Current Affairs 24th November

India, U.S. commit to linking economies across sectors #GS2 #IR

The United States and India committed to integrating their economies across sectors to harness the untapped potential of the bilateral relationship, at the Trade Policy Forum convened after a gap of four years on Tuesday.

Co-chaired by Commerce and Industry, Textiles, Consumer Affairs and Food & Public Distribution Minister Piyush Goyal and U.S. Trade Representative, Ambassador Katherine Tai, the Forum resolved to take economic ties between the two countries to the ‘next high level’ and exchanged views on ‘potential targeted tariff reductions’.

The two sides decided to activate working groups of the Trade Policy Forum (TPF) on agriculture, non-agriculture goods, services, investment, and intellectual property to meet frequently and address issues of mutual concern in a mutually beneficial manner. The idea is to deliver tangible benefits to farmers and businesses of both countries by resolving outstanding market access issues.

Mutual market access

Specifically, the Forum has decided to forge an agreement to facilitate U.S. market access for mangoes, grapes, and pomegranates, pomegranate arils from India, and reciprocate with similar access in the Indian market to cherries, pork/pork products and alfalfa hay for animal feed from the U.S

Discussions will also be held on enhancing market access for products such as distillers’ dried grains with solubles from the U.S. and resolving market access concerns for water buffalo meat and wild caught shrimp from India.

‘Restore GSP benefits’

The Indian side has sought restoration of the GSP (Generalized System of Preferences) benefits by the U.S. and said this would help industries from both sides in integrating their supply chain efficiently. The United States noted it ‘for suitable consideration’, an official statement said.

The Forum also agreed on the significance of negotiating a Social Security Totalization Agreement in the interest of workers from both sides, and pursuing further engagements for reaching such an agreement.

The agreement, being pursued for over a decade, would allow workers from both countries to move their retirement savings. The absence of such an agreement particularly affects Indian IT workers in the U.S., who lose billions of dollars in U.S. social security contributions that they cannot repatriate home.

With the WTO ministerial meeting coming up next week, India and the U.S. also discussed collaboration and constructive engagement in various multilateral trade bodies, including the WTO and the G20 for achieving a shared vision of a transparent, rules-based global trading system among market economies and democracies. The Forum also decided to find mutually agreed solutions on outstanding WTO disputes.

Ms. Tai and Mr. Goyal directed the TPF working groups to develop plans of action for making substantive progress by March 2022. The plans would include identifying specific trade outcomes that could be finalised for an inter-sessional TPF meeting to be held by mid-2022.

The U.S. indicated an interest in supplying ethanol to India for its goal of 20% ethanol blending with petrol by 2025, while the two sides decided to partner with allies in developing a secure pharmaceutical manufacturing base and de-risk global supply chains in critical sectors like health.

On the services front, the Forum discussed ways in which legal, nursing and accountancy services can facilitate growth in trade and investment, and sought to work together on electronic payment services and the digital economy.

While India welcomed the recent U.S. decision by the U.S. to permit fully vaccinated Indians to travel there, the two sides decided to continue engaging on visa issues to facilitate the movement of professionals, skilled workers, experts, and scientific personnel.

Government’s new Crypto Bill seeks to ban private players #GS3 #Economy

The Union Government will introduce a Bill to regulate cryptocurrency and ostensibly ban all private cryptocurrencies, along with 25 other pieces of legislation, in the winter session of Parliament that begins on November 29.

The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, which is yet to be officially approved by the Cabinet, seeks to create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India.

Pilot project

The central bank is looking at launching a pilot project for an official digital currency soon.

“The Bill also seeks to prohibit all private cryptocurrencies in India. However, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses,” according to the stated purport of the Bill in a Lok Sabha bulletin and the tentative list of the government’s legislative business for Rajya Sabha. So far, the precise contours of the Bill are not in the public domain and no public consultations have been held. The Finance Ministry has been tight-lipped on the Bill, which had been readied for the Cabinet’s approval as early as August.

No details

Media queries about who would be held responsible if investors betting on crypto assets that are liberally advertised, were to make heavy losses, have been met with silence.

