'Gimmick' will save India $6bn

Today is the day Indian companies type the last entries into the year's accounts and start working out the damage. It doesn't look good. It's so bad, in fact, that industry has lobbied for a rule-change to cut the carnage.

Last week, India's advisory body on accountancy recommended a two-year suspension on firms having to mark-to-market foreign exchange losses. The idea is to protect earnings against a 28% fall in the rupee against the dollar.

This may seem like a technicality, but it will save corporate India from a £6 billion hit on their annual profits - fully 20% of the total, according to the Centre for Monitoring the Indian Economy.

For companies like Tata Motors, Tata Steel and Suzlon Energy, with large foreign debts, this artificial boost will be higher still.

"It's just an accounting gimmick," complained Hitesh Agarwal, head of research at Mumbai's Angel Broking, who opposes the change. But this didn't stop shares in Tata Motors, Tata Steel and Suzlon, soaring last week when the recommendation was announced.

* Outsourcing companies in India have more reason than most to be sceptical of Gordon Brown's anti-protectionist rhetoric.

"We have seen a UK-based bank reduce its offshoring programme substantially because they took government money," one chief executive told me last week.

He wouldn't say whether it was RBS or Lloyds who'd pulled the plug: "It probably does not matter anyway," he moaned. "All such banks would behave similarly."

A friend who came to Mumbai last year to help set up an outsourced office for one of the banks agreed attitudes have changed. "I don't know what the future will be," he said.

"The government has a say now. As 'civil servants', we've got many more stakeholders than when we were a pure business entity."

This kind of protectionism, just as common in the US, is only going to get worse. "Everybody is afraid of what is going on in the world," the chief executive said.

* The "maid-for-hire" index is indicating a rapid withdrawal of expatriates. Barely a day goes by here without a new ad on the expat mailing list seeking a home for a live-in-maid, as their employers head back to the US, UK or Europe. Meanwhile, the Breach Candy Club, the expats' weekend hangout in South Mumbai, looks sparser by the week.