracts Options: Options are of two types calls and puts. Calls give the buyer the right but not the obligation to buy a given quantity of the underlying asset, at a given price on or before a given future date. Puts give the buyer the right, but not the obligation to sell a given quantity of the underlying asset at a given price on or before a given date. Warrants: Options generally have lives of upto one year, the majority of options traded on options exchanges having a maximum maturity of nine months. Longer-dated options are called warrants and are generally traded over-the-counter. LEAPS: The acronym LEAPS means Long-Term Equity Anticipation Securities. These are options having a maturity of upto three years. Baskets: Basket options are options on portfolios of underlying assets. The underlying asset is usually a moving average or a basket of assets. Equity index options are a form of basket options. Swaps: Swaps are private agreements between two parties to exchange cash flows in the future according to a prearranged formula. They can be regarded as portfolios of forward contracts. The two commonly used swaps are : Interest rate swaps: These entail swapping only the interest related cash flows between the parties in the same currency. Currency swaps: These entail swapping both principal and interest between the parties, with the cash flows in one direction being in a different currency than those in the opposite direction. Swaptions: Swaptions are options to buy or sell a swap that will become operative at the expiry of the options. Thus a swaption is an option on a forward swap. Rather than have calls and puts, the swaptions market has receiver swaptions and payer swaptions. A receiver swaption is an option to receive fixed and pay floating. A payer swaption is an options to pay fixed and receive floating. Uses of Derivatives Derivatives may be traded for a variety of reasons. A derivative enables a trader to hedge some pre-existing risk by taking positions in derivatives markets that offset potential losses in the underlying or spot market. In India, most derivatives users describe themselves as hedgers (Fitch Ratings, 2004) and Indian laws generally require that derivatives be used for hedging purposes only. Another motive for derivatives trading is speculation (i.e. taking positions to profit from anticipated price movements). In practice, it may be difficult to distinguish whether a particular trade was for hedging or speculation, and active markets require the participation of both hedgers and speculators. A third type of trader, called arbitrageurs, profit from discrepancies in the relationship of spot and derivatives prices, and thereby help to keep markets efficient. Jogani and Fernandes (2003) describe Indias long history in arbitrage trading, with line operators and traders arbitraging prices between exchanges located in different cities, and between two exchanges in the same city. Their study of Indian equity derivatives markets in 2002 indicates that markets were inefficient at that time. They argue that lack of knowledge; market frictions and regulatory impediments have led to low levels of capital employed in arbitrage trading in India. However, more recent evidence suggests that the efficiency of Indian equity derivatives markets may have improved (ISMR, 2004). Development of derivatives market in India Derivatives markets have been in existence in India in some form or other for a long time. In the area of commodities, the Bombay Cotton Trade Association started futures trading in 1875 and, by the early 1900s India had one of the worlds largest futures industry. In 1952 the government banned cash settlement and options trading and derivatives trading shifted to informal forwards markets. In recent years, government policy has changed, allowing for an increased role for market-based pricing and less suspicion of derivatives trading. The ban on futures trading of many commodities was lifted starting in the early 2000s, and national electronic commodity exchanges were created. In the equity markets, a system of trading called badla involving some elements of forwards trading had been in existence for decades.6 However, the system led to a number of undesirable practices and it was prohibited off and on till the Securities and Exchange Board of India (SEBI) banned it for good in 2001. A series of reforms of the stock market between 1993 and 1996 paved the way for the development of exchange-traded equity derivatives markets in India. In 1993, the government created the NSE in collaboration with state-owned financial institutions. NSE improved the efficiency and transparency of the stock markets by offering a fully automated screen-based trading system and real-time price dissemination. In 1995, a prohibition on trading options was lifted. In 1996, the NSE sent a proposal to SEBI for listing exchange-traded derivatives. The report of the L. C. Gupta Committee, set up by SEBI, recommended a phased introduction of derivative products, and bi-level regulation ( i.e., self-regulation by exchanges with SEBI providing a supervisory and advisory role). Another report, by the J. R. Varma Committee in 1998, worked out various operational details such as the margining systems. The first step towards introduction of derivatives trading in India was the promulgation of the Securities Laws(Amendment) Ordinance, 1995, which withdrew the prohibition on options in securities. The market for derivatives, however, did not take off, as there was no regulatory framework to govern trading of derivatives. SEBI set up a 24-member committee under the Chairmanship of Dr.L.C.Gupta on November 18, 1996 to develop appropriate regulatory framework for derivatives trading in India. The committee submitted its report on March 17, 1998 prescribing necessary pre-conditions for introduction of derivatives trading in India. The committee recommended that derivatives should be declared as securities so that regulatory framework applicable to trading of securities could also govern trading of securities. SEBI also set up a group in June 1998 under the Chairmanship of Prof.J.R.Varma, to recommend measures for risk control in derivatives market in India. The report, which was submitte d in October 1998, worked out the operational details of margining system, methodology for charging initial margins, broker net worth, deposit requirement and real-time monitoring requirements. The Securities Contract Regulation Act (SCRA) was amended in December 1999 to include derivatives within the ambit of securities and the regulatory framework was developed for governing derivatives trading. The act also made it clear that derivatives shall be legal and valid only if such contracts are traded on a recognized stock exchange, thus precluding OTC derivatives. The government also rescinded in March 2000, the three- decade old notification, which prohibited forward trading in securities. Derivatives trading commenced in India in June 2000 after SEBI granted the final approval to this effect in May 2001. SEBI permitted the derivative segments of two stock exchanges, NSE and BSE, and their clearing house/corporation to commence trading and settlement in approved derivatives contracts . To begin with, SEBI approved trading in index futures contracts based on SP CNX Nifty and BSE-30(Sensex) index. This was followed by approval for trading in options based on these two indexes and options on individual securities. The trading in BSE Sensex options commenced on June 4, 2001 and the trading in options on individual securities commenced in July 2001. Futures contracts on individual stocks were launched in November 2001. The derivatives trading on NSE commenced with SP CNX Nifty Index futures on June 12, 2000. The trading in index options commenced on June 4, 2001 and trading in options on individual securities commenced on July 2, 2001. Single stock futures were launched on November 9, 2001. The index futures and options contract on NSE are based on SP CNX Trading and settlement in derivative contracts is done in accordance with the rules, byelaws, and regulations of the respective exchanges and their clearing house/corporation duly approved by SEBI and notified in the official gazette. Foreign Institutional Investors (FIIs) are permitted to trade in all Exchange traded derivative products. The following are some observations based on the trading statistics provided in the NSE report on the futur es and options (FO): †¢ Single-stock futures continue to account for a sizable proportion of the FO segment. It constituted 70 per cent of the total turnover during June 2002. A primary reason attributed to this phenomenon is that traders are comfortable with single-stock futures than equity options, as the former closely resembles the erstwhile badla system. On relative terms, volumes in the index options segment continues to remain poor. This may be due to the low volatility of the spot index. Typically, options are considered more valuable when the volatility of the underlying (in this case, the index) is high. A related issue is that brokers do not earn high commissions by recommending index options to their clients, because low volatility leads to higher waiting time for round-trips. Put volumes in the index options and equity options segment have increased since January 2002. The call-put volumes in index options have decreased from 2.86 in January 2002 to 1.32 in June. The fall in call-put volumes ratio suggests that the traders are increasingly becoming pessimistic on the market. Farther month futures contracts are still not actively traded. Trading in equity options on most stocks for even the next month was non-existent. Daily option price variations suggest that traders use the FO segment as a less risky alternative (read substitute) to generate profits from the stock price movements. The fact that the option premiums tail intra-day stock prices is evidence to this. Calls on Satyam fall, while puts rise when Satyam falls intra-day. If calls and puts are not looked as just substitutes for spot trading, the intra-day stock price variations should not have a one-to-one impact on the option premiums. SWAP In finance, a SWAP is a derivative in which two counterparties agree to exchange one stream of cash flow against another stream. These streams are called the legs of the swap. Conventionally they are the exchange of one security for another to change the maturity (bonds), quality of issues (stocks or bonds), or because investment objectives have changed. A swap is an agreement to exchange one stream of cash flows for another. Swaps are most usually used to:- Switch financing in one country for financing in another To replace a floating interest rate swap with a fixed interest rate (or vice versa) (Litzenberger, R.H)In August 1981 the World Bank issued $290 million in euro-bonds and swapped the interest and principal on these bonds with IBM for Swiss francs and German marks. The rapid growth in the use of interest rate swaps, currency swaps, and swaptions (options on swaps) has been phenomenal. Currently, the amount of outstanding interest rate and currency swaps is almost $3 trillion. Recently, swaps have grown to include currency swaps and interest rate swaps. It can be used to hedge certain risks such as interest rate risk, or to speculate on changes in the expected direction of underlying prices. If firms in separate countries have comparative advantages on interest rates, then a swap could benefit both firms. For example, one firm may have a lower fixed interest rate, while another has access to a lower floating interest rate. These firms could swap to take advantage of the lower rates. Different types of swaps:- Currency Swaps Cross currency swaps are agreements between counterparties to exchange interest and principal payments in different currencies. Like a forward, a cross currency swap consists of the exchange of principal amounts (based on todays spot rate) and interest payments between counterparties. It is considered to be a foreign exchange transaction and is not required by law