The European Union launched a World Trade Organisation action against India on Tuesday over its rules on imports of vehicle parts, a European Commission spokesman said. The 15-nation EU had asked for formal consultations with India, the first step in WTO's dispute-settlement procedure. In another move, the EU decided not to impose anti-dumping duties on unbleached cotton grey fabric from India.

100% FDI in advertising likely:

The union government is likely to allow 100 per cent foreign direct investment in new projects in the advertising sector as part of a comprehensive FDI policy. Information minister Sushma Swaraj is expected to offer protection to the Indian partners' interests in the existing joint ventures by putting a 74 per cent cap on foreign equity.

MPs' phone dues to be recovered from salary:

The Mumbai high court has directed the Lok Sabha and Rajya Sabha secretariats to forthwith recover arrears of telephone billsamounting to a staggering Rs 14.15 crore from the salaries, travelling and daily allowances of those members of parliament who have defaulted on the payment of the same. The directions were issued by chief justice MB Shah and justice YC Jahagirdar on Monday.

DGFT notifies wheat, dyes imports:

The Directorate General of Foreign Trade on Tuesday issued a notification for allowing free import of wheat by roller flour mills. It also issued a notification for allowing the import of jigs, fixtures, dyes and moulds under the Export Promotion Capital Goods scheme up to the full value of EPCG licence instead of earlier limit of 20 per cent of the licence value.

Corporate Monitor

Reliance gets TNEB nod on escrow for Jayamkondam:

Reliance Industries Ltd, which has received the letter of intent from Tamil Nadu Industrial Development Corporation Ltd for establishing the lignite-based Jayamkondam power project in phases, has been given escrow cover by the Tamil Nadu Electricity Board.

MercedesBenz losses at Rs 300 cr:

Mercedes Benz India Ltd has run up losses of Rs 300 crore over the past two years. The company suffered a net loss of Rs 170 crore in 1997 as against a loss of Rs 116 crore in 1996, making it Daimler Benz AG's second highest loss-making subsidiary worldwide. However, turnover rose to Rs 315 crore, against Rs 260 crore in the previous year.

Allergan mulls brand buyouts:

American eye-care major Allergan is planning a series of strategic initiatives, including brand buyouts, to boost its presence in the country. The company, which currently operates in India through its joint venture with Nicholas Piramal, also plans to establish contract marketing alliances for non eye-care products.

Market Pulse

HongkongBank gets notice over Indal offer:

The appellate authority in the finance ministry has issued a notice to Templeton's custodian HongkongBank on an appeal filed by Sterlite Industries challenging Sebi's order asking the company to accept the 9lakh-and-odd shares submitted by the FII under the open offer for Indal.

Sensex recovers 42 points:

Domestic institutions came to the market's rescue on Tuesday, making massive purchases to arrest the free fall in share prices which saw the 30-share BSE Sensex end the day at 2,919.74 points, up 41.67 points from the previous close. Accoring to brokers, shortcovering of positions on the last day of the current settlement on the NSE also helped the market revive.

Banking & Finance

`New banks bad loan figures inaccurate':

Nine private sector banks resorted to massive "camouflaging" and under-provisioning of non-performing assets while preparing their balance sheets for 1996-97, according to a confidential RBI report. Against the central bank's estimate of Rs 328.21 crore as total NPAs, the banks have shown a figure of only Rs 205.03 crore.

Economy & Infrastructure

Banks to reschedule loans to textile sector:

Banks and financial institutions on Tuesday agreed toa package of short-term measures including rescheduling of loans to mills and funds for cotton procurement in a bid to reverse the recessionary trends in the industry. The package was evolved at a meeting chaired by textile minister Kashi Ram Rana and financial institutions and banks.

World Corporate

Japan announces tax cuts of $50 bn:

Japanese prime minister Keizo Obuchi on Tuesday announced tax cuts of about $50 billion besides asking his cabinet to prepare a fresh revival package of $80 billion to $90 billion to revive the country's ailing economy. Earlier, the Japanese planning ministry admitted that the economy was contracting and revised its negative growth projection to 1.8 per cent from 1.9 per cent growth.

ABB faces EU penalties:

The European Commission is likely to impose heavy penalties on multinational Asea Brown Boveri and a group of other heating-pipe makers for allegedly creating a cartel to shut out competition. European Union's top competition law official KarelVan Miert said the probe into allegations of price fixing and cartelisation against ABB was coming to a close and indicated that investigations may result in a fine.