INDIA & THE WORLD BILATERAL AFFAIRS DECEMBER 2014
Mr. Sultanzoy who handles foreign policy in the new Afghan establishment, said there may be a re-examination of the defence inventory sought from India by the previous government of President Hamid Karzai. Mr. Sultanzoy was part of Afghan President Ashraf Ghani’s delegation who participated at the recent SAARC summit. Mr. Ghani and Prime Minister Narendra Modi had a bilateral meeting on the sidelines of the summit. India has been providing transport, logistical and engineering equipment to Afghanistan and training its security personnel in India.
India has invested $2 billion in aid and reconstruction and trained scores of Afghan officers but has been careful in supply of arms and military hardware for fear of provoking Pakistan as well as armed groups in Afghanistan.
India and France to fast-track Rafale dealIndia and France have agreed to iron out contentious issues like pricing and a guarantee clause for French firm Dassault to fast-track the estimated USD 15 billion deal for 126 Rafale fighter jets. The issue came up for discussion during the delegation- level talks Defense Minister Manohar Parrikar and his French counterpart Jean-Yves Le Drian.
India had in 2012 selected the Rafale jet but the final negotiations are still continuing between the Defence Ministry and Dassault Aviation. The deal with India is a big one for the Rafale fighter as it will be the first mega export order for the aircraft.
Though the deal was first valued at about USD 10 billion in 2007 when the Request for Proposal (RFP) was issued, the figure has shot up to over USD 15 billion, sources said. Differences have cropped up over various issues from pricing to work-sharing.
As per the RFP, the first 18 jets are to be imported and the rest manufactured under license by Hindustan Aeronautics Ltd (HAL). The Defense Ministry is of the view that the guarantee clause was part of the Air Staff Qualitative Requirements (ASQR) under the RFP.
Dassault had agreed to the ASQR and hence was selected for the deal, sources maintained.
French Foreign Minister Laurent Fabius had met External Affairs Minister Sushma Swaraj and then Defense Minister Arun Jaitley in June and had pushed for early implementation of the Rafale deal.
Fabius had said France hopes that with the new government, which was keen on efficiency, the implementation of the decision will be swift and had expressed confidence of a "positive outcome" to the ongoing negotiations in the deal.
Rafale, which would replace India's Russian-made fleet of MiG-21 and MiG-27 planes, had stood over combat aircraft manufactured by rivals like Boeing and Lockheed Martin.
At present, India has 34 fighter jet squadrons (16-18 planes in each) against the projected need of 45 squadrons. The French Defense Minister also presented Parrikar with two photographs of
Indian soldiers in World War 1. Both the leaders also agreed that Indo-French Strategic Partnership of 1998 will be taken forward.
Russia, India to ink 15-20 deals during Putin visitIndia and Russia are likely to sign 15-20 agreements during Russian President Vladimir Putin’s visit on December 10 and 11 for the 15th annual summit meeting between the two countries. India and Russia are likely to firm up an agreement on increasing import of rough diamonds from Russia; such imports now stand at $900 million annually.
During the summit the two leaders will also discuss their vision of trade and investment relations over the next decade. At present, bilateral trade stands at about $10 billion, while Russian investments in India and those by Indian companies in Russia stand at $5-6 billion.===
India, Japan fight on higher intellectual property standardsIndia and Japan locked horns over a higher standard in intellectual property rights (IPR), with a special focus on the pharmaceutical sector, at the negotiations for a Regional Comprehensive Economic Partnership (RCEP). Japan, also a key participant in the Trans-Pacific Partnership (TPP) agreement, is pushing for “extremely stringent standards” for IPR, which are higher than the limit set under global trading rules. India is hosting the RCEP Negotiations, which started on 1st December, for the first time. The aim is to increase services exports in partner countries by getting greater market access.
Apparently, Japan has said that in order for the talks to progress it wants all negotiations to be based on the so-called “platinum” standards. In other words, talks on liberalising trade in goods, services and investment will have to be on far more stringent principles.
