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A Shankar IAS Academy Initiative



Door No.18, Old Plot No.109, New Plot No.259, AL Block, 4th Avenue,
Shanthi Colony, Anna Nagar, Chennai 600 040.
Phone : 7667766260
1. NOVEMBER - 2016 5

1.1 Trade with Neighbors 5

1.2 Bottom Trawling 6
1.3 India on Infrastructure projects in Bangladesh 8
1.4 BIMSTEC - Free Trade Agreement 9
1.5 BBINs Motor Vehicle Agreement 10
1.6 Market Economy Status for China 11
1.7 India Japan Nuclear deal 13
1.8 New Zealands role in Indias NSG entry 14
1.9 Maldives left Commonwealth 15
1.10 TPP and India 16
1.11 India to counter China's stance at RCEP 18
1.12 Russia Leaves ICC 19

2. DECEMBER - 2016 20

2.1 Indus Water Treaty and World Bank 20

2.2 India and CPEC 23
2.3 India offers Tsunami Alert System to SCS countries 25
2.4 Rohingya - Bangladeshs dilemma 27
2.5 India and Vietnam likely to sign Civil Nuclear Pact 29
2.6 Improving Defence Cooperation 29
2.7 India-Japan Minimum Import Price issue 31
2.8 U.S & Israel - UNSC Voting 31
2.9 Statesmanship on Paying Homage 33
2.10 India Qatar 34
2.11 Adoption of Urban Plus approach 35

3. JANUARY - 2017 35

3.1 PIO and OCI 35

3.2 Sri Lanka to offer a Port to India 37
3.3 India and China's Tug of War over Nepal 38
3.4 India Japan WTO issue 39
3.5 H1-B Visa Bill 40
3.6 India-US Defence Technology and Trade Initiative 42
3.7 India Russia Stealth Frigates Deal 43
3.8 UK Immigration Policy 44
3.9 Indias West Asia policy 45
3.10 India and UAE 46
3.11 India - Portugal 48
3.12 India - Kenya Opportunities and Challenges 49
3.13 Chagos Archipelago Dispute 50
3.14 Indias Stand on ISDS 52
3.15 Hague convention on child abduction 53

4. FEBRUARY -2016 54

4.1 Mastering in Evacuation 54

4.2 CPEC and the Baloch Insurgency 56
4.3 Sehwan Attack 58
4.4 Bangladesh PMs visit to India 59
4.5 India China Masood Azhar Issue 60
4.6 India China - Strategic Dialogue 61
4.7 Securing Indias Strategic Autonomy 63
4.8 India - CLMV 64
4.9 Trumps foreign policy 65
4.10 What America First means for India? 67
4.11 India - Rwanda 68
4.12 Israels Expanding Settlement 70
4.13 One China Policy 71
4.14 Greece Struggling to meet bailout conditions 72

5. MARCH -2016 73

5.1 Permanent Indus Commission 73

5.2 Miyar project 75
5.3 LeavingPoK alone 76
5.4 China makes Border Settlement 78
5.5 Reconciliation in Sri Lanka 79
5.6 Connecting Asias growth pole 80
5.7 India - U.S. pact likely to miss deadline 82
5.8 India and Canada 83
5.9 India-Mexico 84
5.10 Scotland - Second Independence Referendum 86
5.11 Turkish Referendum 87
5.12 Americas new Trade Policy agenda 2017 89
5.13 WTO crisis 90
5.14 TIR Convention 91
5.15 A New Transport Corridor 93
5.16 Commission on Legal Continental Shelf 93

Bilateral Relations - Part I

1. NOVEMBER - 2016
1.1 Trade with Neighbors

What is the issue?

There have been calls for an embargo on trade with both Pakistan and China in the wake of political tensions
with both countries.

What is the condition of India China trade?

Import - Imports from China account for 16.2 per cent of Indias total imports.

Trade deficit - India had its largest trade deficit of $53 billion with China in 2015-16.

Indias overall trade deficit has been declining, its trade deficit with China accounting for about 44 per cent
of Indias total trade deficit has been increasing over the last five years, driven by declining exports and
increasing imports.

Intermediaries - Indian imports from China comprise mainly of intermediates. India imported chiefly
telecom instruments, computer hardware and peripherals, fertilisers, electronic components, project goods,
chemicals and drug intermediaries from China in 2015-16.

A ban on these imports will affect Indias manufacturing capability.

Revenue - Also, all these goods attract a countervailing duty (CVD) and special CVD of 12 and 4 per cent
respectively, while some of these goods attract a basic duty of 10 per cent additionally. A ban will mean a loss
of tariff revenues for the Indian government.

Price rise - A rise in the costs of manufacturing the final products using these intermediate inputs would
make our exports costlier, thereby reducing our export competitiveness.

It may also give rise to blackmarketing and smuggling.

For China - China, in turn, will have to bear the consequences of lower imports from India.

China currently has 206 import partners and the network effect of this trade, implies that what happens in
China doesnt remain in China.

Indias size and its openness make it a prime candidate to transmit any initial trade shocks that
it experiences to the rest of the world. |

According to the IMF, India has the potential to amplify initial import shocks by 30% and transmit to the rest
of the world.

Thus, any unilateral action by both the nations to suspend trade ties might adversely affect not only them, but
also the global economy at large.

What is the condition of India Pakistan trade?

Pakistan accounted for only 0.74 per cent of Indias total exports and 0.12 per cent of imports in 2015-16.

These figures mask the large volume of informal trade between the two neighbouring countries.

According to certain studies, the volume of informal trade between these countries is twice that of
the formal trade.

A proper understanding of the benefits of trade and attempts to redirect trade towards formal trade channels
will result in a substantial reduction in transaction costs, given the long circuitous routes that such trade takes,
chiefly the Delhi-Mumbai-Dubai-Karachi-Lahore route.

1.2 Bottom Trawling

Why in news?

Recently Sri Lanka urged India to expeditiously end unsustainable industrial-scale fishing in the coastal waters
between the two countries.

What is bottom trawling?

Bottom trawl nets are generally used to catch shrimp and fish living on the seafloor from shallow coastal

When the weighted nets and trawl doors are dragged along the seafloor, everything in their path is disturbed
or destroyed, including sea grasses, coral reefs or rock gardens where fish hide from predators.

This will completely collapse the marine ecosystem.

In addition to the shrimp and fishes, many other animals are also captured and later discarded, including
small fishes.

This overfishing happens because the gear is not selective and discards a lot of dead fish. Overfishing is a
direct threat to local fishing communities and to tourism from sports

Fish that are discarded by the bottom trawler are often juveniles of valuable species caught by other fishermen

Bottom trawling has been banned in many countries like Indonesia, US and New Zealand worldwide.

One way of preventing boundary transgression and bottom trawling is to find a livelihood alternative for Tamil
Nadu fishermen and equipping them for deep sea fishing against bottom trawling. |

What has been done?

Both sides made significant progress in the recent talks which led to the agreement of the Joint Working
Group (JWG).

The agreement on the three-point agenda of the JWG would help end the long-standing issue of fishing in the
coastal waters between the two countries.

Both sides agreed that the JWG would meet every three months.

Meeting between the Ministers for Fisheries would be held every six months.

They also agreed that there should be no military attacks by the Navies/the coast guards of the two countries
in dealing with the fishermen and to set up a hotline between the coast guards.

Three-point agenda: JWG would have three tasks of expeditiously working to end bottom trawling, facilitating
joint patrolling of the coastal waters and working towards the release of arrested fishermen who entered into
each others waters.

What should be done?

A livelihood alternative for Tamil Nadu fishermen should be provided to prevent boundary transgression.

Tamil Nadu fishermen had asked for a three-year phase-out period for their trawlers. They should show
greater understanding of the plight of the Sri Lankan Tamil fishermen, who are economically weaker and yet
to fully recover from a devastating war. A more reasonable phase-out period should be formulated.

Equipping them for deep sea fishing should be done. |

A licensing system under which fishermen from both sides can fish on specified days using sustainable
methods and permissible equipment should be formulated.

1.3 India on Infrastructure projects in Bangladesh

What is the issue?

In 2010, World Bank pulled out of the $3 billion Padma Bridge project. Bangladesh expected India to come in and
finance the project, but India delayed on replying and China jumped in and financed the project.

What is the inference?

Recently, Japan has offered an assistance of $6 billion for Bangladesh.

China has offered a Government assistance of $24 billion for 27 projects and another $14 billion in the form of
private investment promises.

Asian Development Bank (ADB) recently granted $8 billion for infrastructure creation in Bangladesh to
promote sub-regional cooperation.

Therefore there is a feeling among the Bangladeshi public that, assistance from India is too little and too late.

The $1 billion assistance, announced by India in 2010, took five long years to be utilised. Such delays cause
resentment among the Bangladeshi public.

India has not been able to create a transparent visa system in Bangladesh. India grants visas for free. But,
intermediaries charge 5,000 for generating the e-token for appointment with the visa officer.

In the past, India has failed to take West Bengal along, in negotiations with Bangladesh.

India started the electricity trade through the West Bengal border in 2013, but delayed allowing similar trade
through Tripura despite a strong recommendation from the State government.

The issue was touchy because, Bangladesh went out of its way in allowing transport of equipment for setting
up a large power station in Tripura in the hope of getting a share of the electricity. This flared up Anti India
sentiments which prevented Bangladesh Government from allowing transit route to North East India.

What should be done?

As a democracy India is at a disadvantage when compared to a single-party ruled China, in decision making.
But we cannot use it as an excuse any more.

Identify projects in Bangladesh, that can be beneficial to both Bangladesh and India and at the same the
projects should be capable of earning public goodwill in Bangladesh.

Adequate officers at the ministry of external affairs should be appointed to handle such responsibilities.

While concluding deals with Bangladesh, India must take into consideration the domestic aspirations of
Bangladeshis and act accordingly. |

1.4 BIMSTEC - Free Trade Agreement

What is BIMSTEC?

Stands for Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC).

Members from both South Asia and South East Asia - Bangladesh, India, Myanmar, Sri Lanka, Thailand,
Bhutan and Nepal. Thus the association in an inter-regional one.

Was formed in 1997 in Bangkok.

Headquartered in Dhaka, Bangladesh.

Why India is focussing on BIMSTEC?

BIMSTEC is Indias lynchpin in its Act East Policy. Member countries Myanmar and Thailand are Indias
gateway to reach South East Asia for trade and economic opportunities.

Lack of significant positive outcomes in SAARC due to hostility with Pakistan, has guided India to look
outside the South Asian region.

Indias Act East policy and Thailands Look west policy can complement each other, for improving inter-
regional ties.

What are the strengths of BIMSTEC?

The most positive thing in BIMSTEC is, there are no political conflicts or disagreements.

Also, the South Asian countries (India, Bangladesh, Bhutan, Nepal, Sri Lanka) dont have bilateral problems
with the two South-east Asian (Myanmar, Thailand) ones.

Historically, these nations were linked through trade ties over centuries.

Huge market: The region brings together 1.5 billion people or 21% of the world population

Accounts for almost 3.7% of global trade and a combined gross domestic product (GDP) of over $2.5 trillion. |

But, Intra-regional trade is currently very low at 2.8% of the total trade conducted by the

What are the reasons for poor Intra-Regional trade?

Poor connectivity among nations in the region owing to tough terrain, under-developed border areas and the
issue of funding.

The BIMSTEC nations being also engaged under other groupings such as South Asian Free Trade Area, the
Association of Southeast Asian Nations and the Regional Comprehensive Economic Partnership have also
made talks slow.

The secretariat itself was set up only in 2014, almost 20 years after talks started, and it is still in the process of
studying and creating feasibility reports on the various sectoral issues.

What are the issues in talks?

FTA talks were initiated in 2004 and almost concluded in 2014. But by that time, the initial agreements
became almost redundant as the Global economic situation had drastically changed in the post 2008 financial
crisis phase.

All nations have concerns on services. Especially on how to liberalise services or to what extent it can be done,
as well as the categories of services.

What has been done to improve connectivity?

Motor Vehicles Agreement in 2015: Connectivity project involving the sub-group of Bangladesh,
Bhutan, India and Nepal. It enables vehicles to enter any of the four nations without the need for trans-
shipment of goods from one countrys truck to anothers at the border.

Kaladan project envisages connecting Kolkata port to Sittwe port in Myanmar via sea route and then
Mizoram by river and road.

Asian Trilateral Highway, is set to run from Moreh in Manipur to Mae Sot in Thailand via Myanmar. The
project is expected to be completed this year.

1.5 BBINs Motor Vehicle Agreement

Why in news?

Bhutans National Council has decided not to ratify the Motor Vehicles Agreement (MVA).

What is MVA?

The MVA was first proposed by Prime Minister NarendraModi at the SAARC summit in Kathmandu in 2014,
but Pakistan refused to ratify it, as a consequence of which land-locked Afghanistan had to stay out as well. |

India instead pursued a similar motor vehicle agreement with the BBIN. The Bangladesh-Bhutan-India-Nepal
(BBIN) Motor Vehicles Agreement was signed on 15 June 2015.

It enables vehicles to enter any of the four nations without the need for trans-shipment of goods from one
country's truck to another's at the border.

India, Bangladesh and Nepal have already ratified the MVA, after Foreign Ministers of the BBIN nations
signed an agreement to allow ease of motor vehicular traffic on June 15, 2015 and diplomats did a trial run
among the countries.

Along with its potential as a road link that will extend to rail and waterways reducing circuitous shipping
routes by 1,000 km, the BBIN grouping is also seen as Indias way of countering Pakistan in the SAARC

What is Bhutans stance?

Bhutans National Assembly or Lower House had cleared the Motor Vehicle Agreement Bill and forwarded it
to the National Council or Upper House in July 2016.

However, protests from the Opposition, mainly over environmental concerns of vehicular pollution increasing
have derailed the process.

In the 25-member National Council, the government faced sharp questions on the number of vehicles that
would be allowed into the country via the Southern trading point of Phuentsholing and road capacities.

What is the way ahead?

Despite excellent relations between the two countries, India has been wary of leaning too heavily on the
Bhutanese government to speed up the BBIN ratification as it could offend the sensitivities of the smaller

Officials say if the Bhutanese government decides to give the agreement another chance, it could ask for a joint
sitting of both Houses to clear the MVA, or to bring it back to the National Council after a year, according to
the rules of procedure.

In the meanwhile, the BIN (Bangladesh-India-Nepal) countries could go ahead with building their logistics.

1.6 Market Economy Status for China

Why in news?

India is not inclined to automatically grant the coveted Market Economy Status (MES) to China this December under
World Trade Organisation (WTO) norms.

What is MES?

Market Economy Status will ensure that there should not be any no entry or exit barrier for the country. |

No government can impose any tariff barrier or quantitative restriction to protect domestic industries to the
country with MES.

What is Chinas viewpoint?

China has argued that it should automatically be granted Market Economy Status after the 15th anniversary of
its accession to the WTO in December 2016.

Citing the provisions in the Protocol on the accession of China to the WTO in 2001, Beijing has said WTO
member countries must fulfill their promise to deem China as a market economy from December 2016.

Several nations including in Africa and Latin America, dependent on Chinese investments to boost
manufacturing are inclined to grant Market Economy Status to China.

What is dumping?

Dumping is an unfair trade practice of exporting goods to another country at a price lesser than what is paid in the
exporting nation or their normal production cost, thereby distorting international trade and causing injury to the
domestic manufacturers of the goods in the importing country.

Why some countries oppose Chinas MES?

But granting MES to China will severely curb the ability of nations including India to impose anti-dumping
duties on unfairly priced Chinese imports.

Although China has made a number of economic reforms in recent years, the Chinese economy remains
fundamentally a non-market economic system dominated by its government.

The Government still plays a major role in the economy, including the financial system, resource and energy
sectors, through ownership and control of many strategic industries.

Continued government support is encouraging overproduction, distorting prices and flooding the global

When Chinese producers do not have to bear the full cost of production, they can sell products overseas at
prices that are less than the fair value which creates an unfair price advantage and displaces other countries

This non-market economic system and Chinas state-intervention in the economy hurts other countries trade

What is Indias stand?

Of the 535 cases where anti-dumping duties were imposed by India during 1994 to 2014, a maximum of 134
has been on goods from China.

India argues that unlike in market economies where prices of items are market determined (based on demand
& supply conditions), there is still a significant government influence in the Chinese market. |

Countries like India and US have referred to the Chinese government subsidies for various sectors, currency
manipulation & the related price fixing, absence of transparency in lending rates and the lack of proper
business accounting standards in turn cause distortions in global trade.

Thus, India has taken sides with the U.S. and the European Union to refuse China the MES.

The intention will be to ensure Indias manufacturing sector is not hit by unfairly priced Chinese goods.

1.7 India Japan Nuclear deal

Why in news?

The India-Japan nuclear agreement will probably be signed during Indian PMs Tokyo visit for the annual bilateral

What are the procedures of signing the deal?

Negotiations between the Japan and India for a civil nuclear deal began in 2010.

Talks were suspended after the March 2011 accident at Fukushima plant and the talks resumed in 2013.

India and Japan have signed a memorandum on cooperating in nuclear energy in December 2015.

However, certain technical and legal issues must be resolved before a final agreement can be signed.

For the process to be completed the deal has to be ratified by the Diet, the Japanese parliament. This has been
a matter of concern since the matter has not been taken up for discussion since the beginning of this year due
to historical deep sensitivities in Japan on nuclear proliferation and political instability in their parliament.

What is the problem in the deal?

The nullification clause in the deal has been the source of contention between two countries. It means that
the nuclear supplies to India would be cut off if India tests a nuclear weapon. Japan wants India to accept the
clause but India has been reluctant so far.

India also demands that it be allowed to reprocess nuclear fuel from Japan, as long as India submits to
inspections by the UN nuclear watchdog IAEA. No decision has been finalized regarding this yet.

What are the advantages?

India was excluded from nuclear trade for over three decades because of its position of being outside the
Nuclear Non-proliferation Treaty.

Special agreements ended its isolation in 2009.

India can now engage in nuclear trade with those countries with which it has since signed cooperation
agreements, like Australia, Canada, France, Kazakhstan, Russia, the UK and the USA. |

Technology -Japan holds an important position in international nuclear commerce. It holds a monopoly on
several critical reactor components of high quality.

Among the major players, only Russias Rosatom and Chinas two major state-run nuclear are independent of
Japanese components. Hence this deal is important to enhance Indias nuclear capacity.

The signing of such an accord would enable India to import Japanese nuclear technology and service.

