📰 The Nepal reset
Delhi and Kathmandu should rebuildties by focussing on deliverables
•Nepali Prime Minister K.P. Sharma Oli’s visit to India signals an important recalibration of bilateral ties. While the focus of the official pronouncements has been on connectivity, it is the perceptible absence of tensions in public interactions and official meetings, including with Prime Minister Narendra Modi, that gives hope that the rupture in ties over India’s reservations about Nepal’s new constitution is being repaired. The visit follows a great deal of preparation by both Delhi and Kathmandu. External Affairs Minister Sushma Swaraj made an unusual departure from protocol to visit Mr. Oli in Kathmandu and congratulate him for his election win even before he had been sworn in. It was a significant shift from 2015-17, when the five-month-long blockade of truck trade at the Nepal-India border and Nepal’s ties with China placed a severe strain on the relationship. For his part, Mr. Oli put aside the anti-India rhetoric of his election campaign, and came to India on his first post-election visit abroad seeking ‘friendship first, and friendship second and third’. Bilateral meetings at Hyderabad House were devoid of any sermonising and defensive postures, steering clear of contentious issues on the constitution and China; Mr. Modi promised support on development projects that meet “Nepal’s priorities”.
•The reset is long overdue, and should be accompanied by a transformation in the tenor of the relationship. Kathmandu has been too susceptible to conspiracy theories about Indian meddling, while New Delhi and its diplomats in the Nepal embassy have sometimes lent credence to the theories by adopting a patronising attitude. A first step to the reset would be the completion of the ongoing process of updating the 1950 Treaty of Peace and Friendship. Nepal would acknowledge that its citizens have benefited from the ease of employment and residence in India that the treaty provides. But India must recognise that as in all other developing economies, Nepal’s aspirational young population is also looking beyond the open Indian border for opportunities, and Mr. Oli’s desire to turn his “land-locked” country into a “land-linked” country with a merchant navy must be considered positively. From here on it will be the deliverables, such as road and railway links, power projects and post-earthquake reconstruction commitments, that will determine the success of the partnership, not just the announcement of new initiatives. India has residual concerns over enhancing the constitution’s provisions for Nepal’s plains-based Madhesi population, but these should be taken up discreetly and diplomatically. Recovery in the relationship is still fragile, and any grandstanding must be avoided.
📰 Tit-for-tat tariffs
The U.S. and China are now reckoning with the potential costs of their trade conflict to their domestic economies
•Whether last week’s punitive tariffs threat by the U.S. on Chinese imports will explode in a full-blown trade war between the two countries is an open question. The answer may depend in part on the Trump administration’s broader aim to counter the ‘Made in China 2025’ strategy, which aims to transform China’s economy from a manufacturing base to a world leader in scientific innovation.
•To that end, the United States Trade Representative (USTR), in August, 2017, launched suo motu an investigation into China’s alleged unfair trade practices related to technology transfer, innovation and intellectual property. The Section 301 probe reflected diminishing U.S. support for the World Trade Organisation, in the same manner as the U.S. Commerce Department’s launching of an investigation against dumping and subsidies of Chinese aluminium last November. The USTR findings have singled out strategic Chinese innovation enterprises in the robotics, semiconductors, aerospace and information technology sectors as examples of non-reciprocal investment practices, denial of competitive advantage and intellectual property theft. While many of these concerns resonate across Europe and beyond, coordinated action between these countries and a unilateralist U.S. to counter China’s quest for global dominance seems unlikely. If anything, uncertainty over the 25% and 10% global tariffs imposed in March on U.S. steel and aluminium imports respectively, on grounds of national security, has principally affected Washington’s traditional allies and exposed an indiscriminate America First approach.
•In a torrent of tit-for-tat tariffs announced last week, China retaliated with increased duties on 128 U.S. (mostly) farm and food products worth $3 billion. This was followed by the U.S.’s 25% increase in duty on over 1,000 industrial and technology items worth $50 billion, resulting from the USTR investigation, triggering a matching retaliation from Beijing targeting soybeans, cars and chemicals.
