It is no secret that Punjab, once the frontrunner of Indian agriculture, is struggling to retain its dynamism.
Need to diversify
While Punjab ranked at the top of major Indian states in terms of per capita income during 1967-68 to 2002-03, it has slipped below the 13th position.
Punjab’s agricultural growth rate, at 5.7 per cent, was more than double the country’s average of 2.3 per cent during 1971-72 to 1985-86.
This has reversed between 2005 and 2019 with Punjab at 1.9 per cent and India at 3.7 per cent.
Agriculture least diversified state: With almost 85 per cent of the gross cropped area under wheat and rice, agriculture is least diversified in the state.
Mandi transactions cost about 8.5 per cent of the MSP, the highest in the country, making Punjab wheat and rice less competitive.
What explains low diversification in agriculture?
Policies: Guaranteed MSP for wheat and paddy, backed by assured procurement, free power and highly subsidised fertilisers, has disincentivised diversification.
Political economy: The political economy around wheat and rice is so intense that any effort to address its distortionary impact is met with fierce opposition by vested interest groups.
How to recalibrate Punjab agriculture towards higher, sustainable growth?
Augment livestock and milk processing: While fruits and vegetables account for 7.4 per cent of the value of the output of agriculture and allied sectors, livestock accounts for 31.5 per cent and fisheries less than 1 per cent.
The state has the highest per capita availability of milk but it can process less than 20 per cent of it.
Promoting mega parks for value addition in fruits and vegetables, milk, and other livestock products through medium and small enterprises will strengthen its competitiveness.
Strengthen market for seed potato: It is also a significant player in seed potato and with the right package of practices, traceability systems, and infrastructure, the market for Punjab seed potato can be strengthened.
Scaling up alternative marketing channel: Alternative marketing channels for fruits and vegetables such as direct marketing, contract farming, and exports have been in place but these models need to be scaled up with the right ecosystem.
Shift to demand-driven agriculture: Punjab needs to switch from supply-driven agriculture to demand-driven agriculture.
The demand for fisheries, poultry, dairy, and fruits and vegetables is increasing way faster than the demand for wheat and rice.
Rationalise mandi charges: Rationalising mandi charges to not more than 3 per cent will attract private sector investments in building efficient value chains.
Rationalise subsidies: Time-bound incentives in the form of freight subsidies for exporters of high-value agri-produce, tax exemptions for the processing of perishable commodities for value chain players would be more rational than the overloaded subsidies of urea and free power.
Use technology and start-up revolution: Punjab should leverage the start-up revolution that is unfolding in India, and use technology to ensure optimal utilisation of resources, expand markets, and augment farmers’ income.
Geo-tagging of farms can address concerns related to long-term leasing of land that is critical for large-scale investments and enable vibrant agricultural land markets.
Innovations in supply chain management, be it automated grain silos or state-of-art herd management will not only optimise the use of resources but also bring in traceability of farms and animals, early monitoring and prevention of disease outbreaks, and contain value chain losses.
How to manage financial resources?
Rationalise urea subsidy: It should rationalise its fertiliser subsidy regime by moving towards cash transfers on a per hectare basis and free up fertiliser prices.
Include urea in nutrient-based subsidy scheme: If that’s not possible, then urea should be included in the nutrient-based subsidy scheme.
Bring soluble fertiliser under subsidy: Bring soluble fertilisers under subsidy, which will enhance fertiliser use efficiency through fertigation.
This will also help reap environmental gains.
Rationalise food subsidy: Food subsidy can also be rationalised through direct cash transfers replacing PDS, as Punjab is a grain surplus state.
Conclusion
Both environmental and financial sustainability concerns related to business-as-usual farming in Punjab call for a rebooting strategy.
India and the United Kingdom have launched formal Free Trade Agreement (FTA) negotiations with the aim of concluding an early harvest trade agreement over the next few months.
What is a Free Trade Agreement (FTA)?
A FTA is a pact between two or more nations to reduce barriers to imports and exports among them.
Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.
The concept of free trade is the opposite of trade protectionism or economic isolationism.
Key benefits offered by FTA
Reduction or elimination of tariffs on qualified: For example, a country that normally charges a tariff of 12% of the value of the incoming product will rationalize or eliminate that tariff.
