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As India pushes the pedal on free trade agreements (FTAs), non-tariff issues such as carbon emission norms, climate action, labour and gender balance standards, that comprise an increasingly substantive part of these new pacts, are weighing on these ongoing negotiations.
Policymakers in New Delhi have flagged concerns these issues could pose hurdles for India in reaping the gains of its comparative labour advantage, with officials of the view that these incremental issues need to be dealt with “cautiously” in the ongoing FTA negotiations with the UK, the European Union, as well as the India-Australia Comprehensive Economic Co-operation Agreement (CECA).
There is also a considered view in policy circles here that the window for wrapping up these FTA talks could narrow by early next year, given that New Delhi’s focus would invariably shift to the series of events linked to India’s G20 Presidency and that political lobbying from influential lobby groups such as farmer unions and the auto sector could intensify in the run up to the 2024 national elections.
In much of the negotiations currently under discussion, climate action, carbon emissions and labour issues are taking precedence over pure trade issues. Indian negotiators view these as instruments that could potentially offer partner countries a handle to trigger non-tariff protectionist measures, especially as developed nations stare at recessionary conditions.
There are significant differences between the old (FTAs negotiated prior to 2015) and the new FTAs under discussion currently. Earlier, predominantly trade-related issues used to dominate; rules, operations, tariffs measures.
Earlier there used to be about a dozen chapters, now in the new FTAs, the number of chapters has doubled with non-trade issues such as gender balance, labour standards, environment and climate issues dominating these FTAs.
That’s why we are putting our foot down. We have to negotiate these (FTAs) properly given this context,” a senior government official involved in the negotiations told The Indian Express.
Developed countries such as the US, for instance, have brought up the issue of carbon emissions in the process of manufacturing melted steel as a non-tariff related issue.
While India mostly produces steel generated from iron ore, which in turn comes from mining, most developed countries have resorted to methods to generate it from scrap, which results in lower carbon emissions, a senior official involved in the negotiations said.
Backed by oli, and other parties, Prachanda appointed Nepal PM (Page no. 5)
(GS Paper 2, International Relations)
Hours after he walked out of a pre-poll five-party alliance led by Nepali Congress president and outgoing Prime Minister Sher Bahadur Deuba, Communist Party of Nepal (Maoist Centre) chairman Pushpa Kamal Dahal ‘Prachanda’ joined hands with rival K P Sharma Oli, chairman of the Communist Party of Nepal-Unified Marxist Leninist (CPN-UML), and other smaller parties to be appointed as the new Prime Minister of Nepal.
Prachanda has claimed the support of 170 parliamentarians – from six parties and four Independents – in the 275-member House.
The general elections last month failed to produce a clear winner.
The Nepali Congress is the single largest party with 89 seats, while CPN-UML and CPN-MC have 78 and 32 seats respectively.
In a statement, the President’s office said Prachanda has been appointed as the Prime Minister of Nepal as per Article 76(2) of the Constitution – his third time in office.
A PTI report said Prachanda and Oli have reached an understanding to lead the government on rotation basis, and Oli agreed to make Prachanda Prime Minister in the first round, as per his demand.
Earlier in the day, Prachanda walked out of the Nepali Congress-led pre-poll alliance after Deuba rejected his bid to become the Prime Minister in the first round. Deuba and Prachanda had earlier reached a tacit understanding to lead the new government on a rotational basis.
After talks with Deuba failed, Prachanda reached Oli’s private residence to seek his support. He was joined by leaders of other smaller parties, making it clear that Oli had done the groundwork to bring the parties together.
Deuba, who was re-elected as leader of the Nepali Congress parliamentary party, was all set to stake claim and submit the list of his supporters, when the events unfolded.
Interestingly, the parties supporting Prachanda include the pro-monarchy Rastriya Prajatantra Party, the Rastriya Swatantra Party, Janata Samajbadi Party, and regional outfits like the Janamat Party and NagarikUnmukti Party.
Staking his claim before the deadline given by President Bidhya Devi Bhandari expired at 5 pm on Sunday, Prachanda, 68, was accompanied to the President’s office by Oli, RSP president Ravi Lamichhane and RPP chief Rajendra Lingden among other top leaders.
Citing damage to ancient rock carvings, experts red-flag mega oil refinery project (Page no. 5)
(GS Paper 3, Economy)
The site proposed for a mega oil refinery in Barsu village of Maharashtra’s Ratnagiri district is at the centre of a row over whether it might damage ancient rock carvings found in the area.
The rock art, or petroglyphs, estimated to be 20,000 years old and classified as protected monuments by the state archaeology department and the Archaeological Survey of India, have been added to the tentative list of UNESCO’s world heritage sites.
Known as Ratnagiri oil refinery and petrochemical complex, the project is being developed by Ratnagiri Refinery & Petrochemicals Limited, a joint venture of Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd.
However, the alternative site too has run into trouble, not just with residents of Barsu village who have been citing land acquisition and environmental reasons for their opposition, but conservationists and archaeologists, who say it will end up damaging the petroglyphs.
Last month, a committee of experts appointed by the Union Ministry of Science and Technology visited Ratnagiri to inspect and study the petroglyphs scattered across several villages such as Barsu, Rundhe, Devihasol, DevacheGothne, Ukshi, Chave and Kasheli, and propose measures for conserving them.
Led by senior archaeologist Professor Vasant Shinde, a CSIR Bhatnagar Fellow at Centre For Cellular And Molecular Biology (CCMB) and former Vice-Chancellor of Deccan College, Post-Graduate and Research Institute, Deemed University, Pune, the team included scientists, historians and archaeologists from premier institutes of India.