•Both sides are now reckoning with the potential costs to their domestic economies from the pain they propose to inflict on each other. After all, manufacturing jobs in America’s Rust Belt states would be hit by the latest U.S. tariffs. Similarly, the soybeans levy will likely hurt Chinese consumer demand for cooking oil and animal feed. Given growing opposition, even among Republicans, against the extreme economic nationalists in their party, the political fallout from the contentious tariffs could be huge for U.S. President Donald Trump in the November mid-term Congressional elections. Equally, China’s largely exports-driven economy may not have enough elbow room to withstand further escalation of ongoing trade battles. The U.S.’s 2017 merchandise exports to China were up 12.8% over a year earlier, in stark contrast with a rise from 2.1% in 2000 to 8.4% in 2017, says a 2018 U.S. Congressional Research Service report. It calls for reflection on the meaning of the U.S. trade deficit.
📰 Cauvery: SC slams Centre’s inaction
Prove your bona fides, submit draft of water-sharing proposal by May 3, orders the top court
•The Supreme Court on Monday rapped the Centre for not framing a water-sharing scheme for the Cauvery and ordered it to prove its “bona fides” by submitting a draft scheme by May 3.
•The three-judge Bench led by Chief Justice of India Dipak Misra expressed its disappointment over the Centre’s lack of resolve to play its part in ending the water conflict between neighbours, Tamil Nadu and Karnataka.
•A February 16 judgment of the Supreme Court had directed the Centre to frame the scheme by March 29. Yet, on the eve of the deadline, the Centre moved the court for another three months to frame the Cauvery scheme. This would have taken it well past the Karnataka Assembly election scheduled on May 12.
‘You didn’t show resolve’
•“You are bound by our decree... you are obliged to frame the scheme. We are surprised that it was not done... We have delivered the judgment after much study and difficulty... yet you did not show the resolve to frame the scheme,” Chief Justice Misra said, addressing Attorney-General K.K. Venugopal, for the Centre.
•Tamil Nadu counsel and senior advocate Shekhar Naphade said that, in India, litigation starts after the court decree.
‘It will be binding’
•“Absolutely right. Now you [the Centre] must show your bona fides by framing a scheme... you should show respect to the principle of distribution of water... Let the draft scheme be filed before the court... you (the States) can give your suggestions... When the scheme comes into effect, it will become binding,” Chief Justice Misra said.
•The court was primarily hearing a contempt petition filed by Tamil Nadu against the Centre. The Bench, also comprising Justices A.M. Khanwilkar and D.Y. Chandrachud, asked the people of Karnataka and Tamil Nadu to maintain peace “so that the court can put its final stamp on the scheme.”
•“Please tell your people, when the matter is before us, they must co-operate,” Chief Justice Misra said.
‘Ruling clear’
•Mr. Naphade, along with advocate G. Umapathy, replied that the people were only conveying their anguish.
•“Your Lordships’ judgment of February 16 is crystal clear. Anyone who understands elementary English will understand it. Yet the Centre says it is not clear,” Mr. Naphade said.
•Chief Justice Misra allayed Tamil Nadu’s fears that a draft scheme would provoke another round of litigation while its farmers are suffering. “We will ensure it (scheme) is implemented,” Chief Justice Misra told Mr. Naphade.
•Mr. Naphade sought clarity about the setting up of the Cauvery Management Board.
📰 Patents and protecting public health
Seeking full disclosure on how patents are working locally through Form 27 will help promote innovation
•A new chapter on the access to medication debate in India began when Shamnad Basheer filed a public interest litigation before the Delhi High Court. The petition pointed out the importance of “working requirements” in the Patents Act, 1970; the need to amend Form 27; and the lapses by patentees in furnishing information. The importance of Form 27 on the question of access to health cannot be underestimated. In essence, Form 27 seeks information to ensure that the patented material is adequately supplied in India. If the supply of the patented invention does not cater to the demands, statutorily the reasonable requirement of the public with regard to the patented invention is deemed as not met. This will be a ground to seek compulsory licensing of the product within India. The underlying rationale is to protect public health.
