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  • [Sansad TV] Diplomatic Dispatch: Nepal Elections and India

    Context

    • Nepal’s next government is beginning to take shape.  The elections have provided a complex, fragmented mandate. Political stability could be elusive.
    • In this article, we will focus on the outcome of the recent Nepalese elections and their implications of newly elected govt on ties with India.

    Nepal politics and India

    • Sher Bahadur Deuba-led coalition is likely to form the next government in Nepal. This government is likely to enable smooth ties with India.
    • The Rakhi Diplomacy initiated by Deuba’s wife, was one of the landmark development for India.
    • The former prime minister KP Sharma Oli was “pro-China”.
    • Even before Oli began his first term in October 2015, India and Nepal had a bitter falling out over Nepal’s new constitution.

    India-Nepal Ties: A quick backgrounder

    • Ancient ties: The relationship between India and Nepal goes back to the times of the rule of the Sakya clan and Gautama Buddha.
    • Cultural relations: From 750 to 1750 AD period saw a shift from Buddhism to Hinduism in Nepal and witnessed widespread cultural diffusion.
    • Diplomatic ties: The India-Nepal Treaty of Peace and Friendship of 1950 forms the bedrock of the special relations that exist between India and Nepal.

    Various facets of India-Nepal ties

    (1) Cultural ties

    • While enjoying their own peculiarities, both India and Nepal share a common culture and ways of life.
    • Religion is perhaps the most important factor and plays a predominant role in shaping the cultural relations between these two countries, marked by a cross country pilgrimage on Char Dham Yatra, Pashupatinath Temple and some Buddhist sites.

     (2) Strategic ties

    • Nepal is a buffer state between India and China.
    • Several Nepali Citizens are also deployed in Indian defence forces as well. Ex. Gorkha Regiment.

    (3) Political ties

    • Constitutional turmoil is not new in Nepal. India has played a vital role in the democratic transition in Nepal against the monarch King Gyanendra.
    • Nepali Congress (NC) is one of the country’s oldest parties which supports relations with India, but the communist parties show a tilt towards China.

    (4) Economic ties

    • Nepal is an important export market for India. India is Nepal’s largest trading partner.
    • Himalayan rivers flowing through Nepal can be used for hydroelectric power projects which will benefit Border States of UP, Bihar and other adjacent areas.
    • Also, Nepal is the largest borrower of Indian Currency in South Asia. Nepal has escalating trade deficit with India.  

    (5) Connectivity

    • The 1950 Treaty of Peace and Friendship was sought by the Nepali authorities in 1949 to provide for an open border and for Nepali nationals to have the right to work in India.
    • The BBIN Motor Vehicles Agreement (MVA) in which Nepal is a partner will permit the member states to ply their vehicles in each other’s territory for the transportation of cargo and passengers.

    (6) Multilateral and Regional Fora

    • Both Nepal and India work in tandem in the United Nations, Non-aligned Movement and other international fora on most of the important international issues.
    • Both countries have been deeply engaged in the regional and sub-regional frameworks of SAARC, BIMSTEC and BBIN for enhancing cooperation for greater economic integration.

    China’s role in Nepal – A matter of concern

    • Once considered a buffer state between India and China, Nepal is now showing an inclination towards Beijing.
    • China is trying to stimulate and tempt Nepal with multiple aids, economic growth and acquisition.
    • China has overtaken India as the largest source of foreign direct investment with the annual development assistance being worth $120 million.

    Indo-Nepal Border Disputes

    India and Nepal share about an 1800 Km long border. There are 2 major border or territorial disputes:

    (1) Kalapani

    • The Kali River in the Kalapani region demarcates the border between India and Nepal.
    • The Treaty of Sugauli signed by the Kingdom of Nepal and British India (after the Anglo-Nepalese War) in 1816 located the Kali River as Nepal’s western boundary with India.
    • The discrepancy in locating the source of the Kali River led to boundary disputes between India and Nepal, with each country producing maps supporting their own claims.

    (2) Susta Region

    • It is about 140 sq. km of land in Uttar Pradesh at the Nepal border in the Terai area. India has control of the territory. Nepal claims this territory.
    • The change of course by the Gandak River is the main reason for disputes in the Susta area.

