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Subject: International Relations

  • India, Bangladesh discuss River Water Sharing issues

    India and Bangladesh discussed a wide range of River Water Sharing issues related to the major common rivers such as the Ganga, Teesta and several others during the 38th meeting of the Joint River Commission (JRC).

    Rivers between India and Bangladesh

    • Overall, India and Bangladesh have 54 transboundary rivers between them, all of which are part of the drainage system of the Ganga-Brahmaputra-Meghna (GBM) basin.
    • The Padma (the Ganga), the Jamuna (the Brahmaputra) and the Meghna (the Barak) and their tributaries are integral in maintaining food and water security in Bangladesh.
    • In most of these cases, Bangladesh is the lower riparian.
    • This causes concern in Bangladesh that India—being both the upper riparian and first to develop the water resources—can have far more disproportionate control over the rivers.
    • Compounded by the lack of transparent data regarding trans-boundary rivers, such concern can lead to a more serious conflict between the two otherwise friendly neighbours.

    Genesis of the disputes

    • The issues between India and Bangladesh regarding water resource allotment can be traced to the time Bangladesh was still East Pakistan.
    • In 1961, India began construction of the Farakka Barrage—which was to be operational by April 1975—to divert a portion of the dry-season flow and increase the navigability of Kolkata port.
    • When India began its preliminary planning for the project in 1950-51, Pakistan immediately expressed concerns over the potential effect of the project on East Pakistan.

    Moves for disputes resolution: Joint River Commission

    • Soon after the independence of Bangladesh in 1971, the Joint River Commission was formed between India and Bangladesh in 1972.
    • In a joint declaration issued on 16 May 1974, the PM of Bangladesh and India acknowledged the need for the flow augmentation of the Ganga in the lean season to meet the requirements of both countries.

    Often in news: Teesta River Dispute

    • The Bangladesh government has been insistent on sealing the Teesta Waters Agreement, which has eluded settlement so far.
    • Teesta River is a 315 km long river that rises in the eastern Himalayas, flows through the Indian states of Sikkim and West Bengal through Bangladesh and enters the Bay of Bengal.
    • It is a tributary of the Brahmaputra (known as Jamuna in Bangladesh), flowing through India and Bangladesh.
    • It originates in the Himalayas near Chunthang, Sikkim and flows to the south through West Bengal before entering Bangladesh.
    • Originally, it continued southward to empty directly into the Padma River but around 1787 the river changed its course to flow eastward to join the Jamuna river.
    • The Teesta Barrage dam helps to provide irrigation for the plains between the upper Padma and the Jamuna.

    What is the dispute about?

    • The point of contention between India and Bangladesh is mainly the lean season flow in the Teesta draining into Bangladesh.
    • The river covers nearly the entire floodplains of Sikkim while draining 2,800 sq km of Bangladesh, governing the lives of hundreds of thousands of people.
    • For West Bengal, Teesta is equally important, considered the lifeline of half-a-dozen districts in North Bengal.
    • Bangladesh has sought an “equitable” distribution of Teesta waters from India, on the lines of the Ganga Water Treaty of 1996, but to no avail.
    • The failure to ink a deal had its fallout on the country’s politics, putting the ruling party of PM Sheikh Hasina in a spot.

    Q.The hydrological linkages between India and Bangladesh are a product of geography and a matter of shared history. Discuss this statement in line with the Teesta water-sharing dispute.

    The deal

    • Following a half-hearted deal in 1983, when a nearly equal division of water was proposed, the countries hit a roadblock. The transient agreement could not be implemented.
    • Talks resumed after the Awami League returned to power in 2008 and the former Indian PM Manmohan Singh visited Dhaka in 2011.
    • In 2015, PM Modi’s visit to Dhaka generated more ebullient lines: deliberations were underway involving all the stakeholders to conclude the agreement as soon as possible.

    Issues from the Indian side

    • It remains an unfinished project and one of the key stakeholders — West Bengal CM is yet to endorse the deal.
    • Her objection is connected to “global warming. Many of the glaciers on the Teesta basin have retreated.
    • The importance of the flow and the seasonal variation of this river is felt during the lean season (from October to April/May) as the average flow is about 500 million cubic metres (MCM) per month.
    • The CM opposed an arrangement in 2011, by which India would get 42.5% and Bangladesh 37.5% of the water during the lean season, and the plan was shelved.

    Why does this deal matters?

    • India and Bangladesh have resolved border problems through the Land Boundary Agreement of 2015.
    • However, both nations have locked horns over the sharing of multiple rivers that define the borders and impact lives and livelihoods on both sides.

     

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  • G20 presidency opportunities for India’s growth and prosperity

    G20 Context

    • India’s presidency of the G20 grouping next year arguably the sole remaining effective forum for global governance presents an enormous opportunity to accelerate sustainable growth within India, in the emerging world, and beyond.

    About G20

    • Formed in 1999, the G20 is an international forum of the governments and central bank governors from 20 major economies.

    Features

    • Collectively, the G20 economies account for around 85 percent of the Gross World Product (GWP), 80 percent of world trade.
    • To tackle the problems or the address issues that plague the world, the heads of governments of the G20 nations periodically participate in summits.
    • In addition to it, the group also hosts separate meetings of the finance ministers and foreign ministers.

    Objectives

    • Stability: The Group was formed with an aim of studying, reviewing, and promoting high-level discussion of policy issues pertaining to the promotion of international financial stability.
    • Fiscal responsibilities: The forum aims to pre-empt balance of payments problems and turmoil on financial markets by improved coordination of monetary, fiscal, and financial policies.
    • Universal Support: The forum seeks to address issues that go beyond the responsibilities of any one organisation.

    G20Is India ready for G20 leadership?

    • At some levels, India is ready.
    • Indian business and industry is becoming a noteworthy competitor globally.
    • The country’s domestic economy is starting to pick up, thanks to structural economic reforms.
    • The central government is economically stronger, and the states are starting to learn about economic independence, making them more aligned with their global counterparts.

    Punchline

    It is said that “those who hold the pen, write the rules”.

    The time has come for India to both hold the pen and write the rules for a more equitable global economics and governance.

