Trial resumes in 2G telecoms scam

A sacked former telecoms minister and six business executives will appear in court on Friday to face trial in India's biggest case of corruption that has exposed the nexus between government and industry in one of the world's fastest growing economies.

The court will rule on the bail applications of officials from the Indian joint ventures of Norway's Telenor, the United Arab Emirates' Etisalat and from India's Reliance ADA group, owned by tycoon Anil Ambani, named in the case.

Former minister Andimuthu Raja and several firms are charged with manipulating the grants of telecoms licences in the world's fastest-growing telecoms market, causing a potential loss to the government of USD 39 billion.

The case is the latest chapter in a series of corruption scandals that have embarrassed the Congress party-led government, which faces a test of strength in major state elections that could redraw India's political landscape.

Most analysts expect the DMK, Raja's party and a key Congress ally in the south, to lose power because of the backlash from the scandal.

The new telecoms minister Kapil Sibal could cancel several of the contentious licences issued under Raja, a move that will likely feed investor uncertainty about the stability of government contracts and regulations in India.

Under fire from a resurgent opposition, the corruption saga has sapped the government's strength to push an agenda of economic reforms such as simplifying India's tax code or opening its supermarket to foreign players.