1) Obama offers $4 billion in investment, loans
Further cementing trade ties with India, US President Barack Obama on 26th January announced investments and loans worth $4 billion. Half of this will flow into renewable energy projects in India.
- Jointly addressing the India-US Business Summit with Prime Minister Narendra Modi, Obama said that the US EXIM Bank will finance $1 billion in exports of “Made in America” products to India.
- Another $1 billion will be given in loans by Overseas Private Investment Corporation to small and medium-sized enterprises in the country’s under-served rural areas, while the US Trade and Development Agency will invest $2 billion in India’s renewable energy sector.
- Pushing for further trade and investment ties between the world’s two largest democracies, Obama pointed out that while US bilateral trade with China is $520 billion annually, with India it is still about $100 billion. “It shows trade potential between the two of us,” he said.
- Modi, on his part, promised American businesses a tax regime that is predictable and competitive.The Prime Minister promised as much to American CEOs in the Indo-US CEO meeting, which preceded the Business Summit.
- The Indian side of the CEO forum was led by Tata Group’s Cyrus Mistry and included bigwigs such as Mukesh Ambani, Anil Ambani, Gautam Adani, Shashi Ruia, Anand Mahindra, Vishal Sikka, Sunil Mittal, and DK Sarraf.
- Other issues raised by the two sides in the CEO meeting included strengthening of intellectual property rights (IPRs), commitments on a social security agreement, dialogue on a bilateral investment treaty (BIT) and more visas for professionals from India, including health workers.
- While Obama and Modi remained silent about a social security agreement (totalisation agreement) being pushed for by India, it featured prominently in the CEO meeting.
- Indian businesses in the US could save as much as $3 billion annually in social security contributions made by short-term workers once a pact is in place.
2) India approached WTO over import of US agricultural products
India has appealed to the Dispute Settlement Board of World Trade Organization for a panel decision on its issues with the US over agricultural imports. The WTO said in Geneva that its Secretariat has received a notice by India announcing its decision to appeal certain issues of law and legal interpretation in the panel report in the case `India --Measures concerning the importation of certain agricultural products`.
- India had in 2012 imposed some prohibitions with regard to importation of various agricultural products from the US because of concerns related to Avian Influenza. This import prohibition is maintained through India`s Avian Influenza measures, mainly, the Indian Livestock Importation Act, 1898. The US contended that India`s Avian Influenza measures amounted to an import prohibition that was not based on the relevant international standard or on a scientific risk assessment. The dispute settlement panel ruled that India`s Avian Influenza measures are inconsistent with the Sanitary and Phyto sanitary, SPS agreement because they are not based on the relevant international standards. India claims that the panel committed several legal errors in its interpretation and application of numerous articles of the SPS agreement.
3) German help for smart cities
Germany is interested in developing smart cities in India, the discussion were happened on 28th January. The decision was taken when Urban Development Minister M. Venkaiah Naidu met the visiting German Minister of Environment, Nature Conservation, Building and Nuclear Safety, Barbara Hendricks
- A six-member joint committee will be set up in three months to identify these cities and draw up a plan.The committee will have two representatives of the Urban Development Ministry, one from the Housing and Urban Poverty Alleviation Ministry and three from the Government of Germany
- Dr. Hendricks has invited a delegation from India to the Urban Development Conference in Germany in April. After a discussion on the smart cities initiative, the Minister said the German government was keen on associating with it.
- Following Prime Minister Narendra Modi`s brief, the Centre has decided to dovetail the scheme with the Swachh Bharat Mission and Digital India. Priorities that have been flagged include the need to have clean air, move towards zero waste zones, involve citizens in policy-making and execution, generation of jobs and expanding economic activities.
- There will also be an evaluation of how the cities propose to undertake urban projects through retrofitting, refurbishment and new development.The details of support and hand-holding to help in the transformation will be discussed as well as the role of private players and citizens. The Centre will also examine the possibility of executing works through a Special Purpose Vehicle through PPP.
4) Developing nations want cap on foodgrain procurement removed
Maintaining its hard posture on food security at the World Trade Organization (WTO), India has said that Government procurement of food grain at non-market prices should be allowed without limits. China, Indonesia and Turkey were some of the other members of the G-33 alliance of developing countries in agriculture which pushed for exclusion of support prices for food grain from the list of trade-distorting subsidies.
- The proposal, discussed in the first session on finding a “permanent solution” to India’s (as well as some other developing countries) problem of ensuring food security without bending global trade rules was, however, opposed by some such as the US, the EU, Pakistan, Australia, Japan, Argentina and Paraguay.
- WTO members are supposed to find a “permanent solution” by the end of this year as per the agreement reached in the Bali Ministerial meeting in December 2013, which was later re-negotiated by India.
- New Delhi, meanwhile, has got a short-term solution as part of the Bali deal where members have agreed not to take legal action against it in case subsidy cap is breached. Since the reprieve granted to India is subject to a number of conditions including sharing of numerous data and details, India wants a simple ‘permanent solution’ to the problem as soon as possible.
- The G-33 proposal, made in 2012, also talks about alternative solutions which includes calculating procurement subsidies by changing the base year from 1986-88 and making it more recent, or by indexing it to inflation. India runs the risk of breaching the agriculture subsidy cap, at least in rice, in a few years’ time once it fully implements its food security legislation.
- In Bali, it agreed to give its approval to an agreement on trade facilitation that places obligations on all members to upgrade their customs infrastructure only on the condition that the rules on food procurement subsidies are changed.
5) Make in India good initiative: Germany Finance Minster
Visiting German Finance Minister Wolfgang Schäuble said that his country is eager to invest in Make in India campaign. He visited India on 19th January.
- Schauble expressed interest in working with India in the manufacturing sector, especially in the auto and solar energy industries, at a meeting with business lobby Confederation of Indian Industry (CII). Germany is the world leader in solar energy generation with the largest solar photovoltaics (PV) installed capacity.