Intellectual Property Protection: Protection and enforcement of intellectual property rights in the FTA partner country is upheld.
Product Standards: FTA enhances the ability for domestic exporters to participate in the development of product standards in the FTA partner country.
Fair treatment for investors: FTA provides treatment as favourably as the FTA partner country gives equal treatment for investments from the partner country.
Elimination of monopolies: With FTAs, global monopolies are eliminated due to increased competition.
How many FTAs does India have?
India has signed it’s first Free Trade Agreement (FTA) with Sri Lanka in 1998.
Likewise, India had FTAs with: Nepal, Bhutan, Thailand, Singapore, ASEAN, Japan and Malaysia.
The discussion is going for an FTA with Australia.
India has signed Preferential Trade Agreements such as:
Asia Pacific Trade Agreement (APTA) with Bangladesh, China, India, Lao PDR, Republic of Korea, and Sri Lanka
Global System of Trade Preferences (GSTP)
India – MERCOSUR PTA etc. with South American countries
Back2Basics: Types of Trade Agreements
(1) Free Trade Agreement – discussed above
(2) Preferential Trade Agreement
In this type of agreement, two or more partners give preferential right of entry to certain products.
This is done by reducing duties on an agreed number of tariff lines.
Here a positive list is maintained i.e. the list of the products on which the two partners have agreed to provide preferential access.
Tariff may even be reduced to zero for some products even in a PTA.
India signed a PTA with Afghanistan.
(3) Comprehensive Economic Partnership Agreement
Partnership agreement or cooperation agreement are more comprehensive than an FTA.
CECA/CEPA also looks into the regulatory aspect of trade and encompasses and agreement covering the regulatory issues.
CECA has the widest coverage. CEPA covers negotiation on the trade in services and investment, and other areas of economic partnership.
It may even consider negotiation on areas such as trade facilitation and customs cooperation, competition, and IPR.
India has signed CEPAs with South Korea and Japan.
(4) Comprehensive Economic Cooperation Agreement
CECA generally cover negotiation on trade tariff and Tariff rate quotas (TRQs) rates only.
It is not as comprehensive as CEPA.
India has signed CECA with Malaysia.
(5) Framework Agreement
Framework agreement primarily defines the scope and provisions of orientation of the potential agreement between the trading partners.
It provides for some new area of discussions and set the period for future liberalisation.
India has previously signed framework agreements with the ASEAN, Japan etc.
(6) Early Harvest Scheme
An Early Harvest Scheme (EHS) is a precursor to an FTA/CECA/CEPA between two trading partners. For example, early harvest scheme of RCEP has been rolled out.
At this stage, the negotiating countries identify certain products for tariff liberalization pending the conclusion of actual FTA negotiations.
An Early Harvest Scheme is thus a step towards enhanced engagement and confidence building.
The concept of Web3, also called Web 3.0, used to describe a potential next phase of the internet, created quite a buzz in 2021.
What is Web3?
The model, a decentralized internet to be run on blockchain technology, would be different from the versions in use, Web 1.0 and Web 2.0.
In web3, users will have ownership stakes in platforms and applications unlike now where tech giants control the platforms.
Previous versions of Web
To understand web3, we should start with Web 1.0 and Web 2.0.
[1] Web 1
Web 1.0 is the world wide web or the internet that was invented in 1989. It became popular from 1993.
The internet in the Web 1.0 days was mostly static web pages where users would go to a website and then read and interact with the static information.
Even though there were e-commerce websites in the initial days it was still a closed environment and the users themselves could not create any content or post reviews on the internet.
Web 1.0 lasted until 1999.
[2] Web 2
Web 2.0 started in some form in the late 1990s itself though 2004 was when most of its features were fully available. It is still the age of Web 2.0 now.
The differentiating characteristic of Web 2.0 compared to Web 1.0 is that users can create content.
They can interact and contribute in the form of comments, registering likes, sharing and uploading their photos or videos and perform other such activities.
Primarily, a social media kind of interaction is the differentiating trait of Web 2.0.
What are some of the concerns?