to be shown on the balance sheet. In a currency swap, these streams of cash flows consist of a stream of interest and principal payments in one currency exchanged for a stream, of interest and principal payments of the same maturity in another currency. Because of the exchange and re-exchange of notional principal amounts, the currency swap generates a larger credit exposure than the interest rate swap. Cross-currency swaps can be used to transform the currency denomination of assets and liabilities. They are effective tools for managing foreign currency risk. They can create currency match within its portfolio and minimize exposures. Firms can use them to hedge foreign currency debts and foreign net investments. Currency swaps give companies extra flexibility to exploit their comparative advantage in their respective borrowing markets. Currency swaps allow companies to exploit advantages across a matrix of currencies and maturities. Currency swaps were originally done to get around exchange controls and hedge the risk on currency rate movements. It also helps in Reducing costs and risks associated with currency exchange. They are often combined with interest rate swaps. For example, one company would seek to swap a cash flow for their fixed rate debt denominated in US dollars for a floating-rate debt denominated in Euro. This is especially common in Europe where companies shop for the cheapest debt regardless of its denomination and then seek to exchange it for the debt in desired currency. Credit Default Swap Credit Default Swap is a financial instrument for swapping the risk of debt default. Credit default swaps may be used for emerging market bonds, mortgage backed securities, corporate bonds and local government bond. The buyer of a credit default swap pays a premium for effectively insuring against a debt default. He receives a lump sum payment if the debt instrument is defaulted. The seller of a credit default swap receives monthly payments from the buyer. If the debt instrument defaults they have to pay the agreed amount to the buyer of the credit default swap. The first credit default swap was introduced in 1995 by JP Morgan. By 2007, their total value has increased to an estimated $45 trillion to $62 trillion. Although since only 0.2% of Investment Companys default, the cash flow is much lower than this actual amount. Therefore, this shows that credit default swaps are being used for speculation and not insuring against actual bonds. As Warren Buffett calls them financial weapons of mass destruction. The credit default swaps are being blamed for much of the current market meltdown. Example of Credit Default Swap An investment trust owns  £1 million corporation bond issued by a private housing firm. If there is a risk the private housing firm may default on repayments, the investment trust may buy a CDS from a hedge fund. The CDS is worth  £1 million. The investment trust will pay an interest on this credit default swap of say 3%. This could involve payments of  £30,000 a year for the duration of the contract. If the private housing firm doesnt default. The hedge fund gains the interest from the investment bank and pays nothing out. It is simple profit. If the private housing firm does default, then the hedge fund has to pay compensation to the investment bank of  £1 million the value of the credit default swap. Therefore the hedge fund takes on a larger risk and could end up paying  £1million The higher the perceived risk of the bond, the higher the interest rate the hedge fund will require. Credit default swaps are used not only by investment banks, but also by other financial institutions. Corporate entities use credit default swaps either for protection purposes, to hedge or to sell. Investment banks are primarily affected by the buyers. If a number of major corporate entities have bought protection from the same investment bank, and all of them fail simultaneously, this will put pressure on the investment bank to pay out. Moreover, the credit risk caused by the above failure may lead to other risks, such as liquidity risk, market risk and operational risk. Therefore, most of the investment banks re-sell the sold protection on the market to other market participants. Edwards (2004) argues that derivatives do not reduce credit risk, but rather transfer it from banks to other banks or entities. Therefore, most of the investment banks re-sell the sold protection on the market to other market participants. Edwards (2004) argues that derivatives do not reduce credit risk, but rather transfer it from banks to other banks or entities. Some of the top banks in America are carrying unknown gambling risks that no one has warned about, and they are all tied up in U.S. bank derivative portfolios (Edwards M, 2004). Commodity Swap A commodity swap is an agreement whereby a floating (or market or spot) price is exchanged for a fixed price over a specified period. The vast majority of commodity swaps involve oil. A swap where exchanged cash flows are dependent on the price of an underlying commodity. This swap is usually used to hedge against the price of a commodity. Commodities are physical assets such as precious metals, base metals, energy stores (such as natural gas or crude oil) and food (including wheat, pork bellies, cattle, etc.). In this swap, the user of a commodity would secure a maximum price and agree to pay a financial institution this fixed price. Then in return, the user would get payments based on the market price for the commodity involved. They are used for hedging against Fluctuations in commodity prices or Fluctuations in spreads between final product and raw material prices. A company that uses commodities as input may find its profits becoming very volatile if the commodity prices become volatile. This is particularly so when the output prices may not change as frequently as the commodity prices change. In such cases, the company would enter into a swap whereby it receives payment linked to commodity prices and pays a fixed rate in exchange. There are two kinds of agents participating in the commodity markets: end-users (hedgers) and investors (speculators). Commodity swaps are becoming increasingly common in the energy and agricultural industries, where demand and supply are both subject to considerable uncertainty. For example, heavy users of oil, such as airlines, will often enter into contracts in which they agree to make a series of fixed payments, say every six months for two years, and receive payments on those same dates as determined by an oil price index. Computations are often based on a specific number of tons of oil in order to lock in the price the airline pays for a specific quantity of oil, purchased at regular intervals over the two-year period. However, the airline will typically buy the actual oil it needs from the spot market. Equity Swap The outstanding performance of equity markets in the 1980s and the 1990s, have brought in some technological innovations that have made widespread participation in the equity market more feasible and more marketable and the demographic imperative of baby-boomer saving has generated significant interest in equity derivatives. In addition to the listed equity options on individual stocks and individual indices, a burgeoning over-the-counter (OTC) market has evolved in the distribution and utilization of equity swaps. An equity swap is a special type of total return swap, where the underlying asset is a stock, a basket of stocks, or a stock index. An exchange of the potential appreciation of equitys value and dividends for a guaranteed return plus any decrease in the value of the equity. An equity swap permits an equity holder a guaranteed return but demands the holder give up all rights to appreciation and dividend income. Compared to actually owning the stock, in this case you do not have to pay anything up front, but you do not have any voting or other rights that stock holders do have. Equity swaps make the index trading strategy even easier. Besides diversification and tax benefits, equity swaps also allow large institutions to hedge specific assets or positions in their portfolios The equity swap is the best swap amongst all the other swaps as it being an over-the-counter derivatives transaction; they have the attractive feature of being customizable for a particular users situation. Investors may have specific time horizons, portfolio compositions, or other terms and conditions that are not matched by exchange-listed derivatives. They are private transactions that are not directly reportable to any regulatory authority. A derivatives dealer can, through a foreign subsidiary in the particular country, invest in the foreign securities without the withholding tax and enter into a swap with the parent dealer company, which can then enter a swap with the American investor, effectively passing on the dividends without the withholding tax Interest Rate Swap An interest rate swap, or simply a rate swap, is an agreement between two parties to exchange a sequence of interest payments without exchanging the underlying debt. In a typical fixed/floating rate swap, the first party promises to pay to the second at designated intervals a stipulated amount of interest calculated at a fixed rate on the notional principal; the second party promises to pay to the first at the same intervals a floating amount of interest on the notional principle calculated according to a floating-rate index. The interest rate swap is essentially a strip of forward contracts exchanging interest payments. Thus, interest rate swaps, like interest rate futures or interest rate forward contracts, offer a mechanism for restructuring cash flows and, if properly used, provide a financial instrument for hedging against interest rate risk The reason for the exchange of the interest obligation is to take benefit from comparative advantage. Some companies may have comparative advantage in fixed rate markets while other companies have a comparative advantage in floating rate markets. When companies want to borrow they look for cheap borrowing i.e. from the market where they have comparative advantage. However this may lead to a company borrowing fixed when it wants floating or borrowing floating when it wants fixed. This is where a swap comes in. A swap has the effect of transforming a fixed rate loan into a float Impact of Credit Default Swaps (CDS) Impact of Credit Default Swaps (CDS) Chapter 1 : Introduction A Swap is a derivative in which two counterparties agree to exchange one stream of cash flow against another stream. Swaps can be used to create unfunded exposures to an underlying asset, since counterparties can earn the profit or loss from movements in price without having to post the notional amount in cash or collateral. It can be used to hedge certain risks such as interest rate risk, or to speculate on changes in the expected direction of underlying prices. The main objective of the project is to understand about Credit Default Swaps (CDS), its global footprint, its role in subprime crisis, its settlement in global arena and to check the feasible settlement of CDS in India, after its introduction in India, by understanding about Indian Credit Derivatives market. Research is concerned with the systematic and objective collection, analysis and evaluation of information about specific aspects to check the feasible settlement of CDSs in India. The development of financial derivatives in recent past is astounding when we consider its volume globally. But at the same time the product once created for hedging the risk currently allows you to bear more risk sometimes making the whole financial system to tremble. May be thats why Warren Buffet called it a financial weapon of mass destruction. Whatever it may be but derivatives have grown exponentially and are necessary for the market to flourish. The credit derivatives are nothing but the logical extension to the family of derivatives and have already made its presence felt globally. The credit derivatives have played a significant role in the development of