NSG membership -Japan is the only country affected by nuclear weapon during Second World War.Signing
of CNA with India, signifies global acceptance of India as a responsible nuclear power and strengthen the
Indias claim in NSG membership .

Funding - India is also keen on Japanese funding for its clean energy projects. Signing this deal will fasten
the process.

Clean Energy - Indias ambitious carbon emission targets under the Paris agreement have brought nuclear
power back into the energy equation. Solar and wind cannot provide base-load power and they are prone for
fluctuations. Nuclear is the only carbon-free way to satisfy that all important need.

Japans Gain - Japan is looking to shed its post-war pacificism and become an autonomous diplomatic and
military power in Asia. However, Japan faces strong opposition from China and other victims of Japans
imperial aggression. Japan sees signing of Civil Nuclear Agreement as Indias acceptance of this new
expanding Japanese role.

1.8 New Zealands role in Indias NSG entry

Why in news?

On New Zealand Prime Minister John Key visit to India, major issues under discussion are Indias membership to
Nuclear Suppliers Group (NSG) and permanent membership to United Nations Security Council (UNSC).

Why India opposes NPT?

India views NPT to be a discriminatory agreement, the governing rules are favourably biased towards the P5
members of UNO.

India has opposed NPT, because there are two types of members in the NPT - Nuclear Weapons State and
Non-Nuclear Weapons State. Only five countries that had tested a nuclear device before 1970 were given the
status of Nuclear Weapons State. Any other nation that wished to sign the NPT had to do so as a Non-Nuclear
Weapons State.

India tested its first nuclear device in 1974 which implies that the only option by which India could sign the
NPT is being a Non-Nuclear Weapons State.

What is New Zealands stand?

New Zealand endorses Indias membership to UNSC as a permanent member. |

But on NSG membership, New Zealand holds a hard line stance that, signing Nuclear Non Proliferation Treaty
(NPT) is a prerequisite to NSG membership.

New Zealand showed an understanding of Indias clean energy needs and the importance of predictability in
global rules on nuclear commerce in enabling the expansion of nuclear energy in India.

This stand indicates that, Indias NSG membership would gain consensus among NSG members, if it is able to
bargain entry based on its need to meet Global Climate change commitments.

Also, the success of Make in India programme largely hinges on Indias ability to fulfil the energy
requirements of growing industrial base.

1.9 Maldives left Commonwealth

Why in news?

The Maldives on Thursday pulled out of the Commonwealth calling as unjust the groupings decision to penalise the
island nation over the circumstances that led to then President Mohamed Nasheeds ouster in 2012

What is Commonwealth?

The Commonwealth of Nations or the Commonwealth, is an intergovernmental organisation of 52 member

states that were mostly territories of the former British Empire.

It was formally constituted by the London Declaration in 1949.

The Queen of Britain is the head of Commonwealth.

Member states have no legal obligation to one another.

They are united by language, history, culture and their shared values of democracy, human rights, and the
rule of law.

What was crisis in Maldives?

In January 2012, the then Maldives President Mohamed Nasheed, ordered the detention of Criminal Court
judge Abdulla Mohamed for allegedly obstructing the police and accepting bribes to release certain criminals.

Protests erupted in 2012 in Maldives, over claims of mismanagement of the economy and intervention in the
Independence of Judiciary by the President.

The protests led to ouster of Nasheed in 2012 and the then Vice President was sworn in as President until

On 23 February 2012, the Commonwealth suspended the Maldives from its democracy and
human rights watchdog and backed Nasheed's call for elections before the end of 2012.

In the Presidential election held in 2013, Nasheed lost to current President Abdulla Yameen Abdul Gayyoom. |

In March 2015, Nasheed was convicted under the Anti-Terrorism Act of Maldives for arresting Criminal Court
Judge Abdulla Mohamed.

Amnesty International has described the conviction as "politically motivated", and the United States
Department of State expressed concern at "apparent lack of appropriate criminal procedures during the trial".

What was Maldives rationale to quit?

Maldives is an evolving democracy. Rather than supporting the efforts, the Commonwealth Ministerial Action
Group (CMAG) has intervened in the internal affairs of the nation.

The questions and uncertainties that the CMAG generated in the political environment resulted in the loss of
several investments and project financing opportunities.

Commonwealth turned a deaf ear to several requests for help with technical assistance.

Commonwealth has not been supportive of the new elected Government.

Since November 2013, the present government has enacted 110 articles of legislation. Of these 94 are directly
related to the core values of the Commonwealth Charter yet Commonwealth has censured Maldives.

1.10 TPP and India

Why in news?

With Donald Trump as President, the US could see a renegotiation of some of its existing trade deals with other
countries, especially TPP.

What is TPP?

The Trans-Pacific Partnership (TPP) is a trade and investment agreement between the US, Japan, Malaysia,
Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru. (U.S withdrew from
TPP in January 2017)

India is not part of the TPP.

The aim of the deal is to ease the flow of goods, services and investments among them, and to strengthen the
rules on labour standards, environmental issues, origin criteria and intellectual property. |

It is seen as the most ambitious of trade deals between these countries that have about 800 million people and
account for 40% of the global trade.

It will create uniform IPR rules will lead to an overall growth of 1.1%.

It will crackdown on wildlife trafficking and environmental abuses.

What are its disadvantages?

Due to already existing NAFTAs low tariffs, around 700,000 jobs were lost to cheap labor in other countries,
most of which on manufacturing industries. These additional tariff cuts will lead movement of more jobs away
from US. (This was one of the reasons for U.S withdrawal)

It has provisions like protection of 10 years for trademark, to enforce copyright until 70 years after the death
of the creator, etc. These provisions may be abused to censor online content thereby hurting free expression.

A company could sue any signatory countrys government, if it believed the countrys law harmed its copyright
interests. This brings the corporate on equal footing with the government.

IPR provisions like extensions of patent to 25 years, allowing simple changes for re-patenting will delay the
availability of generic drugs.

It may interfere in the necessary regulatory laws like food safety, banking regulations etc.

These are the reasons why India did not want to be a part of it.

How will TPP affect India?

It If the TPP were to go through, India could likely see a diversion of its trade with the US and European
Union (EU) to TPP member countries, over a period of time.

Countries such as Vietnam, which are among the biggest textile exporters to the US, could gain an edge over
India thanks to freer market access.

The TPP requires its members to discourage the import of goods that have not been produced in adherence
with internationally recognisedlabour laws. This would impact employment generation.

Indias merchandise exports to TPP member countries (apart from the US) would be rendered less competitive
in the event of enforcement of the agreement. Services exports would also be hurt as these would be replaced
by trade in services between the TPP member countries.

India is trying to offset the possible trade loss by engaging in ARSEP (ASEAN Regional Comprehensive
Economic Partnership) which consists of ASEAN and ASEAN FTA countries.

Trump, with his strong trade protectionist stance, has vociferously opposed the Trans-Pacific Partnership
(TPP) and has talked about withdrawing from it.

In the light of the above mentioned issues the move of withdrawal could work in Indias favor. |

1.11 India to counter China's stance at RCEP

Why in news?

India is set to go against China at the upcoming negotiations on the Regional Comprehensive Economic Partnership
(RCEP) agreement.

What is RCEP?

RCEP is a proposed free trade agreement (FTA) between the ten member states of the Association of
Southeast Asian Nations (ASEAN) - Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines,
Singapore, Thailand & Vietnam and the six states with which ASEAN has existing FTAs - Australia,
China, India, Japan, South Korea and New Zealand.

RCEP negotiations were launched in November 2012 at the ASEAN Summit in Cambodia and have
progressively become more complicated after 15 rounds and four ministerial meetings.

Expected to be the largest regional trading bloc in the world, accounting for nearly 45% of the global
population with a combined GDP of $21.3 trillion, it will also bring the biggest economies of the region
into a regional trading arrangement.

For India, the RCEP presents a decisive platform to influence its strategic and economic status in the Asia-
Pacific region.

What is happening now?

At the last ministerial in Laos held in August, India shifted its long-held stance of a three-tiered,
differential levels of tariff reduction to a single one applicable to all the RCEP members.

India is now mulling a two-pronged approach on which it expects to round up support from all other
nations and in the process isolate China.

Under the previous plan, the 10 countries that are part of ASEAN were being offered up to 80% tariff

Of this, 65% elimination of tariff was to come into force immediately upon completion of the agreement.
Another 15% tariff elimination was to happen over 10 years. In the second tier, India offered 65% tariff
elimination to South Korea and Japan, with whom it has free trade agreements.

Similar levels of tariff reduction, if finalised, are expected to hurt India the most as it has a relatively higher
tariff regime. This has always forced India to reduce tariffs much more than partner nations.

India has a goods trade deficit with China that has ballooned from $1.1 billion in 2003-04 to $52.7 billion in
2015-16. The domestic steel and heavy industries sectors have been apprehensive that China may use the
RCEP to try and gain more market access in India even as it remains unwilling to import more. |

Government believes that other RCEP nations shared the same concerns and would support Indias position.
To this end, the number of tariff lines offered for reduction as well as the phase-out period would be different
for China.

The period for phasing out tariff lines for imports from China could be 20-30 years, as it is essential to ensure
Indian industry has enough time to improve its competitiveness.

The RCEP nations will deliberate on finalising the maximum number of goods on which duties will either be
eliminated or reduced drastically.

Under deviations, India may propose a longer duration for either reduction or elimination of import duties for
such countries.

The original target of concluding a deal was by end 2015. However, member nations have managed to only
submit initial offers for trade in goods and services apart from initial reservation lists for investment. The
issue of tariff reduction had then taken hold.

The departure from the earlier stance represented a normal progression in the negotiations since no other
nation was on board with the idea. Commerce & Industry Minister added countries were looking towards a list
of common concessions with minimum deviation with regards to some items.

1.12 Russia Leaves ICC

Why in news?

Russian President Vladimir Putin has signed a decree to withdraw Russia from the International Criminal Court (ICC),
which prosecutes war crimes, genocide and crimes against humanity.

What is ICC?

The International Criminal Court (ICC ) is an intergovernmental organization and international tribunal that
sits in The Hague in the Netherlands.

It is the world's first permanent court mandated to bring to justice people responsible for war crimes, crimes
against humanity, and genocide.

The Rome Statute is a multilateral treaty which serves as the ICC's foundational and governing document.

What is the difference between ICC and ICJ?

ICC investigates and, where warranted, tries individuals charged with the gravest crimes of concern to the
international community: genocide, war crimes and crimes against humanity.

ICJs role is to settle, in accordance with international law, legal disputes submitted to it by States and to give
advisory opinions on legal questions referred to it by authorized United Nations organs and specialized

The main difference is that ICJ settles arguments between countries, but the ICC punishes people. |

Why Russia left?

Russia annexed Crimea in March 2014 from Ukraine after a hastily called referendum, a move that led to
crippling Western sanctions.

A separatist armed conflict later erupted in eastern Ukraine the following month, backed by Russia.

On Monday, the ICC issued a preliminary report in which it described what happened in Crimea as "an
international armed conflict between Ukraine and the Russian Federation".

Russia's foreign ministry insisted in a statement that Russia wants everyone implicated in grave international
crimes to face justice but expressed frustration over the court's work in recent years.

Putin's decision, comes a day after the UN General Assembly's human rights committee approved a resolution
condemning Russia's "temporary occupation of Crimea", and blamed Moscow for rights abuses and
discrimination against some Crimean residents, such as Tatars.

Russia states that the withdrawal is based on "national interests" and argued that since Russia never ratified
the creation of the court, Wednesday's decree was just a formality.

Peskov also dismissed the ICC's accusations of an "armed conflict" in Crimea, arguing that Crimea joined
Russia after a legitimate popular vote.

Russia in 2000 signed the Rome treaty which established the Hague-based court, but never ratified it.

What is the significance?

The tribunal is already facing a major pushback from African countries, who say it's a Western institution
focused on trying nations from the continent.

Burundi was the first country to withdraw in October. Three days later, South Africa also announced that it
planned to leave the ICC, followed by Gambia.

Russia's move further worsens the situation.

2. DECEMBER - 2016
2.1 Indus Water Treaty and World Bank

Why in news?

The India-Pakistan water dispute is set to intensify as New Delhi questioning the World Banks neutrality in
arbitrating between the two countries.

What is IWT?

The World Bank brokered the Indus Waters Treaty (IWT) in 1960. |

The three western rivers (Jhelum, Chenab and Indus) were allocated to Pakistan while India was given control
over the three eastern rivers (Ravi, Beas and Sutlej).

While India could use the western rivers for consumption purpose, restrictions were placed on building of
storage systems.

The treaty states that aside of certain specific cases, no storage and irrigation systems can be built by India on
the western rivers.

Internationally, the IWT is seen as one of the most successful cases of conflict resolution especially
considering the fact that it has stayed in place despite the two countries having been engaged in four wars.

However, India is now not happy as the international body accepted Pakistans demand to initiate a court of
arbitration (CoA) process to resolve a dispute involving the 330-MW Kishenganga and 850-MW Ratle
hydroelectric projects.

What is Pakistans accusation?

The tussle involves two hydroelectric projects that are coming up on the Jhelum and Chenab rivers

Objecting to the design of the 330-MW Kishenganga project, Pakistan claimed it would result in a 40%
reduction of water flowing into the country flouting IWT provisions in the process.

As for the 850 MW Ratle power plant, Pakistan wants the planned storage capacity of the project to be
reduced from 24 million cubic metres to eight million cubic metres. |

What is Indias reaction?

India, however, held that the two projects do not violate any provision of the treaty.

Government sources said New Delhi accused the World Bank of adopting a non-neutral stand that appeared
to favour Pakistan.

India took a very hard stand against the World Bank for not acting on Indias request to have neutral
experts look into the dispute as per IWT provisions.

An official from the Union water resources ministry alleged that the World Bank did nothing despite having
20 days to work on Indias request. But they promptly accepted Pakistans demand to have a CoA, he said.

The latest row follows the World Banks decision to proceed simultaneously with two parallel mechanisms
Pakistans demand for a CoA and Indias request for neutral experts.

India termed it as a decision that was legally untenable and violated the provisions of the IWT.

This row has put the IWT under further strain.

What is the new development?

The World Bank recently declared a pause to two separate processes initiated by India and Pakistan to
resolve a new dispute over the Indus Waters Treaty. The dispute is related to the construction of the
Kishanganga and Ratle hydropower projects in Jammu and Kashmir, which according to Pakistan violates the

While India welcomed the decision and said such disputes could be resolved bilaterally, Pakistans initial
reaction has not been enthusiastic. It was Pakistan which took the matter to the Bank in August 2016, asking it
to set up a Court of Arbitration under the Treatys provisions.

India argued that a Court of Arbitration was not necessary, and asked the Bank for the appointment of a
neutral expert, which is a lower level of dispute resolution mechanism under the treaty.

The Bank initially said that it would activate both the processes simultaneously. India objected, saying the
matter would get very complicated in case the two processes produced contradictory rulings.

World Bank president Jim Yong Kim then wrote to the Finance Ministers of both countries, informing them of
the decision to pause both processes, and asking them to seek alternative resolutions.

Why India and Pakistan opted different mechanisms?

India and Pakistan are insisting on different approaches of dispute resolution because of their past

On a design dispute on the Baglihar dam on the Chenab, a neutral expert had ruled in favour of India, even
though the design of that dam was not strictly in accordance with the parameters prescribed in the Treaty. |

However, a similar question in the Kishanganga case relating to reservoir level going below the dead storage
level was dealt with differently by the Court of Arbitration, which ruled that the design was inconsistent
with the Treaty, and asked India to change it.

Pakistan is keen to establish again that Indian constructions are illegal, and wants a legal resolution to the
dispute; India, on the other hand, maintains that the dispute is of technical nature.

What is in the future?

Its not immediately clear what alternative methods could be employed by the two countries to sort out the

After Prime Minister Narendra Modi declared that blood and water cannot flow together, India suspended
routine bi-annual talks between the Indus Commissioners of the two countries. Therefore the regular lines of
communication over the implementation of the Treaty are currently unavailable.

India, meanwhile, has established a high-level task force on the Treaty it is headed by the Principal
Secretary to the Prime Minister, and has the National Security Adviser, the Foreign Secretary, the Finance
Secretary and the Water Resources Secretary among its members.

It is clear that any talks with Pakistan on the Treaty are unlikely to be purely technical in nature.

It is also possible that the World Bank might nominate a few independent experts to mediate between the

2.2 India and CPEC

Why in news?

Pakistani General suggested that India should shun its enmity with Pakistan and join the $46 billion China-Pakistan
Economic Corridor project. The Chinese foreign ministry also has called the offer a goodwill gesture, exhorting India
to take it up.

What is China-Pakistan Economic Corridor (CPEC)?

It refers to a clutch of major infrastructure works currently under way in Pakistan, intended to link Kashgar in
Chinas Xinjiang province to Gwadar deep sea port close to Pakistans border with Iran.

The project seeks to expand and upgrade infrastructure across the length and breadth of Pakistan.

Chinese firms will invest just under $ 46 billion in the project over six years including energy projects and

What are Pakistans Gains?

The $ 46 bn promised by China is three times the total FDI it has got in the last decade.

The project is estimated to directly create some 700,000 jobs up to 2030, and speed up GDP growth. |

The bulk of the investment will be in energy. $ 15.5 bn worth of coal, wind, solar and hydro energy projects
will come online by 2017 and will reduce power shortage in the country

Besides the potential for growth, it gives greater strategic leverage with both India and the United States in the
Indian Ocean region.

What are Chinas Gains?

The CPEC is part of Chinas larger regional transnational One Belt One Road (OBOR) initiative.

Gwadar lies close to the Strait of Hormuz, a key oil shipping lane. It could open up an energy and trade
corridor from the Gulf across Pakistan to western China that could also be used by the Chinese Navy.

The CPEC will give China land access to the Indian Ocean, cutting the Strait of Malacca route around India, to
a mere 2,000 km road journey from Kashgar to Gwadar.

CPEC provides investment opportunities for Chinese companies.

What are the problems in the project?

Both Balochistan and Khyber Pakhtunkhwa have complained that power projects that ought to be theirs have
gone to Punjab.

The unpredictable security situation remains a huge concern.

There is some concern about the Uighur militants in Xinjiang as well.

Co-operation among the provinces is a key to the success of the CPEC. Pakistan have traditionally failed in this
area. |

How is the relationship of India with China & Pakistan?

India has no dialogue with Pakistan at present.

It has opposed the project, bilaterally with China at the highest level as well as at the UN.

Relations with China have deteriorated considerably since the announcement of the project in April 2015.

China has defended Pakistan against Indias efforts to pin it down with regard to support to terror groups.

