INDIA & THE WORLD BILATERAL AFFAIRS JANUARY 2015
- Nuclear Pact between India and US
Prime Minister Narendra Modi and US President Barack Obama on 25th January reached an understanding that will take the civil nuclear co-operation agreement signed between the two countries, stuck for the past six years, towards commercial implementation.
The US has also agreed to support India in getting full membership in four international export control regimes, at the earliest. These are exclusive clubs or groups where the US has an upper hand.
One of the groups is of nuclear suppliers. Obama said two issues relating to the civil nuclear cooperation have been resolved.
The two leaders set the tone of an administrative agreement, which will broadly be based on the lines of the one India has with Canada. The US has agreed to drop its demand for tracking India’s usage of nuclear fuel and equipment. The US will go only by the International Atomic Energy Agency’s inspections.
The two countries have also reached an understanding on creation of a Rs 750-crore insurance pool (India’s General Insurance and four other public sector undertakings will create the account) that would circumvent the liability clause. This will be similar to 26 such other existing pools globally. India has signed civil nuclear cooperation agreements with Australia, France, Namibia, Argentina, Mongolia, Kazakhstan, Russia, Canada, the UK and South Korea.
While India has been importing from Kazakhstan and Russia, other countries have had their eyes on the commercialization of India’s pact with US before moving forward with their own bilateral nuclear agreements. - India, US to re-start talks on social security pact
Seeking to further strengthen bilateral economic relations, Prime Minister Narendra Modi on 25th January said India and the US will "restart" discussions on the Social Security Agreement and resume talks on Bilateral Investment Treaty.
In addition, Modi said the two countries have established a number of effective bilateral mechanisms to identify opportunities and also help their businesses trade and invest more. India wants early conclusion of the tantalization agreement or Social Security Agreement with the US.
The US has entered into agreements, called 'Tantalization Agreements', with several nations for the purpose of avoiding double taxation of income with respect to social security taxes. Under these, professionals of both the countries would be exempted from social security taxes when they go to work for a short period in the other country.
The two countries are also engaged in negotiations for a Bilateral Investment Treaty to protect investments between the two nations. The bilateral trade between India and the US is estimated at about USD 100 billion. FDI flows from the US to India have totaled USD 13.28 billion from April 2000 to November 2014. - Obama visit sees many firsts
The three-day India visit of US President Barack Obama saw the ceremonial Guard of Honour being led by a woman officer for the first time.Obama inspected the Guard of Honour, commanded by Wing Commander Pooja Thakur during the ceremonial welcome at the Rashtrapati Bhawan on 25th January. She is the first woman to achieve this feat Obama is the first American President to be the Chief Guest at India’s Republic Day Parade, and also the first US President to have visited India twice during his tenure.
- Gift to Obama
Prime Minister Narendra Modi on 25th January gifted President Barack Obama a piece of India-U.S. history, a copy of the first telegram from the United States to India’s Constituent Assembly in 1946.The telegram was sent by the then Acting Secretary of State, Dean Acheson, to Sachchidananda Sinha, provisional Chairman of the Constituent Assembly. Mr. Modi presented the copy after he received Mr. Obama at Hyderabad House.
The copy was the reproduction of the telegram read out at the inaugural sitting of the Constituent Assembly on December 9, 1946. - MoU signed to develop Vizag as Smart City
The Andhra Pradesh government and US Trade Development Agency on 25th January signed a memorandum of understanding (MoU) for the development of Visakhapatnam as smart city. The MoU was signed in the national capital on the first day of US President Barack Obama's three-day visit to India.
AP Chief Secretary IYR Krisha Rao and US Trade Development Agency (USTDA) Director Leocadia I Zac signed the MoU in presence of Urban Development Minister Venkaiah Naidu and various officials of the US and Indian governments. Under this agreement, USTDA intends to contribute funding for feasibility/pilot studies, and study tours workshops/trainings. It will also support consultancies and advisories for the development of Visakhapatnam into smart city
Other agencies of the US government like the department of commerce and US Exim Bank would also support the effort of the two parties to the MoU. - Obama offers $4 billion in investment, loans
Further cementing trade ties with India, US President Barack Obama on 26th January announced investments and loans worth $4 billion. Half of this will flow into renewable energy projects in India.
Jointly addressing the India-US Business Summit with Prime Minister Narendra Modi, Obama said that the US EXIM Bank will finance $1 billion in exports of “Made in America” products to India.
Another $1 billion will be given in loans by Overseas Private Investment Corporation to small and medium-sized enterprises in the country’s under-served rural areas, while the US Trade and Development Agency will invest $2 billion in India’s renewable energy sector.