debt market but also share a blame for the proliferation of subprime crisis. A credit default swap which constitutes the major portion of credit derivatives is similar to an insurance contract which allows you to transfer your risk to third party in exchange of a premium. Right from its origin as plain vanilla product for hedging purpose it has grown to very complex products and now has posed a question mark on its credibility. The subprime crisis started in what were regarded as the worlds safest and most sophisticated markets and spread globally, carried by securities and derivatives that were thought to make the financial system safer. The subprime crisis brings the complexity of securitized products and derivatives products, the human greedy nature, inability of rating agencies to gauge the risk, inefficiency of regulatory bodies, etc. to the fore. Although CDS was not the cause of the subprime crisis but it had cascading effect on the market and was considered as the reason for the collapse of American International Group (AIG). The lessons from the consequences of subprime crisis have helped in creating awareness about the regulatory frameworks to be in place which has increased the transparency, standardization, and soundness in the market. The various measures include formation of central counterparty for CDS, hardwiring of auction protocol and ISDA determination committee. On the backdrop of global crisis the movement of CDS is being watched carefully. The various data sources now provide data even on weekly basis. The efforts are being paid off and the market size of CDS has reduced considerably. And now with the central counterparties in place the CDS market will have more transparency and better control. After opening up of the economy the equity market of India have grown significantly bringing in more transparency. But the corporate bond market is still in undeveloped mode and the efforts being taken on developing it have not provided expected returns. Under this light, India is now all set to launch Credit Default Swaps which are expected to ignite the spark which will flourish the corporate bond market. Considering the cautious nature of RBI and the havoc created by CDS in global market the move by RBI is significant. From the move of RBI one can say as the knife itself is not harmful but it depends whether its in doctors hand or a robbers hand. Similarly CDS as a product is certainly not harmful but its utility will depend on the judicious use of the same. Chapter 2: Literature Review Derivatives The global economic order that emerged after World War II was a system where many less developed countries administered prices and centrally allocated resources. Even the developed economies operated under the Bretton Woods system of fixed exchange rates. The system of fixed prices came under stress from the 1970s onwards. High inflation and unemployment rates made interest rates more volatile. The Bretton Woods system was dismantled in 1971, freeing exchange rates to fluctuate. Less developed countries like India began opening up their economies and allowing prices to vary with market conditions. Price fluctuations made it hard for businesses to estimate their future production costs and revenues. Derivative securities provide them with a valuable set of tools for managing this risk. Financial markets are, by nature, extremely volatile and hence, the risk factor is an Important concern for financial agents. To reduce this risk, the concept of derivatives comes into the picture. Derivatives are products whose values are derived from one or more basic variables called bases. These bases can be underlying assets (for example forex, equity, etc), bases or reference rates. It is afinancial instrument(or more simply, an agreement between two people/two parties) that has a value determined by the future price of something else. Derivatives can be thought of as bets on the price of something.Itis the collective name used for a broad class offinancial instrumentsthatderivetheir value from other financial instruments (known as the underlying), events or conditions. Essentially, a derivative is a contract between two parties where the value of the contract is linked to the price of another financial instrument or by a specified event or condition. Asecurity whose price is dependent upon or derived fromone or more underlying assets.The derivative itself is merely a contract between two or more parties. Itsvalue is determinedby fluctuationsin the underlying asset.The most common underlying assets includestocks, bonds,commodities,currencies, interest rates and market indexes. Most derivatives are characterized by high leverage.Derivatives are generally used as an instrument to hedgerisk, but can also be used forspeculative purposes. For example, wheat farmers may wish to sell their harvest at a future date to eliminate the risk of a change in prices by that date. The transaction in this case would be the derivative, while the spot price of wheat would be the underlying asset. Derivatives have probably been around for as long as people have been trading with one another. Forward contracting dates back at least to the 12th century, and may well have been around before then. Merchants entered into contracts with one another for future delivery of specified amount of commodities at specified price. A primary motivation for pre-arranging a buyer or seller for a stock of commodities in early forward contracts was to lessen the possibility that large swings would inhibit marketing the commodity after a harvest. The need for a derivatives market The derivatives market performs a number of economic functions: They help in transferring risks from risk averse people to risk oriented people They help in the discovery of future as well as current prices They catalyze entrepreneurial activity They increase the volume traded in markets because of participation of risk averse people in greater numbers They increase savings and investment in the long run The participants in a derivatives market Hedgers use futures or options markets to reduce or eliminate the risk associated with price of an asset. Speculators use futures and options contracts to get extra leverage in betting on future movements in the price of an asset. They can increase both the potential gains and potential losses by usage of derivatives in a speculative venture. Arbitrageurs are in business to take advantage of a discrepancy between prices in two different markets. If, for example, they see the futures price of an asset getting out of line with the cash price, they will take offsetting positions in the two markets to lock in a profit. Types of Derivatives Forwards: A forward contract is a customized contract between two entities, where settlement takes place on a specific date in the future at todays pre-agreed price. Futures: A futures contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. Futures contracts are special types of forward contracts in the sense that the former are standardized exchange-traded contracts Options: Options are of two types calls and puts. Calls give the buyer the right but not the obligation to buy a given quantity of the underlying asset, at a given price on or before a given future date. Puts give the buyer the right, but not the obligation to sell a given quantity of the underlying asset at a given price on or before a given date. Warrants: Options generally have lives of upto one year, the majority of options traded on options exchanges having a maximum maturity of nine months. Longer-dated options are called warrants and are generally traded over-the-counter. LEAPS: The acronym LEAPS means Long-Term Equity Anticipation Securities. These are options having a maturity of upto three years. Baskets: Basket options are options on portfolios of underlying assets. The underlying asset is usually a moving average or a basket of assets. Equity index options are a form of basket options. Swaps: Swaps are private agreements between two parties to exchange cash flows in the future according to a prearranged formula. They can be regarded as portfolios of forward contracts. The two commonly used swaps are : Interest rate swaps: These entail swapping only the interest related cash flows between the parties in the same currency. Currency swaps: These entail swapping both principal and interest between the parties, with the cash flows in one direction being in a different currency than those in the opposite direction. Swaptions: Swaptions are options to buy or sell a swap that will become operative at the expiry of the options. Thus a swaption is an option on a forward swap. Rather than have calls and puts, the swaptions market has receiver swaptions and payer swaptions. A receiver swaption is an option to receive fixed and pay floating. A payer swaption is an options to pay fixed and receive floating. Uses of Derivatives Derivatives may be traded for a variety of reasons. A derivative enables a trader to hedge some pre-existing risk by taking positions in derivatives markets that offset potential losses in the underlying or spot market. In India, most derivatives users describe themselves as hedgers (Fitch Ratings, 2004) and Indian laws generally require that derivatives be used for hedging purposes only. Another motive for derivatives trading is speculation (i.e. taking positions to profit from anticipated price movements). In practice, it may be difficult to distinguish whether a particular trade was for hedging or speculation, and active markets require the participation of both hedgers and speculators. A third type of trader, called arbitrageurs, profit from discrepancies in the relationship of spot and derivatives prices, and thereby help to keep markets efficient. Jogani and Fernandes (2003) describe Indias long history in arbitrage trading, with line operators and traders arbitraging prices between exchanges located in different cities, and between two exchanges in the same city. Their study of Indian equity derivatives markets in 2002 indicates that markets were inefficient at that time. They argue that lack of knowledge; market frictions and regulatory impediments have led to low levels of capital employed in arbitrage trading in India. However, more recent evidence suggests that the efficiency of Indian equity derivatives markets may have improved (ISMR, 2004). Development of derivatives market in India Derivatives markets have been in existence in India in some form or other for a long time. In the area of commodities, the Bombay Cotton Trade Association started futures trading in 1875 and, by the early 1900s India had one of the worlds largest futures industry. In 1952 the government banned cash settlement and options trading and derivatives trading shifted to informal forwards markets. In recent years, government policy has changed, allowing for an increased role for market-based pricing and less suspicion of derivatives trading. The ban on futures trading of many commodities was lifted starting in the early 2000s, and national electronic commodity exchanges were created. In the equity markets, a system of trading called badla involving some elements of forwards trading had been in existence for decades.6 However, the system led to a number of undesirable practices and it was prohibited off and on till the Securities and Exchange Board of India (SEBI) banned it for good in 2001. A series of reforms of the stock market between 1993 and 1996 paved the way for the development of exchange-traded equity derivatives markets in India. In 1993, the government created the NSE in collaboration with state-owned financial institutions. NSE improved the efficiency and transparency of the stock markets by offering a fully automated screen-based trading system and real-time price dissemination. In 1995, a prohibition on trading options was lifted. In 1996, the NSE sent a proposal to SEBI for listing exchange-traded derivatives. The report of the L. C. Gupta Committee, set up by SEBI, recommended a phased introduction of derivative products, and bi-level regulation ( i.e., self-regulation