However, India has said such a move will virtually stifle any possibilities of emerging countries competing with the richer and developed countries.
RCEP is being negotiated between the 10-member Asean (Association of Southeast Asian Nations) countries and Australia, China, India, Japan, South Korea and New Zealand.
India also came under severe pressure from countries like China and Australia to substantially reduce tariffs on agricultural products and industrial goods in order to gain more market access.
Ever since the talks began between all 16 countries in May 2013, India had been accused of dragging the talks. Indian industry is also not much upbeat about RCEP. This is because if RCEP has to be successful than India will have to establish a free trading arrangement with all members countries, including China.
The talks, are taking place in Greater Noida, an industrial hub near New Delhi
- External Affairs Minister Swaraj in South Korea
External Affairs Minister Sushma Swaraj on 28th December held talks with South Korea's Minister of Trade, Industry and Energy and discussed collaboration in vital areas like co-production of LNG tankers while making a strong pitch for the 'Make in India' campaign In pursuance of the government's "Act East" policy, Swaraj arrived on 28th December on a three-day visit to co-chair the 8th Joint Commission meeting on 29th December with her South Korean counterpart Yun Byung-se which will take stock of an entire gamut of the bilateral relationship besides focusing on ways to enhance ties in a range of areas.
Following her arrival, Swaraj met South Korea's Minister of Trade, Industry and Energy Yoon Sang-jick, to seek Korean support for India's flagship 'Make in India' programme. Amongst the specific issues discussed was the possibility of Korean co-production of LNG tankers with Indian shipyards
Given the projected growth in Indian need for LNG, and that much of it will be imported, the government is considering both outright purchase as well as co-production of LNG tankers. Swaraj made a strong pitch for South Korea's partnership in this vital area of projected growth in Indian requirements. Yoon indicated that while it is for the private companies to take business decisions, the South Korean government views India as an attractive business destination. He said South Korea is encouraging its companies to avail the opportunities that have opened up in India following the new initiatives of Prime Minister Narendra Modi-led government.
Yoon mentioned that there are high expectations in South Korea to enhance economic ties with India, in light of recent developments in India, the sources said. The two Ministers also discussed possibilities of addressing the trade deficit which is in favour of South Korea. The External Affairs Minister raised the need for a level playing field for Indian pharmaceuticals and software exports. The two sides agreed that the Ministers of Commerce could meet in the first quarter of 2015 to build on the momentum in the relations. - Korean firms invited
Calling South Korea an important partner for India's economic growth, External Affairs Minister Sushma Swaraj on 29th December invited Korean companies to make "bold investments" and benefit from the 'Make in India' initiative of the government.
In her address at the 8th India-South Korea Joint Commission Meeting, Swaraj said Korea and Korean companies occupy a strategic place in India's 'Act East' initiative and that there was huge scope for greater investment in the country, particularly in the manufacturing sector.
Seeking to boost trade ties to realise the target of USD 40 billion bilateral annual trade by next year, Swaraj said Korean companies like Hyundai, Samsung and LG have become household names in India.
The Joint Commission meeting was co-chaired by Swaraj and her South Korean counterpart Yun Byung-se. In the meeting, the two leaders agreed that development of cooperation in the field of defence equipment and technology, as well as, sectors like shipbuilding, electronics, IT, energy and infrastructure held considerable possibilities.
They reiterated mutual interest in deepening cooperation in the areas of civil nuclear energy and cyber security. The two Ministers also agreed to step-up exchanges between officials and academics of the two sides.
Currently 300 Korean companies have invested approximately USD 3 billion and have employed nearly 40,000 people in India. The current bilateral annual trade between the two countries is about USD 16 billion. Indian companies have invested around USD 2 billion in South Korea and some of the leading names who acquired Korean companies are Tatas, Mahindra and Aditya Birla Group.