Pushing for further trade and investment ties between the world’s two largest democracies, Obama pointed out that while US bilateral trade with China is $520 billion annually, with India it is still about $100 billion. “It shows trade potential between the two of us,” he said.
Modi, on his part, promised American businesses a tax regime that is predictable and competitive.The Prime Minister promised as much to American CEOs in the Indo-US CEO meeting, which preceded the Business Summit.
The Indian side of the CEO forum was led by Tata Group’s Cyrus Mistry and included bigwigs such as Mukesh Ambani, Anil Ambani, Gautam Adani, Shashi Ruia, Anand Mahindra, Vishal Sikka, Sunil Mittal, and DK Sarraf.
Other issues raised by the two sides in the CEO meeting included strengthening of intellectual property rights (IPRs), commitments on a social security agreement, dialogue on a bilateral investment treaty (BIT) and more visas for professionals from India, including health workers.
While Obama and Modi remained silent about a social security agreement (totalisation agreement) being pushed for by India, it featured prominently in the CEO meeting.
Indian businesses in the US could save as much as $3 billion annually in social security contributions made by short-term workers once a pact is in place. - India approached WTO over import of US agricultural products
India has appealed to the Dispute Settlement Board of World Trade Organization for a panel decision on its issues with the US over agricultural imports. The WTO said in Geneva that its Secretariat has received a notice by India announcing its decision to appeal certain issues of law and legal interpretation in the panel report in the case 'India --Measures concerning the importation of certain agricultural products'.
India had in 2012 imposed some prohibitions with regard to importation of various agricultural products from the US because of concerns related to Avian Influenza. This import prohibition is maintained through India's Avian Influenza measures, mainly, the Indian Livestock Importation Act, 1898. The US contended that India's Avian Influenza measures amounted to an import prohibition that was not based on the relevant international standard or on a scientific risk assessment. The dispute settlement panel ruled that India's Avian Influenza measures are inconsistent with the Sanitary and Phyto sanitary, SPS agreement because they are not based on the relevant international standards. India claims that the panel committed several legal errors in its interpretation and application of numerous articles of the SPS agreement. - German help for smart cities
Germany is interested in developing smart cities in India, the discussion were happened on 28th January. The decision was taken when Urban Development Minister M. Venkaiah Naidu met the visiting German Minister of Environment, Nature Conservation, Building and Nuclear Safety, Barbara Hendricks
A six-member joint committee will be set up in three months to identify these cities and draw up a plan.The committee will have two representatives of the Urban Development Ministry, one from the Housing and Urban Poverty Alleviation Ministry and three from the Government of Germany
Dr. Hendricks has invited a delegation from India to the Urban Development Conference in Germany in April. After a discussion on the smart cities initiative, the Minister said the German government was keen on associating with it.
Following Prime Minister Narendra Modi's brief, the Centre has decided to dovetail the scheme with the Swachh Bharat Mission and Digital India. Priorities that have been flagged include the need to have clean air, move towards zero waste zones, involve citizens in policy-making and execution, generation of jobs and expanding economic activities.
There will also be an evaluation of how the cities propose to undertake urban projects through retrofitting, refurbishment and new development.The details of support and hand-holding to help in the transformation will be discussed as well as the role of private players and citizens. The Centre will also examine the possibility of executing works through a Special Purpose Vehicle through PPP. - Developing nations want cap on foodgrain procurement removed
Maintaining its hard posture on food security at the World Trade Organization (WTO), India has said that Government procurement of food grain at non-market prices should be allowed without limits. China, Indonesia and Turkey were some of the other members of the G-33 alliance of developing countries in agriculture which pushed for exclusion of support prices for food grain from the list of trade-distorting subsidies.
The proposal, discussed in the first session on finding a “permanent solution” to India’s (as well as some other developing countries) problem of ensuring food security without bending global trade rules was, however, opposed by some such as the US, the EU, Pakistan, Australia, Japan, Argentina and Paraguay.
WTO members are supposed to find a “permanent solution” by the end of this year as per the agreement reached in the Bali Ministerial meeting in December 2013, which was later re-negotiated by India.
New Delhi, meanwhile, has got a short-term solution as part of the Bali deal where members have agreed not to take legal action against it in case subsidy cap is breached. Since the reprieve granted to India is subject to a number of conditions including sharing of numerous data and details, India wants a simple ‘permanent solution’ to the problem as soon as possible.
The G-33 proposal, made in 2012, also talks about alternative solutions which includes calculating procurement subsidies by changing the base year from 1986-88 and making it more recent, or by indexing it to inflation. India runs the risk of breaching the agriculture subsidy cap, at least in rice, in a few years’ time once it fully implements its food security legislation.
