Dec-16IR Flashcards
Dec-16IR-Index
- India-Singapore
- India-Qatar
- India-Vietnam
- India-Indonesia
- India-USA
- India-Cyprus
- Heart of Asia (HoA) conference
- Environmental Refugees
- UN Military Observer Group in India and Pakistan
- ‘Urban Plus’ Approach
- Kafala Labour System
- Battle of Aleppo
- Russian-Turkish Peace Initiative for Syria
- One China Policy
- Xisha and Nansha islands in the South China Sea
- Indus Water Treaty (IWT)
- India-Nepal
- China-Nepal
2.1. INDIA-SINGAPORE
Why in News
India signed a third protocol with Singapore to amend the bilateral double taxation avoidance agreement (DTAA), in a move to check tax evasion.
Main points about protocol
The India-Singapore DTAA at present provides for
residence-based taxation of capital gains of shares
in a company. The Third Protocol amends
the DTAA with effect from April, 2017 to provide
for source based taxation of capital gains arising
on transfer of shares in a company.
It will allow India to levy capital gains tax on investments coming from Singapore.
The tax rate will be half the prevailing Indian rate for the next two years and rates will be equated by April 2019.
For first 2 years, India and Singapore will share the
taxes on such gains equally and from third year
onwards, all such taxes will accrue to India.
Significance of protocol
It is a significant step to plug another loophole on black money.
This amendment effectively closes one route of laundering domestic black money by “round-tripping”. Regulators have long suspected rich Indians routing money through these tax jurisdictions, and channeling money back to India.
This is in line with India’s treaty policy to prevent double non-taxation, curb revenue loss and check the menace of black money through automatic exchange of information
This is a taxpayer friendly measure and is in line with India’s commitments under Base Erosion and Profit Shifting (BEPS) Action Plan to meet the minimum standard of providing Mutual Agreement Procedure (MAP) access in transfer pricing cases.
Box–A DTAA is a tax treaty signed between two or more countries. Its key objective is that tax-payers in these countries can avoid being taxed twice for the same income. A DTAA applies in cases where a tax-payer resides in one country and earns income in another.
The DTAA was a major reason for a large number of foreign portfolio investors (FPI) and foreign entities to route their investments in India through Singapore.
FDI flows from Singapore stood at $50.6 billion between April 2000 and Sept 2016, contributing more than 16 percent to total capital inflows during that period, second only to Mauritius.
DTAA with Singapore, Mauritius and Cyprus give full exemption on capital gains to investors as there’s no cap gains in contracting countries. These agreements were misused for round tripping black money.
To curb revenue loss and check menace of black money through automatic exchange of information, India recently revised treaties with Mauritius and Cyprus and joint declaration was signed with Switzerland.
2.2. INDIA-QATAR
Prime Minister of Qatar Sheikh Abdullah bin Nasser bin Khalifa Al Thani paid official visit to India.
List of agreements
Visa pact: It will allow holders of diplomatic, special and official passport of the two countries to visa-free travel
The ‘protocol on technical cooperation in cyberspace and combating cybercrime’.
MoU was signed between Supreme Committee for
Delivery and Legacy of Qatar and Confederation of Indian Industry, which will provide a framework for project experts for Indian companies in Qatar, including through participation in infrastructure projects in Qatar
undertaken for the 2022 FIFA World Cup.
MoU was signed for encouraging greater collaboration and exchange in the field of national ports management.
Box–Qatar’s Importance for India
Energy security:
Qatar is the largest supplier of LNG to it, accounting for 66 per cent of the total imports in 2015-16.
Important trading Partner:
Bilateral trade in 2014-15 standing at $15.67 billion of which India’s exports were only $1 billion.
Security and welfare of Indian community:
Indians form largest expatriate community in Qatar. There are over expatriate 630,000 Indians in Qatar.
To counter radicalization: close cooperation is essential to counter radicalization in India.
Qatar is member of Gulf cooperation council (GCC), close cooperation with Qatar is essential for maintaining stable relation in Gulf region
2.3. INDIA-VIETNAM
Nguyen Thi Kim Ngan, Chairwoman of National Assembly of Vietnam, paid official visit to India. List of agreements
Civil nuclear cooperation agreement:
Vietnam is the 14th country with which India signed the civil nuclear deal.