Working requirement
•Patent law grants to the patentees the privilege of enjoying a limited monopoly in order to achieve the objective of public benefit. Thus, the quid pro quo for getting patent monopoly is patent disclosure. As part of the disclosures, patentees are required to disclose if they are locally working their patented invention in exchange for the conferred benefits. Thus, Section 83 of the Patents Act states that “patents are granted to encourage inventions and to secure that the inventions are worked in India on a commercial scale and to the fullest extent that is reasonably practicable” and that the monopoly granted to the patentees is not merely to import the invention. Historically, laws in India have considered “working” the invention as being so crucial to the enjoyment of the monopoly that non-working in India entitled a third party to apply for a compulsory license.
•In streamlining the local working requirement, especially in the field of pharmaceuticals, India is in line with its international trade obligations. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) provides flexibilities and underscores the sovereign rights of countries to weave in the ground realities of each country while honouring their international trade commitments. Paragraph 5(2) of the Doha Declaration outlines the right of national governments to compulsorily license patents and the “freedom to determine the grounds upon which such licences are granted” , including the use of grounds not explicitly specified in Article 31 of TRIPS. Thus, lack of local working of the patent can be grounds for granting a compulsory licence along with other grounds such as high prices and non-supply of the patented invention locally. In doing so, the Doha Declaration allows the exercise of sovereign rights to define when exclusive rights could be curtailed to achieve a larger public interest result.
•Seeking local working information is part of India’s use of its sovereign rights. The state is obligated to protect the right to life of its citizens under Article 21, and this duty is heavier than any duty that the state may owe the patentees. The state should ensure that patentees perform their duties as monopoly holders. This means that the grant of patents must contribute to the promotion of technological innovation and to the transfer and dissemination of technology in a manner conducive to social and economic welfare and to a balance of rights and obligations.
•Currently, Form 27 requires patentees to submit a statement “regarding the working of the patented invention on a commercial scale in India”. But as the Form is bereft of crucial details, India’s next step is not to abjure it, but to revise it in a way that the conditions subject to which the patent privilege is granted are complied with. In this regard, the Indian Patents Act (Section 146) empowers the Controller to require a patentee or a licensee to furnish statements of how the invention has been commercially worked in India. It also requires the patentees and every licensee to furnish the prescribed statements regarding the invention. The Controller also has the right to publish the information received. This is the law. The law requires transparency and patentees and licensees should know that they are bound by this law. In this regard, requiring licensees to make a full disclosure of the patent working information through Form 27 would not be considered out of the norm. The liability for non-compliance with Form 27 must be strict civil liability.
•India needs to appreciate that the World Trade Organisation (WTO) rules do not prohibit getting information on the local working. After all, TRIPS Article 27 does not apply to this situation. The Article 27 prohibition against discrimination based on whether the goods are locally manufactured or imported applies to the grant of a patent and not to grounds for issuing a compulsory license. Further, the WTO’s jurisprudence in Canada Pharmaceuticals states that the word “discrimination” does not ban all forms of differentiation and that it refers to “results of the unjustified imposition of differentially disadvantageous treatment.”
•Countries like India signed up to the intellectual property bandwagon to maximise opportunities for technology transfer. Part of this exercise involves allowing local firms to compete and improve innovation, especially on life-saving pharmaceuticals. There is no wisdom in enacting patent laws that mainly enable foreign companies to import into a jurisdiction, without using it as a tool to foster scientific and technological progress at home. Thus, disclosures under Form 27 are required as part of a national strategy to improve innovation and further technology transfer into India, to maintain public health and to ensure supply of pharmaceuticals nationally.
A great opportunity
•The U.S. has set a precedent with its America First approach, leading to an imposition of 25% steel tariffs. Article XXI of the General Agreement on Tariffs and Trade that allowed the U.S. to impose the steel and aluminium tariffs to prevent importation will also justify India’s position in requiring local working to ensure access to medication. In any case, the use of Section 301 of the U.S. Trade Act, 1974 to unilaterally impose trade pressures stands on shaky legal grounds. India has been subjected to this unwanted bullying regularly. The amendment of Form 27 presents a great opportunity for India to reiterate the limits and limitations of the unilateral approach, should the U.S. choose to take unilateral action.