It has opposed Indias Nuclear Suppliers Group membership application.

Given all this, the suggestion by China and Pakistan can only be understood to have been made rhetorically,
especially as it was accompanied by allegations of Indias anti-Pakistan activities and subversion in

What is the scope of CPEC?

These factors show that there is little expectation of any room for India in CPEC at present.

But there is space for India to step back and see where China and Pakistan want to go with it.

CPEC is no longer a project in Pakistan, but one that runs through it, a project that will link 64 countries.

The offer to India was made along with offers to other neighbouring countries.

Already, Iran wants Gwadar to be a sister port to Chabahar.

Turkmenistan and other Central Asian Republics have shown interest in the warm-water port that will
be a nodal point for goods through Pakistan to the Chinese city of Kashgar.

Despite its problems on terror from Pakistan, Afghanistan is becoming a nodal point for Chinas connectivity
projects to Iran.

The meeting among Russian, Chinese and Pakistani officials on Afghanistan this week, and Russian
engagement with the Taliban, indicate much more is changing in the region than just the alignment of
highways and tunnels.

While India has done well to shore up relations with others in the region, it cannot afford to be blindsided by
their involvement with the OBOR project and Chinese plans.

2.3 India offers Tsunami Alert System to SCS countries

Why in news?

India is looking to have South China Sea countries such as Vietnam, Malaysia and Philippines use the tsunami early
warning-system developed by India. |

How does the early warning-system work?

Since a deadly tsunami struck Tamil Nadu in 2004, India has put in place its own tsunami-alert system over
the years that immediately warn concerned authorities in India of any large earthquake in the Indian Ocean
and the threat it poses.

However, because of limited data on the historical occurrence of tsunamis, scientists at the Indian National
Centre for Ocean Information Services (INCOIS) have developed a technique that uses mathematical
modelling to estimate if an earthquake will result in a tsunami.

The system is also designed to send out a series of graded warnings to warn officials of danger.

There are also sensors lodged on the ocean floor that will measure actual earthquake signals and based
on that we can revise our warnings.

Weve expanded our modelling capabilities to include countries in the South China sea and so it can be useful
to them too.

What is the significance of the move?

India already provides earthquake and tsunami-warning alerts to several countries in the Indian Ocean
neighbourhood, as do Australia and Japan.

The South China Sea is a controversial region with China exerting territorial rights over a large part. Some of
these territorial claims have been challenged by Vietnam, Malaysia and the Philippines.

By the current move India is aimed at achieving soft power i.e it isnt expecting a commercial deal to result
but fame and leadership from the effort. This could help with broader government efforts. |

India so far has only said that all countries must abide by the United Nations Convention on the Law of the
Sea (UNCLOS), which governs how countries must respect international waters and the ocean boundaries of
countries. China too is a signatory to this convention.

Talks were held with China last year to use Indias early warning system.

2.4 Rohingya - Bangladeshs dilemma

What is the issue?

With prevailing persecution of Rohingyas, Bangladesh feel morally pressured to take in the refugees.
But the reality makes it difficult.

Who are Rohingyas?

Rohingya Muslims in Myanmars Rakhine state, neighbouring Bangladesh, are not recognised by the
Myanmar government as an official ethnic group and are therefore denied citizenship.
Most Rohingyas are not qualified to be citizens of Myanmar as per the 1982 Citizenship Law, which was
promulgated by the erstwhile military junta.
They are branded as Bengali Migrants.
While it is claimed that there were no Rohingyas in Myanmar before the British brought Bengalis to Burma,
there is sufficient evidence to show that the Rohingyas pre-existed the British-engineered migration (during
the British occupation of the Arakan State in 1823) from present-day Bangladesh to Burma.
This effectively makes them a stateless people.
A large number of those escaping the brutal violence end up in the trafficking networks of the region who
smuggle them out for huge amounts of money.
Some die en route, some make it to the borders of neighbouring countries only to be turned away. |

Why it is an emotional issue?

It is argued that Bengalis should look back at the history of their own persecution by the Pakistan army in
1971, when 10 million of them crossed into India and were provided shelter.

Images of Bangladeshs coast guard and its navy turning away Rohingya approaching the countrys shores
have been deeply unsettling for people.

Why Bangladesh government is reluctant?

The 1971 analogy does not work as the Rohingya are not engaged in a war of independence. Another reason is
that the conditions do not exist for Bangladesh to pursue a military solution to the Rohingya issue with

Bangladesh government remains wary of letting the Rohingya in owing to their experiences in the past. In the
1990s, a very large number of Rohingya, fleeing persecution in Myanmar entered Bangladesh and made their
home in the coastal regions of the country.

While a very insignificant number of these earlier Rohingya migrants returned home as a result of local and
international measures, a very large segment of as many as 5,00,000 stayed back.

The fears of a fresh influx of Rohingya therefore have compelled the Bangladesh government to refuse entry.

Bangladeshs government and vast sections of its people are not swayed by the argument, that once the
Yangon authorities are persuaded into arriving at a deal on the status of the Rohingya, those allowed entry
into Bangladesh will go back home.

From among those Rohingya who have been in Coxs Bazar and Chittagong for the past couple of decades has
emerged a new class of Islamist militants hostile to the growth of liberal politics in the country. Most of these
new militants came under indoctrination by such fanatical groups as the Jamaat-e-Islami.

Add to that the corruption involved in a supply of Bangladeshi passports illegally to large groups of Rohingya,
who then made it to West Asia as wage earners. They committed criminal acts in the Middle East, leaving the
country red in the face.

Adding to these, Bangladeshs government and people were confounded by the absolute silence of Myanmars
democracy icon Aung San SuuKyi on the issue.

In her years in incarceration, SuuKyi enjoyed mass adoration in Bangladesh and it was only natural to expect
that she would influence a change in the approach to the Rohingya situation.

That she has said not a word, and has carefully stayed clear of addressing these persecuted people as
Rohingya, has convinced people in Bangladesh that the Myanmar military continues to call the shots and that
SuuKyi wields little authority. |

2.5 India and Vietnam likely to sign Civil Nuclear Pact

Why in news?

India is likely to seal a landmark civil nuclear pact with Vietnam this week during the visit of the President of
Vietnams National Assembly.

It is the first such partnership with a neighbour of China.

What are the provisions of the deal?

During Prime Minister Narendra Modis trip to Hanoi in early September the two sides also agreed to
accelerate the negotiation process for a new Inter-Governmental Framework Agreement on Cooperation in the
Peaceful Uses of Nuclear Energy.

India has been helping Vietnams civil nuclear sector since signing the first agreement in 1986, besides
supplying a research reactor and training a few scientists under the International Atomic Energy Agency

The current agreement in the field of civil nuclear cooperation will entail

1. Capacity building and training of Vietnamese nuclear scientists by India

2. Assistance to improve safeguard measures of nuclear installations in the Southeast Asian country.

Sri Lanka is the only other developing country with which India has signed a civil nuclear pact.

Vietnam currently has bilateral civil nuclear pacts with Russia and Japan, a fact that will complement Indo-
Vietnamese partnership. While Russia has wide-ranging presence in Indias civil nuclear sector, India and
Japan concluded a civil nuclear pact last month.

What else will be addressed in the visit?

The visit of President of Vietnams National Assembly, third highest ranking leader of Vietnam, will push
comprehensive strategic partnership between the two countries.

The National Assembly President will be accompanied by a big business delegation to push economic and
investment ties.

The visit will also provide a fillip to parliamentary cooperation through exchanges between leaders of
parliaments, committees, parliamentary friendship groups and parliamentarians of two countries.

2.6 Improving Defence Cooperation

Why in news?

As part of a defence appropriations bill of over $600 billion, the US Congress passed legislation that designated India
as a major defence partner. |

How well is India-US defence cooperation?

Under the newly designated status, India will be treated at par with the USs closest allies when it
comes to the transfer of defence technologies.

The defence cooperation entered into next stage in 1995 with the Agreed Minute on Defence Relations.

However, after May 1998 following the Indian nuclear tests, all such collaboration effectively ground to a halt.

What are the reasons that hinder India-US defence cooperation?

Despite the successful conclusion of this diplomatic minuet, progress on defence cooperation did not

First, India had remained heavily dependent on Russia for its defence supplies.

Second, despite the Cold Wars end, some within Indias policymaking community remained reluctant to turn
to the US for substantial defence purchases.

What was the approach of Obamas administration?

The Obama administrations initial approach to India appeared lukewarm.

Following the assassination of Osama bin Laden and the US decision to drawdown its forces in Afghanistan,
Pakistans utility dramatically declined.

Around the same time, the PRC, which had been boosting its presence in the South China Sea, showed signs of
greater assertiveness.

Despite past tensions with the US over Modis tenure as Gujarats chief minister, the Obama administration
adopted a pragmatic approach toward the new regime.

The P.M proved to be more than willing to reciprocate.

Whether the defence cooperation is transforming?

The US Congresss willingness to designate India as a major defence partner represents the culmination of a
process that has slowly but surely brought the two states into a mutually supportive defence cooperation

Along the way, it has also been supplemented with important defence deals.

India has become not only the largest foreign purchaser of US weaponry but the US has now transplanted
Russia as the principal supplier of weaponry to India.

Even though some big-ticket joint projects, such as the building of an aircraft carrier, remain in abeyance,
there is little question that the Indo-US arms transfer relationship has undergone a fundamental
transformation. |

2.7 India-Japan Minimum Import Price issue

Why in news?

Japan has dragged India to the World Trade Organisation against certain measures taken by New Delhi on
imports of iron and steel products.

What happened?

India has imposed minimum import price (MIP) on imports of certain iron and steel products.

In February, India imposed MIP of 173 products for six months, which was later extended twice for two months.

According to the ministry sources, WTO-compliant measures like anti-dumping duty should be used to overcome
the issue of cheap imports of commodities.

What is Minimum Import Price?

MIP is the minimum price per tonne that Indian firms have to pay while importing products into

The Govt. of India on February 5, 2016 had imposed the MIP on steel ranging from $341 to $752 per tonne on 173
steel products.

So MIP can be seen as a type of quantitative restriction which aims at providing relief to the domestic steel
product manufacturers from low priced steel from abroad.

This can be seen as government's policy of promoting domestic growth of steel manufacturing
industry and restricting and reducing dependence on externally manufactured steel products.

This would also help in reducing fiscal deficit.

What are the problems related with MIP?

One of the problems related with MIP is of money being illegally stashed off in overseas accounts of Indian

Indian importers of steel are under the scanner for deliberately over invoicing to show on paper that the
price of item they are importing is equal to or above the MIP while the actual price of import may be well
below the MIP.

The importers are alleged to have parked this difference in money between the MIP and the actual price of the
products into foreign accounts to escape from Indian government's tax.

2.8 U.S & Israel - UNSC Voting

Why in news?

The Obama administration allowed the United Nations Security Council (UNSC) to adopt a resolution that condemned
Israeli settlement construction. |

What is UNSC?

The United Nations Security Council (UNSC) is one of the six principal organs of the UN, charged with the
maintenance of international peace and security as well as accepting new members to the United Nations and
approving any changes to its United Nations Charter.

It consists of fifteen members. Russia, the United Kingdom, France, People's Republic of China and the United
States serve as the five permanent members. They can veto any substantive Security Council resolution.

The Security Council also has 10 non-permanent members, elected on a regional basis to serve two-year terms.
The current non-permanent members are Angola, Egypt, Japan, Malaysia, New Zealand, Senegal, Spain,
Ukraine, Uruguay and Venezuela.

What was the resolution?

Israel for decades has pursued a policy of constructing Jewish settlements on territory captured by Israel in a
1967 war with its Arab neighbours including the West Bank, Gaza and East Jerusalem.

Most countries view Israeli settlement activity in the West Bank and East Jerusalem as illegal and an obstacle
to peace.

The resolution had been put forward by Malaysia, New Zealand, Senegal and Venezuela.

In the resolution, the Council reiterated its demand that Israel immediately and completely cease all
settlement activities in the occupied Palestinian territory, including East Jerusalem, and that it fully respect all
of its legal obligations in this regard.

The 15-nation Council adopted on Friday the resolution by a vote of 14 in favour.

In a rare step the United States abstained, enabling the adoption of the first UN resolution since 1979 to
condemn Israel over its settlement policy.

Why did U.S abstain?

The action follows growing US frustration over the unrelenting construction of Jewish settlements on land
Palestinians want for a future independent state.

The US broke with the long-standing American approach of shielding Israel, which receives more than $3
billion in annual US military aid, from such action.

The US abstention was a result of failed efforts to forge a peace agreement based on a two-state solution of
creating a Palestinian state existing peacefully alongside Israel.

US Ambassador to the UN Samantha Power said that US did not veto it because the resolution reflects the
facts on the ground and is consistent with US policy across Republican and Democratic administrations. |

What is the outcome?

The resolution formally enshrined the international communitys disapproval of Israeli settlement building.

While the resolution contains no sanctions, it could widen the possibility of prosecution at the International
Criminal Court (ICC).

It could encourage some countries to impose sanctions against Israeli settlers and products produced in the

What are the shortcomings?

The resolution has more symbolic value and is unlikely to change the situation on ground between Israel and

The PM of Israel called the resolution anti-Israel and will not abide by its terms.

The President-elect Trump is likely to be a staunch supporter of Israels right-wing policies.

The upcoming U.S. ambassador to Israel also rejects two nation theory.

Therefore the future is not clear as of now, regarding peace between Israel and Palestine.

2.9 Statesmanship on Paying Homage

Why in news?

Japanese Prime Minister Shinzo Abe visited to Pearl Harbour this week.

Why the apology has been delayed?

In the case of Japan, the conservatives have long regarded that any attempt to apologise for the slaughter of
hundreds of U.S. marines at Pearl Harbour in 1941 as nothing but a betrayal of the national interest.

In the US view, the horror in Hiroshima and Nagasaki brought the war to a close sooner than it might
otherwise have been. They have also sought to repudiate the narrative that the dropping of the atom bomb was
a calculated demonstration of U.S. and western military superiority in a Cold War scenario.

Were there precedence?

Much earlier this year the Canadian PM Justin Trudeau has formally apologized in the House of Commons for
the KomagataMaru incident.

Kniefall von Warschau was a famous incident that happened on December 7, 1970, during a visit to a
monument of Warsaw Ghetto Uprising by the then German Chancellor Willy Brandt.

After laying down a wreath, Brandt, spontaneously knelt. He remained silently in that position for a short time
apologising for the crimes commited in Warsaw Ghetto. |

Why is it significant?

Earlier U.S. President Barack Obama paid his homage at the peace memorial at Hiroshima.

Both the leaders have undertaken this bold and difficult journey on behalf of their peoples more than 70 years
after atrocities were committed against each other during World War II.

Conspicuous gestures of reconciliation between nations to heal the deep emotional wounds of wars will have
connotations that go beyond the symbolic.

Abe and Obama have displayed a statesmanlike readiness to rise above partisan accounts.

They emphasised the need to bridge the gulf that neither history nor geography could have narrowed.

The ability to acknowledge a wrong that has been done, to simply say sorry, will go a far far longer way than
some percentage of GDP in the form of aid.

Prime Minister Abe and President Obama have shown how history can be revisited in a realistic manner.

It remains for countries grappling with their own complex pasts to draw the right lessons from this.

2.10 India Qatar

Why in news?

Prime Minister of India met Qatars Prime Minister and inked several pacts.

What are the deals signed?

Both the leaders acknowledged that the current level of trade and investment was much below potential.

They agreed on joint action to tackle money laundering and terrorist financing.

Agreements were signed in areas such as Visa Exemption for holders of Diplomatic, Special and Official
Passports, Technical Cooperation in Cyber Space and Combating Cyber Crime, Grant of E-Visa for
Businessmen and Tourists, and anMoU between Supreme Committee for Delivery and Legacy of Qatar & CII.

The two leaders also discussed on enhancing cooperation in defence and security, in particular in cyber
security on which a Memorandum of Understanding was signed on Saturday.

They planned to move beyond the buyer-seller relationship to include Joint Ventures, Joint Research and
Development and Joint Exploration.

Indian companies were ready to invest in both upstream and downstream projects in Qatar in the
hydrocarbon sector. |

2.11 Adoption of Urban Plus approach

Why in news?

The New Delhi Declaration was during the Asia Pacific Ministerial Conference on Housing and Urban
Development (APMCHUD).

In this, Asia Pacific countries have resolved to adopt Urban Plus approach.

What is Urban Plus Approach?

It takes urban planning and development beyond city limits to prevent unmanageable and unsustainable
urban expansion.

The New Delhi Declaration has strongly advocated planning for urban and adjoining rural areas in an
integrated manner instead of looking at them as independent entities.

Resilience is the ability of cities to withstand and absorb disasters and shocks and maintain normal services
and quickly return to normalcy.

Most of the Asia Pacific countries are vulnerable to natural disasters and other risks.

So the Implementation Plan has recommended urban resilience as a criterion for investment.

The member countries have also strongly recommended formulation of National Human Settlement Policies
to promote inclusive, safe, resilient and sustainable city and human settlements.

It also called for a thorough review of existing policies and formulation of new policies to promote New Urban
Agenda adopted at the United Nations Conference on Housing and Sustainable Development.

It stressed on the need for effective governance structures in urban areas.

The Implementation Plan further recommended land regulation policy mechanisms such as land pooling to
ensure inclusive and participatory planning, integration of land use and transportation planning across
defined boundaries of cities and mixed land use.

3. JANUARY - 2017
3.1 PIO and OCI

Why in news?

Prime Minister recently urged the diaspora community to switch from their Person of Indian Origin (PIO) cards to
Overseas Citizenship of India (OCI) cards during the inauguration of the Pravasi Bharatiya Diwas.

What is Pravasi Bharthiya Divas?

PravasiBharatiya Divas is celebrated in India on 9 January every other year (every year before 2016) to mark
the contribution of the overseas Indian community to the development of India. |

It commemorates the day Mahatma Gandhi returned from South Africa in 1915.
It is sponsored by the Ministry of External Affairs

Who are PIO and OCI?

There are over 30 million overseas Indians living abroad and the remittance of close to 69 billion dollars
annually by overseas Indians.

They can be categorised in three broad categories - NRIs, PIOs and OCIs. A Non-Resident Indian (NRI) is a
citizen of India who has temporarily emigrated to another country for six months.

PIOs and OCI card holders are not citizens but people who want to stay connected and involved with India
more closely.

The PIO card was first implemented in 2002 as a benefit to foreign nationals who could establish at least a
third generation tie to Indian origin.