The two countries had earlier in 1986 signed a pact in the civil nuclear field limited to training. However, the new agreement is broad based and encompasses research on reactors.
MoU was signed between Air India and Vietjet Aviation Company for promotion of traffic between Vietnam and India and sharing of best practices in airline operation, ground handling procedure and management.
Another MoU was signed between India’s Energy Efficiency Services Limited (EESL) and Vietnam Electricity (EVN) on developing a partnership to jointly work in the area of energy efficiency.
A parliamentary cooperation agreement was also signed between LS Speaker Sumitra Mahajan and Ngan.
Other areas of cooperation
Vietnam extended invitation to India to explore energy in South China Sea and supported India’s multilateral membership plans.
Highlighting India’s importance as a regional power, Vietnam has urged New Delhi to intensify economic engagement with Southeast Asia.
Defence cooperation:
In a further boost to its growing defence ties with Vietnam, India has agreed to train the southeast nation’s Sukhoi-30 fighter pilots.
A memorandum of understanding was signed on peacekeeping as well as exchange of delegations.
2.4. INDIA-INDONESIA
Indonesian President Joko Widodo paid official visit to India. This is his first visit after assuming power in 2014.
Outcomes of the visit
India and Indonesia, the world’s most populous Muslim nation decided to expand their defence and maritime security ties and resolved to deal with terrorism.
A joint communiqué on combating illegal and unregulated fishing.
A joint statement said the two leaders condemned terrorism in all forms, saying there must be “zero tolerance” of acts of terror.
South China Sea dispute: The two sides called for resolving the issue through peaceful means and in accordance with the universally recognised principles of international law, including the United Nations Convention on the Law of the Sea (UNCLOS).
Both sides reiterated support for reforms to the U.N. and its principal organs, including the Security Council, with a view to making the global body more democratic, transparent and efficient.
Defense cooperation: Both sides wanted early convening of the Defence Ministers’ Dialogue and the Joint Defence Cooperation Committee meetings to upgrade the agreement on defence to a bilateral defence cooperation agreement.
Box–Indonesia’s Importance for India
India and Indonesia enjoy a long standing shared historical affinity and close cultural ties.
Indonesia is a strategic partner of India since 2005 and an important trade partner in ASEAN (about US$ 16 billion two way trade) and also a major target for outward investment (about US$ 15 billion).
A strong multi-dimensional relationship with Indonesia is a vital element of India’s Act East policy.
Indonesia with its size, population, strategic maritime location and natural resources, is a latent Asian power.
India and Indonesia are also among the very few fast-growing large economies today.
They have also decided to give a major boost to their trade and investment ties by focusing on the areas of oil and gas, renewable energy, information technology and pharmaceuticals.
Indonesia is the world’s largest archipelago, straddling the Indian and Pacific Oceans. It can potentially control all the straits linking the southern Indian Ocean to the South China Sea.
India needs to look for partners who can play a stabilising role in the Indo-Pacific region as China is showing its naval muscle in the South China Sea and its strategic and commercial reach through ‘One Belt One Road’
India has a stake in the diversity of Islam found in Indonesia against exclusive and homogenising influences.
Indonesia and India can provide complementary models for coexistence of religious minorities with majority communities in Asia based on their own traditions of coexistence
India could also learn from Bali about a more ‘simple’ Hinduism that is relatively free from caste and sectarian divisions.
2.5. INDIA-USA
India-US Visa dispute
In March 2016, India dragged the US to WTO’s dispute settlement body against the latter’s measures imposing increased fees on certain applicants for L-1 and H-1B visa categories.
India has stated that the move would impact Indian IT professionals.
India has alleged that the US is violating its obligations under General Agreement on Trade in Services (GATS) as well as the GATS Annex on Movement of Natural Persons Supplying Services, to not discriminate against or between non-US service providers.
Congressional Research Service (CRS) report
A Congressional report has warned American lawmakers that if visa dispute between India and US moves to formal settlement phase, it could possibly result in WTO-authorised trade retaliation against the U.S.