India-South Korea Joint Commission for bilateral cooperation was established in February 1996, which is chaired by the External Affairs Minister and the Minister of Foreign Affairs from the Korean side.
Other important points- India and South Korea have decided to enhance cooperation in sectors like shipbuilding, electronics, defence production, infrastructure and energy besides outlining mutual interest in areas of nuclear energy and cyber security.
- South Korean President Yun welcomed the initiatives taken by India and agreed to encourage the South Korean industry to engage with India even "more closely".
- In the meeting, there was agreement on the considerable potential for further expanding bilateral economic and investment cooperation.
- The South Korean side reiterated a cordial invitation for an early official visit of Prime Minister Narendra Modi to the country.
- The two ministers exchanged views on global and regional developments and agreed to step-up exchanges between officials and academics of the two sides.
- Swaraj also called on South Korean President Park Geun-hye and held meetings with the minister of trade, industry and energy and the national security adviser.
- India-South Korea joint commission for bilateral cooperation was established in February 1996, which is chaired by the external affairs minister and the minister of foreign affairs from the South Korean side.
- U.P. signs pact for NRI investment
To boost medical infrastructure in Uttar Pradesh, Chief Minister Akhilesh Yadav on 21st December signed a pact with a U.S.-based group, Tenacity, under SVADESH (Silicon Valley and Avadh’s Development for Entrepreneurial Services for Humanity), an investment initiative by NRIs that would connect the State government with the U.S. businesses and NRIs in Silicon Valley. The project is part of UP government’s initiatives to reform health sector. - Nepal's Sarda river to be linked with Yamuna
The Sarda river in Nepal has been identified for connecting with the Yamuna, the Rajya Sabha was informed on 22nd December. Besides, the Ghaghra river (known as the Karnali in Nepal) has been identified for linking with the Yamuna, Minister of State for Water Resource Sanwar Lal Jat said. - Arunachal signs pact with Russian power firm
Arunachal Pradesh has roped in RusHydro International, partly owned by the Russian government, to explore the prospects of collaboration in creating manpower for the several hydro-electric projects coming up in the state. Chief Minister Nabam Tuki, meanwhile, said the state would also want the Russian company to design hydro-electric projects in the state.
RusHydro International is one of Russia’s largest power producing companies with 38.2 GW installed electricity generation capacity distributed over 70 renewable energy source facilities across the country. The joint declaration was signed on the sidelines of Russian President Vladimir Putin’s visit to New Delhi last week when representatives of RusHydro were part of a business delegation accompanying him. - India, Germany ink green energy pact
India will receive € 625 million from Germany to support green energy infrastructure, according to a financial cooperation agreement signed between the two countries on 17th December. The funds will support the Green Energy Corridor project under the Indo-German Bilateral Development Cooperation. The German government has committed funds amounting to € 500 million for the GEC project this year.
With that, Germany’s total commitment to the GEC project stands at € 750 million. In 2013, Germany had committed € 250 million to the project.
Three separate loan agreements, including a € 76 million loan to Tamil Nadu and a € 49 million loan to Rajasthan for intra-State transmission schemes, were also signed between India and KfW, Germany’s official development bank. - Power ties: Russia to build more N-plants for India
During the visit of Russian President Putin, Indian Prime Minister Narendra Modi outlined an ambitious vision for nuclear energy of at least 10 more reactors. It will also include manufacture of equipment and components in India. This also supports our Make in India policy.”
According to the document on “The strategic vision for strengthening cooperation in peaceful uses of atomic energy between India and Russia,” conscious of India’s ambitious economic growth strategy, which would require a significant enhancement of power generating capacity, “the two sides have decided to fast-track the implementation of agreed cooperation projects for Nuclear Power Plants.
India and Russia will strive to complete the construction and commissioning of not less than 10 units in the next two decades, in accordance with the Agreement of 2008.
Towards this objective, the Indian side agrees to expeditiously identify a second site in addition to Kudankulam, for the construction of the Russian-designed nuclear power units in India.”
