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Current Affairs

EU drags India to WTO

  • The European Union (EU) on Tuesday said it has dragged India into WTO’s dispute settlement mechanism over imposition of import duties on certain ICT product, India has been applying duties ranging from 7.5 per cent to 20 per cent. These import duties are therefore in clear breach by India of WTO rules. It has requested consultations with the Indian government under WTO rules governing the settlement of disputes with regard to the tariff treatment that the country accords to certain goods in the information and communication technology sector. The levis affect EU exports worth Euro 600 million per year.
  • The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations.

Headquarters- Geneva, Switzerland

Established in- 1995

Fisheries and WTO

  • S and Australia proposed for member specific limits on subsidies given to finishing folk. Fisheries is the only current multilateral negotiation taking place at the. Developed nations are averse to special and differential treatment.
  • Negotiations over fisheries are simply a testing ground and developed countries will attempt to do away with S&DT altogether. There is no development concern in the proposal. Instead, it asks countries to take reduction commitments-India.
  • This proposal is a setback to developing and least developed countries’ attempts to retain special provisions in international trade. The proposal categories nations into 3 tiers based on share of global marine capture and seafood exports. India, China, and most developing countries fall in tier 1, which comprises members that account for either 0.7% or more or more of global marine capture production or 0.7% or more of global seafood exports. The proposal also has the condition that all countries notify their subsidies by June 30 to help negotiate request offers.
  • India is the 6th largest fish-producing country, doled out Rs 750 crore of subsidies for fisher folk in 2017-18.
  • According to the proposal, tier II members- that account for 0.05-0.7% of global marine capture production or global seafood exports –can opt for negotiate a cap, or accept a “default subsidy cap” of $5 million annually.

Arun Jaitley in USA

  • ArunJaitley is visiting the US to attend the IMF-World Bank meeting in Washington from April 12 to 14 to discussed India’s economic reforms and outlook for the future as he addressed investors in New York.
  • India’s Consulate General in New York tweeted Wednesday that since his arrival in the city, Jaitley “held a series of roundtables with the investors community of New York on India’s economic reforms and vision for the future. Investors are bullish on India”. Jaitley addressed an interactive session jointly organized by industry chamber FICCI, the Indian Consulate in New York and the US- India strategic Partnership Forum. When we do reforms, we have to make sure that benefit reaches last man in the queue.
  • Getting bank accounts for all, providing 99% of population with access to modern approach.Over the next five years, reducing poverty, providing best infrastructures, new cities to manage migration, increasing participation of women, will be the focus.
  • RBI governor Shaktikanta Das is also slated to attend the IMF-World Bank meetings.

Developing country tag

  • In a separate paper, presented at the WTO, India, China and some others have rebutted US claims. Both asserted that in various key indicators, ranging from per capita income and human development indices to agriculture, the gap between them and the rich nations is too stark to miss.
  • Targeting India in the same breath is not fair at all. Since human beings are central to any debate on development, per capita income is the most crucial indicator of their progress. In 2017, the per capita gross national income (as per Atlas method) of India was just $1,800, way below $54,530 in Singapore, $28,380 in South Korea and $8,690 in China, according to the World Bank data.
  • Special and differential treatment allows developing countries longer time frames to implement commitments and greater flexibilities in adopting measures to improve their presence in global markets. Developing countries are allowed to provide considerably larger input subsidies and minimum price support.
  • Further, developing countries will continue to provide indirect export subsidies, covering internal transport and marketing, until 2023, five years after the deadline for elimination of all forms of export subsidies. Chinese economy is over four times larger than ours. India can’t be treated as a developed country merely on the basis of its aggregate GDP number (The country is the world’s 6th largest economy).
  • India is home to the largest number of the world’s poor and undernourished, when two-thirds of its population can’t afford food grains at market prices, promoting the government to bring in a food security law.
  • How can India be treated as a developed country at the WTO? World Bank: As high as 21.2% of the Indian population was poor (earning less than $1.90 a day as per 2011 purchasing power parity)
  • 2% in South Korea, 7.9% in China, in Singapore, poverty is virtually non-existent. 14% of population is undernourished in India, against 2.5% in South Korea and 8.7% in China, according to the World Bank.
  • In the Human Development Index of the UNDP, India occupied the 130th position in 2017, while Singapore ranked 9th, Korea 22nd and China 86th.
  • In the 2018 Global Hunger Index, India ranked an abysmal 103rd out of 119 countries, China ranked 25th.
  • The US’ domestic support per farmer was $60,586 in 2016, 267 times of India’s ($227), although Beijing’s support ($863) was almost four times of New Delhi’s.