When Prime Minister Narendra Modi chaired a meeting on November 13, to assess the regulatory prospects for cryptocurrencies with the top brass of the central bank and the Ministries of Home Affairs and Finance, a consensus was reached to stop ‘attempts to mislead the youth through over-promising and non-transparent advertising’

It was also resolved that unregulated crypto markets cannot be allowed to become avenues for money laundering and terror financing. A close watch and pro-active steps are necessary for the sector, the Government had determined.

Last Monday, when the Standing Committee on Finance met cryptocurrency stakeholders, industry representatives agreed with the need for regulation of the crypto market but were unable to answer several questions raised by parliamentarians.

Apart from the proposed cryptocurrency law, the government has also listed a Bill to repeal the three contentious farm laws of 2020, as promised by Prime Minister Modi last Friday, after they had triggered an year-long protest from a section of farmers. The Government has also listed the Electricity (Amendment) Bill, 2021, which seeks to remove all cross-subsidies and make all consumers pay the actual cost of supply. This could make farmers and rural consumers pay the highest price for electricity, as the cost of supply to rural areas is significantly higher than to urban consumers.

Several non-BJP State governments have raised objections to the Bill, which was listed in the Monsoon session of Parliament but was not introduced to avoid further confrontation with the Opposition at a time they were raising objections over the Pegasus Project revelations.

Three Bills issued as ordinances by the government will also be tabled for consideration and passing, including changes in the Central Vigilance Commission Act of 2003, the Narcotic Drugs and Psychotropic Substances Act of 1985, and the law governing the Central Bureau of Investigation.

DAC approves AK-203 deal with Russia #GS2 #IR

The Defence Acquisition Council (DAC) which met under the Chairmanship of Defence Minister Rajnath Singh on Tuesday approved the long-pending deal for the manufacture of 6.71 lakh AK-203 assault rifles in India, according to a defence source.

This comes ahead of Russian President Vladimir Putin’s visit to India early next month for the India-Russia annual summit. Mr. Putin is scheduled to visit India for the summit on December 6, when the two sides will also hold their inaugural 2+2 ministerial dialogue.

The two countries had signed an Inter-Governmental Agreement (IGA) in February 2019 following which a joint venture, Indo-Russian Rifles Private Ltd. (IRRPL), was set up at Korwa in Uttar Pradesh for manufacturing the rifles.

The JV is between Ordnance Factory Board (OFB) from the Indian side and Rosoboron Export and Kalashnikov on the Russian side. The Army had also appointed a Major General as the Chief Executive Officer (CEO) of the IRRPL to ensure timely execution and deliveries.

The Ministry of Defence has already floated a Request For Proposal (RFP) to the JV for the supply of 6.71 lakh rifles, but the final deal has been held up over the high cost for each rifle.

As reported by The Hindu earlier, with repeated delays in the deals for procurement of AK-203 assault rifles, India had signed a deal in August for 70,000 AK-103 assault tickets to be procured off the shelf. The deliveries would begin within three months once the first payment is made and would be completed in six months.

Another deal likely to make progress is for Igla-S Very Short Range Air Defence (VSHORAD) systems. The Ka-226T utility helicopter deal is unlikely to be cleared, according to official sources.

Air Force satellite

The DAC approved a proposal for the procurement of the GSAT-7C communication satellite for the Indian Air Force (IAF) at a cost of Rs. 2,236 crore, a Defence Ministry statement said.

Induction of the GSAT-7C satellite and ground hubs for Software Defined Radios (SDRs) will enhance the ability of the armed forces to communicate beyond Line of Sight (LoS) among one another in all circumstances in a secure mode, the Ministry statement said.

Myanmar stint beefed up Manipur PLA #GS2 #IR

Fighting the Myanmar Army’s war against pro-democracy resistance groups may have emboldened the People’s Liberation Army (PLA), a Manipur-based extremist group, to ambush an Assam Rifles convoy killing seven, including a colonel, his wife and minor son, on November 13.

According to an intelligence report accessed by The Hindu , there are about 300 members of the PLA and other VBIGs — short for (Imphal) Valley-based insurgent groups — across the India-Myanmar border. These groups have lost at least 40 members in the internal war between the military junta and the People’s Democratic Front (PDF).

“The Myanmar Army had been grudgingly supportive whenever India had asked for any help and they have time and again destroyed a few terrorist bases and camps in their territory, however mostly for optics rather than effect,” the report said. The situation took a new dimension after the military coup on February 1.

