The HINDU Notes – 25th September 2019 - VISION

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Wednesday, September 25, 2019

The HINDU Notes – 25th September 2019

πŸ“° India, U.S. trade deal falls through

Prime Minister Narendra Modi, US President Donald Trump talk trade and terror.

•Despite Commerce Minister Piyush Goyal’s presence in New York to conclude a trade package with U.S. Trade Representative (USTR) Robert Lighthizer, the two sides failed to bridge the gap in their positions.

•The announcement of an agreement was expected to coincide with Tuesday’s bilateral between Prime Minister Narendra Modi and President Donald Trump. “We will have a trade deal soon. We will have a bigger trade deal down the road,” Mr. Trump said before the talks held on the sidelines of the UN General Asssembly meeting.

•While Foreign Secretary Vijay Gokhale did not share details on why a trade package could not be concluded, three sources familiar with the negotiations told The Hindu that the prospects of an agreement unravelled due to the failure to reach an agreement on Information and communications technology (ICT) products. The U.S. has wanted India to eliminate tariffs (20%) on ICT products, but New Delhi is concerned that this could open up the market to flooding by Chinese technology.

•The U.S. wanted greater access to Indian markets for medical devices, such as stents and knee implants, ICT and dairy products and sought the removal of price caps.

•The US had sought the removal of price caps (“Trade Margin Rationalization” or TMR) on medical devices and greater access for dairy products and some other categories of agricultural goods.

•On its part, India wanted the reinstatement of preferential market access to U.S. markets under the Generalized System of Preferences (GSP) program, which was revoked in early June. It had also wanted facilitation of processes in agricultural product markets where it already had access (such as easier certification of food product irradiation facilities) and greater access in some agricultural markets (table grapes, pomegranates for instance), sources told The Hindu.

•Although a limited trade package could not be finalised, Mr. Gokhale said the two sides had “narrowed their areas of difference”, and made “significant progress”.

•“The two leaders, therefore, felt that they were optimistic in terms of reaching some kind of a trade agreement in the near future. And discussions will continue in this regard,” he said. However, he did not provide a time frame for the conclusion of agreement.

•“It appears there was no trade deal and that’s disappointing. Hopefully the two sides will keep engaging and not let momentum dissipate,” Mark Linscott, former senior USTR negotiator and now senior fellow at the Atlantic Council told The Hindu.

•“Frankly it’s not a good sign that a modest deal could not get done because there are bigger issues down the road. If India and the U.S. are going to realize the full potential of the trade relationship, they need to start putting points on the board,” Mr Linscott said.

•Some of the larger issues for the U.S. include digital trade (for instance regulations around data localization and FDI in e-commerce). India also continued to appear on U.S.’s  “Priority Watch List” this year along with 10 other countries. The annual list identifies countries which, according to the U.S., pose challenges to American intellectual property rights. 

Modi, Trump discuss terror and trade

•Mr Modi and Mr Trump discussed trade and terrorism during their bilateral meeting which lasted for about 40 minutes, Mr. Gokhale said.

•Mr. Modi had a 13 member delegation (as per a White House pool report)  including External Affairs Minister S Jaishankar, Commerce Minister Piyush Goyal, Mr Gokhale and Indian Ambassador to the U.S., Harsh Shringla.

•“We believe that we have given a good understanding to the U.S. side about the challenges that we face on the count of terrorism in India, including in Jammu & Kashmir,” the Foreign Secretary said.

•Answering questions from the media prior to their bilateral meeting at the UN building, President Trump urged Prime Minister Modi and Pakistan Premier Imran Khan to meet for a “good outcome” on Kashmir.

•“As Prime Minister Modi and Prime Minister Khan meet and get to know each other, a lot of fruitful and peaceful things can be expected,” Mr Trump said.

•His comments reiterated his remarks on Monday during his meeting with Mr. Khan when he had asked both India and Pakistan to hold talks.

•Despite repeated questions, President Trump, however, remained non-committal about targeting cross border terrorism from Pakistan and said, “You have a great Prime Minister and he will take care of that.”

‘Father of India’

•On his experience at the “Howdy, Modi!” diaspora event, U.S. President Donald Trump said, “They love this gentleman to my right. People went crazy, he [Narendra Modi] is like an American version of Elvis.” 

•“I remember India before was very torn. There was a lot of dissension, fighting and he brought it all together. Like a father would. Maybe, he is the Father of India,” he added. 

πŸ“° PM pushes to strengthen FATF as Imran calls blacklist part of India’s ‘agenda’

The meeting was organised by Jordan, France and New Zealand, and attended by leaders of about 24 countries.