In Web 2.0, most of the data in the internet and the internet traffic are owned or handled by very few behemoth companies ex. Google.
This has created issues related to data privacy, data security and abuse of such data.
There is a sense of disappointment that the original purpose of the internet has been distorted.
It is in this context that the buzz around Web3 is significant.
Dawn of Web3
Gavin Wood, founder of Ethereum, a block chain technology company, used the term Web3 first in 2014 and in the past few years many others have added to the idea of Web3.
In 2021, owing to the popularity of crypto-currency, more discussions happened on Web3.
How will Web3 address the problems of data monopoly?
Web3 will deliver decentralized and fair internet where users control their own data.
Currently if a seller has to make a business to the buyer, both the buyer and seller need to be registered on a “shop” or “platform” like Amazon or Ebay or any such e-commerce portal.
What this “platform” currently does is that it authenticates that the buyer and seller are genuine parties for the transaction.
Web3 would try to remove the role of the “platform”.
For the buyer to be authenticated, the usual proofs aided by block chain technology will be used. The same goes for the seller.
How is blockchain technology used here?
With block chain, the time and place of the transaction are recorded permanently.
Thus, Web3 enables peer to peer (seller to buyer) transaction by eliminating the role of the intermediary. This concept can be extended to other transactions also.
Consider a social media application where you want to share pictures with your followers.
It could be a broadcast operation from you aided by blockchain and you don’t need social media accounts for all the participants to be able to perform this.
Another key feature: Decentralized Autonomous Organization
The key concepts in Web3 seen so far are peer to peer transaction and block chain.
The spirit of Web3 is Decentralized Autonomous Organization (DAO).
DAO is all about the business rules and governing rules in any transaction are transparently available for anyone to see and software will be written conforming to these rules.
Crypto-currency and block chain are technologies that follow the DAO principle.
With DAO, there is no need for a central authority to authenticate or validate.
Will it take off?
We don’t know yet if Web3 will become the dominant mode of handling the internet but the questions it raises are relevant.
Web3 is in its very initial days and there is no consensus if it will take off like Web 1.0 or Web 2.0 did.
There is much skepticism from top tech brains in the industry and the academic community that Web3 does not solve the problems it purports to solve.
Recently, the University Of Maryland School Of Medicine announced that it had successfully transplanted a genetically-modified pig heart into a patient with severe ailments.
What is Xenotransplantation?
Xenotransplantation, or transplanting organs across different species, was first tried in humans in the 1980s.
The experiment was abandoned after the famous case of the American Baby Fae who was born with a congenital heart defect and received a baboon heart in 1984.
However, pig heart valves have been used for replacing damaged valves in humans for over 50 years now.
Nowadays, harvesting organs from genetically engineered pigs is seen as a viable alternative to meet organs shortage.
How the pigs are genetically engineered?
The donor pig underwent 10 genetic modifications, by which the genes responsible for the rapid rejection of foreign organs by the human body were inactivated or knocked out.
Four pig genes were removed, and six human genes were added.
“GalSafe” pigs, or pigs that had undergone editing to knock out a gene that codes for Alpha-gal (a sugar molecule) were used.
Alpha-gal can elicit a devastating immune response in humans.
GalSafe pigs have been well studied, and are approved by the US Food and Drug Administration (FDA) for use in pharmacology.
Why pursue xenotransplantation?
Modern scientific supporters of xenotransplantation argue that the potential benefits to society outweigh the risks, making pursuing xenotransplantation the moral choice.
None of the major religions object to the use of genetically modified pig organs for life-saving transplantation.
A crucial case in India
Harvesting organs from genetically engineered pigs is seen as a viable alternative to meet organs shortage.
According to the health ministry, around 0.18 million people in India are estimated to suffer from renal failure every year, but only about 6,000 renal transplants are carried out in the country.
About 25,000-30,000 liver transplants are needed annually in India but only about 1,500 are being performed.
In the case of the heart, 50,000 people suffer from heart failure and are in need of a heart transplant.
Yet, only 10-15 heart transplants are carried out in India each year.
Issues with Xenotransplantation
Besides scientific challenges, there are several ethical challenges to overcome:
Animal rights: Many, including animal rights groups, strongly oppose killing animals to harvest their organs for human use.