by exchanges with SEBI providing a supervisory and advisory role). Another report, by the J. R. Varma Committee in 1998, worked out various operational details such as the margining systems. The first step towards introduction of derivatives trading in India was the promulgation of the Securities Laws(Amendment) Ordinance, 1995, which withdrew the prohibition on options in securities. The market for derivatives, however, did not take off, as there was no regulatory framework to govern trading of derivatives. SEBI set up a 24-member committee under the Chairmanship of Dr.L.C.Gupta on November 18, 1996 to develop appropriate regulatory framework for derivatives trading in India. The committee submitted its report on March 17, 1998 prescribing necessary pre-conditions for introduction of derivatives trading in India. The committee recommended that derivatives should be declared as securities so that regulatory framework applicable to trading of securities could also govern trading of securities. SEBI also set up a group in June 1998 under the Chairmanship of Prof.J.R.Varma, to recommend measures for risk control in derivatives market in India. The report, which was submitte d in October 1998, worked out the operational details of margining system, methodology for charging initial margins, broker net worth, deposit requirement and real-time monitoring requirements. The Securities Contract Regulation Act (SCRA) was amended in December 1999 to include derivatives within the ambit of securities and the regulatory framework was developed for governing derivatives trading. The act also made it clear that derivatives shall be legal and valid only if such contracts are traded on a recognized stock exchange, thus precluding OTC derivatives. The government also rescinded in March 2000, the three- decade old notification, which prohibited forward trading in securities. Derivatives trading commenced in India in June 2000 after SEBI granted the final approval to this effect in May 2001. SEBI permitted the derivative segments of two stock exchanges, NSE and BSE, and their clearing house/corporation to commence trading and settlement in approved derivatives contracts . To begin with, SEBI approved trading in index futures contracts based on SP CNX Nifty and BSE-30(Sensex) index. This was followed by approval for trading in options based on these two indexes and options on individual securities. The trading in BSE Sensex options commenced on June 4, 2001 and the trading in options on individual securities commenced in July 2001. Futures contracts on individual stocks were launched in November 2001. The derivatives trading on NSE commenced with SP CNX Nifty Index futures on June 12, 2000. The trading in index options commenced on June 4, 2001 and trading in options on individual securities commenced on July 2, 2001. Single stock futures were launched on November 9, 2001. The index futures and options contract on NSE are based on SP CNX Trading and settlement in derivative contracts is done in accordance with the rules, byelaws, and regulations of the respective exchanges and their clearing house/corporation duly approved by SEBI and notified in the official gazette. Foreign Institutional Investors (FIIs) are permitted to trade in all Exchange traded derivative products. The following are some observations based on the trading statistics provided in the NSE report on the futur es and options (FO): †¢ Single-stock futures continue to account for a sizable proportion of the FO segment. It constituted 70 per cent of the total turnover during June 2002. A primary reason attributed to this phenomenon is that traders are comfortable with single-stock futures than equity options, as the former closely resembles the erstwhile badla system. On relative terms, volumes in the index options segment continues to remain poor. This may be due to the low volatility of the spot index. Typically, options are considered more valuable when the volatility of the underlying (in this case, the index) is high. A related issue is that brokers do not earn high commissions by recommending index options to their clients, because low volatility leads to higher waiting time for round-trips. Put volumes in the index options and equity options segment have increased since January 2002. The call-put volumes in index options have decreased from 2.86 in January 2002 to 1.32 in June. The fall in call-put volumes ratio suggests that the traders are increasingly becoming pessimistic on the market. Farther month futures contracts are still not actively traded. Trading in equity options on most stocks for even the next month was non-existent. Daily option price variations suggest that traders use the FO segment as a less risky alternative (read substitute) to generate profits from the stock price movements. The fact that the option premiums tail intra-day stock prices is evidence to this. Calls on Satyam fall, while puts rise when Satyam falls intra-day. If calls and puts are not looked as just substitutes for spot trading, the intra-day stock price variations should not have a one-to-one impact on the option premiums. SWAP In finance, a SWAP is a derivative in which two counterparties agree to exchange one stream of cash flow against another stream. These streams are called the legs of the swap. Conventionally they are the exchange of one security for another to change the maturity (bonds), quality of issues (stocks or bonds), or because investment objectives have changed. A swap is an agreement to exchange one stream of cash flows for another. Swaps are most usually used to:- Switch financing in one country for financing in another To replace a floating interest rate swap with a fixed interest rate (or vice versa) (Litzenberger, R.H)In August 1981 the World Bank issued $290 million in euro-bonds and swapped the interest and principal on these bonds with IBM for Swiss francs and German marks. The rapid growth in the use of interest rate swaps, currency swaps, and swaptions (options on swaps) has been phenomenal. Currently, the amount of outstanding interest rate and currency swaps is almost $3 trillion. Recently, swaps have grown to include currency swaps and interest rate swaps. It can be used to hedge certain risks such as interest rate risk, or to speculate on changes in the expected direction of underlying prices. If firms in separate countries have comparative advantages on interest rates, then a swap could benefit both firms. For example, one firm may have a lower fixed interest rate, while another has access to a lower floating interest rate. These firms could swap to take advantage of the lower rates. Different types of swaps:- Currency Swaps Cross currency swaps are agreements between counterparties to exchange interest and principal payments in different currencies. Like a forward, a cross currency swap consists of the exchange of principal amounts (based on todays spot rate) and interest payments between counterparties. It is considered to be a foreign exchange transaction and is not required by law to be shown on the balance sheet. In a currency swap, these streams of cash flows consist of a stream of interest and principal payments in one currency exchanged for a stream, of interest and principal payments of the same maturity in another currency. Because of the exchange and re-exchange of notional principal amounts, the currency swap generates a larger credit exposure than the interest rate swap. Cross-currency swaps can be used to transform the currency denomination of assets and liabilities. They are effective tools for managing foreign currency risk. They can create currency match within its portfolio and minimize exposures. Firms can use them to hedge foreign currency debts and foreign net investments. Currency swaps give companies extra flexibility to exploit their comparative advantage in their respective borrowing markets. Currency swaps allow companies to exploit advantages across a matrix of currencies and maturities. Currency swaps were originally done to get around exchange controls and hedge the risk on currency rate movements. It also helps in Reducing costs and risks associated with currency exchange. They are often combined with interest rate swaps. For example, one company would seek to swap a cash flow for their fixed rate debt denominated in US dollars for a floating-rate debt denominated in Euro. This is especially common in Europe where companies shop for the cheapest debt regardless of its denomination and then seek to exchange it for the debt in desired currency. Credit Default Swap Credit Default Swap is a financial instrument for swapping the risk of debt default. Credit default swaps may be used for emerging market bonds, mortgage backed securities, corporate bonds and local government bond. The buyer of a credit default swap pays a premium for effectively insuring against a debt default. He receives a lump sum payment if the debt instrument is defaulted. The seller of a credit default swap receives monthly payments from the buyer. If the debt instrument defaults they have to pay the agreed amount to the buyer of the credit default swap. The first credit default swap was introduced in 1995 by JP Morgan. By 2007, their total value has increased to an estimated $45 trillion to $62 trillion. Although since only 0.2% of Investment Companys default, the cash flow is much lower than this actual amount. Therefore, this shows that credit default swaps are being used for speculation and not insuring against actual bonds. As Warren Buffett calls them financial weapons of mass destruction. The credit default swaps are being blamed for much of the current market meltdown. Example of Credit Default Swap An investment trust owns  £1 million corporation bond issued by a private housing firm. If there is a risk the private housing firm may default on repayments, the investment trust may buy a CDS from a hedge fund. The CDS is worth  £1 million. The investment trust will pay an interest on this credit default swap of say 3%. This could involve payments of  £30,000 a year for the duration of the contract. If the private housing firm doesnt default. The hedge fund gains the interest from the investment bank and pays nothing out. It is simple profit. If the private housing firm does default, then the hedge fund has to pay compensation to the investment bank of  £1 million the value of the credit default swap. Therefore the hedge fund takes on a larger risk and could end up paying  £1million The higher the perceived risk of the bond, the higher the interest rate the hedge fund will require. Credit default swaps are used not only by investment banks, but also by other financial institutions. Corporate entities use credit default swaps either for protection purposes, to hedge or to sell. Investment banks are primarily affected by the buyers. If a number of major corporate entities have bought protection from the same investment bank, and all of them fail simultaneously, this will put pressure on the investment bank to pay out. Moreover, the credit risk caused by the above failure may lead to other risks, such as liquidity risk, market risk and operational risk. Therefore, most of the investment banks re-sell the sold protection on the market to other market participants. Edwards (2004) argues that derivatives do not reduce credit risk, but rather transfer it from banks to other banks or entities. Therefore, most of the investment banks re-sell the sold protection on the market to other market participants. Edwards (2004) argues that derivatives do not reduce credit risk, but rather transfer it from banks to other banks or entities. Some of the top banks in America are carrying unknown gambling risks that no one has warned about, and they are all tied up in U.S. bank derivative portfolios (Edwards M, 2004). Commodity Swap A commodity swap is an agreement whereby a floating (or market or spot) price is exchanged for a fixed price over a specified period. The vast majority of commodity swaps involve oil. A swap where exchanged cash flows are dependent on the price of an underlying