•Institutional mechanisms against terrorism like UN Security Council (UNSC) sanctions and the Financial Action Task Force (FATF) listings must not be “politicised”, urged Prime Minister Narendra Modi at a special session on extremism and terrorism at the world body, in comments that appeared to be aimed at China and Pakistan.

•“Prime Minister Modi said terrorists should not be allowed to get funds and arms,” Gitesh Sarma, Secretary (West) in the Ministry of External Affairs, told journalists. “For this objective to be realised, we need to avoid politicisation of mechanisms like UN listings and the FATF,” Mr. Sharma quoted Mr. Modi as saying.

•Mr. Modi was speaking at the “Leaders’ Dialogue on Strategic Responses to Terrorist and Violent Extremist Narratives”, held on the sidelines of the 74th UN General Assembly session on Monday. 

•The meeting was organised by Jordan, France and New Zealand, and attended by leaders of about 24 countries, but did not include either China or Pakistan.

•Earlier in the day, Pakistan Prime Minister Imran Khan referred to India’s efforts as part of a concerted plan against his country. “We found India was pushing to blacklist us at FATF, and we realised they have an agenda,” he said at the Council for Foreign Relations.

•Mr. Modi’s reference to UNSC listings comes months after China finally withdrew its veto on the sanctions listing of Pakistan-based Jaish-e-Mohammad chief Masood Azhar, something Beijing had opposed for more than a decade. 

•The reference to the FATF is significant, as the global body to counter terror financing will meet in November this year to decide on whether Pakistan should be ‘blacklisted’ for its failure to take credible action. 

•China has assumed the presidency of the group that works by consensus, and India has been keen to see Pakistan, which is on the FATF ‘grey list’ at present, face stricter financial scrutiny till it stops terror groups listed by the UNSC from operating there.

•Earlier in the day, Pakistan Prime Minister Imran Khan referred to India’s efforts at the FATF as part of a concerted plan against his country. “We found India was pushing to blacklist us at FATF, and we realised they have an agenda,” he said at the Council for Foreign Relations.

•Significantly, the FATF came up at another UN session on Monday, an informal meeting of the Conference on Interaction and Confidence-Building Measures in Asia (CICA), where Indian and Pakistani ministers were present. 

•Minister of State for External Affairs V. Muraleedharan stated, “Organisations such as the FATF are engaged in maintaining integrity of the international financial system in Asia for combating terror financing. Members of the CICA must continue to support the FATF in its endeavours.” He said this in the presence of Pakistan’s Foreign Minister Shah Mehmood Qureshi.

πŸ“° India accepts RCEP tips on investments

Agrees to remove technology transfer requirements, caps on royalty payments

•While India has not yet signed the Regional Comprehensive Economic Partnership agreement, it has accepted suggestions of other countries regarding rules on investments, a source aware of the developments told The Hindu.

•India and the other RCEP countries are currently in the final phase of negotiations in Vietnam.

•India has so far agreed to several provisions that bring it in line with the investment rules applicable in most comparable countries, including banning host countries from mandating that the investing companies transfer technology and training to their domestic partners, and removing the cap on the quantum of royalties domestic companies can pay their foreign partners.

•If the RCEP agreement is signed, these rules are expected to attract greater investment in India from the other 15 RCEP countries (the 10 ASEAN countries, China, Japan, South Korea, Australia and New Zealand). Indian laws currently have the provision wherein companies investing in the country can be made to transfer technology or know-hows to their domestic counterparts.

•The government and Reserve Bank of India also currently impose a cap on the royalties a domestic company can pay to its foreign parent or partner, for certain kinds of investments.

Major hindrance

•These restrictions have been seen as major hindrances to investing in India, and other RCEP countries have argued strongly for their removal.

•“The investment chapter of the RCEP deal has been agreed upon, and India has agreed to the removal of technology transfer requirements, and also the removal of any caps on royalty payments,” the source said.

•“This means there will be no cap on the royalties that a company like, say, Maruti, [can] pay a foreign partner.”

•While there is apprehension in industry that removing the cap on royalty payments would lead to increased outflow in foreign exchange and deplete the ability of domestic firms to pay dividends to shareholders, there is also the view that removal of these restrictions will result in increased investments in India.

•“If India has taken this decision, then it is certainly a step in the right direction,” T. S. Vishwanath, principal adviser with ASL, a law firm specialising in trade law and remedies, said.

πŸ“° Kerala police gear up to scan underworld of Internet

Expert from Israel trains Kerala Cyberdome analysts to monitor the darknet

•The Kerala police have set up a state-of-the-art lab complete with enabling software to intervene and crack down on the rising criminal activities over the Darknet, known as the underworld of the Internet.

•Spearheading the programme is Cyberdome, the State police department’s premier facility dedicated to prevent cybercrime and mitigate security threats to the State’s critical information infrastructure.

