CUTS International Global Affairs
Monthly Brief #72, March 2024
India-EFTA Sign TEPA Agreement: A Beckon of Hope Amidst Increasing Trade Protectionism
 
India and the European Free Trade Association signed a Trade and Economic Partnership Agreement (TEPA) on March 10 marking a significant milestone in India's trade relations. The agreement heralded a new era of economic engagement with the European Free Trade Association (EFTA) countries and represented India's pursuit of deeper economic integration and global engagement.

TEPA underscores India's commitment to trade liberalisation amidst rising protectionism globally. By securing FTAs with developed economies like Switzerland, Norway, Iceland, and Liechtenstein, India signals its willingness to deepen economic ties and foster mutual benefits through increased market access and investment opportunities. Through forging closer ties with EFTA countries, India aims to leverage new opportunities for trade, investment, and economic growth, while also signalling its commitment to an open, rules-based trading system.

One of the primary components of the TEPA is the ambitious investment target set by EFTA countries, aiming for a US$100 billion inflow of foreign direct investment (FDI) into India over 15 years, resulting in the creation of one million jobs. This commitment not only demonstrates EFTA's confidence in India's economic potential but also underscores the tangible outcomes envisaged from the agreement. However, it's important to note that these targets are contingent upon various factors, including India's economic growth trajectory and the attractiveness of its investment climate.

The trade aspects of the agreement are equally significant, with provisions aimed at reducing tariffs and facilitating trade in goods and services. For EFTA countries, the TEPA provides enhanced access to India's vast market by eliminating tariffs on a wide range of products over a phased timeline. This opens up opportunities for EFTA exporters, particularly in sectors such as seafood, fruits, pharmaceuticals, and machinery. Conversely, India stands to benefit from increased access to EFTA markets, particularly in services such as yoga instruction, traditional medicine, and professional services.

However, challenges remain, particularly in the implementation and enforcement of the agreement's provisions. Concerns have been raised regarding the enforceability of investment commitments, as well as the potential impact on sectors sensitive to foreign competition, such as agriculture and small-scale industries. Additionally, navigating regulatory differences and ensuring compliance with intellectual property rights (IPR) provisions will be crucial to fostering a conducive business environment and preventing disputes.

Pradeep S. Mehta
Editor

P.S.: Considering the lacklustre performance of the 13th Ministerial Conference of the World Trade Organisation in Abu Dhabi in end February, questions are being raised on the efficacy of the multilateral trading system, and that FTAs are the way forward for trade liberalisation.
 
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Can India rescue the U.S. from Scarce Drug Supplies?
India’s booming pharmaceutical sector has a long history of innovation and distributing lifesaving medicines at very affordable costs around the world. Indian Prime Minister Narendra Modi has long hailed India as the “pharmacy to the world.” He is not the only one to crown India with this title. When India sent essential vaccines and medicines to several countries during the coronavirus pandemic, the Indian pharmaceutical industry truly lived up to its name and reputation. Dr Robert M. Califf highlighted India’s potential in this endeavour, also calling it the “pharmacy to the world.”
(Article by Sangeetha Mugunthan, Purushendra Singh)
India and EFTA sign US$100 billion free trade deal
India has signed a trade agreement with Iceland, Liechtenstein, Norway and Switzerland that includes a commitment of US$100 billion (€91 billion) in investments and creating one million direct jobs in India in the next 15 years. India committed to reducing import tariffs on industrial products from the four European countries, which together make up the European Free Trade Association (EFTA).
IACC President hopeful of India, US "shortly" achieving target of bilateral trade 
Lauding the economic ties between India and the U.S., Indo-American Chamber of Commerce (IACC) President Pankaj Bohra has said that the IACC is working on a target to achieve bilateral trade of US$500 billion between the two nations. He expressed hope that India and the U.S. will “very shortly” achieve the target of bilateral trade of US$500 billion.
 