Decreased life expectancy: In the 1960s, many organs came from the chimpanzees, and were transferred into people that were deathly ill, and in turn, did not live much longer afterwards.
Religious violations: Certain animals such as pork are strictly forbidden in Islam and many other religions.
Informed consent: Autonomy and informed consent are important when considering the future uses of xenotransplantation.
Threats of zoonosis: The safety of public health is a factor to be considered. We are already battling the biggest zoonotic disease threat.
India’s trade with China in 2021 crossed $125 billion, with imports from China nearing a record $100 billion, underlining continued demand for a range of Chinese goods, particularly machinery.
Note: India-China trade has always been an all-time contested issue. This newscard presents crucial stats which is essential to substantiate your answers in Mains as well as in Interviews.
Highlights of the bilateral trade
Bilateral trade reached $125.6 billion in 2021, with India’s imports from China accounting for $97.5 billion.
Trade fell from $92.8 billion in 2019 to $87.6 billion in 2020 on account of the pandemic.
Trade has boomed in 2021 thanks to a recovery in demand as well as rising imports of new categories of goods such as medical supplies.
Also, note that these figures exclude bilateral trade between India and Hong Kong.
Imports-Exports imbalance
Imports were higher by 30% from 2019 while India’s exports to China, amounting to $28.1 billion, were up by as much as 56% from two years earlier.
The trade deficit last year reached $69.4 billion, up by 22% from the pre-pandemic figure in 2019.
While a break-up of imports and exports wasn’t immediately available, India’s biggest exports to China in recent years were iron ore, cotton, and other raw material-based commodities.
India has imported large quantities of electrical and mechanical machinery, active pharmaceutical ingredients (APIs), auto components, and over the past two years, a range of medical supplies from oxygen concentrators to PPEs.
A global comparison
The 43% year-on-year growth in bilateral trade with India was among the highest that China recorded with its major trading partners.
Trade figures with China’s top three trading partners showed growth of 28.1% with ASEAN (to $878.2 billion), 27.5% with the EU (to $828.1 billion), and 28.7% with the US, (to $755.6 billion).
Back2Basics: India-China Bilateral Trade
China is India’s largest trading partner.
Major commodities exported from India to China were: cotton; gems, precious metals, coins; copper; ores, slag, ash; organic chemicals; salt, sulphur, stone, cement; machines, engines, pumps.
Major commodities imported from China into India were: electronic equipment; machines, engines, pumps; organic chemicals; fertilizers; iron and steel; plastics; iron or steel products; gems, precious metals, coins; ships, boats; medical, technical equipment.
Experts have argued that the introduction of African cheetahs to Kuno National Park could endanger the Asiatic lion which has also been identified for re-introduction.
Do you know?
Cheetahs had a more extensive distribution than lions — there are no records of lions occurring south of the Narmada River, but Asiatic cheetahs roamed most of India until they were hunted to extinction by 1947.
About Asiatic Cheetah
Cheetah, the world’s fastest land animal was declared extinct in India in 1952.
The Asiatic cheetah is classified as a “critically endangered” species by the IUCN Red List, and is believed to survive only in Iran.
It was expected to be re-introduced into the country after the Supreme Court lifted curbs for its re-introduction.
From 400 in the 1990s, their numbers are estimated to have reached to 50-70 today, because of poaching, hunting of their main prey (gazelles) and encroachment on their habitat.
Why reintroduce Cheetahs?
Reintroductions of large carnivores have increasingly been recognized as a strategy to conserve threatened species and restore ecosystem functions.
The cheetah is the only large carnivore that has been extirpated, mainly by over-hunting in India in historical times.
India now has the economic ability to consider restoring its lost natural heritage for ethical as well as ecological reasons.
Why was the project halted?
The court was worried whether the African cheetahs would find the sanctuary a favorable climate as far as the abundance of prey is concerned.
Those who challenged the plan argued that the habitat of cheetahs needed to support a genetically viable population.
Issues with cheetah re-introduction
Since 2018, dozens of lions have died from diseases, including canine distemper, opening up a frightening possibility of loss when confined to a single location.
