(Current Affairs) India and The World | September: 2014

India & The World

China’s Xi invites Modi to visit, calls for ‘early’ border settlement

  • In Fortaleza to attend the BRICS Summit, Mr. Modi and Mr. Xi met for 80 minutes – extending beyond the scheduled 40 minutes.

  • China’s President Xi Jinping on Tuesday invited Prime Minister Narendra Modi to visit China in November and called for a “negotiated resolution” to the boundary dispute “at an early date”.

  • China had invited Mr. Modi to attend the APEC leaders’ meeting in Beijing in November. However, with scheduled SAARC and G20 meetings that same month, the visit may take place at a later date.

  • Mr. Xi called for a “negotiated solution to the border issues at an early date”

  • Prime Minister Modi said that maintaining peace and tranquility on the border was essential for resolving the issue and India is willing to peacefully settle the boundary issue through exisiting mechanisms and friendly negotiations.

  • The Prime Minister also referred to India and China’s common civilisational heritage, and links through Buddhism, and called for both countries to do more together to tackle their common challenge of fighting terrorism.

  • The Chinese President said he wanted both countries to launch “a batch of exemplary projects” in infrastructure, such as railway construction, to enable more balanced and sustainable trade. The rising trade deficit in China’s favour, reaching $ 29 billion last year, was raised by Mr. Modi.

  • Mr. Xi also said China welcomed India to join its initiative to set up a new Asian Infrastructure Investment Bank as a founding member, the official Xinhua news agency reported.

India, Russia begin naval drills in Sea of Japan

  • Two countries fielded an impressive array of warships and aircraft during the Indra-14 exercise, will work together to check piracy, render assistance to ships in distress and counter the threat from submarines.
  • India and Russia have commenced naval manoeuvres in the Sea of Japan which coincide with their growing energy ties that could, in the future, include transit of oil through the Arctic route.
  • Russia’s guided missile cruiser Varyag and destroyer Bystry are participating in the exercise, in which the Navy is showcasing INS Shivalik, a modern stealth frigate, and INS Ranvijay, a Rajput class destroyer.

India to Host IBSA Summit Next Year

  • India will be hosting the 7th IBSA (India-Brazil-South Africa) Summit in 2015.
  • IBSA is a trilateral initiative amongst India, Brazil and South Africa “to promote, inter-alia, South-South cooperation and exchange”.
  • The platform was announced, following a meeting of the foreign ministers of the three countries in Brasilia in 2003, through the adoption of the Brasilia Declaration.
  • The IBSA summit involves consultations at the Heads of State level while meetings between Ministers and officials are held at the Trilateral Joint Commission and Focal Point levels respectively.
  • New Delhi would also be hosting the India Africa Forum in December this year.

Bank in Shanghai, but presidency for India

  • BRICS countries ironed out their differences over the announcement of the BRICS bank and the contingent reserve fund. The two economic initiatives are the major announcements of the Fortaleza declaration.

  • Shanghai won out as the location for the headquarters for the BRICS bank with equal shareholding for all BRICS members. India would assume the first presidency of the bank, which would be named, as per the Indian suggestion, the “New Development Bank”.

  • The NDB, to be headquartered in Shanghai, will have an initial authorised capital of $100 billion and an initial subscribed capital of $50 billion equally shared by the five member countries.

  • What has clouded the bank’s future in recent months is the unexpected move by China to push forward the setting up of another financial institution — the Asia Infrastructure Investment Bank (AIIB).

  • The AIIB is expected to focus on China and Southeast Asia, while the BRICS bank effort which would emphasise projects in the member countries and in Africa.

  • The AIIB move is being seen as an effort by China to challenge the influence of Japan in the region, as seen in Japanese influence in the functioning of the Asian Development Bank.

  • Prime Minister Narendra Modi also said that The U.N. Security Council and the IMF are in need of “urgent reform”.

  • He also pitched for a common outlook on global crises such as the conflict in Israel, Syria and Iraq, and called for BRICS countries to help “Afghanistan fight the forces of terrorism.” He said that cyber security was a priority for BRICS countries, and called for a united stand on “zero terrorism”.

  • Mr. Modi invoked mantra of “Vasudaiv kutumbakam” (the global family), and called for more “people to people” ties within the BRICS countries, including a BRICS university, more travel, scientific exchanges and sharing of healthcare facilities.

