(Current Affairs) India and The World | November: 2013

India & The World

INDIA AND USA

India and United States of America (USA) signed a joint declaration on 27 September 2013 in defence cooperation in research in defence, defence technology transfer, co-development and coproduction of defence articles and services and protecting each other’s sensitive technology and information.

Highlights of the Joint declaration in defence cooperation

  • The United States and India share common security interests and place each other at the same level as their closest partners. This principle will apply with respect to defence technology transfer, trade, research, co-development and co-production for defence articles and services, including the most advanced and sophisticated technology.

  • Both countries will work to improve licensing processes, and, where applicable, follow expedited license approval processes to facilitate this cooperation.

  • The U.S and India are also committed to protecting each other’s sensitive technology and information.

  • The two sides will continue their efforts to strengthen mutual understanding of their respective procurement systems and approval processes, and to address process-related difficulties in defence trade, technology transfer and collaboration.

  • The two sides look forward to the identification of specific opportunities for cooperative and collaborative projects in advanced defence technologies and systems, within one year. Such opportunities will be pursued
    by both sides in accordance with their national policies and procedures, in a manner that would reflect the full potential of the relationship.

  • The U.S. continues to fully support India‘s full membership in the four international export control regimes, which would further facilitate technology sharing.

An Investigation into Indian Trade Policies

A Federal Agency of United States in last week of August 2013 launched an investigation into the trade policies of India. The federal agency has alleged that the Indian trade policies has discriminated the American trade and investment sector.

A joint Senate Committee on Finance and the House Committee on ways and means requested for the investigation named Trade, Investment and Industrial Policies in India: Effects on the U.S. Economy. An investigation report on recent policies and measures in India that affects the U.S. exports and investment would be presented by the United States International Trade Commission (USITC). The USITC will also evaluate the effects of such barriers on U.S. firms and the economy. While examining the Indian policies, the USITC will also produce details of restrictive trade and investment policies maintained or adopted by India in recent past to figure out the sectors that have been affected the most out of the policies. It will also provide the case studies of US firms that have seen the impact of Indian policies in forms of restrictions.

The Process of Investigation

A sample of US firms would be surveyed by the USITC for measurement of the sensitivity if Indian policies and its impact on US firms. The results of the survey would be based on the quantitative analysis trade policy effects, investment and US economy.

INDIA & RUSSIA

Russia and Government of India on 21 September 2013 agreed on collaboration to jointly develop and manufacture civilian aircraft and helicopters for especially for emergency relief and medical purposes. Russian Government also offered to set up manufacturing facilities in the India for joint production of defence hardware. Russia and Government of India also reached an understanding for setting up two major projects in a joint
venture for producing civil choppers and aircraft.

This was decided during the 7th India Russian Forum on Trade and Investment meet between Union Commerce and Industry Minister Anand Sharma and Deputy Prime Minister of Russia Dmitry Rogozin and Russia’s Industry and Trade Minister Denis Manturov in St. Petersburg. Anand Sharma and Dmitry Rogozin agreed on collaboration to jointly develop and manufacture civilian aircraft and helicopters for especially for emergency relief and medical purposes.

And both Russia and India stated that these two aircraft projects should not be seen only for domestic use but will also explore the possibilities of third country exports.

For production of Civilian Aircrafts

  • One of the projects under collaboration for civilian aircrafts or helicopters envisages the setting up of the joint venture for manufacturing in Indian factories different modifications of light helicopters Ka-226T for medical, rescue and other purposes. The Russiangovernment also mooted a new proposal involving IL-112V.

For Setting up of manufacturing facility

  • Russia also proposed to India for setting up manufacturing facilities in the country for production of defence equipment in various fields. The opportunity could also be used to make India as the export base for such defence hardware.

India and Russia have also developed a framework for tracking key priority projects at the Ministerial level. The sectors covered under this joint understanding include automobile, industrial and roadbuilding machinery, chemical and petrochemical industry, civil aircraft construction, fertilizers, pharmaceuticals, energy, diamonds, IT, automobiles, and agro and processed foods.

7th India-Russia Trade Investment Forum held in St. Petersburg

7th India Russia meeting on trade and investment was held at St. Petersburg , Russia on 20 September 2013. A high level delegation of 120 Indian business leaders led by Union Minister of Commerce and Industry participated in the meeting. It discussed various business opportunities with their Russian counterparts. The special focus was on Pharmaceutical and Medical Industry, Tourism and Medical Tourism and Trade in goods, services and innovative products.

At the forum Pharmaceutical sector received major attention as India is looking at the opportunities that the 2020 Pharma programme offers. India sought regulatory simplifications for Indian companies who not only want to have market access but also look for establishing manufacturing base in Russia. In recently concluded 19th India Russia Working Group on Trade and Economic Cooperation (IRWGTEC) meeting in Moscow Indian side had conveyed the details of barriers in the trade of pharmaceutical products to Russia. These barriers included substantial delay in all approvals and dossier evaluation due to insufficient number of competent specialists, huge number of backlog of dossiers accumulated by the Russian health authorities, lack of information about stage of approval etc. All this leads to avoidable delay in supplies, commencement of production, and launch of new product in the market.

Fertilizer sector has also attracted Indian interest for setting up manufacturing in Russia. Production of Phosphate and Potash in Russia by way of JV with Indian Fertilizer entities was discussed. There exist complimentarity between availability of fertilizer resources in Russia and growing fertilizer demand in India which should result in strategic partnership in this field. AKRON and ORGSINTEZ, the two Russian companies are in discussion with IFFCO as they have Potassic and Phosphatic resources. Both side discussed the need to support the proposal of M/s AKRON of Russia for setting up of facilities for production of Phosphate and Potash in Russia by way of JV with Indian Fertilizer entities. Furthermore, In January 2013, Secretary (Fertilizer) met the Russian Ministry of Industry and Trade and Russian fertilizer companies to explain new investment policy changes in urea production in India and invite them to invest in India under the new policy. A non-paper was also shared with the Russian side. During this visit Shri Sharma was informed of Russian companies expressing interest in the proposition and companies on both sides are expected to identify opportunities for investment in urea production in India.

The Forum in its 7th edition with specific purpose of ‘encouraging discussion among the businesses of the two sides to increase economic engagement for common benefits’ concluded that fresh initiatives need to be taken to further exploit complementarities in other sectors such as fertilizers, industrial machinery, diamonds etc. Other new areas such as automobiles, electrical equipment, chemicals, mining and processed foods need to be explored as they have immense potential in both countries. Another area identified for focused approach between India and Russia is IT Services. This conclusion is an endorsement of the sector that have been identified in Joint Understanding & Intention on Possible Plans and Priority Investment Projects for Enhancing Indo-Russian Economic & Investment Cooperation Under which a total of 15 high value, high tech projects have been
selected for special attention for ministerial supervision.

Some of the projects are as following

  • The establishment of India- Russian Joint venture with Hindustan Aeronautics Ltd. (HAL) as joint centre of development the helicopters.
  • Production of Nitrogen Tetra Oxide for Space programme
  • Possible future cooperation between MMTC and ALROSA for long term supply of rough diamonds
  • ONGC Videsh Ltd. (OVL)’s prospects for further hydrocarbon collaboration with Russian energy companies
  • Joint project of Ranbaxy Laboratories Limited (RLL) and Government of Yaroslavl region
  • Participation of Russian companies in urea production in India under new investment policy.
  • Plant construction for manufacturing butyl rubber with capacity of 100000 tons per year at the production site of Reliance Industriesin Jamnagar (India)

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