Modi proposed that Russia locate in India manufacturing facilities for spares and components of Russian defence equipment. India imports around 70 per cent of its defence requirements from Russia, but has been looking at other countries
To give further impetus to the bilateral relationship, several commercial contracts were also signed at the summit, including a memorandum of understanding between Tata Power and the Russian Direct Investment Fund for exploring investment opportunities in the energy sector across Russia.
Essar entered into a $10-billion deal with Russian oil major Rosneft to import crude oil over a 10-year period. Infrastructure Development Finance Corporation and Russian Direct Investment Fund signed entered into a MoU to set up on co-investment opportunities of up to a pool in a $1-billion fund which can be used for making investments in both the two countries Russia and India.
A joint statement issued at the conclusion of the summit said the leaders set a bilateral trade target of $30 billion by 2025, when the level of mutual investments was expected to exceed $15 billion each way. The current level of bilateral trade stands at $10 billion and the level of mutual investments at about $6 billion.
India and Russia on 11th December signed two agreements which will set the groundwork for starting units 3 and 4 of the Kudankulam Nuclear Power Project.
A supplement to the General Framework Agreement for units 3 and 4 was signed which will operationalised the GFA and Technical Commercial Offer signed in April.
In addition, NMDC entered into a MoU with ACRON for acquiring stakes by a consortium of Indian companies in a $2-billion project of the Russian fertiliser company.
Setting the bilateral trade turnover in goods and services at $30 billion by 2025, the two countries also signed a number of other agreements including Essar Group’s MoU with VTB for finance arrangement of $1 billion to Essar.
The two countries entered into an agreement for enhancement of cooperation in oil and gas in 2015-16 which includes joint exploration and production of hydrocarbons, long-term LNG supplies and joint study of a hydrocarbon pipeline systems connecting Russia with India.
An agreement for training of Indian Armed Forces personnel in the military establishments of the Defence Ministry of the Russian Federation was also initialled.
A strategic vision for strengthening cooperation on uses of atomic energy between the two countries which envisages a roadmap of bilateral cooperation in the civil nuclear energy sector for the next two decades was also signed.
As part of strategic this vision, the two nations recognised that the agenda for bilateral cooperation in the nuclear power sector is globally one of the largest between any two countries.
The two countries will also explore opportunities for sourcing materials, equipment and services from Indian industry for the construction of Russian-designed nuclear power plants in third countries.
India wants Russia to allow the latter’s diamond companies to sell rough diamonds to India and buy polished ones without any duty. Russia, on the other hand, stressed that India needs to improve its custom procedures, enhance security, and ease of doing business.
India is the biggest exporter of polished diamond with a value of nearly $20 billion. It handles 14 out of the 15 diamonds traded world-wide.
Modi said diamonds are also an important source of jobs. The Gem & Jewellery sector provides employment to nearly 35 lakhs people, out of which around 10 lakh people work in the diamond industry.
Pact on multi role fighter aircraft:According to Defence Minister of India an Inter-Governmental Agreement has been signed with Russia for design, development and production of the Multi Role Fighter Aircraft. Defence Minister said in the Lok Sabha that there has not been any deal struck with Russia for procurement of Fighter Aircraft equipped with stealth technology.
Mr. Parrikar also clarifies that no agreement has been signed with any country for the procurement or purchase of fighter aircraft. - WTO rules against U.S.
The World Trade Organization (WTO) has ruled against the U.S. imposing high duty on imports of certain Indian steel products, an order hailed by India as a ‘significant victory’ that will help domestic manufacturers and exporters.
The Appellate Body of the WTO has ruled that the high duty imposed by the U.S. on the certain Indian steel imports was ‘inconsistent’ with various provisions of the Agreement on Subsidies and Countervailing Measures (ASCM). - India-Israel Cooperation in renewable energy sector
India and Israel are set to conclude a broader agreement on cooperation in the renewable energy sector between the two countries. This follows earlier agreements between the two countries to work on the renewable energy sector.