The OCI card was implemented in 2005, carried more benefits than the PIO card, and is valid for the holders

In 2015, the PIO scheme was withdrawn by the Government of India and was merged with the OCI.

What were the benefits of PIO?

A PIO card holder doesnt need a visa to visit India.

The holder also doesnt require a student or employment visa to acquire employment or academic
opportunities in India.

The holder was exempted from registering at the foreigner regional registration office (FRRO) during the
duration of stay in India.

The holder also enjoys parity with NRIs in concern to economic, financial and educational matters like
property transfer or acquisition, holding, disposal, investment, admission of children in educational
institutions under general category quota for NRIs.

Separate immigration counters are provided at all International airports.

What are the additional benefits of OCI?

Apart from the benefits of PIO, the OCI can attain Indian citizenship and then live in India for a period of one
year including short breaks, if they remain an OCI for 5 years.

An OCI cards holder can open special bank accounts in India just like NRIs and make investments.

They can also buy non-farm property and exercise ownership rights.

They apply for a drivers license and PAN card. |

They get same economic, financial and educational benefits like NRIs and they can also adopt children.

Both OCI and PIO cannot vote, hold a government job or purchase agricultural or farm land. They also cannot
run for public office or travel to restricted areas without permission.

3.2 Sri Lanka to offer a Port to India

Why in news?

The Colombos Minister of Regional Development said during Raisina Dialogue, that the decision on offering the port
of Trincomalee to India will be taken soon.

What is Raisina Dialogue?

The Raisina Dialogue is an annual conference held in New Delhi, envisioned to be India's flagship conference of
geopolitics and geo-economics.

The conference name comes from Raisina Hill, which is the location of both the Government of India as well as the
presidential palace of India.

What was Sri Lankas decision?

Trincomalee has been on the table for some time as Sri Lanka wants to maintain a neutral stand and provide equal
access to its ports to both China and India.

Chinese carried out major infrastructural work at the Hambantota port in southern coast of the island nation.

It has not been very beneficial as we are facing a heavy debt burden due to the work done in that port.

The port is currently given to a private entity so that some of the more immediate issues are resolved.

This arrangement will also address Indias security concerns. |

3.3 India and China's Tug of War over Nepal

Why in news?

Chinas Peoples Liberation Army (PLA) is planning to hold its first-ever joint military exercise with Nepal.

What is the status of India-Nepal relations?

India is the largest supplier of military hardware to the Nepali Army.

Since 1950, it has been a custom for the two countries to confer honors on each others army chiefs,

This signifies the close military-to-military ties between the two countries.

Chinese military assistance to Nepal has significantly increased in recent years.

But this is the first time that China has proposed a joint military exercise and Nepal accepted.

The development came as Nepal is proposing to change some provisions of the 1950 Peace and Friendship
Treaty with India.

The treaty states that Nepal needs to inform or receive consent from India when it purchases military
hardware from other countries.

Nepal wants to change such provisions and make independent decisions on security issues, including the
purchase of military equipment.

How Chinese influence grew?

For the long time, India enjoyed almost exclusive influence in Nepal.

But after the abolition of monarchy in 2008 China has increased their influence in Nepal, mainly on political

Relationship of India and Nepal strained during Indias interference in the Nepals constitution making

After accusations of a blockade at the Nepal-India border, Nepal relied on China to meet its everyday essential

The tensions between Nepal and India provided room for China to increase its influence in all areas of Nepal,
including in politics.

Similarly, several joint Nepal-China infrastructure development projects, including the expansion of railways
and road connectivity, gained momentum.

What is the new development?

India sees the recent announcement of military exercise as China encroachment in Indias backyard.

India wants to maintain Nepal as its sphere of influence while China wants to increase its influence.

India sees this as not only related to trade and commerce, but a part of Chinas larger strategy to encircle it in
South Asia. |

What should be done?

There is no reason that India should worry about a Nepal-China military exercise.

China is not the only country conducting such drills with Nepal. e.g Nepal-U.S. military drill.

India has no right to say that Nepal cannot conduct military exercises with another partner.

Nepal has the sovereign right to make that decision.

India also has its own joint military exercise with China.

Even after NSG issue both countries conducted a 13-day joint military exercise in November 2016.

Indias own experience with China should reassure it that joint exercises are not an indicator of converging
strategic interests.

It is unfortunate that Nepals government is quickly labeled as either pro-Indian or pro-Chinese.

Nepal should be allowed to build a cordial relationship with both of its neighbors to gain the maximum
economic benefits.

3.4 India Japan WTO issue

Why in news?

Japan is threatening to take India to the WTO over the trade restrictions placed by India.

What were Indias restrictions?

India imposed duties of up to 20% on some steel imports in 2015.

It set a minimum import price in 2016 for steel product imports to deter countries such as China, Japan and
South Korea from undercutting local mills.

Undercutting means selling cheaper than the local mills and eventually removing them from the competition.

Why Japan wants to move to WTO?

Japan is the worlds second-biggest steel producer after China.

It exports nearly half of its products.

The move by India nearly halved Japans steel exports to India over the past year. India dropped down from
sixth-largest buyer in 2015 to 11th-largest in 2016.

Japan usually tries to settle disputes through bilateral talks.

But currently it wants to move to WTO as it accuses Indias move to be against WTO rules. |

This is not just to oppose Indias move but also against the growing protectionism worldwide. e.g The new
administration in US also signalled similar protectionist moves, Chinas steel exports dropped by 3.5% in 2016
due to similar moves by Vietnam, Malaysia and South Africa.

Therefore Japan wants to send a clear message of open and fair international markets and to stop unfair trade
actions from spreading.

India is of the view that it is following the WTO guidelines.

What is the dispute settlement mechanism in WTO?

The request for consultations is the first step.

It is followed by discussions under the dispute settlement system to find a satisfactory solution.

If the consultations fail, the complainant can move for adjudication by a panel after 60 days.

It further takes around a year to submit the final report.

3.5 H1-B Visa Bill

Why in news?

The stocks of Indian IT majors such as Infosys, Wipro, HCL and TCS took a beating at the Mumbai Stock Exchange
following the introduction of a new bill in the US House of Representatives.

What is a H1-B visa?

Generally, a citizen of a foreign country who wishes to enter the United States must first obtain a visa.

It must either be either a nonimmigrant visa for temporary stay or an immigrant visa for permanent residence.

Temporary worker visas are for persons who want to enter the US for employment lasting a fixed period of time,
and are not considered permanent or indefinite.

The US H-1B visa is a non-immigrant visa that allows US companies to employ graduate level workers in specialty
occupations that require theoretical or technical expertise in specialized fields for a certain period of time.

H-1B visa holders can bring immediate family members/spouse under the H-4 visa category as dependents.

Some spouses of H-1B visa holders, who are in line for a green card, are allowed to apply for eligibility to work.

65,000 H-1B visas be awarded every year to foreign nationals working in specialty areas including computer
programmers, scientists and engineers.

An L1 Visa is an Intra-Company Transferee Visa. It specifies no education requirement and a maximum of 7 years
stay is allowed. |

What is the bill about?

The bill seeks to more than double the minimum salary of H-1B visa holders from $ 60,000 to $ 1,30,000.

It seeks to remove several numerical quotas per country in issuance of Green Cards.

It also wants to make Masters Degree mandatory for H-1B visas.

These will discourage the American companies to outsource jobs.

There have been earlier attempts at legislation to amend the rules pertaining to the H-1B visa programme.

But the bill introduced by Lofgren rang alarm bells in the Indian IT sector because it was accompanied by
news that US President Donald Trump has drafted an executive order to overhaul the H1B visa programme.

There is also a proposal of scrapping the existing lottery system used to award the visas and replacing it with a
system that favours visa petitions for jobs that pay the highest salaries.

How will the Bill affect Indian companies?

Around 70% of the H-1B visas are given to Indian workers annually.

If the reform goes through, the resultant increase in employee wages will be a cost worry for the IT industry.

But there are also positives.

It may turn out to be beneficial to Indians in parts at least as

As Indians are the second highest foreign students on US campuses the proposals may definitely appeal to them.

In the present circumstances Green Cards for Indians are delayed due to quota system per country as citizens of
any country cannot get more than 7% of the available green cards in that particular year. Indians being in the top
two countries of immigration seekers this would be beneficial.

The job seekers are exploited by the consulting companies forcing them to pay damages if they move to a better
opportunity. The proposed bill argues for transparency to protect H-1B holders.

The suggestion of H-1B visa allocation on market needs rather than the lottery system is likely to enhance the
chances of employment of Indian students.

20% of H-1B visas for start-ups with less than 50 employees can also help Indian start-ups.

Will it affect American Economy?

Indians with H1B and L-1 visas contribute USD 1 billion annually to the US.

Indian IT industry contributes to about 4 lakh jobs in the US and USD 5 billion in taxes annually.

Silicon Valley majors like Microsoft and Google have reiterated that the H-1B visas are critical for recruiting
specialised workers for jobs they cant fill with US citizens. |

What is Indias viewpoint?

As no executive order has been passed India is of the view that will not prejudge the outcome of the three private
bills raised before they go through the full Congressional

3.6 India-US Defence Technology and Trade Initiative

Why in news?

American Defence Secretary General highlighted the centrality of the India-US Defence Technology and
Trade Initiative (DTTI) to ties between the two countries.

What is DTTI?

The DTTI mechanism was launched in 2012. It is not a treaty or a law.

It is a flexible mechanism to ensure that senior leaders from our nations are persistently focused on the
opportunities and challenges associated with growing our defense partnership.

It aims to

1. Transform the bilateral defense relationship into one that is limited only by independent strategic
decisions, rather than bureaucratic obstacles or inefficient procedures.

2. Strengthen Indias defense industrial base by moving away from the traditional buyer-seller dynamic
toward a more collaborative approach.

3. Explore new areas of technological collaboration from science and technology cooperation through co-
development and co-production.

4. Expand U.S.-Indian business ties.

The first four projects under the DTTI were announced during President Barack Obamas visit to New Delhi as
chief guest for the 2015 Republic Day celebrations.

India and the US are currently working on six projects.

The whole idea of the DTTI was to cut through the government bureaucracies on the two sides. As a
mechanism for defence cooperation, it has to focus on advanced technologies.

What are the projects proposed under DTTI?

Fifty per cent of the original projects have reached project agreement stage, two are in a limbo, and we are hopeful
of progress on the rest.

DRDO and US Labs are the lead agencies from the two countries for these projects.

The Next General Individual Protection Ensemble and Mobile Electric Hybrid Power Source projects reached the
agreement stage in 2015. |

The Digital Helmet Mounted Display and Joint Biological Tactical Detection System projects were proposed last
year and are currently at a discussion stage.

The US offer for trilateral cooperation (with Israel) on the futuristic military platform was made last
November but sources said that they are yet to make up their mind on it.

The Americans feel that three advanced countries can bring their advantage of expertise and economy to the
project which, if successful, could then be used by the armies of all the three countries.

The American side also proposed bilateral development of Future Vertical Lift Helicopter (FVLH) under the DTTI.

The Pentagon has also proposed to the Defence Ministry that the two sides work on a deal for an American combat
fighter aircraft, F-16 or F-18.

But the Defence Ministry did not want the fighter aircrafts to be considered under the DTTI but under Make in
India to supplement the 36 Rafale fighters in the medium-weight category.

Though National Defence Authorization Act of 2017 was passed by the US government last month, which
institutionalised the DTTI mechanism, New Delhi will adopt a wait and watch attitude.

3.7 India Russia Stealth Frigates Deal

Why in news?

The multi-billion dollar deal between India and Russia for four stealth frigates has run into trouble over pricing and
local construction with Transfer of Technology.

What are the problems?

India and Russia had signed an Inter-Governmental Agreement for four additional Krivak or Talwar class
stealth frigates during bilateral discussions on the sidelines of the BRICS summit in October 2016.

As per the agreement, two ships are to be procured directly from Russia and two to be built in India with Russian

In the commercial offer submitted later, Russia has quoted about $990 million for the two ships to be directly

For those to be built in India, the commercial offer quoted about $800 million for supply of material to ensure
construction of the two ships in India and $51 million for supply of project documentation to ensure their

The cost of construction of the two ships in an Indian yard was to be arrived at later.

This would steeply push up the overall cost of the two ships and it was seen as a way to ensure that all four
ships were imported from Russia.

It will be a serious setback to the Make-in-India initiative. |

The issue was discussed in detail by the Defence Acquisition Council.

It has been decided that identification of the shipyard to be deferred till the cost for the construction of the ships in
India was not cleared.

India is of the view that the decision on procurement of two ships from Russia will not be initiated unless details of
Transfer of Technology, costs etc of balance two ships are found acceptable.

It will either take all four ships or none.

3.8 UK Immigration Policy

Why in news?

The UK government had announced changes to its visa policy for non-EU nationals, which will also affect a large
number of Indians.

What are the new rules?

Tier 2 route for applying visa is for Intra-Company Transfer of resident from outside European Economic Area
(EEA) and Switzerland, when an overseas employer has offered him/her a role in a UK branch of the

Under the new visa rules anyone applying after November 24 under the Tier 2 (ICT) category would be
required to meet a higher salary threshold requirement of 30,000 pounds from the earlier 20,800 pounds.

For those working as third party contractors, the minimum salary is raised to 41,500.

An annual levy of 1,000 on firms for every worker hired from outside the EU.

What are the advantages?

In 2015, UK employers struggled to fill nearly one fifth of the job vacancies as a result of the skills gap.

Immigration is not helping to increase the incentive to employers to train and upskill the UK workforce. e.g
Ready access to a pool of skilled IT professionals in India.

The proposals would toughen the intra-company transfer route.

It would make it harder and more expensive for firms to hire talent from abroad.

The fee levied could be used to skill domestic workers in the UK.

What are the disadvantages?

Indian IT workers accounted for nearly 90% of visas issued under the ICT route, therefore it will affect them
greatly. |

New English language requirements when applying for settlement as a family member after two and a half
years in the UK will also affect Indians.

It will affect the growth of Britains IT and engineering sectors, medium-sized businesses and healthcare
sector, which relies heavily on migrant nurses.

A lot of start up companies might move to nearby hubs like Berlin, Paris or Amsterdam.

Various sectors are of the view that they should be keeping the resources they have developed and skilled over
the years.

What should India do?

India should examine the UK-India Bilateral Investment Protection Treaty, whether such a move that adversely
impacts operations of Indian companies in the UK could be found to be in breach of the core principles of the treaty.

3.9 Indias West Asia policy

Why in news?

In November, India held its first joint commission meeting with the Palestinian Authority and recently sent a
representative to a Paris meeting on reviving the West Asia peace process.

What is the rationale behind the move?

In the pre-1990 days India was a vocal supporter of the Palestinian cause.

The current moves are not path-breaking but there are several reasons India is considering tentative steps in this
direction. They are,

The transformation of relations of India with the UAE, Saudi Arabia and Qatar, has meant the present government
is beginning to shape a greater West Asia policy.

Besides some standard diplomatic and economic interests, India probably sees an opportunity to reduce
Pakistans standing in a part of the world.

To increase the credibility of the present government in West Asia.

India is likely to further expand its relationship with Israel.

Already the larger importer of Israeli arms in the world, India now has a security relationship that extends to the
most sensitive defence areas like nuclear weapons technology and doctrine.

Does the renewed Palestine interest help India?

New Delhi knows that as it becomes closer to Tel Aviv there is an inevitable blowback in the Arab world.

Showing renewed interest in Palestine is a useful means to help counter this. |

New Delhi has used support for Palestinian nationalism as a foil to counter criticism of its shift to Tel Aviv for

In the joint commission meeting the Palestinians said they were pleased to talk to India because of its presumed
influence on the Israelis.

Will we involve in West Asian peace process?

New Delhi has no interest in getting directly involved in the West Asian peace process. It has neither the
means and interest nor the diplomatic heft to do so.

India has other problems. One of them is its refusal to deal with Hamas, the Palestinian arm of the Muslim
Brotherhood, because of its dislike for non-secular Islamic groups.

So New Delhis interest in Palestine is about issues other than Palestine itself.

3.10 India and UAE

Why in news?

India and the United Arab issued a joint statement, after the Crown Princes visit to Republic day celebration.

What was the significance of the statement?

They condemned efforts by States, to use religion to justify, sustain and sponsor terrorism against other

It holds significance since the UAE as part of the Organisation of Islamic Cooperation (OIC), supported
Islamabad-backed resolutions on Kashmir.

The UAE has been one of Pakistans closest allies and also one of the few countries to have recognised Taliban
rule in Afghanistan in the mid-1990s. Therefore this would be a strong message.

They condemned the terrorist attacks in Kabul and Kandahar in which five UAE diplomats were killed.

The UAE and India also agreed to coordinate efforts to counter radicalisation against misuse of religion by
groups and countries for inciting hatred and perpetrating acts of terrorism.

They also emphasised the importance of promoting a culture of inclusiveness, openness and tolerance within
and among societies.

Lending support to New Delhis position on the Comprehensive Convention on International Terrorism in the
United Nations, they also called for early conclusion of negotiations.

What is India UAE stratetgic paternership?

India appreciated the support extended by UAE security agencies on specific issues of security concern to
India a reference to the ISIS threat. |

The two leaders reiterated that the ongoing close cooperation on a range of security issues, particularly on
counter-terrorism, maritime security and cyber-security remained a key pillar of the bilateral strategic

The two sides agreed to further enhance cooperation in the fields of law enforcement, anti-money laundering,
smuggling of fake currency, drug trafficking, human trafficking, illegal migration and other transnational
organized crimes.

What are the MoUs signed?

India invited UAE participation in Indias National Infrastructure Investment Master Fund as an
anchor investor.

India and UAE have signed Memorandum of Understanding in several sectors.

MoU onMutual Recognition of Certificates of Competency to pave way for recognition of maritime education
and training, certificates of competency, endorsements, training documentary evidence and medical fitness
certificates for seafarers issued by the Government of the other country.

MoU on Bilateral Cooperation in the Road Transport and Highways Sector to increase investment
in infrastructure development and enhance logistics efficiency.

MoU in SME and Innovation to benefit Indian SMEs and lead to equitable and inclusive

The exposure to best practices in SME sector abroad would provide an opportunity to Indian SMEs to improve
upon them and innovate further.

MoU in agriculture to help in better productivity at farmer fields as well as improved global market access
leading to equity and inclusiveness.

What both countries need to do?

The strategic partnership that India envisions with the UAE must be based on clarity and concrete measures. This
should include a crackdown on the shadowy businesses owned by Dawood Ibrahim.

Also more steps to curb terror financing of the Taliban and groups in Pakistan and Afghanistan; such money is
often routed through expatriate remittances from the UAE.