commodity. This swap is usually used to hedge against the price of a commodity. Commodities are physical assets such as precious metals, base metals, energy stores (such as natural gas or crude oil) and food (including wheat, pork bellies, cattle, etc.). In this swap, the user of a commodity would secure a maximum price and agree to pay a financial institution this fixed price. Then in return, the user would get payments based on the market price for the commodity involved. They are used for hedging against Fluctuations in commodity prices or Fluctuations in spreads between final product and raw material prices. A company that uses commodities as input may find its profits becoming very volatile if the commodity prices become volatile. This is particularly so when the output prices may not change as frequently as the commodity prices change. In such cases, the company would enter into a swap whereby it receives payment linked to commodity prices and pays a fixed rate in exchange. There are two kinds of agents participating in the commodity markets: end-users (hedgers) and investors (speculators). Commodity swaps are becoming increasingly common in the energy and agricultural industries, where demand and supply are both subject to considerable uncertainty. For example, heavy users of oil, such as airlines, will often enter into contracts in which they agree to make a series of fixed payments, say every six months for two years, and receive payments on those same dates as determined by an oil price index. Computations are often based on a specific number of tons of oil in order to lock in the price the airline pays for a specific quantity of oil, purchased at regular intervals over the two-year period. However, the airline will typically buy the actual oil it needs from the spot market. Equity Swap The outstanding performance of equity markets in the 1980s and the 1990s, have brought in some technological innovations that have made widespread participation in the equity market more feasible and more marketable and the demographic imperative of baby-boomer saving has generated significant interest in equity derivatives. In addition to the listed equity options on individual stocks and individual indices, a burgeoning over-the-counter (OTC) market has evolved in the distribution and utilization of equity swaps. An equity swap is a special type of total return swap, where the underlying asset is a stock, a basket of stocks, or a stock index. An exchange of the potential appreciation of equitys value and dividends for a guaranteed return plus any decrease in the value of the equity. An equity swap permits an equity holder a guaranteed return but demands the holder give up all rights to appreciation and dividend income. Compared to actually owning the stock, in this case you do not have to pay anything up front, but you do not have any voting or other rights that stock holders do have. Equity swaps make the index trading strategy even easier. Besides diversification and tax benefits, equity swaps also allow large institutions to hedge specific assets or positions in their portfolios The equity swap is the best swap amongst all the other swaps as it being an over-the-counter derivatives transaction; they have the attractive feature of being customizable for a particular users situation. Investors may have specific time horizons, portfolio compositions, or other terms and conditions that are not matched by exchange-listed derivatives. They are private transactions that are not directly reportable to any regulatory authority. A derivatives dealer can, through a foreign subsidiary in the particular country, invest in the foreign securities without the withholding tax and enter into a swap with the parent dealer company, which can then enter a swap with the American investor, effectively passing on the dividends without the withholding tax Interest Rate Swap An interest rate swap, or simply a rate swap, is an agreement between two parties to exchange a sequence of interest payments without exchanging the underlying debt. In a typical fixed/floating rate swap, the first party promises to pay to the second at designated intervals a stipulated amount of interest calculated at a fixed rate on the notional principal; the second party promises to pay to the first at the same intervals a floating amount of interest on the notional principle calculated according to a floating-rate index. The interest rate swap is essentially a strip of forward contracts exchanging interest payments. Thus, interest rate swaps, like interest rate futures or interest rate forward contracts, offer a mechanism for restructuring cash flows and, if properly used, provide a financial instrument for hedging against interest rate risk The reason for the exchange of the interest obligation is to take benefit from comparative advantage. Some companies may have comparative advantage in fixed rate markets while other companies have a comparative advantage in floating rate markets. When companies want to borrow they look for cheap borrowing i.e. from the market where they have comparative advantage. However this may lead to a company borrowing fixed when it wants floating or borrowing floating when it wants fixed. This is where a swap comes in. A swap has the effect of transforming a fixed rate loan into a float

Craig Waddell’s Perils of a Modern Cassandra and the Ehrlichs’ The Population Bomb :: Perils of a Modern Cassandra Population Bomb

Rhetorical Strategy in Craig Waddell’s Perils of a Modern Cassandra and the Ehrlichs’ The Population Bomb In Perils of a Modern Cassandra, Craig Waddell suggests that the Ehrlichs should revise their rhetorical strategy in The Population Bomb because it is ineffective in attracting readers to their argument. Particularly problematic are the Ehrlichs’ alienating attitude towards non-educated non-environmentalists in his audience, a lack of both an inviting ethos, and a lack of compassion for the reader. Since the goal of a book is usually to inform or persuade readers, the Ehrlichs’ book does not serve its purpose and is therefore ineffective. The same â€Å"ineffective argument† problem can be seen in Betrayal of Science and Reason, since many of the Ehrlichs’ key ideas on environmental problems (along with their contestable use of rhetoric) in The Population Bomb are mirrored in Betrayal of Science and Reason. The following passages were taken from Betrayal of Science and Reason to demonstrate what Waddell sees as problems in the Ehrlichs’ rhetoric:â€Å"†¦Paul began to appear on radio and television to condemn the behavior of human beings in general. The possible public response worried him less than his colleagues’ reactions because, as is the case for most scientists, Paul’s ego rewards come mostly from the approval of his peers† (Ehrlich and Ehrlich 8). This passage supports Waddell’s claim by showing that one of the Ehrlichs is lacking in compassion toward humankind. When reading this passage, the reader gets a sense of ethos that revolves mostly around Paul Ehrlich’s ego, and consequently, the reader feels that the entire environmentalist argument of the book was written to satisfy his ego. This is because Paul Ehrlich liked the approval of his educated, environmentalist peers, and therefore, he really did not need to care about others in his audience. â€Å"Anti-science as promoted by the brownlash is not a unique phenomenon in our society; the largely successful efforts of creationists to keep Americans ignorant of evolution is another example, which is perhaps not entirely unrelated† (Ehrlich and Ehrlich 12). This is a good example of how the Ehrlichs inadvertently alienate large sections of their actual, not invoked, audience. The Ehrlichs may have invoked an audience full of educated, environmentalist readers, but this is not the audience who is reading Betrayal of Science and Reason. There are also creationists who might happen to harbor some environmentalist sentiment and who might want to share a stronger environmentalist view given that the Ehrlichs’ argument is persuasive enough.

Inherit The Wind Essay -- English Literature Essays

Inherit The Wind Rachel’s Quest for independence I think Rachel was looking for the ways for her independence and willing to protect Bert during the trial. Rachel believed that Bert was innocent. Rachel was in love with Bert, she knew that Bert was not a criminal and she wanted him to confess the court and the town’s people that he had done wrong, and it was all a joke and he was sorry for that. Rachel said to Bert, â€Å"Bert, why don’t you tell `em it was all a joke? Tell `em you didn’t mean to break a law, and you won’t do it again.† This clearly shows that she was worried about him and wanted to help him. But she knew that what he had done was bad. And she was also quite sure that he would not win the trial against the mayor. Her father was a powerful man. The townspeople liked him and appreciated what he had done and was doing for them. Rachel soon found that she could not convince him to confess because he did not believe that he had done something wrong. As all he had told the pupils were the quotations from the book Hunter’s Civic Biology and from Chapter 17, Darwin’s origin of species. He learned from the books, â€Å"That man was not stuck here like a geranium in a flower pot; that living comes from a long miracle, it didn’t just happen in seven days.† All this shows that his thoughts and ideas were based on scientific facts, but her father only trusted the Bible. Rachel has been always scared of her father. When she was little she used to have bad dreams. She ...

A Streetcar Named Desire, by Tennessee Williams :: A Streetcar Named Desire Essays

Tennessee Williams is known for his powerfully written psychological dramas. Most of his works are set in the southern United States and they usually portray neurotic people who are victims of their own passions, frustrations, and loneliness. The play represents the conflict between the sensitive, neurotic Blanche DuBois and the crude, animalistic Stanley Kowalski. Blanche visits the home of her sister, Stella, in New Orleans and that is when Stanley started picking at her, almost testing her. Before she had met Stanley, she told her sister of how their plantation had been lost due to the costs of paying for the funerals of many family members. There was not enough money for her to keep the plantation. While Blanche bathed after her arrival, Stanley came home. Stella had told him what had happened and he immediately insisted that Blanche was swindling them. He hinted that Blanche had sold the plantation in order to buy beautiful furs and jewelry. He went through Blanche's trunk while she bathed, Stella insisted he stop. He was looking for sale papers from the plantation. After Blanche was finished bathing, Stella was outside, so Stanley started questioning Blanche. She insisted that she had nothing to hide from him and let him go through all historical papers from Belle Reve, the plantation. While living with Stella and Stanley, Blanche had met a man named Mitch, who she started dating. She liked him a lot but she hid many things from him. Firstly, she hid secrets of her first lover, her husband Allan Grey. Every time she thought of him, she thought of how he killed himself and she heard the polka which played in the background. She did not want to speak of this to Mitch. After Allan's death, Blanche used to go to the Tarantula Arms hotel where she would have intimacies with strangers. She did it because she felt it would fill her empty heart. She did not want to tell Mitch because she wanted him to respect her.Blanche was very careful to hide her looks too. She felt that she was old looking and tried to avoid bright lights from glaring down on her. She covered a light in Stella's house with a Chinese paper lamp to keep it from being so bright she hid her looks from Mitch, he never saw her in the day. Finally, one day, Stanley tried to find out many of Blanche's secrets and told them to Mitch so he would not fall for her, even though he was considering marrying her.