    Issue of Simultaneous floods in Bihar and Nepal

    • Some of Nepal’s biggest river systems originate in the Himalayan glaciers which then flow into India through Bihar.
    • During the monsoons, these river systems flood causing many problems for Bihar.
    • It is a necessity that there is process-driven coordination between the Centre and the Government of Bihar to handle the flooding in Nepal’s Terai and North Bihar (largely the Mithilanchal region).

    Why Nepal is Important to India?

    • Buffer to China: It acts as a strategic buffer against the aggression of China.
    • Pakistan factor: peddling of FICN, drugs and terrorism through the Indo-Nepal border. It makes the cooperation of Nepal important.
    • Common culture: There are huge Nepali communities in Darjeeling and Sikkim. Many marital relations across the border exist.
    • National Security: There is a lot of interdependence. Gurkha Regiment in Indian Army is known for its valiance.
    • Energy Security: Nepal has the potential of 80 GW of hydroelectricity. But only 600 MW potential is realized so far.

    Major irritants in bilateral ties

    • Nepali nationalism and Anti-India sentiments: Anti-India Sentiment in Nepal is largely politically motivated as it is wrongly perceived as India’s backing to Monarchy.
    • China factor: Nepal’s assent for the ‘One Belt One Region’ (OBOR) initiative of China is viewed by India with suspicion. It has been slowly fallen prey to China’s inroad debt trap policy.
    • India’s perception of Nepal: The reality is that India has ignored the changing political narrative in Nepal for far too long.
    • Open borders: The issue of open borders has also been a point of debate in Nepal in recent years- Nepalese people argue that India is benefiting more from it than Nepal.
    • Madhesis Issue: Madhesis share extensive cross-border ethnic and linguistic links with India. India upset that the final draft of the Constitution did not include the marginalization concerns of the Madhesi and the Tharu.

    Way Forward

    • Dialogues: In the best spirit of friendship, Nepal and India should restart the water dialogue and come up with policies to safeguard the interests of all those who have been affected on both sides of the border.
    • Investments: TheBilateral Investment Promotion and Protection Agreement (BIPPA) signed between India and Nepal needs more attention from Nepal’s side.
    • Sensitization: The onus is on India to rethink on a long-term basis how to recalibrate its relationship with Nepal provided Nepal should not ignore its relations with India.
    • Strengthening Economic Ties: The power trade agreement needs to be such that India can build trust in Nepal.

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  • What is the Recusal of Judges?

    A Supreme Court judge recused herself from hearing a writ petition filed by Bilkis Bano against the decision to prematurely release 11 men sentenced to life imprisonment for gang-raping her during the 2002 riots.

    What is the Recusal of Judges?

    • Recusal is the removal of oneself as a judge or policymaker in a particular matter, especially because of a conflict of interest.
    • Recusal usually takes place when a judge has a conflict of interest or has a prior association with the parties in the case.
    • For example, if the case pertains to a company in which the judge holds stakes, the apprehension would seem reasonable.
    • Similarly, if the judge has, in the past, appeared for one of the parties involved in a case, the call for recusal may seem right.
    • A recusal inevitably leads to delay. The case goes back to the Chief Justice, who has to constitute a fresh Bench.

    Rules on Recusals

    • There are no written rules on the recusal of judges from hearing cases listed before them in constitutional courts. It is left to the discretion of a judge.
    • The reasons for recusal are not disclosed in an order of the court. Some judges orally convey to the lawyers involved in the case their reasons for recusal, many do not.
    • Some explain the reasons in their order. The decision rests on the conscience of the judge.
    • At times, parties involved raise apprehensions about a possible conflict of interest.

    Issues with recusal

    • Recusal is also regarded as the abdication of duty. Maintaining institutional civilities are distinct from the fiercely independent role of the judge as an adjudicator.
    • In his separate opinion in the NJAC judgment in 2015, Justice Kurian Joseph highlighted the need for judges to give reasons for recusal as a measure to build transparency.
    • It is the constitutional duty, as reflected in one’s oath, to be transparent and accountable, and hence, a judge is required to indicate reasons for his recusal from a particular case.