Establishing an additional free-ranging wild lion population in Kuno is of paramount importance and roadblocks, if any, must be transparently addressed.
Clearly, the introduction of African cheetahs cannot take precedence over translocating Asiatic lions from Gujarat to Kuno National Park as ordered by none other than the apex court in 2013.
However, simultaneous re-introduction can create a conflict for prey between these two wild cats.
Notwithstanding the eventual introduction of the Cryptocurrency and Regulation of Official Digital Currency Bill in Parliament, cryptocurrencies continue to proliferate.
Provisions in Income Tax Act 1961 to tax cryptocurrencies
Cryptocurrencies not mentioned in Income Tax Act, 1961: Although the Income Tax Act, 1961 (“IT Act”) does not specifically mention cryptocurrencies, it does cast a wide enough net to bring crypto transactions under its ambit.
Capital asset: Trading in cryptocurrency may be classified as transfer of a ‘capital asset’, taxable under the head ‘capital gains.
Business income: If such cryptocurrencies are held as stock-in trade and the taxpayer is trading in them frequently, the same will attract tax under the head ‘business income’.
Even if one argues that crypto transactions do not fall under the above heads, Section 56 of the IT Act shall come into play, making them taxable under the head ‘Other sources of income’.
Challenges in taxing cryptocurrencies
The above provisions in themselves are not sufficient in order to put in place a simple yet effective taxation regime for cryptocurrencies.
[1] Varied interpretations:
First, the absence of explicit tax provisions has led to uncertainty and varied interpretations being adopted in relation to mode of computation, applicable tax head and tax rates, loss and carry forward, etc.
For instance, the head of income under which trading of self generated cryptocurrency (currencies which are created by mining, acquired by air drop, etc.) is to be taxed is unclear.
Since there is no consistency in the rates provided by the crypto-exchanges, it is difficult to arrive at a fair market value.
Similarly, when a person receives cryptocurrency as payment for rendering goods or services, how should one arrive at the value of the said currency and how should such a transaction be taxed?
[2] Identifying tax jurisdiction
It is often tricky to identify the tax jurisdiction for crypto transactions as taxpayers may have engaged in multiple transfers across various countries and the cryptocurrencies may have been stored in online wallets, on servers outside India.
[3] The anonymity of taxpayer
The identities of taxpayers who transact with cryptocurrencies remain anonymous.
Exploiting this, tax evaders have been using crypto transactions to park their black money abroad and fund criminal activities, terrorism, etc.
[4] Lack of third party information on crypto transaction
The lack of third party information on crypto transactions makes it difficult to scrutinise and identify instances of tax evasion.
One of the most efficient enforcement tools in the hands of Income Tax Department is CASS or ‘computer aided scrutiny selection’ of assessments, where returns of taxpayers are selected inter alia based on information gathered from third party intermediaries such as banks.
However, crypto-market intermediaries like the exchanges, wallet providers, network operators, miners, administrators are unregulated and collecting information from them is very difficult.
[5] Physical goods/services may change hand in return for cryptocurrencies
Even if the crypto-market intermediaries are regulated and follow Know Your Customer (KYC) norms, there remains a scenario, where physical cash or other goods/services may change hands in return for cryptocurrencies.
Such transactions are hard to trace and only voluntary disclosures from the parties involved or a search/survey operation may reveal the tax evaders.
Steps need to be taken
Statutory provision: The income-tax laws pertaining to the crypto transactions need to be made clear by incorporating detailed statutory provisions.
Awareness generation: This should be followed by extensive awareness generation among the taxpayers regarding the same.
Separate mandatory disclosure: The practice of having separate mandatory disclosure requirements in tax returns (as is the case in the United States) should be placed on the taxpayers as well as all the intermediaries involved, so that crypto transactions do not go unreported.
Strengthen international legal framework: Additionally, the existing international legal framework for exchange of information should be strengthened to enable collecting and sharing of information on crypto-transactions.
This will go a long way in linking the digital profiles of cryptocurrency holders with their real identities.
Training tax officers: the Government must impart training to its officers in blockchain technology.
The United Nations Office on Drugs and Crime’s ‘Cybercrime and Anti-Money Laundering’ Section (UNODC CMLS) has developed a unique cryptocurrency training module, which can aid in equipping tax officers with requisite understanding of the underlying technologies.