    Issues and Challenges

    • India need to have a clear global financial agenda.
    • The country should also have the capacity to lead the G20 year intellectually, financially, managerially and administratively.
    • Geopolitically, India is more internationally engaged but less so geoeconomically.
    • Its narrow focus is on the World Bank, IMF, WTO and foreign investment issues.
    • But India has much to contribute on issues like reconfiguration of global financial regulations, design of a new framework for trade in services and the digital economy and establishing better cross-border standards for transparency in financial flows.
    • To make its G20 year a success, India has to address organisational challenges, where the country has an infrastructure, management and intellectual gap.

    G20What could India bring to the table?

    • Mediation: Firstly, it remains pertinent for the world that escalating tensions between Russia and Ukraine come to a halt. Maintaining its balanced stance, India needs to neutralise this situation by introducing peace talks between the two nations.
    • Open trade: It’s about time for India to raise its voice in support of a transparent New Economic Order and building a prosperous and just world. Unreasonable bans on certain commodities from various countries limits commerce between states when trade liberty exists.
    • Collaboration around science and technology: The global agenda has been tilted towards investment, whereas science and technology are the driving force for economic diversification, sustainably urbanising the world, and ushering the hydrogen economy and new crop varieties as the answer to both human well-being and global climate change.
    • Redefining digital access as universal service: Harnessing the potential of the digital-information-technology revolution requires redefining digital access as a “universal service” that goes beyond physical connectivity to sharing specific opportunities available.

    Conclusion

    • India’s presidency must leave the grouping with the agility and energy to respond to new realities, and it must create a future-ready multilateralism through a novel and robust institutional architecture.

    Mains question

    Q. It is said that “those who hold the pen, write the rules”. The time has come for India to both hold the pen and write the rules for a more equitable global economics and governance. Discuss in the context of India’s presidency of G20 summit with challenges and opportunities ahead.

     

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  • India-Srilanka Relations

     

    Context

    The present economic crisis in Sri Lanka has pushed it closer to India for immediate relief.

    Reasons for the Crisis

    The first wave of the pandemic in 2020 offered early and sure signs of distress.

    • In-migration: Thousands of Sri Lankan laborers in West Asian countries were left stranded and returned jobless.
    • Shut-down: Garment factories and tea estates could not function, as infections raged in clusters. Tourism sector to saw a big dip.
    • Domestic job losses: Thousands of youth lost their jobs in cities as establishments abruptly sacked them or shut down.
    • Forex decline: It meant that all key foreign exchange earning sectors, such as exports and remittances, along with tourism, were brutally hit.

    Reasons behind crisis

    • The Easter bomb blasts of April 2019 in churches in Colombo resulting in 253 casualties,consequently, dropped the number of tourists sharply leading to a decline in foreign exchange reserves.
    • The newly led government by Gotabaya Rajapaksa in 2019 promised lower tax rates and wide-ranging SoPs for farmers during their campaign.
    • No strategy: The lack of a comprehensive strategy to respond to the crisis then was coupled with certain policy decisions last year.
    • Ill-advised policies: It included the government’s abrupt switch to organic farming —widely deemed “ill-advised”, further aggravated the problem.
    • Food hoarding: The government declared emergency regulations for the distribution of essential food items. It put wide import restrictions to save dollars which in turn led to consequent market irregularities and reported hoarding.
    • Continuous borrowing: Fears of a sovereign default rose by the end of 2021, with the country’s foreign reserves plummeting to $1.6 billion, and deadlines for repaying external loans looming.

    Brief background of India-SL relations

    • India is the only neighbor of Sri Lanka, separated by the Palk Strait; both nations occupy a strategic position in South Asia and have sought to build a common security umbrella in the Indian Ocean.
    • There are deep racial and cultural links between the two countries. Both share a maritime border.
    • The India- SL relations have been however tested by the Sri Lankan Civil War and by the controversy of Indian intervention during the war.
    • In recent years Sri Lanka has moved closer to China, especially in terms of naval agreements.
    • India has signed a nuclear energy deal to improve relations and made a nuclear energy pact with Sri Lanka in 2015.

    India’s role in the Lankan Civil War

    • In the 1970s–1980s, the RAW and the state government of Tamil Nadu were believed to be encouraging the funding and training for the Liberation Tigers of Tamil Eelam (LTTE), a separatist insurgent force.
    • In 1987, faced with growing anger amongst its own Tamils, and a flood of refugees India intervened directly in the conflict for the first time.
    • This was after the Sri Lankan government attempted to regain control of the northern Jaffna region by means of an economic blockade and military assaults; India supplied food and medicine by air and sea.

    Why did India intervene?

    • Indian intervention in Sri Lankan civil war became inevitable as that civil war threatened India’s unity, national interest and territorial integrity.

    Outcomes

    • The peace accord assigned a certain degree of regional autonomy in the Tamil areas with a body controlling the regional council and called for the Tamil militant groups to lay down their arms.
    • Further India was to send a peacekeeping force, named the IPKF to Sri Lanka to enforce the disarmament and to watch over the regional council.
    • The accord failed over the issue of representations. The result was that the LTTE now found itself engaged in military conflict with the Indian Army.

    Areas of cooperation

    (1) Political Relations

    • Regular Exchange: Political relations between the two countries have been marked by high-level exchanges of visits at regular intervals.
    • Bilateral Cooperation: A joint statement covering all areas of bilateral cooperation, titled ‘MitratvaMaga’ was issued following the Virtual Summit of 2020.

    (2) Commercial Relations

    • ISFTA: The India-Sri Lanka Free Trade Agreement (ISFTA) in 2000 contributed significantly towards the expansion of trade in areas such as infrastructure, connectivity, transportation, housing, health, livelihood and rehabilitation, education, and industrial development.
    • Trading Partner: India has traditionally been among Sri Lanka’s largest trade partners and Sri Lanka remains among the largest trade partners of India in the SAARC.
      • In 2020, India was Sri Lanka’s 2nd largest trading partner with the bilateral merchandise trade amounting to about USD $ 3.6 billion.
    • India and Sri Lanka are member nations of several regional and multilateral organizations such as the South Asian Association for Regional Cooperation (SAARC), South Asia Co-operative Environment Programme, South Asian Economic Unionand BIMSTEC.
    • India is Sri Lanka’s third-largest export destination, after the US and UK.
    • Exports: Sri Lankan exports to India have increased substantially since 2000 when ISLFTA came into force.
    • FDI: India is also one of the largest contributors to Foreign Direct Investment in Sri Lanka. According to BoI, FDI from India amounted to about US$ 1.7 billion during the period 2005 to 2019.