Indias hopes of investment from the Abu Dhabi sovereign wealth fund, one of the worlds largest at $500 billion,
will not be realised until New Delhi steps up efficiency at its end.

It took more than a year for the government to fully set up the National Investment and Infrastructure
Fund mechanism for the UAE funds is a case in point.

The delay resulted in the MoU for investment of a possible $75 billion over 10 years falling through. |

Personalised leader-to-leader bilateral diplomacy is a great conversation-starter but enough should be done to
energise ties.

3.11 India - Portugal

Why in news?

Portugal Prime Minister Antonio Costa paid a seven-day long official visit to India.

What was the Mou on Defence about?

Memorandum of Understanding (MoU) on Defence cooperation signedbetween the two countries will help
us harness our respective strengths in this field for mutual benefit.

India thanked Portugals support to Indias efforts to get a membership in the elite Nuclear Suppliers Group.

A joint statement issued by the two sides called for tough global action against terror networks and states
harbouring them stressing that there should not be any double standards in combating terrorism.

They exhorted the international community to effectively implement the measures enumerated by the 1267
UN Sanctions Committee.

The statement comes days after China blocked Indias move to list Pakistan-based MaulanaMasoodAzhar as a
global terrorist, at the 1267 Sanctions Committee.

The two leaders also called for eliminating terrorist safe havens and infrastructure, disrupting terrorist
networks and their financing, and sought adoption of the Comprehensive Convention on International
Terrorism by the UN.

The Portugese prime minister is the chief guest at the PravasiBharatiya Divas.

Why India needs Portugal?

Since Brexit, India has lost its traditional pathway to Europe i.e Great Britain.

Now, India needs another partner country in Europe to take advantage of the common market.

India has strong economic interests in the Netherlands, which continues to be one of the top destinations for
outward Indian FDI.

However, in the volatile global macroeconomic climate, India should look to hedge its investments and seek
another country in Europe that can act as a gateway.

Portugal can be one of the contenders to fill the void left by Britain.

Presently Indias business presence in Portugal is quite minimal.

There are only a handful of companies in the hospitality industry, auto parts, renewable energy, and
information technology (IT). |

But Portugal offers a good business environment, well-developed physical and IT infrastructure and a
favourable climate for both short term and long-term investment.

It takes around 46 minutes to set up a business there compared to 89 days in India.

Its strategic location can make it a promising gateway to the European common market.

Importantly, Portugal also has one of the lowest labour and operational costs in Western Europe.

In addition to its European Union membership, Portugal retains close ties with Brazil, Mozambique, Macau
and Angola and can serve as gateway to other Portuguese-speaking markets.

It has also launched the Golden Visa residence programme, which is a simple and fast track residence permit
programme designed to attract foreign investment into the country

3.12 India - Kenya Opportunities and Challenges

Why in news?

India announced 100 million dollars Line of Credit for Kenyas agricultural mechanisation.

The announcement followed talks between PM Modi and Kenyan President Kenyatta during which they agreed to
deepen economic cooperation and expand trade.

What are the avenues of engagement?

The Line of Credit would open a new dimension of engagement.

The Kenyan leaders leader top priority is likely to be to seek more access to the Indian market for Kenyan goods,
while India is likely to be interested in exploring ways to become its top foreign trading partner.

Long-term arrangement with Kenya for production and import of pulses is being explored and discussed.

Kenyatta has repeatedly called for Indias help in augmenting Kenyan healthcare.

The India had also offered to help set up a full-fledged cancer hospital in Kenya.

Kenyatta has publicly invited Indian firms to set up manufacturing facilities in his country and make it a
distribution hub for generic drugs for the region.

The agriculture and leather industries are other sectors where Kenya is hoping to attract Indian investment
to offset the trade imbalance.

India has already explored the possibility of importing food grains from Kenya to help meet its insatiable
demand for pulses.

What are the challenges?

Regaining the top spot for trade from China will be a hard climb. |

The challenges in the maritime domain are a shared concern and the two sides will explore opportunities in blue

Indian imports were around $2.4 billion, while Chinese imports were $3.09 billion in 2015.

The sharp rise in Chinas trade figures was attributed to import expenditure for railway construction materials
from China.

Besides laying rail tracks, China is also constructing roads around the country and building berths at Laamu port.

What are the advantages for India?

Between 2003-2015, Chinese FDI was only the fifth largest creator of jobs. In contrast, Indian FDI was the top
employment generator for Kenyans, creating 7422 jobs during the same period.

For Kenya, with a large youthful population, accelerating job creation is an essential part of maintaining domestic

Beyond economic ties, India is keen to build up a strong security relationship linked to Kenyas coastal location on
the Indian Ocean.

While India will find it difficult to win a race with China on financing, Indian money can be stretched in other

Indias Africa policy is broadly in line with Agenda 2063, promoted by the African Union.

However, some recalibration in New Delhis approach may be needed because issues such as UN reform,
counterterrorism, climate change and international solar alliance will inevitably take longer to show results.

Meanwhile, India must concentrate on actions that strengthen its economic cooperation with select African

3.13 Chagos Archipelago Dispute

Why in news?

The British Foreign Secretary has sought Indian assistance in resolving current tensions in the U.S. military base
Diego Garcia.

What is the dispute?

The Chagos Archipelago is a group of seven atolls comprising more than 60 islands in the Indian Ocean about
500 km south of the Maldives.

It had been part of Mauritius since the 18th century when the French first settled the islands.

All of the islands of French colonial territory in the region were ceded to the British in 1810. |

Before Mauritian independence, in 1965, the UK split the archipelago from the territory of Mauritius to form
the British Indian Ocean Territory and permitted the US to use it for defence purposes for 50 years (until
December 2016) followed by a 20-year optional extension.

Following this US Military Base was setup in Diego Garcia, the largest of the islands.

2,000 inhabitants were resettled in Mauritius and the Seychelles.

The UN resolutions banned the dismemberment of colonial territories before independence.

Therefore Mauritius claims sovereignty over the islands and states that Britains claim is a violation of law and
of UN resolutions.

The resettled inhabitants now number around 10,000 including their descendants and they wish to resettle.

UK declared Marine Protected Area around Chagos in 2010, which prohibits fishing and extractive industry
and has the effect of preventing any resettlement.

In 2015, the Permanent Court of Arbitration ruled this move as illegal under the United Nations Convention
on the Law of the Sea (UNCLOS).

According to PCA, Mauritius holds legally binding rights

1. to fish in the waters surrounding the Chagos.

2. to the eventual return of the Chagos to Mauritius when no longer needed for defence purposes

3. to the preservation of the benefit of any minerals or oil discovered in the Chagos Archipelago pending
its eventual return

In November 2016, the U.K. ruled out the resettlement of the islanders on the grounds of feasibility, defence,
security interests and the cost.

UK also renewed the lease for Diego Garcia with US, up until 2036.

Subsequently, Mauritius warned that it would push to take the matter to the International Court of Justice
(ICJ). |

What is the recent move?

UK sees Diego Garcia as vital for its operations in the region.

Therefore it wants India to exercise its influence with the Mauritian government to help reach some

They believe that it would be in Indias security interest in the region.

India has maintained that the matter of to proceed with ICJ is a decision for the Mauritian government to

But this is seen as a positive move, as it signals Britains eagerness to partner with India on security matters.

3.14 Indias Stand on ISDS

Why in news?

India and some other countries have rejected an informal proposal made by the EU and Canada to work towards a
multilateral pact on investments at the World Trade Organisation that would have an Investor-State Dispute
Settlement (ISDS) mechanism built into it.

What new proposal has been made?

The EU and Canada have got into an investment agreement in which they have got the much contentious ISDS
which allows corporates to take sovereign governments to international arbitration.

They now want it to be the template for a multilateral agreement.

Investor-state dispute settlement (ISDS) or investment court system (ICS) is a system through
which individual companies can sue countries for alleged discriminatory practices.

ISDS is a neutral, international arbitration procedure. Like other forms of commercial, labour, or judicial
arbitration, ISDS seeks to provide an impartial, law-based approach to resolve conflicts.

The proposal for a global investment pact, made at an informal breakfast meeting of Trade Ministers of select
countries in Davos last week, was rejected by India, Brazil, Japan and Argentina.

What is the need for ISDS?

To resolve investment conflicts without creating state-to-state conflict

To protect citizens abroad

To signal to potential investors that the rule of law will be respected

Why India rejects?

It is only after all options for settling disputes between a sovereign government and a corporate in domestic
courts have been exhausted do we want to allow the issue to be taken up in international courts. |

It should be part of a bilateral agreement and not a multilateral agreement.

The EU, in a bilateral meeting with India, also indicated that it would hold free trade talks with India only
after concluding a new bilateral investment treaty (BIT) with India.

Earlier New Delhi had asked all countries with which India has investment protection agreements, including
the EU, to re-negotiate those pacts on the basis of the new draft text of BIT.

EU did not do so and the existing BITs with existing members are set to lapse in April.

3.15 Hague convention on child abduction

What is the Hague Convention?

The Hague Convention on the Civil Aspects of International Child Abduction is an international treaty that
establishes procedures that provide for the prompt return of children wrongfully retained or removed
from their habitual residence.

Minister for women and children, took a decision not to have India sign the treaty. But there is now some reported

How does the Hague convention work?

Often a male Indian migrant who is a green card holder comes to India to marry an Indian woman, who is not a
green card holder.

They settle for example in the US and have children.

Trouble erupts between them and the woman had to leave the country with her children.

It is here the Hague Convention will enter the picture.

The husband can now apply to an executive authority for the return of the child based only on an
order of a freight court which could be an ex-parte order (temporary order) or if the husband is entitled to
custody under a foreign law.

The mother, will be a child abductor and an application can be made to the authority in India for the
return of the child to the place of habitual residence, that is the US or any other reciprocal country who has
signed the convention.

Why it would be disastrous for India to sign?

The Convention deals with what has come to be known as international child abduction.

The Law Commission of India observed that the word abduction when used by a parent is misplaced as no
parent can abduct her own child.

The Commission recommends the passing of a domestic law and the signing of the Convention. |

The recommendation is surprising since the report itself notes that it is mainly women who are compelled to
return to a foreign country to fight lonely battles for custody with no support.

There are number of cases where women fleeing a violent marriage with the children, with no desire to return.

To compel such a child to return to the foreign country would be compounding the original problem.

It is argued that the mother can go to the foreign court and convince that court that she should be allowed to take
the child back.

To deny a woman to apply in a foreign court for a variation of a custody order in favour of the husband means
returning to a foreign land with no support structure in place.

Often such litigation is carried only by husbands with a view to compel a woman to give up her claims to
alimony and any separation settlement.

It is a known fact that when faced with such a choice, custody of children or alimony, women choose to exit a bad
marriage with custody of the children with no alimony.

What is the solution?

The solution lies in a reverse law on protection of children found in the jurisdiction of the Indian courts.

Our courts exercise parenspatriae jurisdiction over children - they are the ultimate guardians of children in
their jurisdiction.

When faced with a claim from a father who says that the child has been removed from his custody in the face of a
court order granting him custody, the court must decide whether it is in the best interest of the child to
be sent back to a foreign land.

Indian law does not automatically recognize foreign judgments.

Now by signing the Hague Convention, we will be compelled to recognize a foreign judgment regardless of the
justness of the decision on custody under Indian law or whether was delivered ex-parte.

4. FEBRUARY -2016
4.1 Mastering in Evacuation

Why in news?

Minister of State for External Affairs told the Lok Sabha that around 95,500 Indian nationals have been brought back
from countries affected by war, internal strife, and natural disasters as also due to economic slowdown in the Gulf
region during the last two years. |

How well is Indias evacuation capability?

On 1986, South Yemen was being engulfed in a civil war that threatened the lives of thousands of foreigners
living there.

While Britain, France and the Soviet Union coordinated to jointly evacuate their nationals, the 850 Indians in
the country were forced to wait for several more days till evacuation was facilitated.

On April 2015, Yemen was once again under unrest. This time, however, the Indian government successfully
conducted Operation Raahat to evacuate almost 5,000 Indians and nearly 1,000 citizens from 41 other

Besides Air India aircraft, the Indian Navy deployed vessels, and the Indian Air Force C-17 Globemasters for
strategic airlift.

Such unprecedented efforts and resources reflect New Delhis new drive to protect the lives and assets of its
citizens abroad in times of crisis.

But most of these operations are successful because of heroic efforts by individual officials or quick-fix
solutions. There is no proper protocol or policy setup.

What should be done?

The government should document its rich experience in conducting more than 30 evacuations and
institutionalise them so that it is passed on to younger generation officials.

An inter-ministerial committee should prepare a manual with guidelines that establish a clear
chain of command and division of competencies, identify regional support bases, assembly points and routes
for evacuation and develop country-specific warden systems to communicate with expatriates.

Indias diplomatic cadre must be given specific training to operate in hostile environments.

The government could instruct the police or army to train Indian Foreign Service probationers to
operate in war zones, conduct frequent evacuation simulations and emergency drills and create rapid
reaction teams.

India will have to invest in cooperative frameworks that facilitate coordination among countries that
have large expatriate populations in West Asia, in particular Nepal, Bangladesh and Sri Lanka.

The government will have to assign a greater role to its armed forces, in particular by strengthening the Navy
and Air Forces capacity to operate in tandem with civilian authorities.

It should direct the military to develop a non-combatant evacuation doctrine, designate the Integrated
Defence Staff as the nodal organisation to improve inter-services and civil-military coordination.

To avoid cost inflation and delays, the government must establish a permanent civil reserve air fleet that
pools aircraft from all Indian airlines based on pre-established requisition and reimbursement procedures. |

The government will have to invest in new technologies to better monitor the diasporas profile and mobility.

This can be achieved by encouraging more diplomatic missions to provide online consular registration
forms, developing an online registration system for overseas travellers, utilising social media.

The government must expand efforts to manage public opinion and be able to conduct a quiet diplomacy
that is crucial to safely extricate Overseas Indians from conflict zones.

4.2 CPEC and the Baloch Insurgency

What is the issue?

The CPEC is a 15-year project between Pakistan and China, which aims to connect the ancient Chinese trading
town Kashgar with Pakistans deep-sea Gwadar port via PoK through a network of highways, railways and oil
and gas pipelines and fibre optic cables.

Gwadar is the crown jewel of CPEC and Balochistan is the home to Gwadar port.

Yet Balochistan stands to gain little from the massive project, despite being in desperate need of economic

The provinces share in the CPEC is a mere 0.5%.

What are the administrative units of Pakistan?

The administrative units of Pakistan consist of four provinces, one federal capital territory, two autonomous and
disputed territories, and a group of federally administered tribal areas.

Who are Baloch people?

Baloch people are an ethno-linguistic group mainly found in Pakistan, Iran and Afghanistan.

Balochistan region covers Balochistan Province in southwestern Pakistan, Sistan and Baluchestan Province in
southeastern Iran, and the Balochistan region of southern Afghanistan.

Baloch nationalism is a movement that claims the Baloch people in the region form a distinct nation. |

The movement propagates the view that Muslims are not a nation and that ethnic loyalty must surpass
religious loyalty

The Insurgency in Balochistan is a guerrilla war waged by Baloch nationalists against the governments of
Pakistan and Iran in the region.

What is the reason for insurgency?

70% of people in Balochistan live in poverty.

The maternal death rate in Pakistan is 278 per 100,000, whereas in Balochistan it stands at 785.

Natural gas was discovered at Sui in Balochistan, yet major parts of the province are still deprived of natural

Its important to understand that the violence in Balochistan is not just because of terrorism.

The insurgents are mostly local people longing for their constitutional rights and welfare.

Therefore most of the insurgent movements in Balochistan have been linked with deprivation and

The division of CPEC benefits repeats the same mistake, where the people of Balochistan are not allowed to
benefit from the provinces own advantages.

What is the problem in Pakistans approach?

Pakistans government has generally regarded Brahamdagh Bugti, the alleged leader-in-exile of the Baloch
Republican Army, as the sole representative of the Baloch conflict, particularly pointing to Bugtis India-
centric policy.

Also Indian Prime Minister Narendra Modi made remarks on Balochistan last year.

Therefore the Pakistani government and military officials tend to blame the violence in Balochistan on Indian
meddling in the province.

But to truly solve the problems in Balochistan, Pakistans focus must be inward.

What should be done?

The state needs to differentiate sub-nationalists from the terrorist outfits operating from within Balochistan.

Terrorist organisations need to be dealt with accordingly as per the national counterterrorism strategies.

But the Sub-national groups should be encouraged to come into the national fold by addressing legitimate

If the violence still gets out of hand, then counter-insurgency (COIN) strategies can be employed. |

The guilty should be subject to normal court proceedings.

Media coverage in the region should be increased rather than the current situation of reporters going missing
from Balochistan.

Pakistani authorities must ensure that CPEC doesnt repeat the earlier injustice meted out to the native
Balochs. Balochistan must get its fair share of the economic corridor.

4.3 Sehwan Attack

Why in news?

A suicide attack by ISIS, at the Sufi shrine of Lal Shahbaz Qalandar at Sehwan in Pakistans Sindh province has killed
at least 80 people.

Why Sufi Shrines are targeted?

Sufism is a mystical and generally moderate form of Islam that is loathed by fundamentalists.

Jihadis have targeted several Sufi shrines all over Pakistan for several years.

e.g Attacks on the shrine of Data GanjBakhsh in Lahore in 2010 and that of Hazrat Shah Noorani in
Balochistan in November 2016.

The jihadis justify their violence against Sufi shrines as attacks against impure manifestations of the
Islamic faith.

Killing unbelievers, heretics and deviants is an integral part of their plan to create a purer Islamic state.

The same justification has been used in the past to attack Shias and Ahmadis as well as Pakistans Christians
and Hindus.

What is the actual reason?

The highly planned, well-publicised attacks on Shias in Iraq and Syria helped the IS mobilise Sunni sectarian
sentiment and win recruits.

IS is using the same strategy in Pakistan to mobile recruits with sectarian ideology.

Sehwan Shrine is a prominent symbol of unity as people of all faiths in the subcontinent have been visiting it
for centuries, thereby making it a particularly potent target for the IS.

Why Pakistan could not contain repeated attacks?

Pakistans ruling class sees terrorism through a geo-strategic lens and not as the consequence of its
appeasement and sponsorship of Islamist extremism.

Some jihadi groups were reportedly nurtured by Pakistan for proxy wars in Afghanistan and against India. |

Pakistan uses them to secure strategic advantage in the region i.e in Afghanistan, Jammu and Kashmir and
against India

But some of them consider Pakistanis as legitimate targets.