Consider the question “What are the provision in Income Tax Act 1961 to tax the cryptocurrencies? What are the challenges in taxing cryptocurrencies? “
Conclusion
It is certain that cryptocurrencies are here to stay. A streamlined tax regime will be essential in the formulation of a clear, constructive and adaptive regulatory environment for cryptocurrencies.
In the first export order for the BrahMos supersonic cruise missile system, the Philippines has approved a $374.96 mn contract for the purchase of a shore-based anti-ship variant of the missile from India.
About BrahMos Missile
BrahMos missile derives its name from the combination of the names of Brahmaputra and Moskva Rivers.
They are designed, developed and produced by BrahMos Aerospace, a joint venture company set up by DRDO and Mashinostroyenia of Russia.
It is a two-stage missile with a solid propellant booster as the first stage and liquid ramjet as the second stage.
The cruise missiles like BrahMos are a type of system known as the ‘standoff range weapons’ which are fired from a range sufficient to allow the attacker to evade defensive fire from the adversary.
Such weapons are in the arsenal of most major militaries in the world.
Its capability
BrahMos missile flies at a speed of 2.8 Mach or almost three times the speed of sound.
It is the main weapon system of the Indian Navy warships and has been deployed on almost all of its surface platforms.
An underwater version is also being developed which will not only be used by the submarines of India but will also be offered for export to friendly foreign nations.
Various versions
The versions of the BrahMos that are being tested have an extended range of around 400 km, as compared to its initial range of 290 km, with more versions of higher ranges currently under development.
Various versions including those which can be fired from land, warships, submarines and Sukhoi-30 fighter jets have already been developed and successfully tested in the past.
The earliest versions of the ship launched BrahMos and land-based system are in service of the Indian Navy and the Indian Army since 2005 and 2007 respectively.
A controversy recently broke out after the National Commission for Protection of Child Rights (NCPCR) recommended that the Delhi government suspend its flagship ‘Desh ke Mentor’ programme.
What is the Desh Ke Mentor Programme?
The programme was launched in October 2021 and is aimed at connecting students in classes IX to XII with voluntary mentors.
People between the ages of 18 and 35 can sign up to be mentors through an app created by a team at the Delhi Technological University and will be connected with students based on mutual interests.
The mentorship entails regular phone calls for a minimum of two months, which can optionally be carried on for another four months.
The idea is for the young mentors to guide students through higher education and career options, preparation for higher education entrance exams, and dealing with the pressure of it all.
How is a person selected to be a mentor?
The registration process takes place on the Desh ke Mentor app.
The volunteer has to fill in information about themselves such as their date of birth, education qualification, profession, organisation they work with and so on.
However, it is optional for them to upload any proof of identity.
Once the registration is complete, the mentor is connected to a set of children of the same gender as themselves whose interests align with theirs.
Students have to take parental consent before becoming a part of the programme.
What are the concerns raised by the NCPCR regarding this process?
It has stated that assigning children to a mentor of the same gender as them does not necessarily assure their safety from abuse.
It has also expressed concern over the lack of police verification of the mentors.
It has a psychometric test which has not been scrutinized by professional practising experts.
It has also stated that limiting interactions to phone calls also does not ensure the safety of children since “child-related crime can be initiated through phone calls as well.”
Back2Basics: National Commission for Protection of Child Rights (NCPCR)
The NCPCR is an Indian statutory body established by an Act of Parliament, the Commission for Protection of Child Rights (CPCR) Act, 2005.
It works under the aegis of the Ministry of Women and Child Development and began operational on 5 March 2007.
It works to ensure that all Laws, Policies, Programmes, and Administrative Mechanisms are in consonance with the Child Rights perspective as enshrined in the Constitution of India and the UN Convention on the Rights of the Child.
As defined by the commission, a child includes a person up to the age of 18 years.
To mark the contribution of the overseas Indian community in the development of India, the Pravasi Bharatiya Divas is celebrated on 9th January every year.
Indian Diaspora: A backgrounder
Indian Diaspora is a generic term used for addressing people who have migrated from the territories that are currently within the borders of India.