The PDF, comprising mostly civilians armed with rudimentary weapons, caused a heavy toll on the capabilities of the Myanmar Army, which began demanding the services of the VBIGs. The Army used to extract cash from the Manipur extremist groups for allowing them to stay in the country, the report said.

Shared duties

The duties the VBIGs have been doing for the Myanmar Army include holding their sentry posts, carrying out duties at vehicle checkpoints and routine patrolling besides combat. It is believed that rubbing shoulders with the Myanmar Army is believed to have given the confidence to the PLA to strike in Manipur.

“After a series of joint operations between the Indian and Myanmar Armies, the VBIGs were forced to shift their camps east of Manipur to the north in areas opposite South Arunachal Pradesh, where they live as tenants of NSCN (KYA),” the report said.

The NSCN (KYA) is the National Socialist Council of Nagaland (Khaplang-Yung Aung). Some shifted south of Manipur to Chin State in Myanmar, where the intensity of the civil war has been such that some 15,000 people have taken refuge in Mizoram.

The VBIGs who shifted to Chin are believed to have carried out the November 13 ambush near the Myanmar border in Churachandpur district of Manipur.

Glacier changed track 20,000 years ago #GS3 #Environment

Nearly 20,000 years ago, a five-kilometre-long Himalayan glacier “abruptly” changed course and over time fused into an adjacent glacier in present-day Pittoragarh, Uttarakhand. This is the first time, say scientists who have described the findings in a peer-reviewed journal this week, that such a turn in glacier’s course has been recorded in the Himalayas. Change in climate along with tectonic movement probably caused this to happen.

Based on remote sensing and an old survey map, the study, which appears in the Journal of Geosciences, assessed that the glacier had been affected by active fault and climate change.

The glacier, which does not have a name and lies in an extremely inaccessible region, was large enough that it formed its own “valley” and the accumulated debris that accompanies the formation of glaciers probably caused it to turn from a north-eastern direction to a south-eastern course, said Manish Mehta of the Wadia Institute of Himalayan Geology (WIHG), a Department of Science and Technology institute, who is among the authors of the study.

The study adds to evidence of the inherent instability of the Himalayan region, among the youngest mountain ranges in the world due to which the underlying tectonic plates that support it are not stable but are jittery and frequently trigger earthquakes and landslides.

The event had “similarities” to the February disaster in Rishiganga valley, Uttarakhand, in which a large mass of rock and debris detached from a glacier and hurtled down the Rishiganga river. “This event that we have described is a much larger event. However, that the Himalayan region is ecologically fragile and prone to events such as these is certain,” Mr. Mehta added.

More concessions for vehicle scrapping likely #GS3 #Economy

Union Minister for Road Transport Nitin Gadkari on Tuesday said that the Government is considering a proposal to give buyers additional concessions on buying new vehicles after scrapping of their old vehicles.

“We will once again sit and discuss with the Finance Ministry to see if we can give more concessions. We have planned something… this will facilitate [vehicle scrapping] and will help reduce pollution. He was speaking at the inauguration of Maruti Suzuki Toyotsu India Private Ltd.’s Government-approved end-of-life vehicles scrapping and recycling unit set up in Noida.

“I have requested OEMs, it is not mandatory. Sales will go up by 12-13% after the scrappage policy… OEMs will also get the benefit. Plus, for Centre and State the GST will go up, so they should also give incentive,” he said, adding that he is also requesting the GST Council to explore what more incentives can be given under the National Automobile Scrappage Policy. “The final decision will be taken by the finance ministry and the GST Council.

U.S. warship transits Taiwan Strait after Biden-Xi summit #GS2 #IR

A U.S. warship sailed through the strait separating Taiwan and China on Tuesday, the Navy said, the first such passage since leaders from the two rival superpowers held a video summit.

The passage through the Taiwan Strait by the Arleigh Burke-class guided missile destroyer USS Milius was a routine transit, the U.S. Seventh Fleet said. The voyage, the 11th declared freedom of navigation exercise of the year, “demonstrates the U.S. commitment to a free and open Indo-Pacific,” it said in a statement.