    (3) Development Cooperation

    • Grants: The overall commitment by GOI is to the tune of more than USD 3.5 billion.
      • Demand-driven and people-centric nature of India’s development partnership with Sri Lanka have been the cornerstone of this relationship.
    • The Indian Housing Project: India has so far committed to construct close to 62,500 houses in Sri Lanka, making it one of the largest projects undertaken by GoI abroad.
    • Emergency Ambulance Service: The Service which was initially launched in July 2016 is now expanded to all the Provinces.
      • At a total cost of more than USD 22.5 million, close to 300 ambulances were provided by GOI under this project.
    • Other Projects: India is also involved in projects for renovation of Palaly Airport, Kankesanthurai Harbor, construction of a Cultural Centre in Jaffna, interconnection of electricity grids between the two countries, construction of a 150-bed hospital in Dickoya and setting up a coal power plant in Sampur as a joint venture between National Thermal Power Corporation (NTPC) and Ceylon Electricity Board (CEB).
    • Latest Development: India-SL agreed for joint development of Trincomalee Oil Tank farmed in 2022 after 35 years of wait.

    (4) Projects under Lines of Credit

    • Sectors: 11 Lines of credit (LOC) have been extended to Sri Lanka by the Export Import Bank of India in the last 15 years.
      • Important sectors under these LOCs include: Railway, transport, connectivity, defense, solar.
    • Infrastructure: Some important Projects completed are- supply of defense equipments; up-gradation of the railway line from Colombo to Matara; track laying by IRCON on Omanthai-Pallai sector; reconstruction of the Railway line; signaling and telecommunication system; supply of engine kits for buses, diesel locomotives railways, DMUs, Carrier and fuel tank wagons etc.
    • Rehabilitation: A project for the rehabilitation of the Kankesanthurai harbor is being executed under a LOC of USD 45.27 million, bringing immense economic benefits to the Northern region of Sri Lanka.
    • Solar Energy: A US$ 100 million LoC for undertaking solar projects in Sri Lanka has been signed for rooftop solar units for Government buildings, rooftop solar units for low-income families and a floating solar power plant.
    • Security: In 2019, a LOC of USD 400 million for development and infrastructure projects and USD 50 million for security and counter-terrorism were announced.
      • These LOC Agreements are currently under discussion.

    (5) Cultural relations

    • India and Sri Lanka have a shared legacy of historical, cultural, religious, spiritual and linguistic ties that is more than 2,500 years old.
    • In contemporary times, the Cultural Cooperation Agreement signed by the Government of India and the Government forms the basis for periodic Cultural Exchange Programmes between the two countries.

    (6) People-to-people ties: Buddhism

    • Buddhism is one of the strongest pillars connecting the two nations and civilizations from the time when Emperor Ashoka sent his children Arhat Mahinda and Sangamitta to spread the teachings of Lord Buddha at the request of King Devanampiya Tissa of Sri Lanka.
    • Underlining the deep people-to-people connect and shared Buddhist heritage, the venerated relics of Lord Buddha from Kapilawasthu discovered in 1970 in India have been exhibited two times in Sri Lanka.
    • India in 2020, announced USD 15 million grant assistance for the protection and promotion of Buddhist ties between India and Sri Lanka.
      • It may be utilized for the construction/renovation of Buddhist monasteries, education of young monks, strengthening engagement of Buddhist scholars and clergy, development of Buddhist heritage museums, etc.
    • Transport- In July 2020, the GoI declared the Kushinagar Airport in India, the place of Lord Buddha’s Mahaparinibbana, as an international airport, to allow Buddhist pilgrims from around the world to visit the revered site associated with Lord Buddha with ease.
    • The Swami Vivekananda Cultural Centre (SVCC)– since its inception in 1998, is actively promoting awareness of Indian culture by offering classes in Bharatnatyam, Kathak, Hindustani and Carnatic vocal, Violin, Sitar, Tabla, Hindi and Yoga.

    (7) Tourism

    • e-Visa- Tourism also forms an important link between India and Sri Lanka. GoI formally launched the e-Tourist Visa (eTV) scheme for Sri Lankan tourists on 14 April 2015.
    • Visa Fee- Subsequently, in a goodwill gesture, the visa fee for eTV was sharply reduced. In 2019, out of the total 1.91 million tourists, 355,000 tourists arrived from India.
    • Sri Lankan tourists too are among the top ten sources for the Indian tourism market.
    • Visa on arrival- On 24 July 2019 Sri Lanka included India in the free visa on arrival scheme and commenced the scheme on 1 August 2019.

    Plummeting relations

    • The ties began to worsen between the two since February, 2021 when Sri Lanka backed out from a tripartite partnership with India and Japan for its East Container Terminal Project at the Colombo Port, citing domestic issues.
      • However, later, the West Coast Terminal was offered under a public private partnership arrangement to Adani Ports and Special Economic Zones Ltd.
    • Sri Lanka in a state of economic emergency: Sri Lanka is running out of foreign exchange reserves for essential imports like food. It has recently declared a state of economic emergency.
    • Covid Impact:
      • Sri Lanka increased policy rates after the covid pandemic in response to rising inflation in August 2021 caused by currency depreciation.
      • Tourism sector has suffered since the Easter Sunday terror attacks of 2019, followed by the pandemic.
      • Earnings fell from $3.6 billion in 2019 to $0.7 billion in 2020, even as FDI inflows halved from $1.2 billion to $670 million over the same period.
      • Sri Lanka’s fragile liquidity situation has put it at high risk of debt distress. Its public debt-to-GDP ratio was at 109.7% in 2020, and its gross financing needs remain high at 18% of GDP.
      • Its gross official reserves slipped to $2.8 billion, which is equivalent to just 1.8 months of imports. More than $2.7 billion of foreign currency debt will be due in the next two years.