From Google CEO to Nobel laureate scientist Har Gobind Khorana, the list of Indians abroad and their contribution to the world goes endlessly.
One of the greatest economic contributions of Indian Diaspora has been in terms of remittances.
Historical perspective
Imperialism led-migration: The incorporation of the British Empire in India can be linked to the existence of modern Indian Diaspora all over the world.
Indentured labor: Dating back to the nineteenth century, Indian indentured labor was taken over to the British colonies in different parts of the world.
World Wars: In the post World War II period, most of the Indian labor and professionals got scattered and it was a worldwide phenomenon.
European reconstruction: The reconstruction of Europe after the war was provided by Indians and other South Asians, particularly in the United Kingdom and Netherlands.
Modern brain-drain: Most recently, Indians have made their presence visibly felt in professions in countries like the United States, Canada, and Australia.
Major sections of Indian Diaspora
(1) Indians in the Gulf
Around 8.5 million Indians live and work in the Gulf countries, one of the largest concentrations of migrants in the world.
The geographical and historical proximity makes it a convenient destination for Indians.
Today migrants from across India are working and living in the Gulf countries (Saudi Arabia, UAE, Qatar, Bahrain, Oman, and Kuwait).
(2) Indians in USA
In recent decades the population has grown substantially, with 2.4 million Indian immigrants resident in the United States as of 2015.
This makes the foreign-born from India the second-largest immigrant group in the US after Mexicans.
Categorizing Indian’s abroad
Overseas Indians, officially known as Non-resident Indians (NRIs) or Persons of Indian Origin (PIOs), are people of Indian birth, descent or origin who live outside the Republic of India:
(A) Non-Resident Indian (NRI)
Strictly asserting non-resident refers only to the tax status of a person who, as per section 6 of the Income-tax Act of 1961, has not resided in India for a specified period for the purposes of the Act.
The rates of income tax are different for persons who are “resident in India” and for NRIs.
(B) Person of Indian Origin (PIO)
Person of Indian Origin (PIO) means a foreign citizen (except a national of Pakistan, Afghanistan, Bangladesh, China, Iran, Bhutan, Sri Lanka and/or Nepal), who:
at any time held an Indian passport OR
either of their parents/grandparents/great-grandparents were born and permanently resident in India as defined in GoI Act, 1935 and other territories that became part of India thereafter provided neither was at any time a citizen of any of the aforesaid countries OR
is a spouse of a citizen of India or a PIO.
(C) Overseas Citizenship of India (OCI)
After multiple efforts by leaders across the Indian political spectrum, a pseudo-citizenship scheme was established, the “Overseas Citizenship of India”, commonly referred to as the OCI card.
The Constitution of India does not permit full dual citizenship.
The OCI card is effectively a long-term visa, with restrictions on voting rights and government jobs.
Significance of Indian diaspora
(A) Contribution in the freedom struggle
Mahatma Gandhi’s struggle for ending institutionalized discrimination against Indians in South Africa became an inspiring legend for enduring sentimentalism about the diaspora in modern India.
The diaspora also became a vehicle for promoting the cause of Indian independence among the political elites of major countries.
As the independence movement gathered momentum at home, it began to influence many Indian communities abroad.
(B) Diaspora as Cultural extension
The act of migration is not just limited to geographical limits; rather it is a cultural extension.
Let us take the example of the Sikh community. The Sikhs are one of the largest migrants from India to the UK, Canada and many other countries.
They have very well maintained their culture and ethnic existence for decades.
(C) Remittances
Money sent home by migrants is one of the largest financial inflows to developing countries.
According to a World Bank Report, India received approximately 87 billion dollars in remittances in 2021 with USA being the biggest source, accounting for over 20% of these funds.
Without these remittances, India’s balance of payment position would have looked worse.
(D) Diaspora as ‘Agents of change’
Diaspora acts as ‘agents of change’ facilitating and enhancing investment, accelerating industrial development, and boosting international trade and tourism.
Diaspora’s motives to invest in India are long-lasting as many of them wish to establish a long-term base in India.
(E) Technological development and entrepreneurship
Another tangible long-term advantage in nurturing ties with an active diaspora is an accelerated technological sector and increased socio-economic development.
