With an aim to enhance economic ties, India and Brazil discussed investment opportunities in sectors like infrastructure during the visit of State Minister of Commerce and Industry, Jyotiraditya Scindia to Sao Paulo.

Scindia, who is leading a 12—member business delegation to Brazil, Peru and Chile, met Brazilian Minister of Development, Industry and Foreign Trade Miguel Jorge yesterday and reviewed the bilateral commercial relations.

“They discussed the possibilities of further strengthening the commercial relations and the prospects of investments and joint ventures in sectors like oil and gas, agriculture, infrastructure, sugar, IT, automobiles and renewable energy,” a statement issued here today said.

Scindia also inaugurated the India-Latin America and Caribbean Conclave (Brazil) in Sao Paulo.

Colombia’s Ambassador to India Juan Alfredo Pinto announced that 132 Indian businesses will travel to Colombia to participate in Bogota‘s International Trade Fair in the first week of October.

“We have concluded a six month preparation process that included six promotional events in Delhi, Mumbai, Calcuta, Chennai, Bangalore and Combatore, with the support of the Indian Council for the Promotion of Exports and with the participation of Proexport,” Pinto said.

“Indian businesses and institutions picked up on [Colombia's] Bicentennial of Independence celebrations and we integrated that into our efforts to encourage Indian businesses to come to the Bogota Fair. They are interested in our market and we do not hide our desire for Indian representatives, distributors and partners to invest in Colombia,” Pinto continued.

Under the name Indee Colombia 2010, the Indian Council along with Proexport promoted exports in the sectors of engineering, capital goods, plastics, packing, mining, metallurgy, energy, electricity, telecommunications and information technology.

Trade between Colombia and India has increased by 200% over the last two years from $350 million in 2007 to $1 billion in 2009.

As an influential member of the Southern African Customs Union (Sacu), SA will, together with India, begin preliminary negotiations this year with South America’s biggest regional trading bloc, Mercosur.

Brazil, Argentina, Paraguay and Uruguay make up the full membership of Mercosur. Other South American countries, such as Bolivia, Chile, Colombia, Ecuador and Peru, have been granted associate membership. Oil-rich Venezuela has signaled its intention to become a full member.

Speaking at the opening of the India Show yesterday, Mr Davies said the balance of economic forces favours developing countries and this development is the major factor that has influenced Sacu’s decision to pursue this agreement.

WATER GOVERNANCE IN MOTION— Towards Socially and Environmentally Sustainable Water Law: Edited by P. Cullet, A. Gowlland-Gualtieri, R. Madhaw, U. Ramanathan; Foundation Books, 4381/4, Ansari Road, Daryaganj, New Delhi-110002. Rs. 875.

This volume, based on select papers presented at two workshops — one held in Delhi in 2006 and the other in Geneva in 2007 — covers the process of reform in two water-related areas in India, namely the legal and institutional frameworks. It also brings in the international dimensions of water law reforms and relates India’s experiences with those of countries such as Argentina, South Africa, and Australia.

Organised in five parts, the book has 18 papers — the introduction apart — from 21 well-known scholars in their respective areas. The key point to be noted here is that most of the legal changes India has witnessed over the past few decades are in specific areas such as user organisation, groundwater, water pollution, water harvesting, and forest conservation. But, there is hardly any movement towards a comprehensive reform of water laws as such.

University of Chicago economist Raghuram Rajan makes the argument I was trying to make, only more articulately:

[T]he political response to rising inequality—whether carefully planned or the path of least resistance—was to expand lending to households, especially low-income households. The benefits—growing consumption and more jobs—were immediate, whereas paying the inevitable bill could be postponed into the future. Cynical as it might seem, easy credit has been used throughout history as a palliative by governments that are unable to address the deeper anxieties of the middle class directly.

Politicians, however, prefer to couch the objective in more uplifting and persuasive terms than that of crassly increasing consumption. In the US, the expansion of home ownership—a key element of the American dream—to low- and middle-income households was the defensible linchpin for the broader aims of expanding credit and consumption.

Exactly! Mr Rajan goes on to say:

In the end, though, the misguided attempt to push home ownership through credit has left the US with houses that no one can afford and households drowning in debt. Ironically, since 2004, the homeownership rate has been in decline.

The problem, as often is the case with government policies, was not intent. It rarely is. But when lots of easy money pushed by a deep-pocketed government comes into contact with the profit motive of a sophisticated, competitive, and amoral financial sector, matters get taken far beyond the government’s intent.

The road to hell is paved with good intentions.

It is difficult to understand how some politicians declare they are giving a fillip to the nascent wine industry by declaring it an agri-business but do nothing to ensure its longevity.

As ET reported earlier this year, more than half of Maharashtra’s 58 wineries have either closed down or stopped producing wine due to a glut in the market. Not only are 2 million litres of wine (a quarter of India’s total production) lying unsold, payments for grape crops are down to a trickle and falling prices make the outlook even grimmer.

It does really seem as if farmers were duped into thinking that wines are on the upswing and therefore devoted more acreage to wine grapes. And wineries readily accepted the subsidies offered by Maharashtra and raised capacity. And yet average wine consumption in India has remained a miniscule about 4-5 ml per person per year – that too, of all wines, not just local ones!

Of course I cannot see our cuisine, eating habits and culture allowing us to come anywhere near the US average of 25 litres per person but we can get to China’s average of 4 litres. And we can make a start by exploring what India has to offer.