India-Israel trade which had humble beginnings at $2,00,000, a little over 20 years ago, has now topped the $6-billion mark and this is poised to get a lot bigger as both countries get into more areas of mutual interest. The $6 billion bilateral trade is without the defence business, which is another big area. Israel has developed strong and sound relationships in the defence sector and work is underway to identify a few other clusters of common interest. - Russia lifted restrictions
Russia has lifted restrictions on the import of milk, cheese and other dairy products, a week ago, Russia allowed buffalo meat from the country. This move is a result of Western sanctions on Russia over its role in the Ukraine crisis, which led to Russia not buying food items from the EU, US, Australia, Norway and Canada.
Russia holds as India’s exports to the country during the last fiscal year were just $2.15 billion, a small fraction of Russia’s total imports of $318 billion.
Mr. Sultanzoy who handles foreign policy in the new Afghan establishment, said there may be a re-examination of the defence inventory sought from India by the previous government of President Hamid Karzai. Mr. Sultanzoy was part of Afghan President Ashraf Ghani’s delegation who participated at the recent SAARC summit. Mr. Ghani and Prime Minister Narendra Modi had a bilateral meeting on the sidelines of the summit. India has been providing transport, logistical and engineering equipment to Afghanistan and training its security personnel in India.
India has invested $2 billion in aid and reconstruction and trained scores of Afghan officers but has been careful in supply of arms and military hardware for fear of provoking Pakistan as well as armed groups in Afghanistan.
India and France to fast-track Rafale dealIndia and France have agreed to iron out contentious issues like pricing and a guarantee clause for French firm Dassault to fast-track the estimated USD 15 billion deal for 126 Rafale fighter jets. The issue came up for discussion during the delegation- level talks Defense Minister Manohar Parrikar and his French counterpart Jean-Yves Le Drian.
India had in 2012 selected the Rafale jet but the final negotiations are still continuing between the Defence Ministry and Dassault Aviation. The deal with India is a big one for the Rafale fighter as it will be the first mega export order for the aircraft.
Though the deal was first valued at about USD 10 billion in 2007 when the Request for Proposal (RFP) was issued, the figure has shot up to over USD 15 billion, sources said. Differences have cropped up over various issues from pricing to work-sharing.
As per the RFP, the first 18 jets are to be imported and the rest manufactured under license by Hindustan Aeronautics Ltd (HAL). The Defense Ministry is of the view that the guarantee clause was part of the Air Staff Qualitative Requirements (ASQR) under the RFP.
Dassault had agreed to the ASQR and hence was selected for the deal, sources maintained.
French Foreign Minister Laurent Fabius had met External Affairs Minister Sushma Swaraj and then Defense Minister Arun Jaitley in June and had pushed for early implementation of the Rafale deal.
Fabius had said France hopes that with the new government, which was keen on efficiency, the implementation of the decision will be swift and had expressed confidence of a "positive outcome" to the ongoing negotiations in the deal.
Rafale, which would replace India's Russian-made fleet of MiG-21 and MiG-27 planes, had stood over combat aircraft manufactured by rivals like Boeing and Lockheed Martin.
At present, India has 34 fighter jet squadrons (16-18 planes in each) against the projected need of 45 squadrons. The French Defense Minister also presented Parrikar with two photographs of
Indian soldiers in World War 1. Both the leaders also agreed that Indo-French Strategic Partnership of 1998 will be taken forward.
Russia, India to ink 15-20 deals during Putin visitIndia and Russia are likely to sign 15-20 agreements during Russian President Vladimir Putin’s visit on December 10 and 11 for the 15th annual summit meeting between the two countries. India and Russia are likely to firm up an agreement on increasing import of rough diamonds from Russia; such imports now stand at $900 million annually.
