• The Foreign Direct Investment agency Think London announced that the number of Indian companies setting up operations in London doubled last year bringing the total investments into London at 30% making India the 2^nd largest investor in London. The US amounts to 50% of investments in London. The Indian investments mainly from telecom, pharmaceutical, and Information technology companies will generate 400 new jobs. Of the 119 projects started by Indian companies in Europe from 1997 to 2004, 55 of them were located in London.

• India and Australia are to sign a new Trade and Economic Framework that will facilitate a more balanced and comprehensive development of bilateral trade between the two countries. India-Australia trade is currently at USD 10 billion and is expected to grow rapidly in the next few years. Special attention is being given to energy, mining, infrastructure, education, tourism, entertainment, and biotechnology.

Democracy, Politics and Judiciary

• The Law Minister H.R. Bhardwaj is working on a Judges Inquiry Bill of “minor measures” that can be ordered against “erring” Supreme Court and High Court judges but not strong enough to seek their impeachment. The law proposes to create National Judicial Council headed by the Chief Justice of India and populated by judges to create judicial accountability. If charges against a judge are proved, the Bill proposes to initiate one of 5 minor measures—issuing advisories, issuing warning, withdrawal of pending and future judicial work for a period of time, requesting the judge to voluntarily retire, and private and public censure or admonition. The Parliament and the Judiciary have increasingly been on a collision course with the Speaker Somnath Chatterjee challenging the authority of Judiciary over Parliamentary rulings and procedures. The weakness of the Constitution surfaced in recent times where a repressive Parliamentary ruling without due process targeting certain members denied those Parliamentarians the right to fair trial. While widespread cynicism of political actors is at an all time high, this Bill takes away the power of the Parliament to appoint a Commission to investigate corruption charges against a judge. This Bill will certainly create a controversy especially among the Government’s communist allies who have, in support of the Speaker, fought bitterly to reduce the influence and scope of the judiciary. Bhardwaj himself was embroiled in a recent controversy where he seemingly arbitrarily released monies of wanted arms dealer Quattrochi’s blocked due to charges of his involvement in the Bofors scandal.

• After killing scores of anti-Naxal tribal civilians, hundreds of armed Maoist terrorists in Andhra Pradesh blew up a bus, attacked a village killing 8 people, injuring 20, and taking 15 people hostage. After he assumed power, Andhra Pradesh Chief Minister Y.S. Rajashekara Reddy ill advisedly entered into negotiations with terrorists without demanding their renunciation of arms. After much thought out and sustained operations, his predecessor Chandra Babu Naidu had marginalized the terrorists to a point of insignificance. However, Reddy known for his other populist and disastrous ideas that have bankrupted many state agencies, appeased the terrorists by transferring effective police officers, dismantling intelligence networks, and allowing free movement of terrorists. The Naxals used this space to recruit, regroup, train, and create new bases for attacks police and soft targets in Maharashtra, Madhya Pradesh, Chhattisgarh, Orissa, and Karnataka. Following large protests from these states and the collapse of the dialogue process, Reddy has been ineffective in restarting operations and bringing out law and order. AP capital Hyderabad is being seen as a viable alternative to infrastructure-bankrupt Bangalore by many new and expansion plans of high-end companies. Increased violence in that state and its use to mount terror attacks on neighbors, may seriously compromise this advantage that Hyderabad has. Chhattisgarh Chief Minister Raman Singh and Federal agencies have promised stronger action and arming of locals to fight the communist terrorists.

• Suspected Islamic terrorists set off a series of bombs in the ancient Hindu holy city Varnasi killing 20 and wounding scores of people. The coordinated improvised explosive device is a sure handiwork of Pakistan-based terrorist groups.  The first bomb went off in the Sankat Mochan Hanuman temple that adjoins the ancient Vishwanatha Shiva temple. Armed police were quickly deployed to prevent sectarian backlash and national leaders called for calm. The city shutdown in protest against the bombs—shopkeepers closed down while authorities ordered schools and colleges closed. Bharatiya Janata Party blamed the Uttar Pradesh Samajwadi Party Government of ignoring security threats saying that “the government is encouraging Islamic terrorism by turning a blind eye to their activities". While no group has claimed responsibility analysts suspect Lashkar-e-Toiba, which has attacked other sites in the past, to be behind this crime. Pakistan was quick to condemn these blasts and a spokeswoman said “we know how it feels. We have been on the receiving end, we have had attacks on our places of worship too. It’s insanity, only an inhuman person will do that.” India accuses Pakistan of providing shelter, training, and material support to terrorists; a charge that it denies. Analysts both Indian and Western accuse Pakistan President Pervez Musharraf of trying to play on both sides of the fence—encouraging terrorists for domestic support and promising the West action against them but delivering little .

• A collateral damage to the Indo-US civilian nuclear deal is Israel’s arms deals with India. Israel was one of the largest vendors of high-tech weapons systems to India and this relationship may be compromised by the deal that has brought India and US closer. According to Israel arms vendors, the US is planning to make India one of its largest weapons market.