CRS said India contends, among other things, that the 2010 and 2015 fee increases do not comply with “most-favoured-nation (MFN) treatment” under the GATS.
Protectionist measures
In its analysis, CRS noted that the petition fees increases mandated by the 2010 and 2015 acts are “arguably protectionist” because they “may exceed” the government’s cost in processing a visa applicant
It also could be a punitive measure targeting certain employers perceived by some Members of Congress as abusers of the foreign worker visas.
Defence cooperation
India and the US finalized the specifications for designating India a ‘Major Defence Partner’ of the U.S.
“Major Defence Partner” is based on the concept of the US treating India as its closest ally and partner for the purpose of technology transfer.
India was accorded this status during Prime Minister Narendra Modi’s visit to Washington in June 2016.
Both sides reviewed the progress in defence ties in recent years, and welcomed the progress achieved under the Defence Technology and Trade Initiative (DTTI) intended to promote opportunities for co-production and co-development of weapon systems and platforms.
In the past two years, some major agreements were signed:
The Defence Framework Agreement in 2015, which laid a blueprint for collaboration between the defence establishments
The logistics support agreement Logistics Exchange Memorandum of Agreement (LEMOA).
2.6. INDIA-CYPRUS
The Indian government has rescinded a notification blacklisting Cyprus, providing relief to investors who route their investments through the Mediterranean island nation.
Cyprus’s removal comes after both countries agreed to changes in the double taxation avoidance agreement (DTAA).
The revised treaty signed by both the countries gives India the right to tax capital gains from sale of shares on investments made by Cyprus-based companies after 1 April 2017.
Cyprus was one of the key destinations through which companies based in Europe and the US invested in India, benefiting from the treaty between both countries.
In 2015-16, Cyprus ranked eighth in terms of foreign direct investment into India at $3.3 billion.
2.7. HEART OF ASIA (HOA) CONFERENCE
Why in News
India hosted the 6th Ministerial Conference of Heart of Asia (HoA) in Amritsar.
Amritsar Declaration: Highlights
It called for immediate elimination of terrorism to help the war-ravaged country in its political and economic transition.
State-sponsored terrorism was identified as a key
challenge and members agreed upon a concerted
effort to dismantle all kinds of terrorism.
Members reiterated their belief in principles of sovereignty, independence, territorial integrity, sovereign equality of nations as enshrined in the United Nations Charter.
Members expressed their commitment to the Universal Declaration of Human Rights.
Members called up for leveraging the cultural heritage of the region to drive economic and social development.
Members consented on eliminating non-tariff barriers to trade.
Members concerned about the increase in production and cultivation of opium in Afghanistan, the volume of drug trafficking and demand in the HoA Region and beyond.
Box–About Heart of Asia
The Heart of Asia-Istanbul Process was launched in 2011 and the participating countries include Pakistan, Afghanistan, Azerbaijan, China, India, Iran, Kazakhstan, Kyrgyzstan, Russia, Saudi Arabia, Tajikistan, Turkey, Turkmenistan and the UAE.
14 member countries are supported by 16 other countries and 12 international organizations.
The platform was floated to encourage security, political and economic cooperation between Afghanistan and its neighbours.
2.8. ENVIRONMENTAL REFUGEES
An increasing number of people globally are facing displacement due to droughts, famines, rising sea levels and other natural disasters caused by climate change. This class of migrants has been labelled as ‘environmental refugees’. According to the Internal Displacement Monitoring Centre, an international body reviewing trends of internal displacement, 24 million people are being displaced annually by natural disasters since 2008. This crisis will make almost half a billion people worldwide “environmental refugees” by 2100.
The UN Refugee Convention (1951)
It grants certain rights to people fleeing persecution because of race, religion, nationality, affiliation to a particular social group, or political opinion.
The rights they are entitled to follow the principles of non-discrimination, non-penalisation, and non-refoulement.
However, people migrating due to environmental disasters have no such recognition of their ‘refugee’ status in international law, leaving them without any basic rights of rehabilitation and compensation.
The Paris Agreement
Paris agreement has mentioned the rights of ‘migrants’ in its Preamble. However, it is an anemic attempt at appreciating the gravity of this crisis. There is also little follow-up in the text of the agreement to address this problem.