    Major outstanding issues

    1. Fishing disputes
    • There have been several alleged incidents of Sri Lankan Navy personnel firing on Indian fishermen fishing in the Palk Strait, where India and Sri Lanka are only separated by 12 nautical miles.
    • The issue started because of Indian fishermen having used mechanized trawlers, which deprived the Sri Lankan fishermen (including Tamils) of their catch and damaged their fishing boats.
    • The Sri Lankan government wants India to ban use of mechanized trawlers in the Palk Strait region, and negotiations on this subject are undergoing.
    • So far, no concrete agreement has been reached since India favors regulating these trawlers instead of banning them altogether.
    2.Alleged political interference
    • A media report from Colombo soon after Rajapaksa’s defeat in the January 8 elections of 2015 had said that an Indian Intelligence official was instrumental in uniting rival political parties — the Sri Lanka Freedom Party (SLFP) and the United National Party (UNP) — against him during the polls.
    • In October 2018, President Sirisena alleged that Indian intelligence agencies were plotting his assassination.
    3.Katchatheevu Island
    • It is an uninhabited island that India ceded to Sri Lanka in 1974 based on a conditional agreement called “Kachchativu island pact”.
    • Later on, Sri Lanka declared Katchatheevu, a sacred land given the presence of a Catholic shrine.
    • But Tamil Nadu claimed that Katchatheevu falls under the Indian Territory and Tamil fishermen have traditionally believed that it belongs to them and therefore want to preserve the right to fish there.
    4.China factor
    • Sri Lanka has a history of taking independent decisions even if they cause misgivings in India.
    • In the period of low profile relationship between the two nations, Sri Lanka apparently started favoring China over India.
    • China is Sri Lanka’s largest bilateral creditor: China’s loans to the Sri Lankan public sector amounted to 15% of the central government’s external debt, making China the largest bilateral creditor to the country.
      • Sri Lanka has increasingly relied on Chinese credit to address its foreign debt burden.
    • China’s Exports surpasses India: China’s exports to Sri Lanka surpassed those of India in 2020 and stood at $3.8 billion.
      • India’s exports were $3.2 billion.
    • Infrastructural Investment by China: Owing to Sri Lanka’s strategic location at the intersection of major shipping routes, China’s investment stands at $12 billion between 2006 and 2019.
      • Unable to service its debt, in 2017, Sri Lanka lost the unviable Hambantota port to China for a 99-year lease.
      • Sri Lanka passed the Colombo Port City Economic Commission Act, which provides for establishing a special economic zone around the port and also a new economic commission, to be funded by China.
      • The Colombo port is crucial for India as it handles 60% of India’s trans-shipment cargo.

    Why is Sri Lanka important to India?

    • India is Sri Lanka’s closest neighbor. Both sides have built upon a legacy of intellectual, cultural, religious and linguistic interaction.
    • Sri Lanka has always been politically and economically important to India given its strategic geographical position in the Indian Ocean. The relationship has been marked by close contacts at all levels.
    • Sri Lanka sits at the epicenter of the arc connecting the Persian Gulf to the Strait of Malacca. An island nation with an economy that’s mainly reliant on tourism and tea exports, Sri Lanka’s blessed geography puts it at a crucial juncture of the busy shipping lanes of the Indian Ocean.
    • India also has a vital strategic stake in Sri Lanka for its own security interests. An unfriendly Sri Lanka or a Sri Lanka under influence of a power unfriendly to India would strategically discomfit India.
    • For the Indian Navy, Sri Lanka is important as the switching of naval fleets from the Bay of Bengal to the Arabian Sea and vice versa requires the fleets to go around the island nation.
    • Both countries share a common broad understanding on major issues of international interest and experience common social-political problems relating to community divides.

    How India has helped to boost Sri Lanka’s economy

    • Grants: The overall commitment by GOI is to the tune of more than USD 3.5 billion. Demand-driven and people-centric nature of India’s development partnership with Sri Lanka have been the cornerstone of this relationship.
    • The Indian Housing Project: India has so far committed to construct close to 62,500 houses in Sri Lanka, making it one of the largest projects undertaken by GoI abroad.
    • Other Projects: India is also involved in projects for renovation of Palaly Airport, Kankesanthurai Harbor, construction of a Cultural Centre in Jaffna, interconnection of electricity grids between the two countries, construction of a 150-bed hospital in Dickoya and setting up a coal power plant in Sampur as a joint venture between National Thermal Power Corporation (NTPC) and Ceylon Electricity Board (CEB).
    • Latest Development: India-SL agreed for joint development of Trincomalee Oil Tank farmed in 2022 after 35 years of wait.

    sri lanka

    Impact of recent Economic crisis on India

    • Export:
      • Sri Lanka’s share in India’s total exports has declined from 2.16 percent in FY15 to just 1.3 percent in the first 10 months of FY22.
    • Shipping:
      • If the current situation in the island nation persists, it could cause a major disruption to the normal functioning of the Colombo Port.
      • This would be detrimental to India’s interest.
      • The port handles over 30 percent of India’s container traffic and 60 percent of its trans-shipment.
    • Investments:
      • India has had a substantial investment in Sri Lanka in areas including real estate, manufacturing, and petroleum refining. They all might be adversely affected if the crisis continued.
    • Migration:
      • Also, the continuing Sri Lankan crisis could compel many Sri Lankans to leave for India for their survival.
      • Already, scores of them have fled from the island nation to India.

    Opportunities for India for deeper engagement

    • Dairy sector: Sri Lanka imports a considerable quantity of milk powder. On average, Colombo annually imports dairy products worth $315 million. . India can help Sri Lanka develop its dairy sector.
    • Poultry sector: In this area, through its host of agricultural universities, India can share its knowledge on ways to increase both production and productivity.
    • Energy sector: Considering how the problem on the energy front exploded into a major political crisis in Sri Lanka, India’s participation in energy projects will be desirable.
    • Education sector: School education is another area where India’s presence could be more felt. India can expand its scheme of establishing smart classrooms and modern computer labs to cover all those institutions teaching children of hill country Tamils, the most underprivileged section in society.

    sri lanka

    Challenges

    • Possibility of greater economic collaboration: Whether this bonhomie can lead to greater economic collaboration between Sri Lanka and south India, not necessarily Tamil Nadu alone, given the historical baggage, is anybody’s guess.
    • Baggage of history: Some sections of the Sinhalese still hold the view that India had been a threat to them and it can still be a threat to them.
    • Modest investment in development: Despite India’s open willingness to take part in the development of Sri Lanka after the civil war, the scale of its involvement has been modest.
    • Incomplete projects due to lack of political will: After the cancellation of the tripartite agreement, India was later provided with projects such as the West Container Terminal, the Trincomalee oil tank farm and a couple of renewable projects, there were several proposals that envisaged India’s participation but did not see the light of day.