In his address at the first-ever India-U.S. Legal Services Summit on Indo-U.S. Cooperation on Corporate and Legal Issues, Bohra recalled that the chamber was established when the bilateral trade between India and the U.S. was US$6 billion. Calling U.S. India’s “largest trading partner”, he noted that the bilateral trade between India and the U.S. has reached over US$200 billion.
The India-Australia relationship: Strategic and trade ties; the China factor
After a visit to the cricket stadium in Ahmedabad with Prime Minister Narendra Modi, Australian Prime Minister Anthony Albanese tweeted about the fierce but friendly sporting rivalry between the two nations.
 
“At the heart of this contest is genuine respect, reflecting the affection and friendship between our peoples…On the field, Australia and India are competing to be the best in the world. Off the field, we are co-operating to build a better world (Paywall),” Albanese, the first leader of his country to make a bilateral visit to India since Malcolm Turnbull in 2017, posted.
Dar says Pakistan to examine its trade situation with India
Foreign Minister Ishaq Dar has said that the relevant stakeholders would “seriously examine” the trade situation with India as he highlighted the concerns of the business community.
 
Pakistan, under the government of then-prime minister Imran Khan, had downgraded diplomatic relations with New Delhi and suspended all bilateral trade in August 2019, when India revoked occupied Kashmir’s special status by repealing Article 370 of its constitution.
New trade route could revolutionise Russia-India trade and strategic partnership
The Red Sea crisis has shifted attention to the Eastern Maritime Corridor (EMC) - the proposed trade route for coking coal, crude oil, LNG, fertilisers and containers. Russia's role in India's oil imports remains significant - contributing over 35 percent of total crude imports in 2023, amounting to 1.7 million Barrels Per Day (B/D), as reported by S&P Global. Russia has maintained its position as India's top supplier, despite a notable decline in oil imports from Russia for the second consecutive month in January 2024 amidst the backdrop of sanctions.
USTR Releases 2024 National Trade Estimate Report on Foreign Trade Barriers
U.S. Trade Representative Katherine Tai released the 2024 National Trade Estimate Report on Foreign Trade Barriers (NTE Report), which provides a comprehensive review of significant foreign barriers to U.S. exports of goods and services, U.S. foreign direct investment, and U.S. electronic commerce in key export markets for the U.S.
 
“Statute provides that the NTE Report identify significant barriers to trade and investment, for the U.S. government to use to open those markets. As in years past, USTR is using this year’s NTE Report as a part of the Biden-Harris Administration’s trade policy tool kit to open markets for hardworking American workers, farmers, ranchers, small businesses, and communities,” said Ambassador Tai.
WTO chairpersons for 2024
The WTO General Council, on 22 March 2024, noted consensus on a slate of names of chairpersons for WTO bodies. The General Council decided that consultations on a candidate for the Chair of the Committee on Trade in Services will continue under the leadership of the new General Council Chair, Ambassador Petter Ølberg of Norway, to fill the vacancy as rapidly as possible.

 

Energy Dept. Awards US$6 Billion for Green Steel, Cement and Macaroni Factories
The Biden administration plans to spend up to US$6 billion on new technologies to cut carbon dioxide emissions from heavy industries like steel, cement, chemicals and aluminium (Paywall), which are all enormous contributors to global warming but which have so far been incredibly difficult to clean up. Energy Secretary Jennifer Granholm said that her agency would partially fund 33 different projects in 20 states to test methods for curbing emissions from a wide variety of factories and industrial plants, calling it “the single largest industrial decarbonisation investment in American history.”
New Delhi declares Russia as India`s top oil provider
Amidst escalating tensions and Western sanctions imposed on Moscow in response to the Ukraine conflict, India's reliance on Russian oil has remained steadfast, with trade data from New Delhi's Commerce Ministry revealing a notable increase in crude imports from Russia in 2024.
 