Recovery in Insolvency Case

  • The IBC seeks to provide market determined resolution for stressed assets in a time bound manner. Nearly half of their total admitted claims worth over Rs 1.42 lakh crore have been recovered by financial and operational creditors, according to official data.

Pakistan envoy

  • Pakistan’s outgoing High Commissioner Sohail Mahmood said it was hoping for “re-engagement” with India after the Lok Sabha polls. Structured dialogue would enable the two countries to understand mutual concerns, resolve outstanding disputes and build the edifice of durable peace and security in the region.
  • Pakistan recently announced that it was releasing 360 Indian prisoners, mostly fishermen as a “goodwill gesture”. Pakistan High Commission granting visas to 2,200 Sikh pilgrims from India to facilitate their participation in the annual Baisakhi celebrations in Pakistan.

Peacekeeping operations

  • The United Nations owes India $38 million, the highest it has to pay to any country for the peacekeeping operations as of March 2019.
  • UN Secretary General Antonio Guterres has said as he voiced concern over the world body’s deteriorating financial health. The United Nations is now effectively borrowing for prolonged periods from troop and police contributing countries. Many of them are low- income countries for which they impose a significant financial burden.
  • The UN had a positive cash balance of USD 412 million at the end of 2010 and now at the end of 2018 it had a negative cash balance of USD 323 million.

India’s trade deficit with China: Indepth Analysis

  • Trade deficit– the amount by which the cost of a country’s imports exceeds value of its exports.
  • Amid the euphoria over an “unprecedented”reduction in India’s goods trade imbalance with China last fiscal, New Delhi incurred a trade deficit with Hong Kong. Hong Kong is widely considered a proxy for Beijing.
  • For the first time in at least 20 years in FY19. This indicates that China is ramping up supplies to India through Hong Kong, as India mounts pressure on Beijing to trim its massive trade deficit with the neighbour.
  • Suresh Prabhu- Trade deficit is declined by $10-bilion in FY19, as it results in the savings of Rs 70,000 crore to the exchequer. Its $59 billion dollar in the previous year and $ 61.1 billion in FY19.
  • While India’s imports from China dropped 5% from a year before, its purchase from Hong Kong jumped almost 59%, as its exports to China rose 31% up to January its despatches to Hong Kong declined nearly 14%. This upset India’s trade equilibrium with Hong Kong to a deficit of $4.7 billion in FY19.
  • India has also been seeking greater market access from China in various sectors, specially agriculture, pharma and IT, to improve trade balance.
  • A trade deficit is an economic measure of international trade in which a country’s importsexceed its exports. A trade deficit represents an outflow of domestic currency to foreign markets

India Pak LoC trade suspended

  • India has suspended the trade across the Line of Control (LoC) with Pakistan. The Union Home Minister ordered the suspension. Probe agencies found the route was being”misused” by elements from the neighbouring country to smuggle illegal weapons, drugs and fake currency. It said a stricter regulatory and enforcement mechanism is being worked and the issue of the reopening the trade routes will be revisited once they are implemented.
  • The LoC trade, at present, is conducted through two trade facilitation centres located at Salamabad in Uri of Baramulla district, and Chakkan-da-Bagh in Poonch district, for four days a week and is based on barter system and zero-duty.

EU vs India at WTO

  • Earlier EU challenged introduction of import duties by India on a wide range of information and communications technology (ICT) products. The EU has requested consultations with India under WTO rules governing the settlement of disputes with regard to the tariff treatment that the country accords to certain goods in the ICT sector. Now US, Singapore, Taiwan expressed their interest to join EU against India. India has been applying duties ranging from 7.5 percent to 20 per cent.
  • As per the WTO rules, these three countries would have to seek approval from India and EU to join the consultation process.

US on oil supply to India

  • The US decision not to extend waivers from sanctions on purchases of Iran’s oil is not intended to hurt India and Washington is working towards stabilizing the global energy markets and maintaining steady oil supplies to friends and partners. The issue of ending the sanction waivers and its fallout, including alternative energy supplies, figured in talks between Indian officials and visiting US principal deputy assistant secretary of state for South and Central Asia Alice Wells.
  • The Trump administration alleges that oil revenue contributes to Iran’s military capabilities to fund “proxy groups.”
  • Ending the waivers is aimed at controlling Iranian proxy wars and its ability to support proxy groups in the region.