The latest transit came after U.S. President Joe Biden and China’s Xi Jinping traded strong warnings on the future of Taiwan at a virtual summit earlier this month. Chinese state media reported after the summit that Mr. Xi cautioned Mr. Biden that encouraging Taiwanese independence would be “playing with fire”.

U.S. warships periodically conduct freedom of navigation sailings through the strait, often triggering angry responses from Beijing, which claims Taiwan and the surrounding waters as its own territory. The United States and many other countries view the route as international waters open to all.

A growing number of U.S. allies have transited the route as Beijing intensifies its military threats towards Taiwan and solidifies its control over the disputed South China Sea. British, Canadian, French and Australian warships have all made passages through the Taiwan Strait in recent years, sparking protests from Beijing.

China’s Foreign Ministry spokesman Zhao Lijian slammed the latest transit as a “deliberate attempt to disrupt and undermine regional peace and stability”. “The U.S. should immediately correct its mistake, stop stirring up trouble, crossing the line and playing with fire,” he warned. Collin Koh, a research fellow at Singapore’s S. Rajaratnam School of International Studies, keeps a database of declared U.S. transits through the Taiwan Strait.

Mr. Koh said western navies see the transits “as routine passage in the exercise of high seas freedoms and rights through the waterway”. “These days, these transits are routinised and publicised simply to emphasise the above mentioned established facts of how maritime user states exercise such freedoms and rights.

Countries must prepare for future food ‘shocks’, says FAO #GS3 #Economy

Countries must prepare for future “shocks” to their agricultural and food systems from droughts, floods or diseases following the fallout from the coronavirus pandemic, a UN agency said on Tuesday.

“The COVID-19 pandemic has left the fragilities of national agri-food systems widely exposed,” the Food and Agriculture Organization said in an annual report. “An obvious reason to address these fragilities is, of course, the unwelcome increase in food insecurity and malnutrition,” the FAO said in the document on the state of the agri-food business.

Agri-food systems include production, food supply chains, transport networks and consumption. Three billion people around the world already cannot afford a healthy diet to protect themselves against malnutrition, the FAO said. “An additional one billion people are at risk as they would not be able to afford a healthy diet if a shock were to reduce their incomes by one-third,” the report said.

In a report in July, the FAO said that between 720 million and 811 million people faced hunger in 2020 — some 161 million more than in 2019, largely due to the pandemic.

“Risk management strategies for shocks such as droughts, floods and pests — including multi-risk assessments, timely forecasts, early warning systems and early action plans — are key to help all agri-food systems… prevent and anticipate major disruptions,” the FAO said in Tuesday’s report.

The FAO has established “resilience” indicators to help countries identify vulnerabilities in their food systems. The indicators measure the robustness of a country’s primary production, the extent of food availability, and the degree of people’s access to adequate food. Countries can “look for their weaknesses” and fix them through these tools.

India to release 5 mn barrels of oil from reserves to cool prices #GS3 #Economy

India will release 5 million barrels of crude oil from its emergency stockpile in tandem with the U.S., China, Japan, and other major economies to cool oil prices, the Centre said on Tuesday.

This is the first time ever that India, which stores 5.33 million tonne or about 38 million barrels of crude oil in underground caverns at three locations on the east and west coast, is releasing stocks for such purposes.

“India strongly believes that the pricing of liquid hydrocarbons should be reasonable, responsible and be determined by market forces,” the government said in a statement. “India has repeatedly expressed concern at the supply of oil being artificially adjusted below demand levels by oil-producing countries, leading to rising prices and negative attendant consequences.” While the government specified no date, an official said the stock could be released as early as 7-10 days.

Supply to MRPL, HPCL

The stocks will be sold to refineries of Mangalore Refinery and Petrochemicals Ltd. (MRPL) and Hindustan Petroleum Corp. Ltd. (HPCL), which are connected by pipeline to the strategic reserves.

The U.S. had last week made an unusual request to some of the largest oil-consuming nations, including China, India and Japan, to consider releasing crude stocks in a coordinated effort to pare global energy prices.

This after the Organisation of the Petroleum Exporting Countries (OPEC) and its allies rebuffed repeated requests to speed up production increases.

India has been the most forceful about flexing its muscles as a major oil consumer, cutting shipments from Saudi Arabia by about a quarter after OPEC+ extended production cuts.