To them Pakistan is as much their religious battlefield as Afghanistan or India.

One of the explanations for why Pakistan is unable to intercept jihadi terrorists targeting its own people is that
the state apparatus does not out rightly consider all jihadis as its enemy.

They have double standards.

e.g Operation Zarb-e-Azb targeted out-of-control Pakistani Taliban in Waziristan but spared groups based in
Punjab and Karachi. Hafiz Saeed, the founder of LeT was recently detained but actions against him and
Masood Azhar at the U.N. was blocked with Chinese support.

The jihadis responsible for attacks within Pakistan are deemed agents of Indian intelligence or the
Afghanistan National Directorate of Security (NDS).

What should Pakistan do?

The recent attacks prove that the Pakistans tolerance for terror groups undermines the country.

It corrodes stability and civilian governance, damages the investment climate, and inflicts death and injury on
thousands of innocent Pakistani citizens.

Therefore Pakistan should have to de-legitimate the jihadi ideology in its entirety.

4.4 Bangladesh PMs visit to India

Why in news?

Bangladeshi PM has planned to visit India in early April 2017.

What are the agreements that are expected to be signed?

Bangladeshi PMs visit will further build on the boost the relations received from signing the historic Land
Boundary Agreement in 2015.

A defence partnership agreement, Teesta water-sharing agreement, the Ganga water barrage project, and other
energy & connectivity projects are expected to be announced during PMs Indian visit.

What are issues involved?

Some of the said agreements involve the Centre-State relations.

Ex: The movement on Teesta water-sharing has been held up because of West Bengals reservations.

So the Central government has to reach out to West Bengal Chief Minister to address them. |

Similarly Bihar Chief Minister is against the Farakka Barrage project.

Also, the Bangladeshi PM faces an election in 2018. Her opposition accusing her of being soft on India.

It means, she cannot return home empty-handed on the water question.

Other major issue is, while the border issue has been resolved, border firing has not ceased.

Bangladeshi PM also faces an uphill task of addressing Indias mistrust over Chinese investment in Bangladesh -
$38 billion pledged in infrastructure cooperation and joint ventures.

But India has decided to allow its border roads in Mizoram and Tripura to be used by Bangladeshi forces since
they are constructing border outposts in the terrain areas.

Similar steps should be taken to consolidate the gains on other key issues.

4.5 India China Masood Azhar Issue

Why in news?

U.S moved a proposal at the U.N.s Sanctions Committee 1267, to designate Pakistan-based Masood Azhar as a
global terrorist.

Who is Massod Azhar?

Masood Azhar is the founder and leader of terrorist group Jaish-e-Mohammed, active mainly in the Pakistani
administered Azad Kashmir.

India holds Azhar responsible for many terrorist acts in India including the 2 nd January 2016 attack on the
Pathankot airbase.

Why is China opposing the move?

China was the only country among the 15-member UN Security Council to oppose the ban on Azhar. The reasons are -

China and Pakistan are all-weather friends. Therefore Beijings wants to keep its ally in South Asia in good

Pakistan is supporting China within groupings like the Organisation of Islamic Cooperation and others like the
Non-Aligned Movement where China has no representation. Therefore this could be payback.

China also wants to strengthen its relation with Pakistan because of its key role in Chinas One Belt One Road

China sees Indias growing proximity to the US as a major challenge and this could be retaliation.

This also could be counter measure against India for sheltering Dalai Lama. |

What is the current position?

In December 2016, Indias efforts to get Azhar banned by the U.N. were blocked by China.

The current proposal by US said that JeM is a designated terror outfit and so its leaders should be banned and
the proposal is supported by the U.K. and France.

But China opposed and put a hold on the U.S. move. The hold remains for six months and can be further
extended by three months.

During this period, it can anytime be converted into a block, thereby, ending the life of the proposal.

Therefore, India has said that the matter has been taken up with the Chinese government.

What is UNSC 1267 Committee?

The UNSC 1267 Committee was established as a result of resolution 1267 (1999).

It is also known as the Al-Qaida and Taliban Sanctions Committee.

The Committee comprises all 15 members of the UNSC and decides unanimously and secretly.

It was established for the purpose of overseeing the implementation of sanctions measures imposed on
Taliban-controlled Afghanistan for its support of Osama bin Laden.

Eventually it has been modified and strengthened by subsequent resolutions.

Now, if an individual or an organisation is included in the list, it helps in restricting their movement, financial
penalties and assets freeze among others.

4.6 India China - Strategic Dialogue

Why in news?

Indias Foreign Secretary visited Beijing recently for a Strategic Dialogue with Chinese executive Vice-Minister of
Foreign Affairs.

What are the thorns in the relationship?

Chinas decision to block Indias campaign for the membership of the Nuclear Suppliers Group (NSG)

Putting Pakistans Masood Azhar (of the Jaish-e-Mohammed) on the terror list of the United Nations Security
Council (UNSC).

Another possible flashpoint in May 2017 will be of Chinese President Xi Jinpings global conference on the
Belt and Road Initiative (B&RI), where the CPEC will be highlighted and which Pakistan PM is
expected to attend. India had planned not to take part in it due to the sovereignty issues. |

Due to its growing political influence in the multilateral arena, China was under no obligation to make nice
with Delhi.

Also Chinas GDP is now nearly five times larger than that of India and its defence spending is three times

Therefore India had to adapt to the political consequences of growing strategic asymmetry.

How India responded?

India persisted with a two-fold approach.

One was to continue the campaign for the membership of the NSG and putting Masood Azhar on UNSCs
terror list.

The other was to take up Chinas opposition at every diplomatic encounter bilateral and multilateral.

This had helped in reaching the first round of the newly instituted strategic dialogue

What are the developments in Strategic Dialogue?

The strategic dialogue was divided into five different sub-groups - Afghanistan, nuclear issues, United Nations
including the 1267 designation committee, bilateral issues, and consular and visa matters, or people-to-people

India and China began to look for a common ground on Afghanistan.

Both the Indian and Chinese delegations included officials dealing with Pakistan and Afghanistan as well as
the U.N. and multilateral ties.

They discussed the possibility of joint development projects that could be undertaken despite economic
rivalries between the two countries in other parts of the subcontinent.

Chinese government had expressed its admiration for Indias work on developmental projects, including the
Salma Dam in Herat, Afghanistan.

It also witnessed an effort by both sides to stabilise India-China relations.

These showed that China was open to finding solutions.

What is the reason for Chinas actions?

China had grown economically, and India has been growing because of a predictable international system so

There is a shifting global calculus due to the recent surprise foreign and trade policy moves by the new U.S.
administration under Donald Trump.

e.g Trumps threat of abandoning the One China policy, and backing down on it after talks with Mr. Xi. |

The new unpredictability will affect both.

Therefore both the countries are trying to bring down the volatility, instead of playing up the differences.

What is the way ahead?

The positive characterisation of last weeks talks by both sides does not mean the multiple divergences can be
bridged any time soon.

Some issues like the boundary dispute, trade deficit, OBOR, where the differences between the two sides are
too deep, are not easy to resolve.

But others like Indias NSG membership can be resolved.

The Indian emphasis should be on perseverance with China that puts self-interest above ideology and seek
common ground wherever possible.

4.7 Securing Indias Strategic Autonomy

What is the issue?

Though China had largely refrained from commenting over Indias missile programme, when India conducted
the fourth test of Agni-V, Chinese foreign ministry came out with a statement

It stated that the UNSC has explicit regulations on whether India can develop ballistic missiles capable of
carrying nuclear weapons.

What is the resolution that china talked about?

China was referring to the UNSC Resolution 1172, 1998.

It was passed in the aftermath of the nuclear tests conducted by both India and Pakistan in May 1998.

The resolution had urged India and Pakistan not to develop nuclear weapons delivery platforms like ballistic
missiles, to cap their nuclear weapons programmes and cease all fissile materials production.

This resolution was approved under Chapter VI of the UN Charter and is non-binding.

Therefore there are no constraints on India pertaining to its weapons and missile programmes.

But the Chinese media accused India of breaking the UN's limits on its development of nuclear weapons and
long-range ballistic missile.

India affirmed that India's strategic capabilities are not targeted against any particular country and India
abides by all the applicable international obligations.

Why China reacted?

The media coverage of the successful test-firing of the two long-range missiles by India was elaborate. |

Despite not being a signatory to the Nuclear Non-proliferation Treaty (NPT), is getting preferential
treatment from the rest of the world.

India had recently joined the Missile Technology Control Regime (MTCR), whereas Chinas credentials
to be in the grouping were found lacking.

These are the reasons for Chinas discomfort.

Therefore apart from raising objections to Indias missile testing, it also stalled Indias entry into the NSG and
acted against Indian interests on the issue of terrorism emanating from the Pakistani soil.

What India should have done?

India does not appear to be giving a strong response to such Chinese actions.

Globally military parades have been observed that countries use such ceremonial parades to display their
military capabilities to the world.

During the 2013 Republic Day parade, India had displayed Agni-V.

It appears that India avoided displaying its nuclear might after 2013 for obvious geopolitical reasons.

Nuclear deterrence is also about demonstration and display of capabilities.

Such strategic signalling is often necessary to send a strong message to those questioning Indias strategic

4.8 India - CLMV

Why in news?

The 4th India CLMV Business Conclave held in Jaipur.

What is CLMV conclave?

Cambodia, Lao PDR, Myanmar and Vietnam collectively, the third largest economy in ASEAN, followed by
Indonesia and Thailand.

Due to close proximity, India is looking to boost trade and investment with the CLMV region as part of the
Act East policy.

The CLMV conclave is an annual feature which provides an opportunity for Indian business leaders to interact
with government and business stake holders representing the four countries.

The conclave facilitates to create and provide a platform for the decision makers from CLMV countries to
interact with a range of Indian business companies involved in trading, manufacturing, processing,
engineering, consultancy, construction etc. |

What is the trade scenario?

The trade with the CLMV countries grew from $ 1.5 billion to more than $ 10 billion in the last 10 years and
expressed hope that India will be able to partner in more trade initiatives with these countries to develop a
strong India-CLMV vertical within the ASEAN market.

There are clear verticals for India to facilitate trade with these countries like, organic agriculture produce from
Myanmar, value added products from coffee & pepper produce of Vietnam, two & three wheeler exports to Lao
PDR etc.

These countries can take advantage of the tremendous scope in India on skill resources across various sectors.

What is the way ahead?

India is organising a Business Service Management-cum-exhibition in Myanmar during March, 2017.

At the event, India will showcase her strengths in the healthcare verticals, viz. Pharmaceuticals, medical
technology and health services.

Indias abilities in Agriculture, fisheries, aquaculture, skilling, solar and wind energy can provide a lead to the

4.9 Trumps foreign policy

Why in news?

Donald Trump has issued a series of executive orders consistent with his inaugural speech in which he stressed upon
America First and elimination of radical Islamic terrorism.

What is an executive order (EO)?

The U.S President can issue rules, regulations, and instructions called executive orders.

They have the binding force of law upon federal agencies and they do not require approval of the United States

But the executive orders are subject to judicial review and interpretation.

How international agreements are ratified by the U.S?

The executive signs the agreement.

This has to be ratified by the U.S Senate to come into force.

But the trade agreements, like the TPP, are approved using Trade Promotion Authority authorization, in which
the US Congress is required to hold a yes/no vote on any agreements without modification. |

What are the recent EOs regarding Foreign Policy?

The US president has signed an executive order formally withdrawing the country from the Trans-Pacific
Partnership (TPP) trade deal.

He signed an EO to pose a three-month ban on immigrants from seven Muslim majority countries - Iraq,
Syria, Iran, Sudan, Libya, Somalia and Yemen.

He also suspended the refugee programme for four-months to provide time to review how refugees are vetted
i.e examined before they are allowed in the U.S.

He is also preparing to issue EOs that will bring restrictions on H1-B and other visas.

What are the consequences?

TPP - To come into force, the TPP needed to be ratified by at least six signatories that accounts for 85% of the
total GDP of the bloc.

US is the largest economy in the bloc. Unless it ratifies the TPP cannot come into force. Therefore the
agreement is no longer a possibility.

This withdrawal greatly reduces the possibility of a US-led regional order in the Asia Pacific which was the
central theme of the US Pivot to Asia Policy.

Visa Ban - In theory, the policy is meant to ban terrorists until better vetting methods are formulated.

But this move sends back people to a war zone or places that they fled due to political persecution.

The ban on refugees is against the principle of freedom, at time where the refugee population around the
world is highest since WWII.

H1B restrictions - Indians hold the majority of H1B visas and L-1 visas. The current move is aimed at
bringing back the original intent of H1B visas i.e to hire additional talent to support US not but not to hire
cheap labor that replaces American workforce.

But the Indians also contribute USD 1 billion annually to the US.

Indian IT industry contributes to about 4 lakh direct and indirect jobs in the US and additional USD 5 billion
in taxes annually.

The move also increases inspector raj and ends employment authorisation cards to spouses on such work

His domestic actions regarding the reduction of environment clearance rules reflect his non serious attitude
towards climate change. We are the first generation to feel the effect of climate change and the last generation
who can do something about it. Therefore it is of major concern. |

4.10 What America First means for India?

Why in news?

The US President on his swearing in ceremony has announced the Capitals of World countries saying from that
day onwards, its going to be only America First.

Since then several world capitals have heard various interpretations of this announcement, resulting in a more
uncertain world.

What are the common grounds?

Security - Both the administrations would be interested in the defeat of Radical Islamic Terrorism.

Defence - India is designated a major defence partner by the Obama administration.

Therefore Indias requests for high technology are now considered with a presumption of approval as
opposed to presumption of denial.

The Trump administration is also willing favourably look at Indias pending request for Avenger armed drones
and carry forward the ongoing cooperation between the two countries in defence.

What are the areas of contentions?

NGO - The continuing crackdown on U.S.-based Christian charities operating in India can create a rift as the
evangelical groups have far higher influence in the current White House than in the previous one.

Jobs - Both the governments have promised job creation. Therefore they could be competing in this area
because the last decade witnessed a movement of U.S. jobs to India, and of Indian workers to the U.S.

H-1B Visa - The business model of Indian IT is to locate a crucial part of their workforce in the U.S. who
support the operation of jobs carried out in India.

But in recent years, these companies have increasingly hired Americans in their local workforce. So a
crackdown on H-1B visas will not affect the business model

But the changes in laws that will not allow these companies to relocate the jobs at all will not be welcomed by

What should India do?

Though it has been signalled by the new administration that India would be a friend, it is not of top priority
right now.

Therefore India must do more to catch the attention of the new administration.

Not much is needed to be done in areas like cyber security, intelligence sharing, space, disease control,
maritime surveillance, agriculture, education and climate change. |

They should be allowed to continue in the already existing pace.

The new administration might want India to openly partner with US in tackling China.

Recently US reiterated a long pending demand to sign the COMCASA (Communications Compatibility and
Security Agreement) that would enhance joint surveillance of Chinese vessels.

Indias consistent demand that the U.S. bring more pressure on Pakistan to take action against terrorist
groups could be met with another demand for Indian troops in Afghanistan.

They may be less understanding about Indias domestic sentiment.

Therefore these areas to be treaded cautiously.

4.11 India - Rwanda

Why in news?

Vice President (VP) had returned to India after concluding his five-day visit of Rwanda and Uganda.

What are the MoUs signed between India and Rwanda?

A bilateral air services agreement was signed, thus enabling direct flights between the two countries. Rwandan
Airways will begin direct flights between Kigali and Mumbai from April 2017.

The other two MoUs are setting up of an entrepreneurial development centre in Rwanda and exemption
of visa for entry of diplomatic and official passports.

Rwandan government also cited its desire of wanting many Indian pharmaceutical companies in Rwanda.

Indian government asked questions about President Paul Kagames governance model that helped Rwanda
become one of the cleanest and well-run states in Africa.

India also offered scholarships and fellowships to Rwandan students to enable them to pursue undergraduate,
masters, and research courses in India.

How the MoUs will be useful?

With direct flights between the two countries, the people to people exchange will be more fruitful.

With the air services agreement, the tourism sector will get a major boost.

India-Rwanda Innovation Growth Program is being launched. It will expand ties in Science, Technology and

Under the Programme, 20 demonstrated and validated Indian technologies and innovations are expected to be
adopted over a period of two years. |

The joint ventures created with Rwandan partners can deliver many sustainable social enterprises that will
stimulate economic development in Rwanda.

What happened during Uganda visit?

This was the first high-level bilateral visit to Uganda from India since 1997 and first high-level visit to Rwanda

India and Uganda decided to expand cooperation in the field of energy sector and training of personnel for space
programme and peaceful use of atomic energy.

Uganda has pitched for Indian companies to manufacture automobiles locally to discourage import of cars.

At the India-Uganda Business Forum, the VP has emphasised that business ties with Uganda is a key pillar
of the bilateral relationship.

Uganda & Rwanda Geography

The equator passes through the African countries of Gabon, Congo, the Democratic Republic of Congo, Uganda,
Kenya and Somalia. It also passes through Lake Victoria.

Rwanda (Capital. Kigali) and Uganda (Capital. Kampala) are both land-locked countries.

Rwanda, in east-central Africa, is surrounded by the Democratic Republic of the Congo, Uganda, Tanzania, and

Uganda is bordered on the west by Congo, on the north by the Sudan, on the east by Kenya, and on the south by
Tanzania and Rwanda.

The highest point of Rwanda is Karisimbi, which peaks at 14,826 ft.

Numerous lakes dot the landscape, with Lake Kivu making up most of Rwanda's western border. Lake Kivu is one
of the 20 deepest lakes in the world, and has a maximum depth of 1,575 ft.

Four of East Africa's Great Lakes - Lake Victoria (second largest inland freshwater lake in the world), Lake
Kyoga, Lake Albert, and Lake Edward lie within Uganda or on its borders. |

4.12 Israels Expanding Settlement

Why in news?

Israel passed a legislation that would legalise nearly 4,000 Jewish settler homes on private Palestinian lands in the
West Bank.

What are settlements?

Settlements are communities established by Israel on land occupied in the 1967 Middle East war.

This includes the West Bank, East Jerusalem and the Golan Heights.

Prior to that no Israeli citizens had lived in the territory.

In 1968 Israeli government reluctantly allowed Jews to stay "temporarily."

Since then hundreds of thousands of Israeli Jews now reside in the West Bank, citing religion, history and
Israel's security among their reasons for being there.

There are 131 settlements in the West Bank, housing about 385,000 Israeli Jewish settlers, and 97 outposts -
settlements built without official authorisation.