For IAF, Rafale makes the grade

  • Despite an aggressive counter campaign by the British and Americans, the Indian side is firm about wrapping up the Rafale deal.

  • The Rafale has made the grade because it is a safer twin-engine aircraft, which the IAF wants to fly for the next 40 years.

  • The French have modified the Rafale for atomic weapon delivery, which opens up the possibility of its role in imparting “second strike” capability, which is central for validating India’s posture of credible nuclear deterrence.

  • Presently Russia’s Su-30 MKI forming the core of the IAF’s strike force, supplemented by the air superiority Mirage-2000 jets and the Jaguar bombers.

  • Russia is fast losing its dominance in Indian skies as the Indian Air Force, instead of another batch of IL-78 air-to-air refuellers, which are central for extending the strike range of fighter aircraft, the IAF has declared its preference for the French A330 MRTT refuelling planes.

  • Anticipating a loss of turf, the Russians are, nevertheless showing signs of mounting a riposte by developing weapons in partnership with Indian companies, taking advantage of the 49 per cent stake that foreign companies are now allowed in Indian defence industry.

‘U.S., E.U. can’t be trusted on Bali package’

  • India said on Thursday that it no longer trusts the United States at the ongoing World Trade Organisation (WTO) negotiations on the Bali package in Geneva.

  • Commerce and Industry Minister Nirmala Sitharaman is likely to meet WTO Director-General Roberto Azevedo, United States Trade Representative and the EU Trade Commissioner in Sydney at the G20 Summit in an attempt to find a solution to the gridlocked Bali Deal negotiations.

  • India is sticking to its ground in Geneva and refusing to support a Trade Facilitation Agreement [TFA] unless work starts on finding a permanent solution for its minimum support prices for procuring food from poor farmers for below poverty line Indians that are in danger of breaching the WTO caps on subsidies.

Pipeline to Pakistan may revive stalled mega projects

  • India’s decision to pipe natural gas and other petroleum products to Pakistan is being seen as a first step that could lead to the revival of two stalled mega undertakings involving Islamabad — the Iran-Pakistan-India (IPI) pipeline and the Turkmenistan-Afghanistan-Pakistan-India (TAPI) project.
  • Instability in Pakistan’s Baluchistan, through which the proposed IPI would pass, coupled with the policy of the United States so far to seek Iran’s political and economic isolation, have impeded the project.
  • But the IPI could revive, should a breakthrough be achieved in the ongoing nuclear talks between Iran and the six global powers.

India, U.S, Japan joint naval exercise in Pacific

  • India, the United States and Japan are embarking on joint naval manoeuvres in the Pacific Ocean on Thursday as part of the Malabar series of exercises. The exercise, in which 800 personnel from the Navy will participate, follows the U.S.’s strategic pivot to Asia — a doctrine that will result in the shifting of a bulk of American naval assets in the Asia-Pacific over the next decade.

  • The shift in the U.S. military posture is seen as part of a new initiative to contain China. However, Indian officials say that India will exercise its “strategic autonomy” but will not participate in a U.S. led counter-China policy with Japan and Australia as partners.

  • The Navy is fielding a frigate, a destroyer, and a supply vessel in the week-long exercise meant to focus on anti-piracy and anti-terrorism operations. The three countries earlier participated in joint exercises in 2009, and Singapore and Australia were also part of the manoeuvres in 2007. This exercise follows the Indra-14 drills that India and Russia held in the Sea of Japan.

World needs India to succeed: WB president

  • The world was closely watching the new government in India and needed India to succeed in order to end extreme poverty by 2020, According to Jim Yong Kim, president of the World Bank Group.

  • He also mentioned, If the ranking of India in Doing Business Report(DBR) was based just on Gujarat, [the country] would improve 50 places. So our hope is that what Mr. Modi did in Gujarat in improving the business environment is scaled to all of India, if that does happen, India will rise very quickly in the DBR rankings.

  • WB will provide financial support to India worth $15-18 billion over the next three years.

  • He added, “The world needs India to succeed. If India reaches its economic goals, several million people will be lifted out of poverty in a generation’s tim. This represents an historic opportunity [which is] critical not only for India but for the world if we are to end extreme poverty by 2020.”

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