According to the latest figures, India's crude oil imports in January amounted to US$4.48 billion, marking a significant 14 percent month-on-month surge and a staggering 41 percent rise compared to the same period last year.
Australia to invest in solar panel push to counter imports
Australia will invest AUD$1bil to ensure more solar panels are made domestically, as the nation looks to reduce its dependence on imports from China. The Solar Sunshot programme will offer production subsidies and grants to help Australia capture more of the global solar manufacturing supply chain, the government said in a release. While the nation has the highest uptake of rooftop solar in the world – with panels on one in three households – just 1 percent of those have been made locally, it said.
Building the World's Biggest Clean Energy Plant: India
Imagine a solar and wind farm so vast it can be seen from space, sprawling across an area five times the size of Paris. This is the ambitious Khavda Renewable Energy Park, being built by India's Adani Green Energy, and it's set to become the world's largest clean energy plant. The project is crucial for India's future as it addresses the challenge of balancing its booming energy needs with environmental responsibility.
India buying U.S. oil as tighter enforcement of sanctions affects trade with Russia
Indian oil refiners are on track to take the most American crude in almost a year after tighter enforcement of US sanctions crimped trade with Russia and forced processors to look elsewhere for supply. State-owned Bharat Petroleum Corp. and Indian Oil Corp., along with top private refiner Reliance Industries Ltd., have purchased about 7 million barrels of April-loading U.S. crude so far this month, said traders who asked not to be identified.

 

USISPF and CUTS Roundtable on the U.S.-India Security Partnership in D.C.
CUTS International proudly hosted the 10th event in its ongoing 40th Anniversary series on March 13th, 2024, in Washington DC, US, as part of its commitment to fostering international dialogue.
 
Co-hosted with the U.S.-India Strategic and Partnership Forum (USISPF), this roundtable discussion explored the future of the U.S.-India defence partnership, focusing on technology collaboration and maritime strategy. Key figures from both nations convened, emphasising a shift from past discrepancies to a shared vision for the future, as highlighted by Siddharth Iyer, Director for South Asia at the Pentagon, who emphasised the "incredible momentum" driving the partnership forward in his keynote address.
East Asia cannot rely on the Indo-Pacific economic framework
The future of Biden's Administration is Indo-Pacific Economic Framework (IPEF) looks uncertain. Donald Trump has promised to knock it out if elected President. It was pressure from Democrats that kept it from being launched at APEC in San Francisco in November 2023.
 
Is IPEF destined to join failed efforts to create an economic underpinning for the Indo-Pacific idea following the U.S. withdrawal from the Trans-Pacific Partnership and India's exit from the Regional Comprehensive Economic Partnership (RCEP)? Both India and the U.S. continue to be gripped by a reluctance to commit to economic openness.
UN passes resolution for 'immediate ceasefire' in Gaza
The United Nations Security Council demanded an immediate ceasefire between Israel and Hamas, and the immediate and unconditional release of all hostages after the U.S. abstained from the vote. The remaining 14 council members voted for the resolution, which was proposed by the 10 elected members of the body. Washington had been averse to the word ceasefire earlier in the nearly six-month-old war in the Gaza Strip and had used its veto power to shield U.S. ally Israel as it retaliated against Hamas for an October 7 attack that Israel says killed 1,200 people.
India-Japan ties Strengthened by QUAD Cooperation: EAM Jaishankar
On March 08, 2024, External Affairs Minister S Jaishankar underscored the importance of the India-Japan partnership, particularly within the framework of the QUAD, during his address at the Nikkei Forum on the India-Japan Special Strategic Partnership. He emphasised that both nations could derive strength from their collaborative efforts, contributing to the effectiveness and scope of the QUAD initiative.
Australia to Provide US$41 Million to ASEAN for Maritime Security
Australia’s foreign minister Penny Wong has announced that her government would provide US$41.8 million in maritime security to the Association of Southeast Asian Nations (ASEAN) countries.
 