During the summit the two leaders will also discuss their vision of trade and investment relations over the next decade. At present, bilateral trade stands at about $10 billion, while Russian investments in India and those by Indian companies in Russia stand at $5-6 billion.===
India, Japan fight on higher intellectual property standardsIndia and Japan locked horns over a higher standard in intellectual property rights (IPR), with a special focus on the pharmaceutical sector, at the negotiations for a Regional Comprehensive Economic Partnership (RCEP). Japan, also a key participant in the Trans-Pacific Partnership (TPP) agreement, is pushing for “extremely stringent standards” for IPR, which are higher than the limit set under global trading rules. India is hosting the RCEP Negotiations, which started on 1st December, for the first time. The aim is to increase services exports in partner countries by getting greater market access.
Apparently, Japan has said that in order for the talks to progress it wants all negotiations to be based on the so-called “platinum” standards. In other words, talks on liberalising trade in goods, services and investment will have to be on far more stringent principles.
However, India has said such a move will virtually stifle any possibilities of emerging countries competing with the richer and developed countries.
RCEP is being negotiated between the 10-member Asean (Association of Southeast Asian Nations) countries and Australia, China, India, Japan, South Korea and New Zealand.
India also came under severe pressure from countries like China and Australia to substantially reduce tariffs on agricultural products and industrial goods in order to gain more market access.
Ever since the talks began between all 16 countries in May 2013, India had been accused of dragging the talks. Indian industry is also not much upbeat about RCEP. This is because if RCEP has to be successful than India will have to establish a free trading arrangement with all members countries, including China.
The talks, are taking place in Greater Noida, an industrial hub near New Delhi
- The Trans-Pacific Partnership (TPP) is a proposed regional free-trade agreement.
- As of 2014 twelve countries throughout the Asia-Pacific region have participated in negotiations on the TPP: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam.
- The proposed agreement began in 2005 as the Trans-Pacific Strategic Partnership Agreement (TPSEP or P4). Participating countries set the goal of wrapping up negotiations in 2012, but contentious issues such as agriculture, intellectual property, and services and investments have caused negotiations to continue into the present, with the last round planned to meet in Ottawa from July 3 to July 12, 2014.
India to set up pipeline link to Bangladesh
India and Bangladesh are looking at a comprehensive partnership in the energy sector even as the neighbour is keen on joining the Turkmenistan-Afghanistan-Pakistan-India natural gas pipeline. Also, Indian refineries are looking at possibilities of selling petroleum products to the South Asian neighbour through a pipeline. “With the signing of the Saarc (South Asian Association for Regional Cooperation) framework for energy cooperation, it has become a reality. Besides, export from Turkmenistan is attractive,” said Tawfiq-e-Elahi, advisor to Prime Minister, energy and mineral resources, Bangladesh. The product pipeline is being planned from BPCL’s Numaligarh Refinery to Parbatipur in Bangladesh.
India already sells 500 MW power to Bangladesh from Bhemara Power Plant of NTPC in West Bengal. Bangladesh buys another 300 MW from the open market. Tawfiq-e-Elahi said they were looking to buy another 500 MW from India by 2016.
India and Bangladesh are looking at a comprehensive partnership in the energy sector even as the neighbour is keen on joining the Turkmenistan-Afghanistan-Pakistan-India natural gas pipeline. Also, Indian refineries are looking at possibilities of selling petroleum products to the South Asian neighbour through a pipeline. “With the signing of the Saarc (South Asian Association for Regional Cooperation) framework for energy cooperation, it has become a reality. Besides, export from Turkmenistan is attractive,” said Tawfiq-e-Elahi, advisor to Prime Minister, energy and mineral resources, Bangladesh. The product pipeline is being planned from BPCL’s Numaligarh Refinery to Parbatipur in Bangladesh.
India already sells 500 MW power to Bangladesh from Bhemara Power Plant of NTPC in West Bengal. Bangladesh buys another 300 MW from the open market. Tawfiq-e-Elahi said they were looking to buy another 500 MW from India by 2016.
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