    Way forward

    • Infrastructure development: Even now, there is enormous scope for collaboration between the two countries in the area of infrastructure development.
    • Cross-border energy trade: The economic crisis has revived talk of linking Sri Lanka’s electricity grid with that of India.
    • Facilitating people-to-people interaction: The apprehension in the minds of sections of the Sinhalese majority about India being a threat can be dispelled only by facilitating greater people-to-people interaction, including pilgrimages by monks and other sections of  society to places of Buddhist importance not only in north India but also in the south (Andhra Pradesh).
    • No china factor indeed: Labeling governments in Sri Lanka as “pro-China” or “pro-India” is irrelevant. It is evident that China’s economic and strategic salience in the subcontinent is not tied to the regime leadership. Previous Lankan President Maithripala Sirisena who considered as pro-India came to power criticizing the Chinese projects in Sri Lanka, but within two years into power, it extended full backing to the Chinese projects.

    Conclusion

    • Given the history of bilateral ties, instances such as the Hambantota controversy are bound to arise. But what should not be glossed over is that a politically and economically stable Sri Lanka will be in India’s interest too.

    Mains question 

    Q. There is no such thing as charity in international politics. Critically analyse this statement showing how India can reap benefits of economic cooperation with Sri Lanka.

     

     

  • Pakistan’s Flip-Flop on Trade with India

    Pakistan’s Finance Minister has stated that the government may consider importing vegetables and other edible items from India following the destruction of standing crops due to the massive floods in the region.

    Why in news?

    • This statement comes after three years when Islamabad downgraded trade ties with New Delhi over the abrogation of Article 370 in Kashmir in 2019.
    • The fundamentalist country sees ties with India as against the spirit of religion and betrayal to the so-called Kashmir cause.

    A U-turn by Pakistan

    • Pakistan’s double U-turn on resuming trade with India highlights the internal differences within the country.
    • There are huge differences between business and political communities, and the emphasis on politics over economy and trade.
    • It also signifies Pakistan cabinet’s grandstanding, linking normalisation of ties with India to Jammu and Kashmir.

    What is the news?

    • Pakistan has sought to import only three items from India, namely cotton, yarn and sugar.
    • It has no consensus on resuming bilateral trade completely.
    • This is based on Pakistan’s immediate economic needs and not designed as a political confidence-building measure to normalise relations with India.

    What changed Pakistan’s mind?

    (1) Decline of Textile sector

    • For the textile and sugar industries in Pakistan, importing from India is imperative, practical and is the most economic.
    • Yarn, cotton cloth, knitwear, bedwear and readymade garments form the core of Pakistan’s textile basket in the export sector.
    • By February 2020, there was a steep decline in the textile sector due to disruptions in supply and domestic production.
    • This is definitely due to dumping of cheap Chinese goods.
    • When compared to the last fiscal year (2019-20), there has been a 30% decline (2020-21) in cotton production.

    Do you know?

    Pakistan is the fifth-largest exporter of cotton globally, and the cotton-related products (raw and value-added) earn close to half of the country’s foreign exchange.

    (2) Crisis in the sugar industry

    • When compared to cotton, the sugar industry’s problem stem from different issues — the availability for local consumption and the steep price increase.
    • The sugar industry has prioritised exports over local distribution.
    • Increased government subsidy and a few related administrative decisions resulted in the sugar industry attempting to make a considerable profit by exporting it.
    • As a result, importing sugar from India would be cheaper for the consumer market in Pakistan.

    In a nutshell

    • Clearly, the crises in cotton and sugar industries played a role in the ECC’s decision to import cotton, yarn and sugar from India.
    • It would not only be cheaper but also help Pakistan’s exports.
    • This is also imperative for Pakistan to earn foreign exchange.

    Why all these have made headlines these days?

    • Pakistan is closer to bankruptcy like any other Chinese vassal state.
    • The second takeaway from the two U-turns — is the supremacy of politics over trade and economy, even if the latter is beneficial to the importing country.
    • For the cabinet, the interests of its own business community and its export potential have become secondary.
    • However, Pakistan need not be singled out; this is a curse in South Asia, where politics play supreme over trade and economy.
    • The meagre percentage of intra-South Asian Association for Regional Cooperation (SAARC) trade and the success (or the failure) of SAARC engaging in bilateral or regional trade would underline the above.
    • Trade is unlikely to triumph over politics in South Asia; especially in India-Pakistan relations.

    The Kashmir link

    • The third takeaway is the emphasis on Jammu and Kashmir by Pakistan to make any meaningful start in bilateral relations.
    • This goes against what it has been telling the rest of the world that India should begin dialogue with Pakistan.
    • Recently, both Pakistan’s PM and the Chief of Army Staff, Qamar Javed Bajwa, were on record stating the need to build peace in the region.
    • Bajwa even talked about “burying the past” and moving forward.
    • There were also reports that Pakistan agreeing to re-establish the ceasefire along the Line of Control (LoC) was a part of this new strategy.

    Conclusion

    • The latest statement by Pakistan’s cabinet that unless India revokes the 2019 decision in Jammu and Kashmir, there would be no forward movement.
    • This position also hints at Pakistan’s precondition to engage with India.
    • Pakistan has been saying that the onus is on India to normalise the process.
    • Perhaps, it is New Delhi’s turn to tell Islamabad that it is willing, but without any preconditions, and start with trade.
    • It may even allow New Delhi to inform Pakistan’s stakeholders about who is willing to trade and who is reluctant.

     

     

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  • Russia blocks agreement on Nuclear Non-proliferation Treaty (NPT)

    Russia has blocked the agreement on the final document of a four-week review of the Nuclear Non-proliferation Treaty (NPT).

    Why in news?

    • The NPT review conference is supposed to be held every five years but was delayed because of the COVID-19 pandemic.
    • This marked the second failure of its 191 state parties to produce an outcome document.
    • The last review conference in 2015 ended without an agreement because of serious differences over establishing a Middle East zone free of weapons of mass destruction.

    About Nuclear Non-proliferation Treaty (NPT)

    • Between 1965 and 1968, the treaty was negotiated by the Eighteen Nation Committee on Disarmament, a United Nations-sponsored organization based in Geneva, Switzerland.
    • Opened for signature in 1968, the treaty entered into force in 1970.
    • The NPT is an international treaty whose objective is
    1. To prevent the spread of nuclear weapons and weapons technology
    2. To promote cooperation in the peaceful uses of nuclear energy and
    3. To further the goal of achieving nuclear disarmament and general and complete disarmament
    • The treaty defines nuclear-weapon states as those that have built and tested a nuclear explosive device before 1 January 1967; these are the United States (1945), Russia (1949), the United Kingdom (1952), France (1960), and China (1964).