India Asean Free Trade Agreement

INDIAN-ASEAN FREE TRADE AGREEMENT A TERM PAPER SUBMITTED IN PARTIAL FULFILLMENT OF THE DEGREE OF MASTER OF SOCIAL SCIENCES (HONOURS SCHOOL) Supervisor :Submitted by: Dr. Rajesh KumarKumar Ranjan M. S. Sc. (Hons. ) 2nd Semester Roll No. 12 [pic] SCHOOL OF SOCIAL SCIENCES GURU NANAK DEV UNIVERSITY AMRITSAR 2009 INTRODUCTION India and the association of South East Asian Nations (ASEAN) have concluded negotiations for a free trade Agreement (FTA) after years of difficult negotiations. This agreement will be signed into a treaty at India-ASEAN summit to be held in Bangkok on February 26,2009 (Economic times, January 27, 2009) if every thing goes as planned. Expectation from India ASEAN FTA are high. Joint Media statement of Sixth ASEAM Economic Minister (AEM)-India consultations states that â€Å"the AIFTA (ASEAN-India free trade agreement) could be major avenue in harnessing the region’s vast economic potentials towards sustained progress and improved welfare not only for ASEAN and India but for greater East Asian regions as well†. The India-ASEAN FTA is the result of many international and domestic factors on one hand, the trend of international regionalization and the proliferation of FTA’s and the failure of the Doha round of Multilateral talks to yield concrete results led both India and the ASEAN countries to consider alternative solution towards free trade. On the other hand the adoption policies by India and ASEAN to develop better cooperation with their immediate neighbours in recent years has helped accelerate this negotiation. (www. e_pao. net) INDIA AND ASEAN: HISTORICAL BACKGROUND Although India and ASEAN countries have shared cultural and historical ties, India’s interaction with ASEAN countries was quite limited during the cold war as the two pursued policies which were not very conducive to deep rooted interaction. Soon after the end of second world war, India championed the process of decolonization and drew recognition and appreciation from different parts of the world. It become one of the founding members of Non-aligned Movement (NAM). Even though Indonesia was also a member of NAM alongside India, this relationship did not extend beyond that (Sinha, 2007 pg. 357) The arrival of bipolar politics in southeast Asia, the Vietnam crisis and India’s close ties with the Soviet union led to the adoption of divergent policies by both India and ASEAN. ASEAN was formed in 1967 during the Vietnam war primarily to diffuse regional conflict and to promote better relations between members. Communists victory in Vietnam, Laos and combodia soon worsened the already fragile security situation of southeast Asia. Thus by 1976, ASEAN was forced to contemplate to become an association with security as its main concern. The reunification of veitnam and the Vietnamese invasion of Cambodia created another security dilemma. Sinha, 2007 pg. 350). While ASEAN chastised Vietnam, India supported Vietnam. ASEAN’s suspicions of the soviet union and the paronoia it had with anything communist led many including India, to regard ASEAN as allies of the capitalists and pro-American bloc. Suspicions was so high during this time that refused to hold dialogues with A SEAN twice in 1975 and 1980. But with end of the cold war, interactions between India and ASEAN became more frequent: and relations between the two began to improve at very fast pace. Following the end of cold war and collapse of soviet union, India began to adopt liberalization policies. Mean while, ASEAN has also emerged as an important regional organization with great potential and opportunities for growth. The transformation of the international system and new outlook led to the adoption of the Look East policy in 1991, it marked a strategic shift in its foreign policy and perceptions towards its eastern neighbours. ASEAN’s strategic importance in the larger Asia-Pacific region and the potentials it has in becoming India’s major partner in trade and investment also added an impetus to India to develop closer ties with it. In addition, considering the proposed South Asian Free Tade Area (SAFTA) is unlikely to produce any solid outcome, this policy shift and agreement on the part of India is a strategic s it is important. In continuance of India’s Look East policy, the process of interregional cooperation was institutionalized with India becoming a sectoral Dialogue partner of ASEAN in 1992; a full dialogue partner in 1995 and member of the ASEAN Regional Forum (ARF) in 1996. India because a summit level partner of ASEAN in 2002 and concluded the ASEAN-India partnership for peace, progress and shared prosperity in 2004. India also became enganged in regional initiatives such as Mekong-guga cooperation (MGC) and Bay of Bengal Initiative for Multi-Sectoral Technical and Economic cooperation (BIMSTEC). India has also became member of EAST Asia Summit (EAS) in December, 2005, (Chakraborti, World Focus, 2008, 436). INDIA’S LOOK BEST, ASEAN LOOK WEST POLICIES The real turning point in India-ASEAN relations came with economic liberalization in 1991, the end of the cold war and enunciation of India’s â€Å"Look East† policy by Prime Minister PV Narsimha Rao. As publication of Indian ministry of external affairs observed. â€Å"There was confluence of nterests. A new world order, the economic Reforms in India along with its â€Å"Look East† policy, coincided with ASEAN’s â€Å"Look West† and regionalization drive. (Baru, February 2001 pg. 13. ) Under the â€Å"Look East† policy pursued increased trade and investment cooperation with South Korea and Singapore. Apart from extending India’s enduring relation with Vietnam, the policy also pursued greater economic relations with Malaysia, Thailand and Indonesia. India became a ‘Sectoral Dialogue Partner’ of ASEAN at the ASEAN’s Singapore, summit in 1992, and a ‘Full Dialogue partner’ of ASEAN at the Bangkok Summit in 1995. In February 1995 the ASEAN-Indian Business council was set up. India was invited to the meeting of ASEAN Regional Forum (ARF) in July, 1996. At this it was decided that ARF would only admit as participants countries that have a direct influence on the peace and security of East Asia and pacific region. (Baru, 2001; pg 13). A key objective of India and ASEAN to move from derivative to direct relationship so that there are no distortions, no misperception, no ignorance and no intermediation. There has been doubling of trade between India and ASEAN countries in 1990s and a marked increased in joint ventures and foreign direct investment between the two. Section VI and VII provide a comprehensive account of India-ASEAN trade and investment relation. Suffice it to say that ASEAN has emerged as the third largest foreign investor in India’s after US and EU. There are two dimensions of India’s new relationship with ASEAN. First, the trade and investment dimensions; second, the foreign policy and strategic dimension. Neither of these relations has equal value to all the ASEAN countries clearly, India’s economic relations with some are more developed than with others. Similarly India’s political and strategic relation with some are more developed than with others. Suffice it to say that in no case is the relationship purely undimensional (Baru, 2001, pg 14) DEEPENING RELATIONSHIP BETWEEN INDIA AND ASEAN The deepening of relationship between India and ASEAN is reflected in the buoyancy of trade figures between the two. During April-September 2007-2008, trade grew from US$ 15. 06 billion to US$ 17. 2 billion that is trade grew by 13 percent. India foreign trade with ASEAN, according to directorate General of commercial intelligence and statistics (DGCIS), is also on the rise. During the period 2005-06 to 2006-07 India’s export to ASEAN registered a growth rate of 20. 67 percent. Similarly India’s imports from ASEAN during the same period registered a growth rate of 66% In dia ASEAN trade stoo at US$ 38. 37 billion in 2007-08 and is projected to reach US$ 48 billion during 2008-09 (Economics times, Jan 10). At the first India-ASEAN summit held at Phnom Penh on November 5, 2001. India called for an India-ASEAN within a 10 year time frame. In this context the second India-ASEAN summit held at Bali on October 8, 2003 was significant landmark in India-ASEAN relations. The summit saw the signing of the framework agreement for comprehensive economic cooperation between India and ASEAN. This agreement envisaged the establishment of an FTA within a period of ten years. In March 2004, an ASEAN-India Trade Negotiation committee (Al-TNC) was established to Negotiate the implementation of the provisions of the framework agreement. India, since than entered into numerous agreement with ASEAN. (Sharma, Third concept vol 21, pg 9,10) At the Sixth India- ASEAN summit held at Singapore on November last year, India proposed to increase its bilateral trade with ASEAN to the time of US$ 50 billion by the year 2010. The latest agreement is therefore the result of many years of tactfull policies that led to the thawing of the ice between these two important emerging power in Asia. In addition to these agreements with ASEAN, India has also made consistent efforts to develop bilateral ties with ASEAN members. With Thailand, India has 61 years of diplomatic relation. India also has free trade agreement with Thailand that was signed in 2004. The framework agreement on bilaterals FTA of 2003 was the basis of this FTA with Thailand. Trade b/w the two increased from a mere US $ 606 million to US$ 3. 14 billion in 2006-07. With the CLV countries Cambodia, Laso and Vietnam, India entered into a number of bilateral agreements for cooperation in the fields of trade, science and technology, agriculture, defence, visa exemption, tourism, IT and culture. India has major projects I in the projects in the field of education entrepreneurship development and IT in these three countries. In 2004, India extended a credit line of US$ 27 million to Vietnam. Malaysia is a major source of foreign direct investment (FDI) for India, particularly in the areas of LPG, power plant and highway construction. Trade between the two rose from US$ 2. 2 billion in 2002-03 to US$ 6. 