Wong added that the countries of this region are reliant on oceans, seas and rivers for livelihoods and commerce, including free and open sea lanes in the South China Sea and maritime security is really important for them. The Australian government has not clarified which of the countries would be recipients of this funding.
India’s thrust into Indo-Pacific islands goes far beyond
India’s islands strategy is aimed at securing the country’s maritime interests, countering growing Chinese influence, and ultimately projecting Delhi as a leading regional power. The airstrip Prime Minister Narendra Modi inaugurated in Agaléga, Mauritius, with his counterpart Pravind Jugnauth, symbolises India’s massive outreach to the island nations in the Indo-Pacific region and the long runway this outreach has going forward. This approach is still in a state of evolution, involving a combination of defence outreach and humanitarian as well as development assistance. Away from the headlines of the jetty and the airstrip is the leveraging of India’s strong diaspora presence in these islands.
Sweden officially joins NATO
Sweden became NATO’s newest member on March 7, 2024, upon depositing its instrument of accession to the North Atlantic Treaty with the Government of the United States in Washington DC. With Sweden’s accession, NATO now counts 32 countries among its members. NATO Secretary General Jens Stoltenberg hailed Sweden’s historic accession, marking an end to over 200 years of non-alignment. Sweden brings capable armed forces and strengthens NATO, affirming the alliance’s commitment to openness and each nation’s right to choose its path
India looking to Africa for critical minerals
India is looking to Africa for minerals such as copper, cobalt and other critical minerals, while also engaging with Australia for lithium blocks, said V.L. Kantha Rao, Secretary of Mines, on the sidelines of an industry event on March 22, 2024. “In Africa, we are exploring countries like Zambia, Namibia, Congo, and Ghana for critical minerals,” he added. India is preparing rules for the auction of offshore mineral blocks with 10 blocks ready, Rao said, adding the country aims to begin auctions this year.

 

India’s Defence Minister launches ADITI scheme to promote various innovations
Defence Minister Shri Rajnath Singh launched Acing Development of Innovative Technologies with iDEX (ADITI) scheme to promote innovations in critical and strategic defence technologies, during DefConnect 2024 in New Delhi on March 04, 2024. Under the scheme, start-ups are eligible to a receive grant-in-aid of up to Rs 25 crore for their research, development, and innovation endeavours in defence technology. “The scheme will nurture the innovation of youth, and help the country leap forward in the field of technology,” the Defence Minister said as he addressed a gathering of industry leaders, entrepreneurs, innovators, and policymakers.
Korea and Japan to cooperate in satellite navigation system
Korea and Japan will collaborate on the development and operation of regional satellite navigation systems in East Asia, Seoul's science ministry. The two countries signed a memorandum of cooperation (MOC), designed for practical cooperation in developing and operating their respective satellite systems in the region, according to the Ministry of Science and ICT. In the first technical working group meeting in Seoul, they discussed the progress of the Korean Positioning System (KPS) and Japan's Quasi-Zenith Satellite System (QZSS), along with measures to better allow the two systems to coexist and interoperate.
Joint Statement on the Second U.S.-Jordan Cyber and Digital Dialogue
The Hashemite Kingdom of Jordan hosted the second U.S- Jordan Cyber and Digital Dialogue in Amman, Jordan, on March 4, 2024.  The opening session featured remarks by His Royal Highness Crown Prince Al Hussein bin Abdullah II and Deputy National Security Advisor for Cyber and Emerging Technologies Anne Neuberger.  The dialogue was co-chaired by Principal Deputy Assistant Secretary of State for the Bureau of Cyberspace and Digital Policy Jennifer Bachus and Director of National Policy Council Dr Mohammad Khasawneh.
U.S. Takes Action to Further Disrupt PRC Cyber Activities
The U.S. Government is taking a series of actions against APT 31, a cyber threat group connected to the government of the People’s Republic of China (PRC) that has targeted U.S. officials, politicians and campaign officials, various U.S. economic and defence entities and officials, as well as foreign democracy activists, academics, and government officials.
EU Artificial Intelligence Act: Comparing India’s approach with principles
The European Union passed a landmark legislation on Artificial Intelligence on March 13, 2024, with an overwhelming majority with plans to implement the same by the year-end. The said Act is the first such comprehensive framework across the world. It aims to regulate and govern the booming technology that accompanies fervour and fear of the future.
India-Japan Partnership: A Collaborative Innovation
The longstanding relationship between India and Japan has witnessed a remarkable evolution, transcended traditional boundaries and paved the way for a formidable partnership in technological advancement and economic prowess. The recent India-Japan Innovation Symposium, organised by New Energy and Industrial Technology Development Organization (NEDO) in collaboration with Japanese companies and IIT Gandhinagar, serves as a testament to this burgeoning India-Japan partnership.

