India joined China in the clamber of nations to tap African resources by entering into agreements with Nigeria and Angola, the continent’s two top oil-producing nations.

China is much ahead in the race, with Beijing already active in the continent with infrastructure development projects. More than half a million Chinese workers are engaged in building roadways, railways and even Malawian Parliament House.

India’s long-drawn bureaucracy and necessity for government accountability have proved damper in country gaining a head start. As energy needs of the nation cannot be ignored anymore and with the African continent offering immense possibility, an Indian delegation led by Union Minister of Petroleum and Natural Gas Murali Deora visited the African nations of Nigeria, Angola, Sudan and Uganda.

The government-owned Oil and Natural Gas Corporation signed an energy deal worth $359 million with Nigeria and a treaty for joint exploration and refinery with Angola. Meanwhile, GAIL, leader in India’s LPG production, is exploring its chances in LPG projects in Angola and Nigeria.

Nigeria is presently India’s top trading partner in the African continent with $10 billion worth of annual trade. Deora is optimistic that this figure will grow exponentially in the coming years.

India will also be engaged in building and upgrading refineries in Nigeria and Angola, as both the nations are unable to convert sufficient crude oil to produce enough oil for their need.

The Indian delegation underplayed the competition between the neighbors in exploiting the African resources. GAIL chairman BC Tripathi opined that as huge nations with growing economies, both India and China need to source oil.

However, analysts see this Indian move as a significant one, as India had been trying in vain to gain foothold in the continent.

The Reserve Bank of India raised Cash Reserve Ratio (CRR) by 75 basic points, while the market expectation had been 50 bps. The central bank has left the interest rates untouched. With this raise, banks need to keep 5.75% of their deposits with the RBI, as against the previous 5%.

The proposed CRR hike will be implemented in two phases – the first phase will involve a 50 bps hike effective from 13 February and the second, 25 bps w.e.f. 27 February. The combined effect of the two phases of CRR hike will squeeze out excess liquidity in the system to the tune of Rs. 36,000 crore.

The highlight of the policy review is the decision to leave both repo rate and reverse repo rate undisturbed at 4.75% and 3.25% respectively for the time being. The project GDP growth for the current fiscal also witnessed a hike from 6% to 7.5%. Inflation estimate for March 2010 too saw an increase from 6.5% to 8.5%.

Prior to review, the consensus had been a CRR hike of 50 bps to contain the spiraling inflation. During October review, RBI had hiked the statutory liquidity ratio (SLR) by 100 bps to 25%, which means the banks have to park 25% of their deposits in government securities.

RBI Deputy Governor Subir Gokarn said that the central bank is in the alignment process to adjust to the changes in the economy.

The stock market’s response to RBI announcement was subdued, even as bank and realty stocks posted gains. The top gainers in Sensex are ICICI Bank (5.29%), BHEL (3.10%), SBI (2.72%), DLF (2.54%) and HDFC Bank (2.25%). Sensex closed at 16357.96 points, up 51.09 points (0.30%).

Even amidst the rising speculation regarding the statements made by American President Barack Obama during his State of the Union Address, India has something to cheer about. President Obama’s concern over India’s rapid growth is a testament to the change that the country’s economy has seen over the last few years.

India, which was long seen as an under developed nation, is finally being mentioned in the same breath as Germany, China and some of the other nations which have gained considerable economic growth over the years. Post the economic meltdown, the world expects different things from India.

Economists agree that there has been a slow but steady power shift towards Asia and with this shift of power, India’s prospects look very bright. It is expected that the new trading bloc that is emerging in South East Asia will soon sideline the US and Western Europe. The balance of pwer has been tipped in the favor of the Indian subcontinent and the new India is arriving now.

The US President Barrack Obama vowed to put a full stop to outsourcing of jobs by US companies in a desperate bid to prop up his flailing popularity. In his first state of union address on Wednesday, he revised his stand on outsourcing, which occupied center stage during his presidential campaign.

While the US is still struggling to find a foothold in the aftermath of recession, major outsourcing beneficiaries like India and China posted enviable growth rates. Unemployment rate is at an all-time high in the US at 10%.

Obama is blaming paucity of jobs in the US to outsourcing. He is planning to counter this by removing tax cuts for outsourcing companies and introduce tax breaks for those who create jobs in the US.

However, industry sources are not overly worried and do not see any immediate threat to the Indian IT/BPO sector. Ending of tax breaks is not expected to create any ripples in the present scenario. Those who already have offshore operations are most likely to continue operations. However, it may discourage newcomers to explore overseas in search of greener pastures, as the grass may not be green anymore.

Nasscom, the association of software companies feels that the real worry is ‘indirect protectionism’ and not tax cuts. Nasscom VP Ameet Nivsarker assured that the move is aimed at those US companies operating in regions where they get tax benefits.

The general feeling is that outsourcing has grown deep roots and is practically impossible to uproot. With the competition over cost and skill getting higher and higher, US companies are left with no choice but to offshore to destinations like India.