    Non-members of the treaty

    • Four UN member states have never accepted the NPT, three of which possess or are thought to possess nuclear weapons: India, Israel, and Pakistan.
    • In addition, South Sudan, founded in 2011, has not joined.

    Issues in Nuclear Disarmament

    • Notion of Nuclear ‘Haves’ and ‘Have-Nots’: The proponents of disarmaments are themselves nuclear armed countries thus creating a nuclear monopoly.
    • Concept of Peaceful Nuclear Explosion (PNE): conducted for non-military purposes such as mining.

    Why didn’t India join NPT?

    • India is one of the only five countries that either did not sign the NPT or signed but withdrew, thus becoming part of a list that includes Pakistan, Israel, North Korea, and South Sudan.
    • India always considered the NPT as discriminatory and had refused to sign it.
    • India maintains that they are selectively applicable to the non-nuclear powers and legitimised the monopoly of the five nuclear weapons powers.

    India’s commitment for de-nuclearization

    India has always batted for a universal commitment and an agreed global and non-discriminatory multilateral framework.

    • It has outlined a working paper on Nuclear Disarmament submitted to the UN General Assembly in 2006.
    • India participated in the Nuclear Security Summit process and has regularly participated in the International Conferences on Nuclear Security organised by the International Atomic Energy Agency (IAEA).
    • India is also a member of the Nuclear Security Contact Group (but has signed off the Nuclear Non-Proliferation Treaty (NPT)).
    • India has expressed its readiness to support the commencement of negotiations on a Fissile Material Cut-off Treaty (FMCT).
    • India couldn’t join the Comprehensive Nuclear-Test-Ban Treaty (CTBT) due to several concerns raised by India.
    • India has piloted an annual UNGA Resolution on “Measures to Prevent Terrorists from Acquiring Weapons of Mass Destruction” since 2002, which is adopted by consensus.

    Way forward

    • India has actively supported and contributed to the strengthening of the global nuclear security architecture.
    • There is a need for the international community to pay closer attention to the illicit proliferation of networks of nuclear weapons, their delivery systems, components and relevant technologies.
    • India hopes that the international community will continue to work towards realising our collective aspiration for a nuclear weapon-free world.

     

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  • Places in news: Taiwan Strait

    India has for the first time referred to what it called “the militarization of the Taiwan Strait”, marking a rare instance of New Delhi appearing to comment on China’s actions towards Taiwan.

    What is the news?

    • Two American warships have recently sailed very close to China through Taiwan Strait.
    • This has intimidated the China which is already fuming due to the visit of Nancy Pelosi.

    Taiwan Strait

    • The Taiwan Strait is a 180-kilometer wide strait separating the island of Taiwan and continental China (and Asia of course).
    • The strait is part of the South China Sea and connects to the East China Sea to the north.
    • The narrowest part is 130 km wide.

    Issues over Taiwan Strait

    • The Taiwan Strait is itself a subject of an international dispute over its political status.
    • China claims to enjoy sovereignty, sovereign rights and jurisdiction over the Taiwan Strait” and regards the waterway as “internal territorial waters” instead of being international waters.
    • This means that the Chinese government denies any foreign vessel having the freedom of navigation in the strait.
    • This position has drawn strong objections from the western World.

    India’s change of stance

    • India has followed a “One China policy” since its recognition of the PRC in 1949, and only maintains trade and cultural relations with Taiwan.
    • India routinely reiterated this policy until 2008 after which it stopped mentioning it in official statements.
    • This is a demand that China usually asks of most countries in official declarations.

    Why is India shifting its stance?

    • China often make provocative statements claiming Arunachal Pradesh.
    • It often moves to issue “stapled visas” to Indian citizens in Jammu and Kashmir and Arunachal.

     

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  • Reinvigorating the Chabahar Port

     

    After months of what appeared to be a go-slow, the Union government has pushed up its interest in using Iran’s Chabahar port to connect to Afghanistan and Central Asia for trade, with the visit of the Union Minister of Ports, Shipping & Waterways to the port.

    Chabahar Port

    • In 2016, India signed a deal with Iran entailing $8 billion investment in Chabahar port and industries in Chabahar Special Economic Zone.
    • The port is being developed as a transit route to Afghanistan and Central Asia.
    • India has already built a 240-km road connecting Afghanistan with Iran.
    • All this were expected to bring cargo to Bandar Abbas port and Chabahar port, and free Kabul from its dependence on Pakistan to reach the outer world.
    • Completion of this project would give India access to Afghanistan and beyond to Turkmenistan, Uzbekistan, Tajikistan, Kyrgyzstan, Kazakhstan, Russia and Europe via 7,200-km-long multi-modal North-South Transport Corridor (INSTC).

    Why is Chabahar back in the news?

    • The visit is a chance to strengthen ties and the maritime relationship between the two countries.
    • Due to pandemic, there were less number of visits from India to Iran and vice-versa and the pace of the project is also allegedly slower.
    • This visit will also highlight the importance of Chabahar as a gateway for Indian trade with Europe, Russia and CIS [Commonwealth of Independent States] countries.
    • India is keen in developing the Shahid Beheshti port as a “a transit hub” and link it to the International North South Trade Corridor (INSTC), that also connects to Russia and Europe.

    What is India’s strategic vision for Chabahar?

    When the first agreement for Chabahar was signed by then PM Atal Bihari Vajpayee in 2003, the plan had a three-fold objective:

    1. To build India’s first offshore port and to project Indian infrastructure prowess in the Gulf
    2. To circumvent trade through Pakistan, given the tense ties with India’s neighbour and build a long term, sustainable sea trade route and
    3. To find an alternative land route to Afghanistan, which India had rebuilt ties with after the defeat of the Taliban in 2001
    • Subsequently, PM Manmohan Singh’s government constructed the Zaranj -Delaram Highway in Afghanistan’s South.
    • It would help connect the trade route from the border of Iran to the main trade routes to Herat and Kabul, handing it over to the Karzai government in 2009.
    • In 2016, PM Modi travelled to Tehran and signed the agreement to develop Chabahar port, as well as the trilateral agreement for trade through Chabahar with Afghanistan’s President Ashraf Ghani.