The agreement, in Paragraph 50 of the Loss and Damage section, creates a task force to build upon existing work and develop recommendations for addressing climate migration.
But this is meaningless for two main reasons - first, the recommendations of the task force have no binding authority; and second, no details are provided on its functions, operations, funding and other aspects.
Way forward
People migrating due to environmental disasters should be accorded ‘refugee’ status in international law. This can be achieved either by amending existing UN Refugee Convention to include climate migration or by creating an independent treaty framework addressing challenges of climate-change induced migration comprehensively.
2.9. UN MILITARY OBSERVER GROUP IN INDIA AND PAKISTAN
Why in news?
Jose Ramos-Horta has called upon India to allow the U.N. Military Observer Group in India and Pakistan (UNMOGIP) to play a role in de-escalating tension over the Kashmir issue.
Jose Ramos-Horta won the 1996 Nobel peace prize for his role in resolving the violence in East Timor.
India in 2014 had asked UNMOGIP to wind up its work in Kashmir and earlier this year the MEA spokesperson had reiterated that the UNMOGIP did not have the mandate to monitor situation in Kashmir.
India has contended that the U.N. mission’s mandate, set up in 1948 had lapsed in 1971 after the ceasefire line changed to Line of Control (LoC), and the Shimla agreement.
However, Pakistan continues to welcome the UNMOGIP mission based there.
2.10. ‘URBAN PLUS’ APPROACH
Why in news?
The sixth edition of Asia Pacific Ministerial Conference on Housing and Urban Development (APMCHUD) was held in New Delhi.
Outcomes of the conference-
Asia Pacific countries that account for over 55% of global urban population have resolved to adopt ‘Urban Plus’ approach. This was contained in the ‘New Delhi Declaration’ adopted on the conclusion of the APMCHUD. It also adopted implementation plan.
New Delhi Declaration
The New Delhi Declaration has strongly advocated planning for urban and adjoining rural areas in an integrated manner instead of looking at them as independent entities.
The Declaration also called for a thorough review of existing policies and formulation of new policies to promote New Urban Agenda adopted at the United Nations Conference on Housing and Sustainable Development in Quito, Ecuador in October 2016.
Noting governance as the key to sustainable development, the Declaration stressed on the need for effective governance structures in urban areas.
Implementation plan-
The member countries have strongly recommended formulation of National Human Settlement Policies to promote inclusive, safe, resilient and sustainable city and human settlements.
The Implementation Plan further recommended land regulation policy mechanisms such as land pooling to ensure inclusive and participatory planning,
Integration of land use and transportation planning across defined boundaries of cities and mixed land use.
Enforcement and incentivasation of timely execution of infrastructure projects.
Formulation of comprehensive urban parking policies and community participation in urban planning and service delivery.
Box–Urban plus approach
This approach will address ways to make urban expansion sustainable and manageable. This would mean an emphasis on planning for urban and its adjoining peri-urban and rural areas in an integrated manner.
2.11. KAFALA LABOUR SYSTEM
Why in news?
Qatar formally announced the end of its controversial “kafala” system.
Kafala System
The kafala system is a system used to monitor migrant laborers, working primarily in the construction and domestic sectors, in Lebanon, Bahrain, Iraq, Jordan, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE.
The system requires all unskilled laborers to have an in-country sponsor, usually their employer, who is responsible for their visa and legal status.
The system was compared to modern-day slavery and left vulnerable workers with little protection and open to abuse.
Under “kafala”, all foreign workers working in Qatar require a local sponsor, in the form of an individual or company, and need their permission to switch jobs or leave the country.
2.12. BATTLE OF ALEPPO
Syrian government troops have captured almost 85% of the eastern part of the city (Aleppo) which fell into rebel hands in 2012.
The Battle of Aleppo was a major military confrontation between the Syrian opposition (including the Free Syrian Army and Sunni fighters, such as the Levant Front and the Al-Qaeda-affiliated Al-Nusra Front), against the government of Bashar al-Assad, supported by Hezbollah, Shiite militias and Russia, and against the Kurdish People’s Protection Units.