Palestinians, along with the rest of the world, see their presence as one of the key obstacles to a peace
agreement and the creation of a Palestinian state.

Palestinians say the presence of settlements in the West Bank and East Jerusalem - land they seek for a future
state - make such a state with contiguous territory impossible.

They have demanded Israel freeze all settlement activity as a precondition for resuming peace talks. |

What is the legislation about?

Despite international criticism, successive governments have supported the settlements.

The legislation allows the Israeli government to confiscate private Palestinian land if the land-owners are

If known, they will be compensated in cash or kind.

What will be the impact?

The legislation seeks to extend Israeli law to the West Bank.

It can be overturned by the judiciary.

Israels Attorney-General has said he wouldnt defend the bill in the high court as it is unconstitutional and
violates international law.

But this is unlikely to stop the currentgovernment from taking more Palestinian land.

Earlier UN Security Council demanded that Israel stop all settlement activity in the Occupied Territories.

An international conference attended by more than 70 countries urged both sides in the conflict to resume

In this scenario, Israels legislation shows its disregard for international opinion and institutions.

What is the Israels stand?

Israel still says it is committed to the two-state solution.

But the two-state solution will not be relevant if it continues to grab Palestinian land.

The current government has shown no interest in resuming negotiations.

This is compounded by the election of Donald Trump as U.S. President, who also does not believe in the two-
state solution.

4.13 One China Policy

Why in news?

The new U.S. administration has agreed to honour the long-standingOne China Policy, after previously placing
it in doubt and infuriating China.

What is the 'One China' policy?

The One China policy is a key cornerstone of Sino-US relations. It is the diplomatic acknowledgement of
China's position that there is only one Chinese government. |

Under the policy, the US recognises and has formal ties with China rather than the island of Taiwan, which China
sees as a breakaway province.

China insists Taiwan is an inalienable part of one China. So, any country that wants diplomatic relations with
mainland China must break official ties with Taipei.

Since, the US established formal diplomatic ties with Beijing in 1979, it had to sever ties with Taiwan and closed its
Taipei embassy.

This has resulted in Taiwan's diplomatic isolation from the international community.

What is behind the China-Taiwan divide?

The One-China policy can be traced back to 1949 and the end of the Chinese civil war.

The defeated Nationalists, also known as the Kuomintang, retreated to Taiwan and made it their seat of
government while the victorious Communists began ruling the mainland as the People's Republic of China.

Both sides said they represented all of China. Since then China's ruling Communist Party has threatened to use
force if Taiwan ever formally declares independence.

Initially, many governments including the US recognised Taiwan and they shied away from Communist China.

But the mutual need to develop relations with China begun in the 1970s, and as a result, the US and other
countries started cutting ties with Taipei in favour of Beijing.

What happened in the recent weeks?

U.S. stated commitment to honour the One China policy.

But the move showed a bad diplomatic judgment on the part of U.S.

This doesnt mean that the U.S. must accept with China on all global issues.

The challenge before the U.S. is to address issues with Beijing without disrupting the Sino-U.S. equilibrium.

4.14 Greece struggling to meet Bailout conditions

Why in news?

The future of Greeces 86 billion Euros bailout hangs in the balance in the absence of crucial backing from the IMF.

What is Greece debt crisis?

After the creation of Eurozone, Euro currency and European Central Bank, Greece had begun to borrow large
amounts of money at very low-interest rates.

The borrowings happened primarily because of politicians could use it for populist programmes like high
pensions, low taxes, etc., |

This led to increasing govt debt, which Greece managed to repay with borrowing even more money.

The cycle has lasted until 2008 when the US housing market suffered a collapse and the entire globe became
engulfed in the financial crisis.

With global financial markets still reeling, Greece announced in October 2009, that it had been understating its
deficit figures for years, thus, raising alarms about the soundness of Greek finances.

Thus by the Spring 2010, Greece couldnt borrow anymore and couldnt repay its debts and it was veering toward
bankruptcy, which threatened to set off a new financial crisis.

To avert the calamity the IMF, the ECB and the European Commission have issued the first of three international
bailouts for Greece, which was more than 240 billion Euros.

Greece, in order to receive bailouts, has agreed to austerity measures, which would have it to cut spending, raise
taxes, etc.,

This is a highly unpopular measure in Greece and has led to severe unemployment and riots.

Till now, Greece has received 3 major bailouts. Yet, Greece is still in debt and has been unable to repay the

What is the recent development?

Athens has to repay a loan instalment by July, 2017, in order to avail of the next part of the rescue funds under the
terms of the 2015 deal.

But there is uncertainty, with the EU and the IMF are in confrontation over the health of the Greek economy and
Greeks unwillingness to adopt more austerity than what was agreed.

The report by IMF recently pointed out that the bailout target of a budget surplus of 3.5% of GDP was
unrealistic and reiterated the need for urgent debt relief.

Also, the IMFs demand that if the country again fails to meet fiscal targets, the parliament must legislate
additional measures to meet fiscal targets, has raised the agitation among Greek legislators.

Germany and other creditor countries are now concerned about the difficulty of garnering domestic
political support in the absence of more direct backing from the IMF.

5. MARCH -2016
5.1 Permanent Indus Commission

What is the issue?

India accepts Pakistans invitation to the next round of talks for the Permanent Indus Commission in Lahore. |

What are the provisions of IWT?

Under the treaty, India has full use of the three eastern rivers i.e Beas, Ravi, Sutlej, while Pakistan
has control over the three western rivers i.e Indus, Chenab, Jhelum.

India is given rights to use the western rivers partially for certain purposes.

The Permanent Indus Commission mandated to implement the Indus Waters Treaty (IWT) has met every
year, since 1960.

The commission has experts who look into issues and disputes on the ground over the utilisation of the waters
of six rivers of the Indus system.

What is the impact of the recent move?

Doubts had been raised over Indias commitment after the terrorist attack on an army camp in Uri.

In the days that followed, senior officials announced the suspension of talks until there was an atmosphere
free of terror.

Prime Minister also made an infamous remark of blood and water cannot go together.

The atmosphere was also charged after the surgical strikes along the Line of Control and subsequent pulling
out from the SAARC summit in Pakistan, leading to fears of a freeze in bilateral ties.

But the current move is a welcome one, as it denotes Indias commitment to the treaty that has stood the test
of time and war.

It also displays Indias sincerity on the issue of water-sharing, given that the IWT is seen to be a model in
dispute management.

What are the other positive moves?

There has been a marked reduction in LoC firing.

They both exchanged the annual list of their nuclear installations under a bilateral agreement that prohibits
them from attacking each others atomic facilities.

There was a release of prisoners by both countries

India was part of the consensus to elect the Pakistani nominee as the SAARC Secretary-General.

It is premature to expect anything out of the current move.

However, they reaffirm the need to keep certain issues such as water-sharing above the politics of the moment. |

5.2 Miyar project

Why in news?

India and Pakistan recently discussed hydroelectric projects and other such issues at the end of two day talks of Indus
water commissioners in Islamabad.

What is the issue with the Miyar project?

Discussions were held on Indias proposed Miyar, Lower Kalnai and PakalDul hydropower projects.

It also includes matters pertaining to exchange of data and conducting tours and meetings of Indus

The Miyar Hydropower plant is located on MiyarNallah, a right bank tributary of Chenab River.

With the 120 MW-capacity it is located in Himachal Pradesh's LahaulSpiti district.

It is the run-of-the river project with a barrage type structure.

The design of the Miyar project was received by Pakistan from India in the year 2009.

Pakistan carried out a detailed review of the design following the guidelines mentioned in the treaty and
communicated its objections to India in the same year.

Pakistan had objected to the placement of spillway, magnitude of pondage, intake and freeboard.

Pakistan has proposed a surface gated free-overflow spillway design.

India agreed to change design of the project.

What are the other issues?

However, on 1,500 MW PakalDul Hydropower plant and 48 MW Lower Kalnai, both sides could not come up
with any kind of consensus. |

PakalDul hydropower project was being constructed on the Marusadar River -a major right bank tributary of
the Chena River in the Indian held Kashmir.

It is concrete faced rock fill dam.

The reservoir will store water every year and release it in the winter season.

Talking about the 48MW Lower Kalnai, the official said the project was being constructed by India on the
Lower Kalnai River, which was also a left bank tributary of the Chenab River.

Pakistan also raised its concern saying that there should be a mechanism of data exchange to ensure that the
reservoir was being filled as per guidelines.

Besides Miyar and Lower Kalnai, Pakistan has been flagging concerns over designs of India's PakalDul (1000
MW), Ratle (850 MW) and Kishanganga (330 MW) hydropower projects, being built or planned in the Indus
river basin, contending these violate the treaty.

5.3 LeavingPoK alone

Why in news?

A Bill seeking to reserve seats in LokSabha and RajyaSabha for the people of Gilgit and Pakistan Occupied Kashmir
has been listed to be introduced in the Budget session.

What is POK?

Azad Kashmir is an autonomous administrative territory of Pakistan.

Gilgit-Baltistan, formerly known as the Northern Areas, is the northernmost province of Pakistan.

They are together referred to by the United Nations and other international organisations as "Pakistan-
administered Kashmir".

How did the POK problem emerge?

The region under British control was divided into two parts.

It included areas directly administered by the UK called British India, and those ruled by indigenous rulers
under British paramountcy called the princely states.

During partition, the Indian Independence Act 1947, gave the princely states the options of joining India or
Pakistan or remaining independent.

Hari Singh, the maharaja of Jammu and Kashmir, wanted his state to remain independent.

Western Jammu province wanted to join Pakistan.

So the city of Srinagar was attacked by Pakistani guerilla soldiers to liberate it. |

To repel this, Raja Hari Singh of J&K sought the help of the Indian army by signing Instrument of Accession.

This handed over the control of defence, external affairs and communications to the Government of India in
return for military aid.

Both Indian and Pakistani armies were mobilised.

Bothe gained control more or less around what is now known as the Line of Control.

India later approached the United Nations, which mandated the holding of a plebiscite with regard to
Kashmir's future.

This required the withdrawal of the Pakistani Army along with the non-state elements and the subsequent
partial withdrawal of the Indian Army.

This never happened.

Since then, the issue of PoK has become a much-debated topic.

What is the stand of Pakistan regarding POK?

In the last several decades, Pakistan has not shown any interest in either peace talks with India or engaging
with separatist movements in PoK.

Earlier attempts by Prime Minister AtalBihari Vajpayee, who undertook the Samjhauta Bus journey to Lahore
ended up in the Kargil war.

The Simla Pact, Agra Agreement and Lahore Declaration all remained inffective.

Is integration of PoK with India a permanent solution?

Merely acquiring 13,000 square kilometres of land and embracing all the violent after-effects, is unlikely to
bring a sensible solution.

India devotes about 35% of its annual budget to its defence and security. One of the main reasons for this is
the ongoing conflict along the Line of Control in Kashmir. |

If India does indeed get PoK, this spending will increase in order to defend it.

There are no safeguards to ensure that such a move will translate into long-lasting peace.

Gaining possession of the disputed land will not ensure its inclusion in the development process. Given the
terror infrastructure ingrained in PoK and a section of its population being radicalised, it is unlikely that India
will be welcome.

If a move is made to occupy the disputed land, the flames of terror in the neighbourhood will not only engulf
PoK, but we may lose our side of Kashmir as well.

When we see the issue in its perspective on economic, social, political or technical lines, it becomes more and
more clear that the Kashmir issue will not be resolved even if we secure PoK.

Our focus should be on our side of Kashmir only and the well-being of its people.

5.4 China makes Border Settlement

What is the news?

A Chinese special representative, in a recent interview, said if India would compromise on this Arunachal Pradesh
track, then Beijing would make similar compromises in the western sector.

What is the Chinese stand?

Referring specifically to Tawang, a town in Arunachal, the representative said Tawang is inalienable from
China's Tibet in terms of cultural background and administrative jurisdiction.

He asserted that China was not a signatory of the Simla Accord of June 3, 1914, which established the
McMahon line in the eastern sector.

China is of the view that even British respected China`s jurisdiction over Tawang and admitted that Tawang
was part of China's Tibet.

It believes that the Simla Accord, as well as the McMahon Line which it created, are not only unfair and
illegitimate, but also illegal and invalid. |

What is Indias position?

India said it was better to permanently close the boundary dialogue rather than Beijing raising the issue of

India also said it would assume that China was not interested in settling the Line of Actual Control dispute if
Tawang was ever brought to the table.

Given the importance of Tawang in the four Buddhist schools in Tibet, particularly the Gelug-pa school to
which the 14th Dalai Lama belongs, India would never give it up to China.

Further it will have to go through a constitutional amendment requiring the nod of two-thirds of
Parliament, which will be politically disastrous for the government that moves the proposal.

Why the Chinese stand is a concern?

After 1962 war, Chinese withdrew behind the McMahon demarcation in the eastern sector but stuck to its
positions in west.

So, further compromise would mean that the boundary would move from Kunlun to Karakoram watershed.

The Chinese interlocutors during the border talks conveyed that India would have to make concessions on
both sides for a boundary settlement as by now the eastern sector had become important for Beijing.

The fact is that the Chinese position on boundary resolution has been shifting depending on Bejings
strategic ambitions.

Beijing is also aggressive in its demands, be it on the One-China policy, the status of the Dalai Lama, the
South China Sea, Masood Azhars designation as terrorist or membership of the UNSC.

The recent interview further deepens Indian suspicion about China as the latter refuses to budge over any
issue raised by India.

5.5 Reconciliation in Sri Lanka

Why in news?

Recently the UN released a report on the progress of reconciliation efforts by the Sri Lankan government.

What did the report say?

The UN warned that a range of serious abuses, including torture, still appear to remain widespread in Sri

The report said the prevailing culture of impunity for perpetrating torture has undoubtedly contributed to
this situation.

It acknowledged that the govt had made positive advances on constitutional and legal reforms, land restitution
and symbolic gestures towards reconciliation. |

But it cautioned that the measures taken so far had been inadequate, lacked coordination and a sense
of urgency.

It urged the govt and people of Sri Lanka to prioritise justice alongside reconciliation to ensure that the
horrors of the past are firmly dealt with and never to recur again.

Report also made recommendations including urging the govt to prioritise the return of private land that has
been occupied by the military, adopt laws allowing the creation of a hybrid court and invite the UN rights
office to establish a presence in the country.

Where did the present regime failed to act?

In 2015, when Sri Lanka agreed to a host of measures at the UNHRC, including a judicial process to
look into the war crimes, hopes were high.

The present govt also came to power on a promise that he would restore the rule of law, end the country's
international isolation and take steps towards reconciliation with the Tamil ethnic minority.

But, key issues such as establishing a hybrid judicial mechanism and returning the military-occupied lands to
Tamil civilians in the north and east still has made no tangible progress.

Issues such as continuing use of excessive force and arbitrary arrests suggest that the government is either not
serious in changing its way or is simply incapable of doing so.

The delay in providing relief is alienating the govts allies, eroding the faith of the public and also giving
more time to the opposition to regroup itself.

Thus, its time, the present govt seize the moment and swiftly start addressing the core issues.

5.6 Connecting Asias growth pole

Why in news?

The vice president of Asian Development Bank highlighted the potentials of integrating South and South-East Asia
and the obstacles in this integration.

What are the benefits of this integration?

India and other South Asian nations, collectively forecast to grow by 7.3% in 2017, can integrate their dynamic
economies into the rest of Asia.

Removing obstacles to trade and investment between South Asia, Southeast Asia and other parts of Asia is the
key to erase extreme poverty in the region.

If South Asia and Southeast Asia each cut non-tariff barriers by 50% and trade costs by 15%, will lead to gains
of 8.9% of GDP in South Asia and 6.4% of GDP in Southeast Asia. |

Sub-regions of Asia have their respective weaknesses. So the Asias growth spurt can be achieved from
integrating these regions.

How can the integration be done?

Myanmar and Bangladesh are ideally located to open the economies on the southern side of Asia and those to
the east.

Therefore the growth should happen along Indias east coast, through Bangladesh and Myanmar into the rest
of Southeast Asia and China.

What are the causes of concern?

Only 5% of total trade is done among the South-Asian compared to 35& in East Asia and 26% in Southeast

Trade between the economies of South Asia and Southeast Asia climbed from just $4 billion in 1990 to $90
billion in 2013. But that is not fast enough and represents only a fraction of the potential gains.

Building the mutual trust, consensus, and political commitment needed to forge closer trade and transport
links will be challenge.

What should be done?

South-East Asian economies grew quickly even after the global financial crisis through new trade agreements,
highways, shipping routes, communications and cross-border logistics. This should be replicated in South

South Asia lacks the institutional framework provided by ASEAN, which has galvanized the above mentioned
economic integration. SAARC should be strengthened on these lines.

The trilateral highway connecting India, Myanmar and Thailand will deliver physical connectivity.

More robust value chains should be developed with Southeast Asia and East Asia to make tsuch movement of
goods efficient.

Market and institutional links are also to be strengthened.

A host of new economic corridors, like Bangladesh-China-India-Myanmar (BCIM), are another key to
connecting Asias fastest growing countries.

What are the gains for India in the integration?

ASEAN and India have forged a free trade agreement to deepen trade in goods and services and strengthen
investment ties.

India is partnering with Myanmar to deepen maritime trade by developing Sittwe as a deep-sea port in
northern Myanmar. |

The 2,500-km East Coast Economic Corridor (ECEC) along Indias east coast links the Visakhapatnam-
Chennai industrial corridor into Bangladesh, Myanmar and China and to the ports of Vietnam.

Matching the strengths of Indias northeast in products such as wood, rubber, cement and steel to ASEANs
needs would maximise the ECECs potential as an eastern gateway.

There is great scope also for economic corridors connecting India with Nepal, Bangladesh and Sri Lanka, to
maximise the export

For all this to happen, behind-the-border barriers to trade in South Asia need to be addressed, including the
better of its infrastructure and regulatory regimes.

5.7 India - U.S. pact likely to miss deadline

Why in news?

The India-U.S pact for buidling six reactors in A.P. by June 2017 is now facing uncertainty.

What are the issues?

Indo-U.S. nuclear arrangement is hinged on two major factors.

In the East - The completion of the India-Japan Nuclear Cooperation Agreement (NCA), as Toshiba
and other suppliers for reactor parts are bound by Japanese laws and by the actual contract to be
negotiated by the U.S.-based Westinghouse.

While the NCA was signed in Tokyo in November 2016, it is yet to be ratified by the Japanese Parliament.

Even after the India NCA is tabled, we can still expect to see some opposition in Parliament, as this is the first
such agreement with a country that has not signed the Non-Proliferation Treaty.