Shinde told that the team visited the sites to assess and make a proposal for funds required to conserve “the heritage and to study how a project can be undertaken to make the entire country and the world aware of the importance of the sites as they are unique.
The city
On the anvil: ‘Floating’ solar farms on water bodies, first one at Bawana lake (Page no. 7)
(GS Paper 3, Energy)
After rooftop panels, the Delhi government has come up with a new proposal to generate electricity through solar energy by installing ‘floating solar farms’ in lakes, water bodies and ponds across the city. While the project has been started in Telangana and Visakhapatnam, it will be the first in Delhi, said officials.
The power department has decided to start the project on a pilot basis at Outer Delhi’s Bawana lake. “We are working on a proposal to install floating solar panels on water bodies such as on the Yamuna at Wazirabad and several ponds and lakes, wherever possible.
These panels can be installed on natural water bodies and man-made lakes. But it will require running water with good flow, only then can it successfully generate electricity.
Bawana lake comes under the Delhi government and we already have our power plant, so installation process, including permission and required clearance from departments such as DJB won’t take time.
The official said the water body at Bawana has a capacity to generate about 1 MW power: “The Bawana power plant has 1,500-1,600 MW capacity, and big plants have ancillary power requirements. So, power produced during the pilot will be used to meet requirements of the plant.”
The panels will be installed through IPGCL. Explaining the process, an official said: “Floaters will first be installed on the water and solar panels will be set up on them.
A wire rope between the floaters and solar panels will be connected to a transformer across the water body… Electricity produced from panels will be stored in the transformer and grid and will be distributed accordingly.”
Floating solar panels are cheaper and more efficient than rooftop ones and don’t need land to be acquired to install photovoltaic panels. They reduce water evaporation, there-by saving more water for hydropower generation.
According to officials, floating solar panels are cheaper and more efficient than rooftop ones. A solar expert said, “As there is scarcity of open land in Delhi, installing solar panels in lakes and reservoirs will be beneficial as the water flow here is also stationary.
Editorial
A partners duty (Page no. 10)
(GS Paper 2, International Relations)
The third round of negotiations of the India-European Union (EU) free trade agreement concluded recently. The two sides are also negotiating an investment protection agreement (IPA), which will contain investment protection standards and an independent mechanism to settle disputes between investors and states under international law.
Notwithstanding the laudable intent of the government to welcome them, foreign investors in India have often got into numerous regulatory troubles with the state.
Several foreign corporations like Vodafone, Cairn Energy, Nissan, White Industries, Telenor, Nokia, Vedanta have sued India to enforce the rights guaranteed to them in bilateral investment treaties (BITs).
This is the main motivation behind the EU seeking an IPA with India. Arguably, EU investors can rely on Indian law for protection.
Indian law can be unilaterally changed to the detriment of the investor. Moreover, the Indian judiciary is agonisingly slow in resolving disputes. Thus, the longing for protection under international law.
But the road to a successful India-EU IPA is going to be bumpy largely because of India’s inward-looking approach to investment protection under international law as enunciated in India’s 2016 Model BIT. The following differences between the two sides are daunting.
First, India wants to push taxation measures outside the scope of the treaty by making tax-related regulatory measures non-justiciable.
The EU has difficulty accepting this proposition given the recent history of India’s tax-related investment disputes with Vodafone, Cairn Energy, and Nissan.
Second, the EU’s investment proposal to India talks of creating a two-tier court-like system with an appellate mechanism and tenured judges to resolve treaty disputes between investors and the state.
This proposal is connected to the EU’s stand internationally for creating a multilateral investment court (MIC), negotiations for which are going on at the United Nations Commission on International Trade Law (UNCITRAL).
The MIC is aimed at overcoming the weaknesses of the current arbitration-based system of settling investor-state disputes. India’s position on creating an investment-court-like system is unknown. India hasn’t publicly contributed to the ongoing negotiations at UNCITRAL towards establishing a MIC.
Ideas page
An engine for growth (Page no. 11)
(GS Paper 3, Science and Technology)
With the G20 presidency, India has an opportunity to set the global agenda and be in the limelight for at least a year. But, if it has to be a real leader, say a Vishwaguru, it has to do some heavy lifting for quite a number of years.
The real Vishwaguru today is the US, which has retained its global leadership for almost a century since World War I. It is not just its military might but its technological superiority in various fields that has made the US the largest and most competitive open economy.
How did the US achieve all this? Thanks to the culture of innovation backed by a solid base of research and development (R&D). Innovation is rightly recognised as an engine for economic growth and Prime Minister Narendra Modi is right when he extended the old slogan of Lal Bahadur Shastri and Atal Bihari Vajpayee, jai jawan, jai kisan, jai vigyan, to include jai anusandhan (research and innovation).
In 2016, the Modi government launched the Atal Innovation Mission (AIM) to create an ecosystem to promote innovation and entrepreneurship in the country.
All these are steps in the right direction, but the foundation of all this lies in how much India actually spends on R&D, both in absolute terms as well as a percentage of its GDP, in relation to other G20 countries.
Even the Sustainable Development Goals (SDGs) Agenda 2030 aims to “build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation”.
In particular, SDG Target 9.5 calls upon nations to encourage innovation and substantially increase the numbers of researchers as well as public and private spending on R&D. Gross domestic expenditure on R&D (GERD) is the proposed aggregate to quantify a country’s commitment to R&D.
According to UNESCO’s Institute for Statistics (UIS) latest report, the G20 nations accounted for 90.6 per cent of global GERD (current, PPP$) in 2018. Global R&D expenditure has reached a record high of about 2.2 trillion current PPP$ (2018), while Research Intensity (R&D expenditure as a percentage of GDP) has gradually increased from 1.43 per cent in 1998 to 1.72 per cent in 2018.