    Commencement of operations

    • Since the India Ports Global Chabahar Free Zone (IPGCFZ) authority took over the operations of the port in 2018, it has handled 215 vessels, 16,000 TEUs (Twenty-foot Equivalent Units) and four million tons of bulk and general cargo.

    Why is it gaining importance?

    • In the last few years, a fourth strategic objective for the Chabahar route has appeared, with China’s Belt and Road Initiative making inroads in the region.
    • The government hopes to provide Central Asia with an alternate route to the China-Pakistan Economic Corridor (CPEC) through Iran for future trade.

    Why is the Chabahar dream taking so long to realise?

    • India’s quest for Chabahar has hit geopolitical road-block after road-block; the biggest issue has been over Iran’s relationship with western countries, especially the United States.
    • In years when western sanctions against Iran increased, the Chabahar project has been put on the back-burner.
    • However, the nuclear talks resulted in the Joint Comprehensive Plan of Action (JCPOA) in 2015 came into being, the Chabahar port has been easier to work on.
    • In 2018, the Trump administration put paid to India’s plans by walking out of the JCPOA and slapping new sanctions on dealing with Iran.
    • This led to the Modi government “zeroing out” all its oil imports from Iran, earlier a major supplier to India, causing a strain in ties.
    • India also snapped ties with Afghanistan after the Taliban takeover in August 2021, which put an end to the humanitarian aid of wheat and pulses that was being sent to Kabul via Chabahar.
    • When India restarted wheat aid this year, it negotiated with Pakistan to use the land route to Afghanistan instead.

     

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  • Iran drops some of its key demands for Nuclear Pact

    Iran has dropped some of its main demands on resurrecting a deal to rein in Tehran’s nuclear programme, including its insistence that international inspectors close some probes of its program, bringing the possibility of an Iran–US agreement closer.

    Which agreement is this article referring to?

    • It is an alternative name of the Joint Comprehensive Plan of Action (JCPOA).

    What demands of Iran are we talking about?

    • Iran had already largely relented on its demand that the US lift its designation of the Iran Revolutionary Guard Corps as a foreign terrorist organization (FTO) entity.
    • This designation was a more of symbolic move and insulting to Iranian authorities.
    • Iran also wanted a guarantee that the International Atomic Energy Agency (IAEA) would close investigations involving unexplained traces of uranium.
    • Iran wants guarantees that the IAEA would close all of them.

    What is JCPOA?

    • The Iran nuclear deal, formally known as the JCPOA is a landmark accord reached between Iran and several world powers, including the United States, in July 2015.
    • Under its terms, Iran agreed to dismantle much of its nuclear program and open its facilities to more extensive international inspections in exchange for billions of dollars’ worth of sanctions relief.

    Expected outcomes of the deal

    • Curb on the nuclear program: Proponents of the deal said that it would help prevent a revival of Iran’s nuclear weapons program.
    • Increasing regional engagement: It would thereby reduce the prospects for conflict between Iran and its regional rivals, including Israel and Saudi Arabia.

    Background of the JCPOA

    • Iran had previously agreed to forgo the development of nuclear weapons as a signatory to the Nuclear Non-proliferation Treaty, which has been in force since 1970.
    • However, after the overthrow of the Pahlavi dynasty in 1979, Iranian leaders secretly pursued this technology.
    • In 2007, U.S. intelligence analysts concluded that Iran halted its work on nuclear weapons in 2003 but continued to acquire nuclear technology and expertise.
    • Prior to the JCPOA, the P5+1 had been negotiating with Iran for years, offering its government various incentives to halt uranium enrichment.

    Issues with the deal

    (1) US withdrawal

    • The deal has been in jeopardy since President Donald Trump withdrew the US from it in 2018.
    • In retaliation for the US, Iran resumed some of its nuclear activities.

    (2) Iran’s insistence over sanctions removal

    • In 2021, President Joe Biden said the US will return to the deal if Iran comes back into compliance, though Iran’s leaders have insisted that Washington lift sanctions first.
    • Iran now has indicated that he will take a harder line than his predecessor in nuclear negotiations.

    Who are the participants?

    • The JCPOA, which went into effect in January 2016, imposes restrictions on Iran’s civilian nuclear enrichment program.
    • At the heart of negotiations with Iran were the five permanent members of the UN Security Council (China, France, Russia, the United Kingdom, and the United States) and Germany—collectively known as the P5+1.
    • The European Union also took part. Israel explicitly opposed the agreement, calling it too lenient.
    • Some Middle Eastern powers, such as Saudi Arabia, said they should have been consulted or included in the talks because they would be most affected by a nuclear-armed Iran.

    What did Iran agree to?

    • Nuclear restrictions: Iran agreed not to produce either the highly enriched uranium or the plutonium that could be used in a nuclear weapon.
    • Monitoring and verification:  Iran agreed to eventually implement a protocol that would allow inspectors from the International Atomic Energy Agency (IAEA), the United Nations’ nuclear watchdog.

    What did the other signatories agree to?

    • Sanctions relief: The EU, United Nations, and United States all committed to lifting their nuclear-related sanctions on Iran. However, many other U.S. sanctions on Iran, some dating back to the 1979 hostage crisis, remained in effect.
    • Weapons embargo: The parties agreed to lift an existing UN ban on Iran’s transfer of conventional weapons and ballistic missiles after five years if the IAEA certifies that Iran is only engaged in civilian nuclear activity.

    How has the deal affected Iran’s economy?

    • Prior to the JCPOA, Iran’s economy suffered years of recession, currency depreciation, and inflation, largely because of sanctions on its energy sector.
    • With the sanctions lifted, inflation slowed, exchange rates stabilized, and exports—especially of oil, agricultural goods, and luxury items­—skyrocketed as Iran regained trading partners, particularly in the EU.
    • After the JCPOA took effect, Iran began exporting more than 2.1 million barrels per day (approaching pre-2012 levels, when the oil sanctions were originally put in place).

    Try this question from CSP 2020:

    Q.In India, why are some nuclear reactors kept under “IAEA Safeguards” while others are not?

    (a) Some use Uranium and others use thorium.

    (b) Some use imported uranium and others use domestic supplies.