In Bali, it agreed to give its approval to an agreement on trade facilitation that places obligations on all members to upgrade their customs infrastructure only on the condition that the rules on food procurement subsidies are changed. - Make in India good initiative: Germany Finance Minster
Visiting German Finance Minister Wolfgang Schäuble said that his country is eager to invest in Make in India campaign. He visited India on 19th January.
Schauble expressed interest in working with India in the manufacturing sector, especially in the auto and solar energy industries, at a meeting with business lobby Confederation of Indian Industry (CII). Germany is the world leader in solar energy generation with the largest solar photovoltaics (PV) installed capacity. - India, South Africa ink Mou
The National Small Industries Corporation (NSIC), a public sector enterprise, on 19th January signed a memorandum of cooperation with Black Business Council (BBC) of South Africa for developing youth-owned enterprises in South Africa.
The MoU also focuses on BBC’s efforts to economically empower the marginalised groups in South Africa, under which it plans to establish five such centres there in cooperation with NSIC. - EU lifts ban on Indian mangoes
The seven-month ban on Indian mangoes, imposed last year by the European Union, has been lifted well in advance of the deadline set for the ban, which was originally till December 2015.
This came after an audit by the EU last September showed “significant improvements in the phytosanitary export certification system,” says an EC release. Shipments of mangoes from India, including the premium Alphonso mangoes, had been stopped last year after inspections found some consignments infested with fruit flies.The EU accounts for more than 50 per cent of total exports of fruits and vegetables from India. - US, India to sign 3 MoUs for smart cities
The Centre’s flagship smart cities scheme is set to receive a boost with US President Barack Obama’s visit to New Delhi next week with pacts being signed for Allahabad, Ajmer, and Visakhapatnam. The pacts will be to assist the cities in project planning, infrastructure development, feasibility studies and capacity building.
The United States Agency for International Development (USAID) had last week signed a Memorandum of Understanding with the Ministry of Urban Development to assist the Government with knowledge exchange and sharing of best practices for water and sanitation services, with likely spends of about $2 million per year.
The Government plans to develop 100 smart cities for which an amount of Rs. 7,060 crore was proposed in the Union Budget for 2014. - CII, Alibaba to provide global platform to Indian SMEs
The Confederation of Indian Industry (CII) and Alibaba.com have signed an agreement for building greater engagement of India-China small and medium enterprises (SMEs). The agreement between Alibaba.com and CII is a step forward in forging greater partnerships, engagement between Indian and global business especially amongst Small and Medium Enterprises, Madhav Sharma, Chief Representative (China), the CII said.
Alibaba.com, headed by Jack Ma, is the leading platform for global wholesale trade serving millions of buyers and suppliers around the world. Through Alibaba.com, small businesses can sell their products to companies in other countries.
He further added that with the expertise of Alibaba.com in the digital space, especially on the business-to-business area, and CII through its network of 64 offices in India, with 8000 direct members and more than 100,000 indirect members is confident that it will be able to achieve the objectives of building greater India-China SME engagement.
This, in turn, should also help in not only strengthening trade and economic relations between India and China but may also help in addressing to some extent the trade imbalance that exists, he said.
Alibaba.com and CII will collaborate and develop various trade opportunities and online promotions to facilitate greater economic engagement between Indian and Chinese SMEs.
The CII and Alibaba.com will also work jointly towards providing SME trainings, promoting Industry clusters for SMEs in some key business sectors. Alibaba will also work with CII to run their e-certificates programmes in India. - Netherlands, Thailand inked MoU with Sikkim
State government of Sikkim on 20 January 2015 inked Memorandum of Understanding (MoU) with governments of the Netherlands and Thailand for development of floriculture in the state. This deal will help the state to reach out to the international market. Governments of the Netherland and Thailand will provide expertise and technology to develop hybrid Sikkim’s Cymbidium and other orchids and also cut flowers. They will help the state in marketing and transportation of flowers. - India’s role key in nuclear disarmament: UN chief
Recognising its growing stature, UN Secretary General Ban Ki-moon asked India to play a major role in ensuring nuclear disarmament in South Asia, bringing back peace and stability in Afghanistan and combating key global challenges like terrorism, climate change and poverty.
Expressing deep concern over rise in violent extremism and radicalization in the region, Ban said India must shoulder the responsibility to help South Asia stop developing nuclear arsenals.
In an address to a select group of diplomats and foreign affairs experts at the Indian Council of World Affairs in New Delhi on 12th January, the UN Secretary General identified terrorism as major global challenge and said the terror attack in Paris was to strike at the "heart of our freedom".
Earlier, External Affairs Minister Sushma Swaraj held expansive discussion with Ban during which issues such as growing global concern over terrorism, UN Peacekeeping Mission and UN reforms figured among others. India has been seeking reform of the UN Security Council to reflect realities of the modern world.