•Kaushik Sunder Rajan has rightly asserted that in a world in which the structure of monopolistic drug development is the norm, there are consequences for both health and democracy, since the initial rationale of patents as a purely instrumental monopoly in public interest is subverted and forgotten. The patent system is misconstrued as serving the patent owner. Similarly, there is wide misconception by trade lobbyists that trade obligations are subservient to sovereign rights. Neither of these propositions is correct. That is why the question raised in the petition filed by Professor Basheer is not to be lightly taken. It is not only about the right to health but also about the state’s sovereign right to preserve public health and duty to fulfil a Constitutional mandate.
📰 PM to address Swachhagrahis in Bihar’s Champaran today
Ally JD(U) again rakes up special category status for the State ahead of the visit
•Prime Minister Narendra Modi would address 20,000 Swachhagrahis (cleanliness ambassadors) in Motihari of East Champaran district on Tuesday to mark the concluding ceremony of Champaran Satyagraha centenary celebrations started by the State government last year. The PM is also scheduled to flag off the “Swachhagraha Express” from Bapudham (Motihari) railway station and unveil other schemes and projects.
•However, the Janata Dal (United), which rules the State in alliance with the BJP, wished that the Prime Minister would declare ‘Special Category State’ status for Bihar during his visit. “PM Modi should grant special status to Bihar as promised earlier,” said JD(U) leader and MLA Shyam Rajak. Recently, Chief Minister Nitish Kumar too had said that he had not given up the demand for special status to Bihar even “for a second” since he first raised it in 2005.
“Swachha Gram”
•The district administration in East Champaran has erected a tent city, being called “Swachha Gram”, to accommodate 20,000 visiting Swachhagrahis at the local aerodrome ground in Bariyarpur locality of Motihari. Spread over 700,000 square feet, Swachha Gram is equipped with toilets and washrooms for the Swachhagrahis visiting from 26 other States. However, 10,000 of them would be from Bihar.
•The Prime Minister would felicitate selected Swachhgrahis or Swachh Bharat Mission volunteers and freedom fighters on the occasion. The Chief Minister, Union Agriculture Minister Radha Mohan Singh and other dignitaries too would be present on the occasion. Mr. Modi tweeted, “A century ago, Indians became Satyagrahis and fought colonialism. Today, let us become Swachhagrahis & create a Swachh Bharat”. “Champaran Satyagraha was a historic mass movement led by Bapu. Its impact was phenomenal,” said the Prime Minister in another tweet.
•Elaborate security arrangements have been made at Motihari in view of the Prime Minister’s visit. “Over 3,000 police personnel would be deployed for the programme,” said East Champaran District Magistrate Raman Kumar.
📰 CVC witnesses a dramatic drop in complaints
‘Perceived fall in public trust inanti-corruption bodies needs study’
•The Central Vigilance Commission (CVC) saw a dramatic drop in the total number of complaints received by it in 2017, keeping in line with the drop in actions by various government departments in cracking down on corruption. The 23,609 complaints received in 2017 by the CVC was less than half of almost 50,000 complaints received in 2016, and the lowest in the previous five years.
•Officials said some of this can be explained by the improved system for weeding out duplication of complaints and a few other streamlining exercises undertaken in recent years. However, others, including whistle blowers and civil servants, said a deeper study was required to assess if the public was losing its trust in anti-corruption bodies because of their perceived inefficiency, quality of investigations and possible manipulations at various levels. They also suggest that the government should notify the original Whistle Blowers Protection Act, 2011, appoint a Lokpal, and initiate other steps for strengthening anti-corruption mechanisms.
•According to the CVC’s annual report submitted to Parliament last week, in the calender year 2017, the agency tackled a total of 26,052 complaints, which included 2,443 brought forward from 2016. Of this, 22,386 complaints were disposed off, and 3,666 complaints remained pending at the end of 2017. Out of them, 2,391 complaints were anonymous, and, the report says, “In majority of complaints the allegations were found to be either vague or unverifiable”.