The battle for Aleppo has been a humanitarian disaster.
The rebels accuse the regime of indiscriminate bombing
and killing civilians, while the government says it had no
option but to move in as the city was controlled by “terrorists”.
From the Syrian perspective, the regime has defeated armed gangs in Aleppo which they had been illegally occupying.
The regime faces serious allegations of human rights violations. US accuses Damascus of war crimes, while France claims Mr. Assad’s “destructive drive” is harming the “defenceless civilian population” in Aleppo.
Box–About Aleppo
In 2011, Aleppo was Syria’s largest city with a population of 2.5 million people.
A UNESCO World Heritage Site, it has been described by Time as Syria’s commercial capital Nationwide protests against President Assad began on 15 March 2011, as part of the Arab Spring. In Aleppo, large protests started more than a year later in May 2012.
2.13. RUSSIAN-TURKISH PEACE INITIATIVE FOR SYRIA
The UN Security Council has unanimously approved a resolution supporting a Russian-Turkish peace initiative for Syria, including an ongoing ceasefire and talks in late January 2017 in Kazakhstan.
The resolution aims to pave the way for the new talks under the aegis of key Syria government backers Russia and Iran, and of Turkey, which backs rebel groups.
The resolution approved also calls for the “rapid, safe and unhindered” delivery of humanitarian aid throughout Syria.
Nearly 50,000 people died in the conflict in 2016, according to the Britain-based Syrian Observatory for Human Rights.
Prospect of recent peace initiative-
The coming together of Russia, Turkey and Iran to discuss a diplomatic solution to the Syrian crisis is a welcome development.
Washington has been kept out from recent peace initiative.
Russia and Iran have direct leverage over the regime in Syria, while Turkey still helps several militant groups. Besides money and arms, the militants need Turkey’s help for any communication with the other side.
There is a reason for Turkey coming forward for talks.
President Recep Tayyip Erdogan appears to have realised that his anti-regime Syria policy has backfired.
Turkey faces severe security challenges, from both Islamic State jihadists and Kurdish militants.
If Syria remains at war and the instability spawns more radical militia groups, it could worsen Turkey’s security problems, while Kurds on the Syrian side could grow in strength.
2.14. ONE CHINA POLICY
Why in news? US President-elect Donald Trump questioned US persistence with a one-China policy. The President-elect indicated that he wants concessions from China over key issues such as trade, South China Sea disputes and the North Korea nuclear crisis, and that by raising the sensitive Taiwan issue, he is trying to gain some bargaining leverage over China
Chinese reaction
China’s Foreign Ministry warned that any change in the one-China policy, if pursued by US, will impair ties between Beijing and Washington.
China reacted harshly cautioning that the ‘One China’ principle is not up for negotiation.
The one-China policy underscores recognition of China’s sovereignty over Taiwan — a position that has been held by the U.S. since 1979.
Beijing is likely to treat a challenge to the ‘One China’ principle as a direct challenge to its sovereignty.
One reason China is so sensitive about Taiwan is its geopolitical vulnerability. It doesn’t want other powers to dictate or change the rules of engagement on its seafront.
What is One-China policy?
The One-China policy refers to the policy or view that there is only one state called “China”, despite the existence of two governments that claim to be “China”.
As a policy, this means that countries seeking diplomatic relations with People’s Republic of China (PRC, Mainland China) must break official relations with the Republic of China (ROC, Taiwan) and vice versa.
The One China policy is different from the “One China principle”, which is the principle that insists both Taiwan and mainland China are inalienable parts of a single China.
What is the ‘One China’ principle?
The principle affirms Chinese sovereignty over Taiwan and is the cornerstone of bilateral diplomatic relations between Washington and Beijing.
Any country that wants to establish political and diplomatic relations with China must agree to adhere to this principle and not recognise Taiwan as an independent country.
Currently, 21 states recognize Taiwan as a sovereign country.
In practice, the ‘One China’ principle is a stabilisation mechanism that preserves the status quo over Taiwan’s political status while allowing it to function as an independent economic, civic and administrative entity. Since 1979, Taiwan has had to negotiate its ‘international living space’ but it has largely honoured the ‘One China’ principle.