    Back2Basics: Bilkis Bano Case

    • Bilkis Bano is a gangrape survivor of the 2002 riots in Gujarat. Rioters brutally attacked Bilkis and her family, raped the women and killed many of them.
    • Her case was taken up by the National Human Rights Commission (NHRC) and Supreme Court. Later, the Supreme Court transferred the investigation to the CBI and the case to Mumbai to facilitate a free and fair trial.
    • Eleven men were convicted by the trial court and sentenced to life. The Bombay High Court confirmed their life terms in 2017.
    • In 2019, the Supreme Court awarded compensation of Rs 50 lakh to Bilkis — the first such order in a case related to the 2002 riots.
    • The convicts were later released after the state government’s remission to them for spending more than 15 years in jail.

    Issues with this remission

    • Causality of a heinous crime: The remission runs contrary to the spirit of contemporary thinking on treating crimes against women and children as so heinous that the perpetrators should not be considered for remission.
    • Whimsy release: The CrPC does permit premature release in the form of remission or commutation in life sentences, but it should be based on a legal and constitutional scheme, and not on a ruler’s whimsy.
    • Political considerations: It would be unjustified if given for political considerations merely because of elapse of the minimum number of years they have to serve.

     

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  • Back in news: Organization of Islamic Cooperation (OIC)

    oic

    India strongly condemned the Organisation of Islamic Cooperation chief’s visit to Line of Control (LoC) from the Pakistani side.

    What is OIC?

    • The OIC — formerly Organisation of the Islamic Conference — is the world’s second-largest inter-governmental organization after the UN, with a membership of 57 states.
    • The OIC’s stated objective is “to safeguard and protect the interests of the Muslim world in the spirit of promoting international peace and harmony among various people of the world”.
    • OIC has reserved membership for Muslim-majority countries. Russia, Thailand, and a couple of other small countries have Observer status.

    India and OIC

    • At the 45th session of the Foreign Ministers’ Summit in 2018, Bangladesh suggested that India, where more than 10% of the world’s Muslims live, should be given Observer status.
    • In 1969, India was dis-invited from the Conference of Islamic Countries in Rabat, Morocco at Pakistan’s behest.
    • Then Agriculture Minister Fakhruddin Ali Ahmed was dis-invited upon arrival in Morocco after Pakistan President Yahya Khan lobbied against Indian participation.

    Recent developments

    • In 2019, India made its maiden appearance at the OIC Foreign Ministers’ meeting in Abu Dhabi, as a “guest of honor”.
    • This first-time invitation was seen as a diplomatic victory for New Delhi, especially at a time of heightened tensions with Pakistan following the Pulwama attack.
    • Pakistan had opposed the invitation to Swaraj and it boycotted the plenary after the UAE turned down its demand to rescind the invitation.
    • Earlier this year, the ousted Pakistani PM called a OIC summit which ended up without any remarks.

    What is the OIC’s stand on Kashmir?

    • It has been generally supportive of Pakistan’s stand on Kashmir and has issued statements criticizing India.
    • Last year, after India revoked Article 370 in Kashmir, Pakistan lobbied with the OIC for their condemnation of the move.
    • To Pakistan’s surprise, Saudi Arabia and the UAE — both top leaders among the Muslim countries — issued nuanced statements, and were not as harshly critical of New Delhi as Islamabad had hoped.
    • Since then, Islamabad has tried to rouse sentiments among the Islamic countries, but only a handful of them — Turkey and Malaysia — publicly criticized India.

    How has India been responding?

    • India has consistently underlined that J&K is an integral part of India and is a matter strictly internal to India.
    • The strength with which India has made this assertion has varied slightly at times, but never the core message.
    • It has maintained its “consistent and well known” stand that the OIC had no locus standi.
    • India asserts that- OIC has become a “mouthpiece” of Pakistan and that the organisation has been taking “blatantly communal, partisan and factually incorrect approach to issues”.

    OIC members and India

    • Individually, India has good relations with almost all member nations. Ties with the UAE and Saudi Arabia, especially, have looked up significantly in recent years.
    • The OIC includes two of India’s close neighbors, Bangladesh and Maldives.
    • Indian diplomats say both countries privately admit they do not want to complicate their bilateral ties with India on Kashmir but play along with OIC.

    Way ahead

    • India now sees the duality of the OIC as untenable, since many of these countries have good bilateral ties and convey to India to ignore OIC statements.
    • But these countries sign off on the joint statements which are largely drafted by Pakistan.
    • India feels it important to challenge the double-speak since Pakistan’s campaign and currency on the Kashmir issue have hardly any takers in the international community.

     

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  • What is a Loan Write-Off?