    (c) Some are operated by foreign enterprises and others are operated by domestic enterprises.

    (d) Some are State- owned and others are privately-owned.

     

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    Back2Basics: International Atomic Energy Agency (IAEA)

    • IAEA is an international organization that seeks to promote the peaceful use of nuclear energy and to inhibit its use for any military purpose, including nuclear weapons.
    • As the preeminent nuclear watchdog under the UN, the IAEA is entrusted with the task of upholding the principles of the Nuclear Non-Proliferation Treaty of 1970.
    • It was established as an autonomous organization on July 29, 1957, at the height of the Cold War between the U.S. and the Soviet Union.
    • Though established independently of the UN through its own international treaty, the agency reports to both the UN General Assembly and the UNSC.

    What are its safeguards?

    • Safeguards are activities by which the IAEA can verify that a State is living up to its international commitments not to use nuclear programs for nuclear weapons purposes.
    • Safeguards are based on assessments of the correctness and completeness of a State’s declared nuclear material and nuclear-related activities.
    • Verification measures include on-site inspections, visits, and ongoing monitoring and evaluation.

    Basically, two sets of measures are carried out in accordance with the type of safeguards agreements in force with a State.

    1. One set relates to verifying State reports of declared nuclear material and activities.
    2. Another set enables the IAEA not only to verify the non-diversion of declared nuclear material but also to provide assurances as to the absence of undeclared nuclear material and activities in a State.

     

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  • Tigray Crisis in Ethiopia

    The director-general of the World Health Organization (WHO), described the Tigray crisis region as the “worst humanitarian disaster on earth”.

    What is the news?

    • Ethiopia has been on the brink of a civil war.
    • On Nov 4 2020, Prime Minister Abiy Ahmed declared war on the country’s Tigray region.
    • The Tigray region is ruled by the Tigray People’s Liberation Front (TPLF).
    • The war was declared in response to the TPLF’s attack on a federal military base in Tigray.

    Tigray Crisis: A backgrounder

    • The animosity between Tigrayans and Eritrea goes back to the Ethiopian-Eritrean war that occurred between 1998 and 2000.
    • It occurred approximately two decades ago was extremely brutal and resulted in the deaths of thousands of soldiers.
    • The roots of this crisis can be traced to Ethiopia’s system of government. Since 1994, Ethiopia has had a federal system in which different ethnic groups control the affairs of 10 regions.
    • The Tigray People’s Liberation Front (TPLF) – was influential in setting up this system.
    • It was the leader of a four-party coalition that governed Ethiopia from 1991, when a military regime was ousted from power.
    • Under the coalition, Ethiopia became more prosperous and stable, but concerns were routinely raised about human rights and the level of democracy.

    How did it escalate into a crisis?

    • Eventually, discontent morphed into protest, leading to a government reshuffle that saw Mr Abiy appointed PM.
    • Abiy liberalized politics, set up a new party (the Prosperity Party), and removed key Tigrayan government leaders accused of corruption and repression.
    • Meanwhile, Abiy ended a long-standing territorial dispute with neighbouring Eritrea, earning him a Nobel Peace Prize in 2019.
    • These moves won Abiy popular acclaim, but caused unease among critics in Tigray.
    • Tigray’s leaders see Abiy’s reforms as an attempt to centralize power and destroy Ethiopia’s federal system.

    How bad is the humanitarian situation?

    • Tigray and its neighbouring regions are facing starvation.
    • There is an absence of medical facilities, no access to their own money due to shut-down banking services, ethnic and physical violence, and raids at the hands of warring forces.
    • The government declared a ceasefire on humanitarian grounds but in an effort to break the TPLF in June last year, imposed a blockade on Tigray.
    • This made it impossible to deliver humanitarian, economic, and medical assistance to Tigrayans.

    Also read:

    [Burning Issue] Ethiopian Crisis and the Geopolitics

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  • What’s at stake in talks for a UK-India Free Trade Agreement (FTA)?

    India and the UK recently revived talks for a Free Trade Agreement (FTA) to encourage trade and investment. The FTA between India and UK is expected to be signed by October.

    What is a Free Trade Agreement (FTA)?

    • It is an agreement between two or more countries to minimize barriers to imports and exports of products and services among them.
    • It includes reducing tariffs, quotas, subsidies or prohibitions which could limit exchange of goods and services across borders.
    • The FTA might allow free trade among the two nations with a few exceptions.
    • This involves a formal and mutual agreement signed between two or more countries.
    • The agreement could be comprehensive and include goods, services, investment, intellectual property, competition, government procurement and other areas.

    What is the status of the India-UK FTA?

    • India and the United Kingdom have a multi-dimensional strategic partnership and are actively engaged in bilateral trade.
    • The two countries agreed to begin formal negotiations for an FTA in January 2022, aiming to advance trade and investment relations between them.
    • The fifth round of FTA talks concluded on 29 July, and the expectation is that negotiations would be completed and the stage set for the FTA by October.
    • The FTA is important for both countries as it would provide a boost and create a robust framework of overall trade and investment between the two countries.

    Which are the countries with which India has FTAs?

    • As of April 2022, India had 13 FTAs, including the South Asian Free Trade Area, and with Nepal, Bhutan, Thailand, Singapore, Japan and Malaysia.
    • The 13 also include the agreements with Mauritius, UAE and Australia signed during the last five years.
    • Additionally, India has also signed six limited Preferential Trade Agreements.

    What is the level of India-UK trade?

    • Bilateral trade stands at $50 billion (ie approx. $35 billion in services and $15 billion in merchandise).
    • India is UK’s 12th largest trading partner and accounts for 1.9% of UK’s total trade in four quarters to the end of 2022.
    • UK is the seventh largest export destination for India.
    • The trade balance maintained by India with UK has largely been a surplus.
    • Top three services exported from India to UK are technical, trade-related and other business services, professional and management consulting services and travel.

    How will an FTA with UK benefit India?

    • Apart from reducing tariffs, the FTA also looks at lowering non-tariff barriers, particularly technical  barriers to trade around rules of origin, investor  protection and IPR.
    • MoUs on joint recognition of certain educational qualifications and an outline pact on healthcare workforce have already been signed.
    • Also, both UK and India have set up panels for a totalization deal being advocated by India and permitting Indian legal services for the UK.

    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.

     

    Also read

    [Sansad TV] Perspective: Free Trade Agreement

     

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