Intentionally hidden

•Darknet is a layer of the Internet accessible only by using special software like Tor (The Onion Router), or I2P, which stands for Invisible Internet Project. Websites and information on the Darknet are intentionally hidden and cannot be accessed using traditional search engines like Google.

•A pool of four analysts has been trained and deployed in shifts for round-the-clock monitoring of Darknet. Since the expertise for imparting training in tracking the Darknet is limited in the country, the analysts were given 14-day training by roping in an expert from Israel.

Drug smuggling

•“We have come across three cases of drug smuggling over Darknet since we jacked up the surveillance with the help of trained analysts a couple of months ago. We chanced upon an attempt to sell drugs, the delivery of which was traced back to Darknet,” Manoj Abraham, ADGP, Headquarters, and the nodal officer of Cyberdome, told The Hindu.

•The relative impermeability of Darknet has made it a major haven for drug dealers, arms traffickers, child pornography collectors and other criminals involved in financial and physical crimes so much so that one can buy anything from tigers to hand grenades to any kind of narcotic substances, provided the potential buyer finds the right website on the Darknet.

•“Place the order and make the payment in bitcoins and it will be delivered at the doorstep with little risk of detection and intervention by the law enforcement agencies,” said Mr. Abraham.

πŸ“° Another chance in Afghanistan

Donald Trump’s calling off Taliban peace talks is to India’s advantage; an outreach to the outfit could secure it

•It is perhaps for the best that the U.S.-Taliban talks were called off earlier this month. The Taliban leadership’s proposed visit to Camp David in the United States would have led to a slew of significant geopolitical changes with implications for the region and beyond.

•Perhaps the Taliban became far too greedy and impatient, or the U.S. President has pulled out what he thinks is the Trump card to gain a negotiating advantage especially given that the American establishment is not too happy with the deal. There were misgivings about the deal that the chief U.S. negotiator to Afghanistan, Zalmay Khalilzad, was about to ink with the Taliban.

Back to square one

•The Taliban, having fought against and displaced the powerful coalition forces over the past 18 years, has the luxury of time on its side, even as it is steadily increasing its political legitimacy within Afghanistan. Recall that this is not the first time U.S.-Taliban talks are breaking down, and every time the Americans have had to come around to negotiating again. Mr. Donald Trump on the other hand may not have the luxury of time. As for the international community, it has grown tired of the Afghan story.

•In any case, we are back to another season of heavy fighting in Afghanistan with devastating attacks being mounted by the Taliban far more frequently than before.

•What implications does the cancellation of U.S.-Afghan talks have for the volatile South Asian region in general and for India in particular?

Implications for Afghanistan

•The direct fallout of the American pullout from the negotiations is more bloodshed in the country. The gloves are now off (not that the Taliban was greatly restrained earlier) and the Taliban has already started carrying out major attacks with the American troops fighting back. However, the current dispensation in Afghanistan, led by President Ashraf Ghani, might not be too displeased with the outcome. The September 28 elections are likely to go ahead, and Mr. Ghani has a chance to continue as President without having to share power with the Taliban — a prospect Kabul has been uneasy about for a long time — to the extent that he actively discouraged all talks with the Taliban that did not involve Kabul. The Ghani government will also be pleased with the fact that U.S. troops are likely to continue in the country, for if left alone the government will not survive long.

•The larger question that should concern the Afghan people is whether the Taliban is a changed lot or not. The Taliban has been making direct and indirect assertations about how they are a much evolved group on the question of girls’ education, treatment of women and minorities, among others. But these are claims at best and that is precisely why a deal with the Taliban should include commitments on its domestic behaviour.

What it means for India

•Even with a properly negotiated deal, the ascent of the Taliban in Afghanistan would have meant a certain amount of regional uncertainty and geopolitical recalibration. Pakistan, for instance, has been counting on the return of the Taliban in Afghanistan which it deeply believes gives it strategic depth vis-Γ -vis India. Pakistani triumphalism in the context of Afghanistan would have meant pinpricks for India. Now that there is no deal between the Taliban and the U.S., there is likely to be more violence internally within Afghanistan while the external implications would be more or less contained. This calculus might change if and when the Taliban returns to power and foreign troops withdraw.

•India’s best bet in Afghanistan would be a negotiated withdrawal of foreign troops from Afghanistan, for this would check the Taliban’s proclivity to engage in trouble- making outside Afghan territory.

•A non-negotiated withdrawal of U.S. forces would be the worst-case scenario for India even though that is unlikely to happen. This will mean little check on the Taliban’s behaviour at home and in the neighbourhood. It will also enhance Pakistan’s ability to control elements of the Taliban for tactical or strategic anti-Indian uses.