    Banks have written off bad loans worth ₹10,09,511 crore during the last five financial years, finance minister informed the Parliament.

    What is a loan write-off?

    • Writing off a loan essentially means it will no longer be counted as an asset.
    • By writing off loans, a bank can reduce the level of non-performing assets (NPAs) on its books.
    • The bank moves the defaulted loan, or NPA, out of the assets side and reports the amount as a loss.
    • An additional benefit is that the amount so written off reduces the bank’s tax liability.
    • The loans written off by the banks are the depositors’ money.

    Why do banks resort to write-offs?

    • Recovery issues: The bank writes off a loan after the borrower has defaulted on the loan repayment and there is a very low chance of recovery. However, the chances of recovery from written-off loans are very low.
    • Provisioning: After the write-off, banks are supposed to continue their efforts to recover the loan using various options. They have to make provisioning as well.
    • Reduce tax liability: The tax liability will also come down as the written-off amount is reduced from the profit.

    Who is at the forefront of write-offs?

    • Public sector banks reported the lion’s share of write-offs at Rs 734,738 crore accounting for 72.78 per cent of the exercise.
    • Among individual public sector banks, reduction in NPAs due to write-offs in the case of State Bank of India Rs 204,486 crore in the last five years.
    • Among private banks, ICICI Bank’s reduction in NPAs due to write-offs was Rs 50,514 crore in the last five years.
    • Axis Bank wrote off Rs 49,715 crore and HDFC Bank Rs 34,782 crore during the period, according to the RBI.

    What about recovery of such loans?

    • Since the loan account is not closed in write-off, the right to recovery of the amount is not waived by the lender or the bank.
    • The bank or lender can try to recover the loan amount from the loan defaulter.

    Back2Basics: Non-Performing Assets (NPAs)

    • A NPA is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days.
    • Banks are required to classify NPAs further into Substandard, Doubtful and Loss assets.
    1. Substandard assets: Assets which has remained NPA for a period less than or equal to 12 months.
    2. Doubtful assets: An asset would be classified as doubtful if it has remained in the substandard category for a period of 12 months.
    3. Loss assets: As per RBI, “Loss asset is considered uncollectible and of such little value that its continuance as a bankable asset is not warranted, although there may be some salvage or recovery value.”

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  • US scientists announce breakthrough in Fusion Energy

    fusion

    US announced a “major scientific breakthrough” in the decades-long quest to harness fusion, the energy that powers the sun and stars.

    What is Fusion?

    • Fusion works by pressing hydrogen atoms into each other with such force that they combine into helium, releasing enormous amounts of energy and heat.
    • This process occurs in our Sun and other stars.
    • Creating conditions for fusion on Earth involves generating and sustaining a plasma.
    • Plasmas are gases that are so hot that electrons are freed from atomic nuclei.

    How is it carried out?

    fusion

    • Three conditions must be fulfilled to achieve fusion in a laboratory:
    1. Very high temperature (on the order of 150,000,000° Celsius);
    2. Sufficient plasma particle density (to increase the likelihood that collisions do occur); and
    3. Sufficient confinement time (to hold the plasma, which has a propensity to expand, within a defined volume).
    • At extreme temperatures, electrons are separated from nuclei and a gas becomes a plasma—often referred to as the fourth state of matter.
    • Fusion plasmas provide the environment in which light elements can fuse and yield energy.

    Fusion Energy

    • The process releases energy because the total mass of the resulting single nucleus is less than the mass of the two original nuclei.
    • The leftover mass becomes energy.

    What did the US achieve?

    • The US experiment uses a process called inertial confinement fusion.
    • It involved bombarding a tiny pellet of hydrogen plasma with the world’s biggest laser.

    Why is it perceived as energy of the future?

    • Carbon free: Fusion Reactions could one day produce nearly limitless, carbon-free energy, displacing fossil fuels and other traditional energy sources.
    • Efficient: Net energy gain has been an elusive goal because fusion happens at such high temperatures and pressures that it is incredibly difficult to control.
    • Clean: Unlike other nuclear reactions, it doesn’t create radioactive waste.

    Fusion still far from reality. Why?

    • Significant though the achievement is, it does little to bring the goal of producing electricity from fusion reactions any closer to reality.
    • By all estimates, use of the fusion process for generating electricity at a commercial scale is still two to three decades away.
    • The technology used in the US experiment might take even longer to get deployed.