Quality of investigation
•The annual report itself highlights one possible reason why there is a general public disenchantment with anti-corruption mechanisms. When it receives a complaint, the CVC calls for inquiry reports from the appropriate agencies. “As per the laid down procedure, the inquiry/ investigation reports are required to be sent to the Commission within a period of three months. However, it is observed that in a majority of cases, there is considerable delay in finalising and submitting reports to the Commission,” the report says. A Central Bureau of Investigation source points out that there was a need to look at the quality of investigation done by agencies. “We have seen a consistent drop in the quality of investigation. While the early steps such as raids and PEs (Preliminary Enquiry) are well publicised, the follow-ups, including investigation and charge sheet are weak,” he pointed out. The officer cited the outcome of the 2G scam verdict, in which the court has severely indicted the CBI for poor investigations.
•According to the CVC’s annual report, based on the CBI’s investigations, the CVC provided the first stage of advice in 171 investigation reports of CBI. Of them, only 30% resulted in criminal proceedings. A significant 22% of the CBI investigation reports resulted in closure of those cases, while another 33% resulted in only administrative actions such as warnings or caution.
•In the case of investigations submitted by Chief Vigilance Officers of various government departments, almost half of them were closed without any action. Only 0.63% of those investigations led to criminal proceedings. Thus, of the total of 2,069 investigation reports examined by CVC in 2017, 45% were closed without any action, while only 3.09% led to criminal proceedings.
•A similar drop in the number of punishments given out by the CVC, too, is visible. The total punishments awarded in 2017 was 2,589, against 3,296 in the previous year. In 2015, it was 3,592.
•The CVC’s annual report has stated that it has “observed that during the year 2017, there were some significant deviations from the Commission’s advice” by various Ministries. The Ministry of Railways refused to follow its recommendation in six investigations against senior officials. The Ministry of Civil Aviation, too, has a similar track record, including not investigating a former Chairman and Managing Director (CMD) of Air India, who recruited his OSD’s (Officer on Special Duty) son as a trainee pilot in Air India, and allowed the top official to retire in 2016.
📰 SC to issue orders in roster case
Petition calls for transparent, codified procedure for constitution of Benches
•A day after the Supreme Court’s number two judge, Justice Jasti Chelameswar, attacked the Chief Justice of India’s discretionary powers to constitute Benches and allocate cases, a three-judge Bench led by Chief Justice of India Dipak Misra on Monday decided to pass judicial orders on a petition calling for a transparent and codified procedure for constitution of Benches and allocation of cases in the court.
•“Unfettered power is being exercised by the Chief Justices in the matter of formation of Benches, and so, the same is liable to be regulated through specific rules,” the petition filed by Asok Pande said.
•It said specific provisions should be incorporated in the Supreme Court Rules of 2013 that the three-judge Bench in the Chief Justice of India’s court should consist only of the Chief Justice of India and the court’s two senior-most judges. That is, in the present scene, Chief Justice Misra and Justices Chelameswar and Ranjan Gogoi.
•The petition further demanded that the Constitution Bench of the Supreme Court should consist of five senior-most judges — the CJI, Justices Chelameswar, Gogoi, Madan B. Lokur and Kurian Joseph — or a combination of the three senior-most and two junior-most judges. That would be the CJI, Justices Chelameswar, Gogoi followed by Justices Navin Sinha and Deepak Gupta.
Subject-wise roster
•Justices Chelameswar, Gogoi, who is the next in line to be the CJI under the seniority norm, Lokur and Kurian Joseph had held the January 12 press conference, accusing the recent trend of CJIs selectively allocating cases to preferred Benches.
•Subsequently, Chief Justice Misra published a “subject-wise roster” of cases to be handled by the Supreme Court judges. However, the roster has not eased criticism. As proof, Justice Chelameswar, responding to a question why all the important cases continue to be heard by Chief Justice Misra, responded: “He is the master of roster ... If he [CJI Misra] has the energy to do the entire work, let him do it.”
•Mr. Pande’s petition follows an earlier petition filed by former Union Law Minister Shanti Bhushan for a declaration that the authority of the CJI as “master of roster” should not be reduced to an absolute, singular and arbitrary power.
•Mr. Bhushan has asked the Supreme Court Registry not to place his petition before a Bench of which Chief Justice Misra is a part of.
📰 List facilities at refugee camps: SC
Rohingya or Indian, all are equally entitled to civic amenities, says the court
•The fundamental right to basic amenities and a dignified life cannot be confined to the Rohingya alone, but has to extend to their Indian neighbours living in the same slum.