6 billion in 2006-07. India public sector undertaking such as BHEL and IRCON have also undertaken and completed a number of projects in Malaysia (www. _pao. net). Presently after India-ASEAN FTA negotiations, it is reported that about 150 Indian Engineering firms are eying to diversify their export base in ASEAN markets and are planning to make Malaysia the Regional hub to penetrate the region. Many of these companies are exploring the possibilities of joint ventures, technology transfer and investment opportunities. It was mainly because of the insistence of Indonesia that Ind ia became a part of the East Asia summit in 2005. Relations between the two had been very good for many years. Bilateral trade between the two increased by 44% from 2005-06 to 2006-07. India has a comprehensive Economic cooperation agreement (CECA) with Singapore since 2005. This agreement include bilateral investment promotion treaty. Double taxation avoidance agreement, an air service agreement and an FTA. Singapore, along with Indonesia had been an important factor for India’s inclusion into the East Asian summit. In addition, it was Singapore’s role that paved the way for India’s association with the ARF. Singapore is the biggest source of FDI for India among ASEAN countries. During the period 2000to 2008, the cumulative FDI of Singapore into India was worth a whooping US $ 4. 35 billion. Concurrently, over two thousand Indian companies were based in Singapore (www. e_pao. net) India also has plans for a free trade area with Brunie, Indonesia and Malaysia by 2011 and with the remaining ASEAN countries by 2016. Since 1995, India have actively engaged Myanmar in Trade. It has singed several agreements and MOU’s including Tripartite Maritime Agreement with Myanmar and Thailand, border trade Agreement and for cooperation between civilian uthorities between India and Myanmar. Since 2000, a number of high level visits have taken place. During these visits, several agreements and MOU’s have been signed in areas ranging from hydroelectric projects on the Chindwin River and IT cooperation to cultural exchange programs. In year 2003 alone, Seven Agreements/ MOU’s were signed to promote trade and communication facilities. By 2006-07 bilateral tr ade between India and Myanmar reached US$ 650 Million as compared to US$ 341. 40 million in 2004-05 (www. e_pao. net). RECENTLY CONCLUDED FREE TRADE AGREEMENT BETWEEN INDIA AND ASEAN India is in process of signing a free trade agreement (FTA) with ASEAN. On 28 August 2008, India ASEAN concluded a trade in goods agreement which will operationalize the FTA in merchandize trade. They will formally signing this TIG agreement in ASEAN-Indian Summit now to be held on 26 Feb 2009. (Economic times, 27 Jan 2009). When India and ASEAN Kicked off Negotiation on the bilateral FTA in 2002, they were supposed to finalise a comprehensive agreement that covers goods, service and investment. However, regional grouping prevailed in India to conclude talks on goods, first and than move on to service and Investment. However signing of TIG Agreement was delayed as the negotiation got stuck a few times due to difference between parties on the coverage of the negative list. In free trade agreement countries are allowed to keep a small number of products out of coverage of the agreement. The issue of the negative list or the list of items that would be excluded from proposed FTA agreement had at one stage brought negotiations to a stands till. The items on the list would have limited or no tariff concession. Indian negotiaters were cautious as there were apprehensions that the ASEAN countries are more competitive in sectors like agriculture, textile, auto and auto components and electronics. India would face negative consequence unless sensitive items in these sectors are protected India submitted a list of aground 1414 products as a negative list. These products counted for 42% of total exports of ASEAN to India. But as the Negotiations from ASEAN insisted that the products include in the FTA, should cover at least 90% of exports to India, a pruning of negative list was done by Rao, Inderjit Singh, (India’s Deputy Minister for Defence). He reduced the number of items to be placed on a negative list from 1414 to 850 on 27 July 2006. In August 2006 These items were further reduced to 560 items. At the end it was decided that each signatory country of INDO-ASEAN FTA can have at most 489 products in its negative list provided that these products do not exceed more than 5% of total bilateral imports. India’s negative list includes 302 agriculture items, 81 items from textile and clothing, 52 items from machinery and auto and 32 items from chemicals and fertilizer plastics. There are 22 other items from various other sectors which are also part of negative list (Thakurta, South Asian Journal, 2007, 107-108). It has been decided in Negotiation that for products which are not in negative list duties will be reduced in phased manger starting from 2009 and the duty cut will be completed by 2018. Under the pact, India and ASEAN will eliminate import duties on 71% products by December 31, 2012 and another 9% by 2015. Duties on 8-10% products that have been kept in the sensitive list will also be brought down to 5%. For all product in non negative list duty will be reduced to zero by 2018. India has also identified 611 products, which will only get a partial duty cut. Among these products India has put five products on highly sensitive list. They are Tea, Coffee, pepper, palm oil and refined palm oil (The Economic Challenger, 2008). India stances during the negotiations indicates some what defensive position in goods sector. This is not surprising because India runs a fairly large trade deficits vis-a-vis ASEAN. Acc to data of Direction of Trade Statistics (DOTS) published by IMF, India had a trade deficit of $ 14,562 million in 2007 with ASEAN. This is around 15% of India’s total trade deficits. Fore individual ASEAN members, India Trade Pattern show that for the last 10 years (1998-2007) it has a trade deficit each year with Singapore, Malaysia, Indonesia, Thailand and Myanmar. India runs a trade surplus with other ASEAN member including Vietnam and Philippines (TABLE 1). Table 1: India’s Trade surplus/Deficits with ASEAN Member countries (in million $) |1998 |1999 |2000 |2001 |2002 |2003 |2004 |2005 |2006 |2007 | |Brunei Daressalam |3. 05 |1. 73 |2. 63 |2. 90 |3. 72 |4. 22 |4. 31 |32. 64 |40. 34 |50. 07 | |Cambodia |2. 85 |6. 60 |6. 88 |2. 48 |16. 97 |18. 55 |17. 10 |21. 68 |24. 43 |30. 32 |Indonesia |-556. 28 |-635. 64 |-536. 55 |-717. 28 |-541. 06 |-883. 68 |-1160. 84 |-1492. 88 |-2450. 39 |-3975. 02 | |Laos |0. 98 |1. 35 |5. 00 |5. 52 |1. 84 |0. 59 |2. 00 |1. 59 |5. 68 |7. 05 | |Malaysia |-1137. 28 |-1504. 35 |-820. 68 |-1032. 57 |-627. 00 |-1044. 68 |-1206. 95 |-1231. 50 |-4429. 51 |-4599. 52 | |Myanmar |-151. 45 |-139. 05 |-131. 31 |-144. 76 |-274. 11 |-304. 77 |-295. 35 |-383. 30 |-473. 73 |-587. 90 | |Philippines |113. 80 |85. 83 |126. 53 |147. 41 |299. 41 |236. 62 |208. 86 |272. 87 |233. 00 |176. 98 | |Singapore |-754. 57 |-862. 95 |-655. 53 |-2001. 17 |-92. 87 |26. 29 |919. 87 |209. 5 |-4000. 42 |-5664. 81 | |Thailand |63. 60 |103. 33 |174. 60 |81. 65 |301. 66 |250. 02 |72. 60 |95. 74 |-513. 20 |-1035. 06 | |Vietnam |116. 70 |136. 25 |195. 85 |157. 36 |280. 97 |356. 22 |427. 08 |534. 92 |648. 69 |1035. 88 | |Overall trade deficits |-2298. 61 |-2806. 93 |-1632. 41 |-3498. 46 |-630. 45 |-1340. 29 |-1011. 32 |-244. 77 |-10915. 11 |-14562. 02 | | Source: – (EPW, 15 Nov 2008) However, overall trade balance is significantly negative. The concern is that if India has already such a huge trade deficit, reduction of tariff rates may worsen the situation unless there is a significant export boost. Among ASEAN members, India already has preferential trade agreement with Thailand Myanmar and Singapore. India, Myanmar and Thailand are part of the Bay of Bengal Institute for multi sectoral technical and economic cooperation (BIMSTEC) which is now knows as Bangladehs, India, Myanmar, Sri Lanka, and Thailand economic cooperation (BIMSTEC) (Thakurata, South Asian Journal No. 16, pg 108). India also has a seprate FTA with Thailand. India and Singapore have signed a comprehensive Economic cooperation agreement (CECA) few years back. Though the terms and tariff reduction conditions of these agreements may be different from the present agreement but still it can be assumed that the marginal impact of Indo-ASEAN FTA will be less for these three ASEAN countries (i. e. Myanmar, Thailand and Singapore). Among other ASEAN members, India has significant trade with Malaysia, Indonesia and Philippines. Though the current volume of trade with Vietnam is low, Vietnam is one of the fastest growing countries in the world and trade potential between India and Vietnam is considered to be significant. Nityanand Deva, India’s look-East policy, www. indianmba. com/occasional_papers/ OP104/ OP104html. HOW TARIFF PROFILE EFFECTS FTA? Tariff reduction, especially of custom duties on imports of Agricultural commodities, is an extremely sensitive issue in India. Till India initiated economic reforms in 1991, the peak custom duty rate used to be as high as 150 percent. (Thakurata, South Asian Journal, pg 110). One assumed that In dia will have some advantage in the ASEAN market because of tariff margin given TIG agreement. The India-Asean pact on goods trade will result in the signatory countries abolishing customs tariffs on 80% of goods including key raw material like Iron ore and aluminum, plastic goods and certain kinds of machinery. The deal is likely to be operational from January 2009 when the signatories to the pact will begin cutting import tariff in phased manner, import duties on normal goods will be reduced to zero over a period of six years and on items in the sensitive list will have a partial tariff reduction over longer period of time. (The Economic challenger, pg 18). It look six long years for the two sides to conclude the negotiation of ROO’s (Rules of origin). ROO means that goods exported from certain destination must have a minimum value addition in the country of origin of proportion specified. India has reportedly agreed to have 35 percent value addition and changes in tariff at level of sub heading whereas in case of bilateral arrangements with individual countries like Thailand and Singapore, the rules specify 40% value addition and tariff changes at the level of headings. ROO’s are major reason why negotiations between India and Thailand over expansion of items in FTA list are stalled. New Delhi fears that further relaxation of ROO’s could lead to imports for third world via Thailand that would, in turn, antagonize Indian industry. (www. bilaterals. org/article. php3? id_artilce=13650) India lowered its duties on crude palm oil (CPO) and refined palm oil to 37. 