    India’s progress: ITER project

    • International Thermonuclear Experimental Reactor (ITER) is one of the most ambitious energy projects in the world today.
    • The idea for an international joint experiment in fusion was first launched in 1985.
    • In southern France, 35 nations* are collaborating to build the world’s largest tokamak, a magnetic fusion device that has been designed to prove the feasibility of fusion.
    • ITER is funded and run by seven member parties: China, the European Union, India, Japan, Russia, South Korea and the United States.

     

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  • What is Base Editing?

    A teenage cancer patient suffering from T-cell acute lymphoblastic leukaemia (T-ALL) has defeated her seemingly incurable cancer with the help of base editing technique.

    Base Editing

    • Bases are the language of life. The four types of base – adenine (A), cytosine (C), guanine (G) and thymine (T) – are the building blocks of our genetic code.
    • Just as letters in the alphabet spell out words that carry meaning, the billions of bases in our DNA spell out the instruction manual for our body.
    • Base editing allows scientists to zoom to a precise part of the genetic code and then alter the molecular structure of just one base, converting it into another and changing the genetic instructions.
    • The large team of doctors and scientists used this tool to engineer a new type of T-cell that was capable of hunting down and killing cancerous T-cells.

    base-editing

    What is T-Cell?

    • T (thymus) cells are type of white blood cell.
    • They are part of the immune system and develop from stem cells in the bone marrow.
    • They help protect the body from infection and may help fight cancer.
    • Also called T lymphocyte and thymocyte.

    How base editing helped this teenage cancer patient?

    • Doctors started with healthy T-cells that came from a donor and set about modifying them.
    • The first base edit disabled the T-cells targeting mechanism so they would not assault patient’s body.
    • The second removed a chemical marking, called CD7, which is on all T-cells.
    • The third edit was an invisibility cloak that prevented the cells being killed by a chemotherapy drug.
    • The final stage of genetic modification instructed the T-cells to go hunting for anything with the CD7 marking on it so that it would destroy every T-cell in patient’s body – including the cancerous ones.
    • That’s why this marking has to be removed from the therapy – otherwise it would just destroy itself.
    • If the therapy works, the patient’s immune system – including T-cells – will be rebuilt with the second bone-marrow transplant.

     

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  • In news: Geminids meteor shower

    geminids

    Bengalurians are all set to witness the annual Geminids meteor shower.

    What are meteor showers?

    • Meteors are usually fragments of comets.
    • As they enter the Earth’s atmosphere at high speed, they burn up, creating a spectacular “shower”.
    • Meteors come from leftover comet particles and bits from asteroids.
    • When these objects come around the Sun, they leave a dusty trail behind them.
    • Every year Earth passes through these debris trails, which allows the bits to collide with our atmosphere where they disintegrate to create fiery and colorful streaks in the sky.

    What makes the Geminids unique?

    • Geminids is one of the brightest and most reliable annual meteor showers.
    • They are unique because unlike most meteor showers, they originate not from a comet, but from an asteroid, the 3200 Phaethon.
    • The 3200 Phaethon was discovered on October 11, 1983.
    • It is named after the Greek mythology character Phaethon, son of the Sun God Helios.
    • It takes 1.4 years to complete one round of the Sun.
    • As the 3200 Phaethon moves close to the Sun while orbiting it, the rocks on its surface heat up and break off.
    • When the Earth passes through the trail of this debris, the Geminids are caused.

    Why are they called Geminids?

    • That comes from the constellation Gemini, from whose location in the sky the meteor shower appears to originate.
    • The constellation for which a meteor shower is named only serves to aid viewers in determining which shower they are viewing on a given night.
    • The constellation is not the source of the meteors.

    Back2Basics:

    gemenids

     

  • India-UK Free Trade Agreement (FTA) is good for both countries

    UK

    Context

    • The ties between India and the UK are often described as a Living Bridge, a dynamic economic force of people, businesses and ideas. As Prime Minister Narendra Modi drives forward plans to make India a developed nation within the next 25 years and the UK forges deeper trade relationships around the globe, our connections are growing stronger every day.

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    Background: How India-UK trade relationship taking shape in recent time?