 

Engaging the Indian-Australian diaspora
An extraordinary and exciting partnership between India and Australia has been forged in less than a decade, with the promise of a collaboration that could credibly become a pivot in the Indo-Pacific, especially at a time when the region faces a hostile and adversarial environment.
 
For this to happen, however, it is important to recognise that while the government can be the principal initiator, the role of multiple stakeholders, including the diaspora often referred to as ‘the human bridge’ between nations plays a significant role.
(Article by Pradeep S Mehta and Amit Dasgupta)
INDUS-X 2024: Progress on the U.S.-India Defence and Security Partnership
The second edition of the India-U.S. Defence Acceleration Ecosystem (INDUS-X) Summit was organised by the U.S.-India Business Council (USIBC) and the Society of Indian Defence Manufacturers (SIDM) in New Delhi on February 20-21, 2024. The Summit explored opportunities to co-produce advanced military capabilities, create resilient defence supply chains, and enhance U.S.-India military interoperability to address shared visions and security challenges for a free and open Indo-Pacific.
 
It highlighted the strong defence partnership between India and the U.S., citing initiatives on Critical and Emerging Technologies (iCET) aimed at fostering innovation across critical sectors, including defence. On this occasion, the U.S. Department of Defence (DoD) and the Indian Ministry of Defence (MoD) released an INDUS-X Fact Sheet to outline progress to date and prioritise near-term efforts.
 
This edition of CUTS Occasional News Wrap (ONW) contains articles and news covered in print and electronic media offering a comprehensive overview of the Summit.
The limits of the India-U.S. strategic partnership
When India and the U.S. concluded the historic Civil Nuclear Agreement in 2008, their bilateral relations were launched on a positive trajectory. Since then, there has been an across-the-board expansion in virtually all dimensions of the relationship — security, technology, defence, economy and commerce. There is today a broader and deeper relationship of unprecedented magnitude. This is undoubtedly anchored in enduring strategic convergence, particularly with respect to maintaining a balance of power in the Indo-Pacific but not limited to it.
Now China sends 1500 tonnes of drinking water from Tibet to Maldives
China donated 1,500 tonnes of drinking water from Tibet to the Maldives amidst a water shortage. The decision came during a visit by China’s Tibet Autonomous Region’s Chairman, Yan Jinhai to the Maldives in November 2023.
 
The Maldives plans to distribute the donated water to islands experiencing shortages. This aid follows previous assistance agreements between China and the Maldives. Earlier, in 2014, the Maldives, which was facing a similar freshwater scarcity exacerbated by climate change, received aid from India.
‘Japan’s funds in India will surge in 5 yrs’
Citing a Japan External Trade Organisation report, consul general of Japan in Mumbai Dr Fukahori Yasukata said India is currently the number one investment target country for Japanese companies reports Chaitanya Marpakwar. He predicted there will be a surge of Japan’s investment in India during the next five years, backed by 5 trillion yen investment target announced in March 2022, in his new book ‘India & Japan: Two Most Religiously Mature Nations’.