5 and 45% (against 80%) respectively. It has also agreed to lower duties on coffee and tea to 45% and pepper to 50% (against 100%). Under the pact India-ASEAN will eliminate import duties on 71% products by December 31, 2012 and another 9% by 2015. Duties on 8-10% products that have been kept in the sensitive list will also be brought down to 5%. India will keep 489 items in negative list of products to be excluded from tariff reduction commitments. Tariff rates in manufacturing goods in India is high whereas in major ASEAN countries are quite low. Therefore India is unlikely to get too much advantage because of tariff preference (The Economic Challenger, vol41, pg 18). On the other hand, the FTA is likely to allow the ASEAN countries to take advantage of the large gap between high Indian applied tariff rates and the preferential rates. It is expected that agreement will open up considerable market for ASEAN countries in Agriculture, electronics, motor car equipment and other light manufacturing goods in India. This way negatively affect domestic farmer in agriculture and small and medium enterprises in light manufacturing including textile in India. There are reports that Asian development bank to contribute to a fund to help compensate industries that likely to be hit by Indo-Asean free trade agreement (Dasgupta and PAL, EPW Nov, 15, 2008). WHAT ARE EFFECTS OF SERVICE TRADE ON FTA The crux of welfare gains from India ASEAN market integration does not rest on free trade in goods, but on free flow of service and investment. That is India’s service industries-IT services, design services and call operators-have long been a hub or source of outsourcing and off shoring from develop economies especially United States and the European Union. The India-ASEAN FTA that successfully liberalises trade in service and investment will therefore provide economic opportunities companies in ASEAN countries to strengthen their competitiveness in global market by fragmenting their production and establishing industrial clusters. www. bilaterals. org/article/phg3? id_article=13650). A treaty which involves services will be extremely important for India also because India sees a big market for its services export in ASEAN. India presently is one of top exporters of services and according to WTO data it is ranked 10th in the world ahead of ASEAN countries like Singapore (rank ed 16th), Thailand (ranked 27th) and Malaysia (ranked 20th). In 2006 reports of services from India were around $74 billion. India is particularly strong in Information technology enables services (ITES), professional services, telecommunication services, health care, financial services and distribution services. ASEAN is also big market for service imports. It is not importer of services and according to WTO (2007), total imports of service by ASEAN members was close to $ 150 billion in 2006. To put this figure in perspective, US imports of services was around $ 300 billion in the same year. ASEAN also has a major export interest in some services sector. Tourism in one of the most important services trade for ASEAN countries. Apart from that they are major exporter of air transport, construction, logistics insurance and financial services. (Dasgupta and PAL, EPW Nov 15, 2008). When India and ASEAN kicked off negotiations on the bilateral FTA in 2002, they were supposed to finalize a comprehensive agreement that covers good, service and investment. However, regional grouping prevailed on India to conclude talks on goods first and then move on to services and investment. India’s trade with the ASEAN, its fourth largest trading partner after the EU, US and China has been growing at a compound annual growth rate of 27%. Bilateral trade stood at 38. 37 billion in 2007-08 and is project to reach $ 48 billion in 2008-09. The agreement on services allow Indian service providers to access the ASEAN Market and set up operation there. The investment agreement in expected to work both ways in terms of attracting FDI from ASEAN member, especially Singapore and Malaysia, and providing opportunity to Indian companies in sectors like pharmaceuticals, coal mining and automobiles to invest in ASEAN region (Economic times, Jan 10, 2008). For a major region which has liberal policies for merchandise trade, services trade in ASEAN in highly regulated. As Karmakar (2005) points out, services trade in ASEAN in highly regulated for foreign suppliers but the restrictions are also there for intra ASEAN, trade. Efforts are being made to gradually integrate service trade among ASEAN members. The ASEAN Framework agreement on services (AFAS) provide broad framework to achieve this. The target is to make ASEAN a single market and production base through free flow of goods, services, investment, skilled labour and free flow of capital by 2015 (Dasgupta and Pal, EPW Nov 15, 2008). HOW ENERGY SECURITY HELPFUL TO FTA? Apart from other items, closer economic and political ties with ASEAN are likely to held India’s quest for energy security. Indian position on global civilian nuclear cooperation received a boost as the 16 leader’s of ASEAN and its dialogue partner signed what was described as landmark declaration on Energy security at the second East-Asia summit. The Cebu Declaration on Energy security was signed by leaders of East Asia summit-an evolving regional forum that includes the ASEAN and six dialogue partners (China, Japan, South Korea, India, Australia and New Zealand). The declaration calls for reducing dependence on hydrocarbons and fossil fuel in the context of surging global crube oil prices and seeks to intensify the search for new and renewable energy resources and technologies with focus on civil nuclear power and biofuels (Thakurata, South Asian Journal No 16, pg 107). India is heavily dependent on west Asia for oil imports, which is geopolitically tense part of the world. India is currently the world’s sixth largest energy consumer, and third largest oil and gas consumer in Asia after China and Japan. For India oil imports account for about 72% of total oil consumption of which 67% is being sourced from west Asia. Hence on external front India is pursuing diversification of supply sources and trying to significantly increase exploration of oil and gas. Among the ASEAN countries, India at present import crude oil from Malaysia and Brunei, which contributes 5. % of its total oil from Malaysia which comprises just 3. 5% of its total LPG import on the other hand, among the ASEAN countries, Indonesia, Malaysia and Vietnam have about 1% of total world’s proven oil reserves and 3% of the world’s proven gas reserves (Dasgupta and Pal, EPW Nov 15, 2008). CONCLUSION To conclude it can be said that the Indo ASEAN trade in goods agreement may not be beneficial for trade in short run but it can be thought of as a part of long runs strategy to improve India’s economic, and strategic presence in the neighbourhood. Though India shares a land border with Myanmar and maritime border with Indonesia and Thailand, the ASEAN countries has never been economically very close to India. In fact India and the ASEAN countries are not considered natural trading partners. This is indirect contrast to China which was established a distributed regional network of production and trade in this region. The Indo-ASEAN FTA can be perceived as an intial step towards increased economic integration of India with South east Asia. From a broader perspective, the Indo-ASEAN FTA can also be viewed as other cog in the wheel of increasing South-south cooperation. This is important because the world economic system is presently going through some significant changes. On the one hand there is severe economic showdown and major financial problem in the developed world. On the other hand there is talk of developing countries like China and India emerging as driver of southern economic growth. Though the impact of China on other developing countries is much stronger. India can play a complementary role. While China provides a big market for exports, via a manufacturing supply chain for other Asian countries, India can potentially become a hub of services-led growth. If India aspires to play a prominent role in global economy and Governance, increased cooperation with ASEAN make a sense as a strategic move. BIBLIOGRAPHY Baru, Sanjay, â€Å"India and ASEAN: The Emerging States Relationship Towards a Bay of Bengal community†. Indian Council for Research on International Economic Relation, February, 2001. Chakraboti, Tribdib, â€Å"India and Indo China states in the 21st century; Challenges and opportunities† World Focus Vol 347-348; Nov-Dec 2008. Dasgupta and Pal, â€Å"Does a Free Trade Agreement with ASEAN make sense† Economic and Political weekly. Nov 15, 2008, Economic Times, January 27, 2009. Joseph and Parayil, â€Å"India-ASEAN cooperation in Information and Communication Technology: Issues and Prospects: RIS Discussion paper (www. ries. org. in) Sharma, Madan Lal, â€Å"India ASEAN Relation†; Third Concept Dec 2007, Vol 21. No 250. Sinha, Prabha Chandra, Handbook of ASEAN and Regional Cooperation. 2th Summit and beyond 2007. Takhurata, â€Å"India’s free Trade Agreement with ASEAN† South Asian Journal, April June 2007, NO. 16. â€Å"The Free Trade Agreement with ASEAN†. The Economic Challenger 2008, No 11, issue 11. WEBSITES www. aseansec. org/4920. htm. www. artilcebase. com/politics_articles www. bilateral. org/rubrique. php3? id_r ubriqu+159,13650,12959 www. econoimctimes. com www. e_pao. net/epsubpageextracts. asp? src=education. scientificpapersIndia-ASEANFTA. www. heindia_au. org/pr_072. html. www. indianmba. com/occasional_papers/OP104. op104. html