India stressed on the need for a decision-making mandate in the evolving UN doctrine on peacekeeping. India has been one of the largest contributors to UN Peacekeeping missions.
The issue of "Indian air component" which had been withdrawn by India in Congo in peace keeping mission also figured in the talks.
In his lecture on "India and the United Nations in a Changing World", Ban also mentioned about 26/11 terror attack on Mumbai and killing of school children in Peshawar recently and said a secure regional environment and stability in South Asia will help India reach its "ambitions and goals".
Ban also said India can play an important role in ensuring peace and stability in Afghanistan. Appreciating India's contribution to UN Peacekeeping Missions, he said he had set up a panel, also comprising an Indian, to ensure better support to those involve in such efforts. Around 8,000 Indian security force personnel are currently engaged in UN Peacekeeping missions.
Mentioning about India's strength, Ban said the country can be a "driver of peace" in the region and in the world as it is a champion of human values. He said the country can also play a leadership role to encourage sustainable development globally.
Admitting that all Millennium Development Goals (MGDs) will not be achieved by 2015, he said India must be congratulated for eradicating polio and bringing down infant mortality and maternal mortality rates. The MDGs are eight international development goals that were set following the Millennium Summit of the United Nations in 2000. - US, India to discuss progress on defense, nuke cooperation
The US and India will try to make progress in defence and civil nuclear cooperation when President Barack Obama visits Delhi this month end, Secretary of State John Kerry said on 12th January. He also said that they expected India to sign a landmark climate change agreement in Paris at the end of this year and this would be part of the discussions Obama will have with Prime Minister Modi.
Obama will be in India as chief guest at the Republic Day celebrations this year. He will also have discussions with Modi on bilateral and other issues.
After the landmark nuclear deal between the two countries in 2008, cooperation in the sector has been stalled over the tough provisions in the Civil Nuclear Liability Act that have come as a dampener for foreign operators.
Kerry said the fact this is the second visit of the President after Modi's visit to Washington displays the value both countries place to the criticality of the relationship. He also said that US investment in India has risen from 300 million to 9 billion, while India's investment in the US has risen from 2.4 billion to 25 billion. - USAID help for clean India Mission
The United States Agency for International Development (USAID) on 13th January signed a Memorandum of Understanding with the Ministry of Urban Development to assist the government with knowledge exchange and sharing of best practices for water and sanitation services.
Under the MoU, performance indicators and city ranking systems will be introduced for incentivizing participation in Swachh Bharat Mission and promoting competition between cities. Promoting public-private partnerships, USAID will help develop creative messaging for behavior changes to increase demand for toilets and supply of sanitation products and services.
The agency is likely to spend about $2 million per year on these activities. A separate Memorandum of Cooperation was signed with the Bill and Melinda Gates Foundation under which the latter will provide technical and management support in the implementation of the mission, fund the National Level Program Management Unit for coordination of decentralized and non-sewered sanitation solutions, award grants to organizations selected by the ministry for delivering sanitation services and release grant funds to grantees such as NGOs, public or private organisations annually, based on satisfactory performance in respect of milestones specified. - Kerry discusses Indo-US ties, economic growth with Modi
Days ahead of US President Barack Obama's India visit, Secretary of State John Kerry on 11th January met Prime Minister Narendra Modi and discussed "ties between the world's oldest and largest democracies" with regard to economic growth and climate issues, among others.
Obama will be the first US President to be the chief guest at the Republic Day celebrations on January 26. Kerry said he also went for a "moving visit to Gandhi Ashram" earlier in the day and participated in a discussion with "dynamic Indian women" regarding furthering economic opportunity and empowerment. He was accompanied by Nisha Biswal, the Assistant Secretary of State for South and Central Asia, among other senior US officials. - Pakistan restricts bus service from India to Wagah
For the first time since the Pak-India Dosti bus service was launched between New Delhi and Lahore, Pakistan has restricted its entry here and Nankana Sahib city, citing increased “terror threats. The Pakistan Tourism Development Corporation has said the Pak-India Dosti bus service will now on be operated only up to Wagah Border. The bus service between the two countries was started on March 16, 1999 primarily to enhance people-to-people contact. - International Camel Festival at Rajasthan
International Camel Festival has begun in Rajasthan. The tourists, arrived to Bikaner from countries such as Australia, Germany, Canada and England. The two-day annual camel extravaganza began on January 4 and concluded on January 5.
Apart from camel race, camel dance, camel decoration competitions and camel wrestling, and several village sport events were also organised at the festival.
Situated around 320 kilometres from Jaipur, Bikaner has been a major trade hub since the sixteenth century. It boasts of a number of places of tourist attraction, including forts, palaces, temples and museums apart from the Centre of Camel Research instituted by the Government of India.
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