•The Supreme Court cannot shine the spotlight on Rohingya refugees without doing anything for the Indian living in the adjacent slum, Justice D.Y. Chandrachud remarked on Monday.
Basic amenities
•The court was hearing PIL pleas to provide the refugees with basic amenities. Justice Chandrachud, who is part of a three-judge Bench led by Chief Justice Dipak Misra, said the right to life under Article 21 was equally applicable to all, whether an Indian citizen or not.
•Senior advocate Rajeev Dhavan said: “The Rohingya is a special category of people. They cannot go back to Myanmar. They are the worst of the worst. The problem here is justice.”
•Additional Solicitor-General Tushar Mehta, for the Centre, said every basic amenity was being provided to Rohingya without discrimination. But Justice Chandrachud said the government could not remain content with making general statements. “Do not make general statements. Make specific submissions like how many toilets you have built, etc,” Justice Chandrachud told Mr. Mehta.
•The court directed the government to submit a report on the basic amenities provided to Rohingya camps in Delhi and Haryana. The next date of hearing is May 9.
📰 ‘Trade friction between U.S., India is over unequal tariffs’
USATR to discuss issue with Commerce Ministry, says Wells
•The friction between the U.S. and India on trade issues has arisen due to the unequal tariff regime implemented by the two countries, according to a senior U.S. envoy, even as India is trying to get an exemption from the import tariffs imposed by the U.S. on steel and aluminium.
•U.S. Assistant Trade Representative Mark Linscott is visiting New Delhi on a two-day trip starting Monday, and he will meet senior Commerce Ministry officials to discuss the issue of the tariffs.
•“America’s average tariff is a little over 3%, India’s is over 13% and this is where the frictions arrive,” Principal Deputy Assistant Secretary for South and Central Asian Affairs Alice Wells told The Hindu . “This is a conversation we will be having when the U.S. trade representative arrives.”
•Mr. Linscott will be meeting the Commerce Ministry’s Trade Policy Division Special Secretary Anup Wadhawan and Joint Secretary Santosh Kumar Sarangi on Tuesday, according to sources in the Ministry. The agenda of the meeting is to make the case that the tariffs on steel and aluminium imposed by the U.S. should not be levied on India because the Asian nation ‘does not pose any security threat to the U.S.’
‘India seeks exemption’
•“India is exploring all options for exploring non-application of the tariffs on Indian steel and aluminium products and, to this extent, consultations with the stakeholders of the industry and with the Ministry of Steel have been done,” according to a senior official in the Commerce Ministry. “On the basis of the inputs received, appropriate action will be taken and discussed with the counterpart from the U.S.”
•U.S. President Donald Trump had early last month signed two proclamations that levied a 25% tariff on steel and a 10% tariff on aluminium imported from all countries except Canada and Mexico. This move was widely criticised, especially by China, which has also undertaken some retaliatory tariff measures.
China backlash
•China upped the ante by imposing tariffs on key import items from the U.S. including soybeans, aircraft and cars, and has taken the U.S. to the WTO over the tariff increases on steel and aluminium. Following this, the Trump administration retaliated by imposing a 25% tariff on about 1,300 industrial technology, transport, and medical products imported from China.
•India too has raised concerns about whether the tariff actions taken by the U.S. are in line with World Trade Organisation norms.
•“What the U.S. has raised, whether it is WTO compatible or not, whether it is violating some rules or not, is something the country will have to individually look into,” Commerce Minister Suresh Prabhu said, following an informal mini-ministerial WTO meeting in the national capital last month.
•“This is a unilateral action [by] the U.S., and any trade-related action is subjected to scrutiny on whether it is WTO compatible or not.”
•He had also said India would take up with the issue with the U.S. at a bilateral level. “I think over the last year there has been a $10 billion increase in bilateral trade [between the U.S. and India], taking the figure to $126 billion, and as trade increases so do trade problems,” Ms. Wells added.
•“What we... have to learn to do in both the U.S. and India is manage our trade differences effectively... as we push ahead in strategic areas where our interests are so overlapped… These are conversations that have solutions, and we believe that big important strategic relations have to be able to manage these natural and occurring differences.”
