Context: There is no clear law for national security screening of inward FDI in India. How India regulates foreign investments? India primarily uses FEMA to regulate Foreign Investments. RBI governs the Foreign Exchange Management Act (FEMA). Objectives of FEMA Facilitating external trade and payments. Promoting the orderly development and maintenance of foreign exchange markets in India. …
Context: Adverse judgements against Indian Government in Vodafone and Cairn Energy cases. What are BITs? Definition: These are international reciprocal agreements between two countries that aim to promote and protect investments of one country in the territory of the other. Protects FDI: BITs play an unparalleled role in protecting Foreign Direct Investment (FDI) as they contain ‘survival …
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The Economic Survey 2020-21 concludes that the sovereign credit ratings are biased and they do not reflect the Indian economy’s fundamentals. Background: Currently, India’s sovereign rating is rated under a very low investment grade. Though it will not have impact on market performance, rupee value against the dollar, or on G-Sec yield. But it can impact the FPI inflow into …
Supply chain disruptions: They can be natural as well as man-made. Natural: In Japan, the Great Tohoku Earthquake of 2011, followed by the Tsunami, led to a nuclear disaster (Fukushima Daiichi), causing a sharp drop in Japanese automobile exports to the United States. Man-made: Terrorist drone attacks on Aramco’s oil refineries in Saudi Arabia resulted in …
Evidences of rising corporate nationalism in India Build wrong narratives about foreign companies: Foreign identity is used to build a narrative that doesn’t necessarily pertain to legal issue at hand. E.g. Future Retail accusing Amazon of behaving like “the East India Company of the 21st century” and calling it “Big Brother in America.” Create tussles for …
Challenges in Free Trade Agreement: Rising trade deficits: ASEAN (Association of Southeast Asian Nations) FTA’s deficit rose from $5 billion to $22 billion. Japan FTA saw the deficit increase from $4 billion to $8 billion. South Korea FTA deficit grew from $8 billion to $12 billion. Unsatisfactory exports: According to NITI Aayog, India’s exports to FTA …
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Nine-Step Framework to make India an investment destination Identify sectors for priority treatment: While electronics, computers, telecom, precision equipment, factory machinery products constitute 70% of global trade, but India’s share is a low 0.7%. These sectors can be targeted. Recognise sectoral concerns: A sector may generate a large turnover, but net earnings may remain small because of …
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Some steps taken by government in recent times have raised questions of Protectionism. Controversial Steps: Contradictory Policy measures: While the Digital India mission seeks to transform India into a knowledge economy counter-productively, the Centre has increased import tariffs on smartphones and laptops. While on one hand government is charging high import tariffs on foreign made …
What is the Devas issue? Read Antrix-Devas Case Notes in GS3 – Technology SC Verdict on Devas Case: SC has confirmed that Devas was created for fraudulent purposes. It neither had the technology nor IP rights when entering into the agreement with Antrix. The court has also held that Devas did not obtain a license …
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Exports in 2021: India’s exports in financial year 2021-22 has crossed $400 billion. This is highest ever and previous record was $330 billion in 2018-19. India’s annual exports have been boosted by the increase in shipments of merchandise; engineering products; apparel and garments; gems and jewellery; and petroleum products. The agriculture sector has also achieved …