    • Enhanced trade relationship: India and the UK are two of the largest economies on the planet. Economic relationship between the two is reaching new heights with an enhanced trade partnership.
    • Minimised trade barriers: Both have lowered several trade barriers, pledged to bring down many more and set an ambitious target to double the value of India-UK trade by 2030.
    • Opening up opportunities in UK: Since then, Indian firms, including established businesses and recent startups, have been finding opportunities in the UK.
    • Business and investment in India: British businesses in fields ranging from food to financial services are expanding and investing in India. The car manufacturer, McLaren, which has just opened a showroom in Mumbai, is one example.
    • FTA’s beneficial for future and mutual growth: An India-UK free trade agreement is a natural next step for both, bringing two nations with extraordinary plans for their futures closer still.

    UK

    What are Free trade agreements (FTA)?

    • Free trade agreements are agreements between the two or more countries or trading blocks that primarily agrees to eliminate or reduce customer tariff and non-tariff barriers on substantial trade between them.

    Importance of Free Trade Agreements

    • FTA include multiple trade aspects: FTAs cover a wide array of topics such as tariff reduction impacting the entire manufacturing and the agricultural sector; rules on services trade; digital issues such as data localization; intellectual property rights that may have an impact on the accessibility of drugs; and investment promotion, facilitation, and protection.
    • Great impact on economy and society: Consequently, an FTA has a far-reaching impact on the economy and society. Given this, one legitimately expects transparency and greater scrutiny of the FTA process both during and after the negotiations.

    UK

    How a Free trade agreement with UK will benefit India?

    • Greater market access works both ways: Prime Minister Modi has urged Indian businesses to export their products to the world with “zero-effect, zero-defect”. In other words, high-quality goods with no environmental impact. A free trade agreement between our nations could further help achieve this target. It would help Indian firms to sell to a market that imported almost £820 billion of goods and services from around the world in the last 12 months on record.
    • UK will aid in the ongoing India’s economic progress: The Indian economy’s future is an exciting one, with the prospect of new technologies, growing businesses and better jobs for its citizens. The UK has the skills and experience to aid this progress. A deal that’s right for both could make it cheaper and easier for ambitious Indian businesses to tap into this expertise. It is also only right that the millions of SMEs that power India’s economy benefit from a deal.
    • Investment in one another’s economy will multiply the opportunities: The British cybersecurity solutions firm, Telesoft Technologies, has just said it will pump £10 million into its India subsidiary over the next five years supporting a growing telecoms sector. A free trade agreement that smooths British and Indian firms’ path to invest in one another’s economy would mean such opportunities multiply.
    • FTA can be a force of primary economic growth in uncertain times: A free trade agreement’s value cannot be measured entirely in rupees and pounds. Covid-19’s impact on supply chains, slow global economic growth and volatile markets mean we are living in uncertain times, where free trade could be the primary force of prosperity throughout history. It will help to build the long-term security that people around the world need right now.

    UK

    Conclusion

    • In the economic uncertainty, free trade can be considered as answer to building the long-term security that people around the world need right now. In this, the year of its 75th anniversary since Independence and its G20 Presidency, India is on a path to a new economic future. It would be great to have UK alongside on this journey, as we together can use trade to benefit our citizens and the world.

    Mains question

    Q. Trade between India and UK is on upward trend. Free trade agreement between the two will surely benefit both the countries. How India can take advantage of the FTA between the two?

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  • Regulating the Big Techs and competition in the market

    competition

    Context

    • The Indian anti-trust body, the Competition Commission of India (CCI)’s move, in October, to impose a penalty of ₹1,337.76 crore on Google for abusing its dominant position in the android mobile device ecosystem, has forced us, once again, to rethink the market power of Big Tech companies.

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    Background: Acknowledging the big tech company’s market distorting abilities

    • India did not account for network effect of big techs: When India established the CCI under the Indian Competition Act 2002, it was to protect and promote competition in markets, and prevent practices that hinder competition. However, it did not account for the network effect of Big Tech companies as a force to reckon with.
    • Countries are realised their market dominance and moved to transform competition law: As their market dominance increased rather exponentially, the European Union, the United States, and even Australia realised their market-distorting abilities and moved to transform their competition law.
    • For instance, European union’s Digital market Act: The EU’s Digital Market Act and “gatekeepers” who will enforce rules and regulations ex-ante to foresee anti-competitive practices is an example.

