Business Roundup 

Broad foreign trade policy 
by July end

What is India News Service, June 22, 2004, 1630 hrs

The government will announce a broad National Foreign Trade Policy (NFTP) at the end of next month. Corporate industry is opposed to the government\92s proposal to reserve jobs for dalits and tribals in the private sector. UTI Bank will merge with IDBI Bank to become U&I Bank. The country\92s BPO sector may see an increase in business with MNCs looking at servicing third party customers, apart from their own companies.

The United Progressive Alliance government will announce a broad National Foreign Trade Policy (NFTP) instead of the usual annual export-import policy. The five-year policy will include the new government\92s exim policy. It is expected to provide a thrust to job-oriented export sectors in non-IT services, manufacturing and farm goods. The government plans to capture 2 per cent of the world\92s exports in the next five years.

The Confederation of Indian Industries (CII) is opposing the government\92s proposal for job quotas for the poor in the private sector. The trade organization says the government should instead upgrade vocational education skills of the weaker sections to make them employable.

UTI Bank will merge with IDBI Bank to become U&I Bank. The new entity will have a total deposit amount of Rs 30,000 crore, over 1,500 ATMs and more than 350 branches. UTI -1 owns 33.36 per cent in UTI Bank, while IDBI has 70 per cent holding in IDBI Bank. HSBC has also taken a 15 per cent stake in UTI Bank, which it wants to increase to 20 per cent.

The country\92s BPO sector will see a change soon with MNCs like GE looking at servicing third party customers in addition to its group of companies. This trend is visible in Nasscom\92s BPO ranking. The financial soundness of such companies is strong thanks to funding from their parent organizations, and they do not have to run from VC to VC. The day GE acquires its first third party customer, it will emerge the largest BPO firm in India, beating Wipro\92s Spectramind, for sheer scale and size.

Overall:

Broad foreign trade policy coming: The government is expected to give priority to employment generating sectors.

CII opposed quota: It said the government should upgrade vocational education skills of the weaker sections instead.

UTI may merge with IDBI: Talks are on, and the new entity is likely to be called U&I Bank

GE\92s BPO may beat Wipro in size: It could emerge the largest BPO in India if it starts servicing companies outside its group.