Some examples to illustrate this phenomenon are Bengaluru, Gurugram and Hyderabad as thriving IT hubs that not only house multinational companies (MNCs) but also multiple Indian start-ups.
(F) Enhancing India’s global say
India’s permanent membership to the UNSC can become a reality with support from the diaspora.
Apart from political pressures and ministerial and diplomatic level lobbying, India can leverage its diaspora to influence states such as Canada and Mexico to support India’s membership
Most Importantly,
(G) Diaspora diplomacy
The diaspora’s ability to spread Indian soft power, lobby for India’s national interests, and contribute economically to India’s rise is now well-recognized.
A less tangible but important advantage in having a large immigrant group is “diaspora diplomacy”.
The recent engagement of Indian leaders in US general elections is a continuation of the extraordinary political investment in engaging the Indian diaspora.
India’s engagement with Diaspora: A policy-wise perspective
Many of the themes of India’s contemporary diaspora policy had their origins in the approach of the Indian national movement before independence.
The nationalist backlash against the Indian communities in Africa and Asia in the 1950s and 1960s saw Delhi consciously distance itself from the diasporic communities.
As India turned inwards, Delhi also took a dim view of the “brain drain” as many well-trained Indians began to look for opportunities elsewhere.
It was only in the late 1980s that Delhi began to rethink its approach to the diaspora.
Change in recent years
PM Rajiv Gandhi was the first to appreciate the potential role diaspora could play in advancing national development and improving India’s ties with the US.
In 2000, the Pravasi Bharatiya Divas was commenced to be celebrated and also led to the formation of a separate Ministry for Overseas Indians under PM AB Vajpayee.
Other innovative initiatives like the Know India Programme (KIP) and Study India Programme (SIP) were launched.
These have engaged the youth living abroad and the Tracing the Roots Scheme, through which some Indians have been able to trace their roots in India.
Most recent initiatives
India has been following the spirit of 4 Cs i.e. Connect – Contribute – Celebrate – Care.
There is a dedicated Diaspora Welfare Officer.
The authorities have been ensuring 100 percent grievance redressal through E-Migration Portal, Madad Portal, and CPGRAMS.
Various policy initiatives
Education: NRI seats are reserved in all the medical, engineering and other professional colleges.
Voting rights: The Representation of the People (Amendment) Bill 2017 the provision would help non-resident Indians (NRIs) to participate in the electoral process through ‘proxy voting’.
Know India Program (KIP): It is a flagship initiative for Diaspora engagement which familiarizes Indian-origin youth (18-30 years) with their Indian roots and contemporary India has been refashioned.
Minimum Referral Wages (MRW): A number of policies were announced keeping in mind the protection of welfare and interest of Indians abroad; for example, the 2014 Minimum Referral Wages (MRW).
Easing the passport facility: The last three years saw the launch of Head Post Offices as passport centers enabling thousands more to apply for a passport.
Challenges faced by Diaspora
Racial antagonism: Rising incidence of hate speech and crimes against Indians by the locals due to racism, communalism emboldened by coming of nationalist and ultra-nationalist governments to power in many countries.
Protectionism: Fear of losing jobs and educational opportunities to outsiders has resulted in stricter visa rules in many countries including the USA, Australia, etc.
Terrorism: Sectarian crisis, increasing terrorist activities and war in the Middle East countries (Yemen, Oman, Libya, Syria etc) leave our diaspora vulnerable to attacks.
Political Polarization: Many Indians abroad are turning against India since the change of government and some extreme right wing factionists.
Anti-national tendencies: India has had problems with negative campaigning and foreign funding, coming from abroad, for separatist movements like the Khalistan movement.
Way forward
India has enjoyed being viewed more favorably by the world since 2014, and the diaspora can further these perceptions.
India needs both additional resources as well as better systems to deal with the recurring challenges of supporting citizens abroad.
The diaspora can step up and act as Indian ‘ambassadors’, as it is insufficient and ineffective for a country or its missions abroad to rely only on press releases to change public opinion.
The diaspora can provide the requisite strategic impulse, which makes it all the more important to unlock their potential.