•Once the Taliban returns to power in Afghanistan, on its own or as part of a power-sharing arrangement, Indian civilian assets and interests in Afghanistan could come under increased pressure. Today, with the Pakistani side up in arms against India, thanks to New Delhi’s Kashmir decision, the possibility of the Taliban going against Indian interests is much higher, if we were to assume Pakistan to be a major influence on the Taliban’s actions.

The Kashmir question

•Kashmir in many ways will continue to be at the centre of how the emerging geopolitical situation in Afghanistan will impact India. While it is true that a repeat of the late 1980s, when scores of unemployed Afghan fighters turned up in Kashmir at the behest of the Pakistani agencies, is unlikely to happen today for a number of reasons, including due to physical barriers and the amassing of Indian troops on the border, some presence of the Taliban fighters cannot be ruled out. More significantly, however, if a non-negotiated withdrawal of the U.S. forces takes place, it could lead to an open season for Taliban’s regional engagement which could potentially be influenced by Pakistan’s strategic calculations. Even if there is a deal between the U.S. and the Taliban, the fact that the Taliban will have “forced” the Americans out of Afghanistan would provide a shot in the arm to Pakistan, and young Kashmiris who are willing to take up arms against the Indian state. “If a superpower like the U.S. can be pushed out of Afghanistan by the Taliban with help from Pakistan, would it be too difficult to beat India?” is the argument doing the rounds among sections of aggrieved Kashmiri youth.

•The manner in which talks between the Taliban and the U.S., were being conducted would have led to negative consequences for New Delhi. To that extent, the breakdown of the Trump-Taliban talks is advantage India. The U.S. and the international community, while picking up the threads of negotiations in the days ahead, will need to ensure that there are enough guarantees built into a deal to disincentivise undesirable external behaviour by the Taliban.

•India, on its part, needs to reach out to the Taliban, not to recognise it but to engage with it, in its own national interest. In fact, we are already pretty late in this game, and with the Chinese, Pakistanis and even the Russians converging on the importance of the return of the Taliban to the Afghan scheme of things, one wonders whether India will ever be able to make inroads into the higher echelons of the Taliban. In any case, any outreach from the Indian side would make the government in Kabul led by Mr. Ghani, unhappy. This leaves India in a difficult situation. Hence, such an outreach will also need to be carefully calibrated and discreetly executed.

πŸ“° Climate for action: On UN Climate Action Summit

India’s call for solid steps on climate change must be matched by domestic measures

•Prime Minister Narendra Modi’s assertive stance on the need for all countries to walk the talk on climate change action is to be welcomed as a signal of India’s own determination to align domestic policy with its international commitments. Mr. Modi’s comments at the UN Climate Action Summit in New York have turned the spotlight on not just the national contributions pledged under the Paris Agreement of the UN Framework Convention on Climate Change (UNFCCC), but also the possibility of India declaring enhanced ambition on cutting greenhouse gas emissions under the pact next year. Several aspects place the country in the unenviable position of having to reconcile conflicting imperatives: along with a declared programme of scaling up electricity from renewable sources to 175 GW by 2022 and even to 450 GW later, there is a parallel emphasis on expanding coal-based generation to meet peaks of demand that cannot be met by solar and wind power. The irony of the Prime Minister telling the international community in Houston that his government had opened up coal mining to 100% foreign direct investment was not lost on climate activists campaigning for a ban on new coal plants and divesting of shares in coal companies. No less challenging is a substantial transition to electric mobility, beginning with commercial and public transport, although it would have multiple benefits, not the least of which is cleaner air and reduced expenditure on oil imports.

•Advancing the national climate agenda in the spirit of Mr. Modi’s action-over-words idiom requires the Central government to come up with a strong domestic action plan. The existing internal framework, the National Action Plan on Climate Change (NAPCC) is more than a decade old. It lacks the legal foundation to incorporate the key national commitment under the Paris Agreement: to reduce the emissions intensity of economic growth by a third, by 2030. Without an update to the NAPCC and its mission-mode programmes, and legislation approved by States for new green norms governing buildings, transport, agriculture, water use and so on, it will be impossible to make a case for major climate finance under the UNFCCC. It is equally urgent to arrive at a funding plan for all States to help communities adapt to more frequent climate-linked disasters such as cyclones, floods and droughts. There is, no doubt, wide support for India’s position that it cannot be held responsible for the stock of atmospheric carbon dioxide influencing the climate; even today, per capita emissions remain below the global average. Paradoxically, the country is a victim of climate events on the one hand and a major emitter of GHGs in absolute terms on the other. In New York, Mr. Modi chose to rely on the country’s culture of environmentalism to reassure the international community on its ability to act. In coming years, national actions will have to be demonstrably effective in curbing carbon emissions.

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