    Competition Commission of India

    • CCI is the competition regulator in India.
    • It is a statutory body responsible for enforcing The Competition Act, 2002 and promoting competition throughout India and preventing activities that have an appreciable adverse effect on competition in India.
    • It was established on 14 October 2003. It became fully functional in May 2009.

    competition

    Big techs and the Market dominance issue

    • Market dominance is natural but gets hazy when its abused: In any free economy, market dominance is natural but things get hazy when it is abused to prevent competition.
    • Google’s case: As the CCI says, the intent of Google’s business was to make users on its platforms abide by its revenue-earning service, i.e., an online search to directly affect the sale of their online advertising services. Thus, network effects, along with a status quo bias, created significant entry barriers for competitors to enter or operate in the markets concerned.
    • Fundamental role of pricing and as a determinant of competition: Predatory pricing entails the lowering of prices that forces other firms to be out competed. Amazon and Flipkart were accused of deep discounting and creating in-house brands to compete with local sellers. Only recently, the CCI raided their offices in an anti-competition probe, leading to Amazon being forced to cut its ties with Cloudtail.
    • Consumers consent has no value: A crucial aspect of self-preferencing beyond the search algorithms is the bundling of services, especially with pre-installed apps, where the manufacturers eliminate competition without the consumer’s consent. Apple is facing heat in the U.S. and Europe over pre-installed apps after Russia forced Apple to provide third-party apps at the time of installation.

    competition

    Use of data, issue of consumer protection

    • Big techs self-asserted right to use, store and transfer consumers data: While the data economy has evolved, we have not dealt with its regulation as effectively. There is sensitive data stored on these platforms (financial records, phone location, and medical history). Big corporations have asserted ownership of the right to use or transfer this data without restriction.
    • Data greed as a motivation: While one might attribute it to efficiency barriers, the greed for data is a motivation. Further, the storage and collection of women’s and children’s data need to be dealt with more cautiously to build a safe digital place.
    • Market distortions lead to data monopoly and poor quality of services: Market distortion can also lead to poorer quality of services, data monopoly, and stifle innovation.

    Steps to ensure a level playing field and consumer protection in the age of digital transformation?

    • Urgent to need to prevent market failures and mitigate possible anti-competitive act: While the competition laws address that anomaly, they are too slow to respond in complex technical sectors. By the time an order is passed, the dominant player has gained an edge — as in the case of Google. Thus, in this context, there is an urgent need for ex-ante legislation to prevent market failures and mitigate possible anti-competitive conduct.
    • Harmony of the competition law and e-commerce rule: For a consumer, there is a need to establish harmony of the Competition law with the new Consumer Protection Act 2020 and e-commerce rules. The new law should include a mechanism to ensure fair compensation for consumers who face the brunt of the anti-competitive practices of the Big Techs. This should ensure that the penalties and restrictions being imposed on companies also ensure proportionate compensation for consumer losses.
    • Ensure a level playing field for local sellers: Pricing plays a fundamental role in defining the position of any digital platform in the marketplace. It is essential to establish an ex-ante framework to ensure a level playing field for local sellers. The Government’s Open Network for Digital Commerce (ONDC) platform is a reliable option for these small players.
    • New laws and provisions for digital marketplace: There is an urgent need to contextualise the law to the digital marketplace and devise new provisions with adequate ex-ante legislation. The EU has already noted this need through the Digital Markets Act. It is time that similar legislation is adopted in India.

    competition

    Prelims shot: What is “ONDC”?

    • Open Network for Digital Commerce (ONDC) seeks to promote open networks, which are developed using the open-source methodology.
    • The project is aimed at curbing “digital monopolies”.
    • This is a step in the direction of making e-commerce processes open-source, thus creating a platform that can be utilized by all online retailers.
    • They will encourage the usage of standardized open specifications and open network protocols, which are not dependent on any particular platform or customized one.

    Conclusion

    • Witnessing the big tech’s ability of market distortion, data monopoly and market dominance, Country’s competition laws need to be vigilant through an ex-ante framework to ensure highest consumer protection. With India now on the cusp of a digital transformation, it is essential that the country a level-playing field to ensure a fair opportunity for new-age start-ups and Micro, Small and Medium Enterprises.
  • 13th Dec 2022 | Prelims Daily with Previous Year Questions

    13th Dec 2022 | Prelims Daily with Previous Year Questions

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