In the West - The questions are growing over the impact of a possible bankruptcyfiling by
Westinghouse over massive $6.3 billion losses the company incurred due to cost over-runs.

U.S. Embassy declined to comment on how the bankruptcy issues would affect the deal.

What is the history?

The two sides had agreed to work toward finalising the contractual arrangements by June 2017 for
six reactors to be built in Andhra Pradesh by Toshiba-owned Westinghouse and the Nuclear Power
Corporation of India Ltd (NPCIL).

When completed, this was to be the first operationalisation of the Indo-U.S. civil nuclear deal, which was
announced in 2008,.

It would be a proof that both sides have effectively sorted out all their issues, including over the liability that
suppliers must accept in the event of an accident. |

What does the issue underscore?

Westinghouses near-bankruptcy is part of a larger pattern of worldwide cost overruns and delivery delays
across the nuclear energy industry.

The cost of importing reactors, relative to those based on indigenous design, is another concern.

Land acquisition issues remain, along with the need for large water reservoirs for the reactors, which will only
grow if the govt goes ahead with its plans for 55 reactors of 63,000 MW in total by 2032.

In addition, there are concerns about a possible tsunami scenario along the Andhra coast.

Thus, India had little control over the above mentioned delays. So, rather than seeing the delays as a setback,
the government and officials should use this as an opportunity to re-examine the countrys
engagement with nuclear energy for future needs.

What is the way forward?

With rapid progress in technology in other renewable energy sources such as wind and solar power, the
collapse of oil prices and the expansion in gas projects as a viable and clean alternative, that promise of
nuclear power has thus dimmed.

Unlike nuclear plants where nothing can be transmitted until the whole plant is complete and attains critical
status, in renewable energy, it can be made available in smaller units.

This is the best time for Indias energy planners and government to use the breathing space provided by the
delays and take a long, hard look at the cost-benefit analysis on the nuclear power balance sheet.

5.8 India and Canada

What is the issue?

The changing world order has necessitated Canada to look beyond its age old partner and create a new trade
relationship with countries like India.

What is the present trade scenario?

Canadas direct investment in India is less than a billion dollars,.

Indias investments in Canada are above $3 billion.

Canadas bilateral goods trade with India is close to $7 billion, more or less evenly balanced.

How can both countries benefit from the relationship?

Canada is the worlds tenth largest economy, a member of the G-8 and a major agriculture, food processing
and energy powerhouse. |

India at present is the worlds fastest growing economy and also has a huge potential for infrastructural

India can benefit from Canadas technological advancement in agriculture, while Canada can make use of
India large domestic market for its investment.

Canadian governments increasing positive gesture towards the Indian origin people and the Indian students
have helped it to gain more students from India for educational purpose.

With the increasing threats from non-state actors, both countries can use their expertise to safeguard each
others borders.

What should be done by both sides?

Canadas recent success in finalising a trade deal with the European Union has sent out a message to India
that Canada is firm in its commitment.

India on the other hand should focus more on enhancing ease of doing business, and trade facilitation
measures as agreed to in the Bali Ministerial of the WTO

Canada is firmly pushing for international arbitration platforms.

Indias model Bilateral Investment Treaty makes its policy transparent for the stakeholders concerned.

Thus the Indian government should adopt a more consultative approach with Canadian government to make
the trade relationship a win-win for both sides.

5.9 India-Mexico

Why in news?

The Mexican ambassador to India has invited Indian IT professionals to use Mexico as the base for near-shore US
operations, after Trumps H-1B visa restrictions.

What is the present scenario?

Mexico is already a major bilateral as well as fast emerging trade partner for India.

India and Mexico will benefit from higher trade due to the discriminatory policy of Trump presidency.

Indias exports to Latin America as a whole declined in 2016 but exports to Mexico have increased by an
impressive 22 per cent from last year ($2.77 billion) and doubled from $1.56 billion in 2012.

In Latin America, Mexico overtook Brazil ($2.3 billion) in 2016 as the largest market for India's exports.

Mexico has emerged as the biggest market for Indias vehicle exports.

Mexico accounts for 13 per cent of Indias global exports of vehicles which stood at $14.98 billion in 2016. |

This is remarkable in view of the fact that Mexico itself exports $80 billion of vehicles and is the fourth largest
exporter in the world.

Indias vehicle exports to Mexico have increased by an incredible 56 per cent from 2015 ($1.17 billion) from a
mere $397 million in 2012.

Besides vehicles export, Indias exports to Mexico included engineering goods, chemicals, textiles, plastics and

Indias imports from Mexico were $2.44 billion in 2016, down from $3.44 billion in 2014 due to the drastic fall
in the prices of crude oil which accounts for 60 per cent of India's total imports from Mexico.

India is the third largest destination for Mexican crude exports which have the potential to increase in the
coming years.

The other major import items are: engineering products, gold, chemicals, optical products, and ores.

Why is Mexico that important?

Mexico is the second largest market in Latin America with a population of 126 million and a GDP of $1.15

It is politically stable with democratic credentials.

The macroeconomic fundamentals are healthy and strong.

The average inflation in the last decade was just 4.3 per cent.

Mexicos GDP growth rate in 2017 is projected to be around 2 per cent. |

Mexico is the largest trading nation in Latin America, accounting for about 40 per cent of the regions external

Its market is open with low tariffs and a predictable, investor-friendly policy regime.

It has become a manufacturing hub of the Americas with a global leadership position in some consumer
appliances; it is competitive in aerospace and high-tech industries.

Mexico is blessed with rich reserves of gold, silver, copper and other minerals as well as oil.

Thirteen Mexican companies have invested about a billion dollars in India.

Around 40 Indian companies have invested in Mexico in pharmaceuticals, auto parts, IT and chemicals.

Indian companies use Mexico as the platform for access to the markets of North and Central America with
whom Mexico has signed FTAs.

Indo-Mexican trade of $5.82 billion in 2016 can touch $10 billion in the next five years.

Given the importance of Mexico for Indias trade, it is imperative for India to sign a free trade agreement to
remove tariff disadvantages faced by Indias exports vis--vis exports from the 45 countries which have signed
FTAs with Mexico.

5.10 Scotland - Second Independence Referendum

Why in news?

Scottish First Minister seeks second independence referendum.

What are the pros?

Scotland would have more control over its political destiny. Currently many decisions are taken in

Scotland is more liberal than the rest of the UK and could push forward
policies to increase social welfare.

It could also decide to remain in the EU.

It could exploit more freely some economic resources, in particular the

North Sea oil.

It would also have more means and freedom to defend its own culture
and identity.

What are the cons?

Scotland may be forced to stop using the Pound (GBP) as its currency. |

Even if it allowed the usage, it would be very dangerous to maintain the currency while not having any control
over the Bank of England which is in charge of deciding the monetary policy.

Both Scotland and the UK would lose political power at international level.

Scotland could no longer be a part of permanent member of UNSC.

The independence of Scotland could trigger a wave of separatist movements in Europe, weakening the political
union of the continent and creating social and economic uncertainty.

Many businesses could leave Scotland or at least transfer their headquarters to London as Scotland is a much
smaller market than the UK.

There could be social problems linked to the separation of the countries as there are many mixed families.

The separation of the countries could also create administrative problems.

Why the demands emerged again?

In Brexit referendum a clear majority of Scots voted Remain.

Yet they were forced to leave.

So the issue of self-determination has been brought back to the political agenda.

The prospects for a separate Scotland once again revived after British Prime Ministers speech on 17 January
2017 announcing the exit from the single market and customs union.

What are the challenges before Scotland?

The economic argument of Scotland to leave is at its weakest, as there is decline in oil prices and a huge fiscal

A large share of Scotlands trade is within the U.K.

Scotlands EU entry would have to be ratified by every single member state. But countries like Spain are
unlikely to back as they themselves are fighting a long drawn separatist movement.

5.11 Turkish Referendum

Why in news?

Turkey is voting on 16 April 2017 on whether to grant President sweeping new powers.

This fundamentally changes how the country is run.

What is the referendum about?

The new draft constitution would change the country from a parliamentary to a presidential republic. |

It brings following changes -

1. The President, currently just the head of state, also becomes the head of the executive.

2. Prime minister post will be scrapped and position of vice president will be created.

3. The President will be able to issue decrees, declare emergency rule and appoint ministers and top

4. A President will be limited for two, five-year terms.

5. Parliamentary and presidential elections will be held every five years, on the same day.

6. Parliament will be able to investigate or impeach the president via a majority vote in parliament. It
would need a two-thirds majority to send the president to trial.

How did Turkey get to this stage?

In 2007, Turkey embraced a semi-presidential system, putting the election of the president to a public vote.

But there was a desire to move to a fully presidential system.

The failed coup attempt was taken as the oppurtunity by Turkish President.

What are the arguments in favour?

Turkeys security is threatened by wars in neighbouring Syria and Iraq and a spate of ISIL and Kurdish
militant attacks.

So the supporters view the plans as a guarantee of stability.

It is also seen as an attempt to modernise Turkeys constitution.

Proponents also say it will improve decision-making.

What are the arguments against?

There is abolition of parliamentary accountability.

It is seen as the erosion of the separation of powers i.e there will be no checks and balances on Turkish
Presdients power.

He will be head of state, head of government and have full power over the judiciary.

He will have the power to issue decrees, which is huge, because it pretty much makes parliament ineffective.

What about the relations with the EU?

Turks living in Europe are also eligible to vote in the referendum. |

Turkish Presidents allies drew up plans to organise rallies in European cities to mobilise support among the
turks living there.

Several European countries like Austria, Switzerland, have banned such rallies due to raising security
concerns and fear of domestic political repercussions.

They also fear that Turkish Presidents outreach could help the anti-Muslim far-right parties in the continent.

The EU needs Turkey in terms of its help with controlling migration into Europe.

Turkey needs EU, because EU is its biggest trading partner.

The Turkish President might win short-term political dividends from this ongoing spat, but in the longer run
he is endangering both Turkeys ties with Europe and the prospects of the thousands of Turks living in the

5.12 Americas new Trade Policy agenda 2017

Why in news?

America had released a new Trade Policy Agenda 2017, which sets to identify and crack down on such trade partners
with whom the US runs a big trade deficit, and force them to shrink it.

What is a trade deficit?

Trade deficit is the excess of a countrys import bill over its export receipts.

e.g The US trade deficit of $502 billion in 2016 means that the country spent $502 billion more on importing
goods and services from other countries last year, than it earned by exporting.

US Trade Deficit with other country

1. China - $300 billion

2. Germany - $68 billion

3. Mexico - $62 billion.

4. India - $30 billion.

The US is hoping that by imposing high import tariffs on trade partners who run a large deficit with it, it can
force global manufacturing giants to relocate their factories back to its shores.

By putting pressures on countries such as China and India to dismantle their import barriers, it can also access
new markets for American goods and services thereby reducing its trade deficit. |

What is the trade deficit for India?

India runs a trade deficit, with its import bill on crude oil, precious metals, electronic goods and other items,
far exceeding its export earnings.

In April to December 2016, Indias trade deficit was $76 billion.

Just like the US, India too is keen to shrink its trade deficit, especially the one with China.

Why is trade deficit important?

Running a persistent trade deficit has following adverse effects on the economy.

The countrys demand for dollars (foreign exchange) will be greater than the supply. This leads to steadily
weakening home currency i.e depreciation.

It forces a country to constantly look to foreign investors to make up the gap between its export earnings and
its import payouts.

It could be an indication that domestically produced goods are unable to compete against imports. If local
factories shut down, that leads to job losses.

What is the effect of US agenda on India?

US is one of the few countries with which India runs a trade surplus.

A reversal of this trade balance could trouble the exchange rate.

Indias exporting and importing sectors will face new hurdles.

The Indian software professionals in US are already on the verge of getting expelled from US due to the recent
H1B visa issue.

Exporters of agri-commodities, textiles and apparel are soon likely take a hit.

It is also not good for Indias young population looking for jobs.

5.13 WTO crisis

What is the issue?

The 2017 Trade Policy Agenda of the US has created a crisis for the WTO.

What is WTO?

The World Trade Organization (WTO) is an intergovernmental organization which regulates international
trade, headquarted in Geneva.

It was officially commenced under the Marrakesh Agreement replacing the General Agreement on Tariffs and
Trade. |

What the Trade Policy Agenda says?

It emphasises that a major thrust of future US trade policy would be resisting efforts by other countries or
Members of international bodies like the World Trade Organization (WTO) to advance interpretations that
would weaken the rights and benefits of the various US trade agreements.

It spells out that the new administration would firmly defend American sovereignty in trade policy issues.

This makes it clear that WTOs rulings would not necessarily lead to changes in US policies.

The Trump administration disregards multilateral and regional trade frameworks and prefers bilateral trade

It has little interest in projecting itself as committed to multilateral and regional initiatives.

The earlier US administrations, while ensuring US remains the major driver of global trade policy, didnt
abandon collective rule-making.

What will be the consequences?

The WTO has just got its biggest success in several years by implementing the Trade Facilitation Agreement
(TFA) in goods.

If the worlds largest economy begins disrespecting the WTOs dispute settlement, it might encourage others
to follow suit and the progress made would be reversed.

This would also mean a decline in commitment to economic multilateralism.

How China reacted?

China has affirmed its faith in the WTO and the multilateral trade framework soon after the US went public
with its trade policy.

China move to position itself as a supporter of multilateralism and global trade order would enable it
to attract considerable political capital, particularly support from poor and small economies.

5.14 TIR Convention

Why in news?

Cabinet approves India's accession to the Customs Convention on International Transport of Goods under cover of
TIR Carnets.

What is TIR Convention?

It is an international transit system under the auspices of the United Nations Economic Commission for
Europe (UNECE) to facilitate the seamless movement of goods within and amongst the Parties to the
Convention. |

At present there are 70 parties to the Convention, including the European Union.

What are theadvantages?

The Convention will help Indian traders to have access to fast, easy, reliable and hassle free international
system for movement of goods by road or multi- modal means across the territories of other contracting

The need for inspection of goods at intermediate borders as well as physical escorts en route will be removed
due to reciprocal recognition of Customs controls.

Customs clearance can take place at internal Customs locations thereby avoiding clearances at Border
Crossing Points and ports that may often be congested.

Movement under the TIR can be allowed by checking only the seals and the external conditions of the load
compartment or the container thereby reducing border delays, transport and transaction costs thereby leading
to increased competitiveness and growth for the trade and transport sectors.

It ensures enhanced security in the supply chain as only approved transporters and vehicles are allowed to
operate in terms of the Convention.

It can be an instrument for movement of goods along the International "North-South" Transport (INSTC)

It would also be helpful in boosting trade with the Central Asian Republics and other Commonwealth of
Independent States (CIS), particularly using ports in Iran like the Chabahar port. |

5.15 A New Transport Corridor

Why in news?

ESCAP body proposed extension of the Istanbul-Teheran-Islamabad (ITI) train corridor to Delhi-Kolkata-Dhaka
(DKD) to promote regional cooperation.

What are the advantages?

Transport connectivity is a cornerstone of regional cooperation, shaping regional production networks and
trade patterns through its impact on competitiveness.

The present international transport network faces gaps and challenges in South and South-West Asia,
compared to other subregions of Asia and the Pacific.

The train corridor has the potential to become an important transport artery for intra-regional trade and an
important conduit of Asias connectivity with Europe.

A key advantage of the ITI-DKD-Y corridor is that, as a trunk rail route traversing the breadth of Southern
Asia, it can be linked with other corridors longitudinally.

It can also provide multi-modal linkages to connect with landlocked developing countries such as Afghanistan,
Bhutan and Nepal and as well as various Central Asian countries.

Economic and Social Commission for Asia and the Pacific (ESCAP)

It is the regional development arm of the United Nations for the Asia-Pacific region. It is mandated with the
promotion of regional cooperation for sustainable development.

5.16 Commission on Legal Continental Shelf

Why in news?

India decided not to field a candidate for the upcoming election of Commission on Legal Continental Shelf (CLCS).

What is CCLS?

India is currently a member to the 21-person body of Commission on Legal Continental Shelf (CLCS).

It is an U.N. scientific body that decides what portions of the seabed can be exclusively mined for natural
resources such as oil, precious metals and minerals.

The CLCS has a five-year tenure and elections are due in June for the 2017-2022 term.

Why India opted out?

The MoES is the nodal Ministry of the Government for the Law of the Sea-related issues.

Ministry of External Affairs (MEA) formally nominates Indian candidates. |

The MoES candidate for CLCS was not agreed to by the MEA.

The elections for a seat on ITLOS will be also held around the same time.

It is believed that the reason for not nominating to CLCS is that India does not want to expend political capital
lobbying for both.

So it chose to nominate a person only to the ITLOS.

If this is true, India should not have made this kind of choice.

What is the significance of the membership?

The country shares maritime boundaries with Pakistan, the Maldives, Sri Lanka, Indonesia, Thailand,
Myanmar and Bangladesh.

Many of these boundaries are such that there are overlapping claims, especially when it comes to the extended
continental shelf.

States can lay claim to an extended continental shelf by making a geological submission to the CLCS, up to a
maximum distance of 350 nm from its coastal baseline.Each CLCS member functions as an independent

CLCS members cannot form part of the sub-commission that is considering the submission of their country.

However, the presence of a member on the commission is always of strategic significance because such a
member can advise the delegation of their country.

The membership of the commission also allows India to use scientific information that is available only to the
participants that will strengthen our claims. |

India has invested heavily in exploring non-living resources in deep international waters for polymetallic
nodules, cobalt crust and hydrothermal sulphides.

India has had disputes with several neighbours Pakistan, Bangladesh and Sri Lanka over how the
continental shelf can be fairly distributed.

Three maritime institutions

For global ocean governance,UNCLOS created three institutions vizthe Hamburg-based International
Tribunal for the Law of the Sea (ITLOS), the Kingston, Jamaica-headquartered International Seabed
Authority (ISA) and the CLCS.

ITLOS is tasked with the peaceful settlement of contentious issues submitted to it by member states.

CLCS is mandated to scientifically determine the maritime boundaries of states relating to the continental

The ISA is designated to oversee exploitation of resources in the deep sea area.

ITLOS requires experts in international law and maritime law to settle disputes between states and render
advisory opinions on the law of the sea.

CLCS requires experts in the field of geology, geophysics or hydrography to scientifically determine the extent
of the continental shelf by considering the scientific data and information submitted by a member state.

The recommendation of the CLCS is binding and there is no provision for making an appeal. Only a revised
submission can be made if the concerned state does not agree with the recommendations of the commission. |