International Relations: May 2023 UPSC Current Affairs | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly PDF Download

6th India-Canada Ministerial Dialogue on Trade & Investment

Why in News?

Recently, the 6^th India-Canada Ministerial Dialogue on Trade and Investment (MDTI) was held in Ottawa, Canada.

What are the Major Outcomes of the MDTI?

• Support for India as G20 Chair:
  • The Canadian Minister expressed her support for India as the G20 Chair and its priorities in the G20 Trade and Investment Working Group.
  • She expressed her intention to participate in the upcoming G-20 Trade and Investment Ministerial meeting in India scheduled for August 2023.
• Enhanced Cooperation:
  • The Ministers highlighted the importance of cooperation in sectors such as clean technologies for infrastructure development, critical minerals, electric vehicles and batteries, renewable energy/hydrogen, and artificial intelligence (AI).
• Critical Mineral Supply Chain Resiliency:
  • The Ministers emphasised the importance of government-to-government coordination to promote critical mineral supply chain resiliency.
  • They committed to an annual dialogue at the official level during the Prospectors and Developers Association Conference (PDAC) in Toronto to discuss mutual interests.
• Canada-India CEO Forum:
  • The Ministers agreed to rework and relaunch the Canada-India CEO Forum with renewed focus and priorities.
  • The CEO Forum would serve as a platform to enhance business-to-business engagement and could be announced at an agreed-upon early date.
• Trade Mission and Delegation:
  • The Canadian Minister announced her leadership of a Team Canada trade mission to India in October 2023.
  • This mission aims to strengthen trade and investment ties, with a significant business delegation.

What are the Areas of Cooperation Between India and Canada?

• About:
  • India established diplomatic relations with Canada in 1947. India and Canada have a long-standing bilateral relationship based on shared democratic values, the multi-cultural, multi-ethnic and multi religious nature of two societies and strong people-to-people contacts.
• Political:
  • India and Canada share commonalities in Parliamentary structure and procedures.
  • In India, Canada is represented by the High Commission of Canada in New Delhi.
  • Canada also has Consulates General in Bengaluru, Chandigarh and Mumbai, as well as trade offices in Ahmedabad, Chennai, Hyderabad and Kolkata.
• Commerce:
  • India-Canada bilateral trade in goods reached approximately USD 8.2 billion in 2022, showing a 25% growth compared to 2021.
  • The services sector was emphasised as a significant contributor to the bilateral relationship, with bilateral services trade valued at around USD 6.6 billion in 2022.
  • Canadian Pension Funds have cumulatively invested around USD 55 billion in India and are increasingly viewing India as a favourable destination for investments.
  • More than 600 Canadian companies have a presence in India and more than 1,000 companies are actively pursuing business in the Indian market.
  • Indian companies in Canada are active in the field such as Information Technology, software, steel, natural resources and banking sectors.
  • The India-Canada Free Trade Agreement is also under negotiation.
  • An Early Progress Trade Agreement (EPTA) is expected to be signed in 2023 between India and Canada.
  • The agreement will cover a wide range of areas including goods, services, investment, rules of origin, sanitary and phytosanitary measures, technical barriers to trade, and dispute settlement.
• Science and Technology:
  • India’s Atomic Energy Regulatory Board (AERB) signed an Arrangement with the Canadian Nuclear Safety Commission (CNSC) on September 16, 2015 to exchange experiences in nuclear safety and regulatory issues.
  • Indo-Canadian S&T cooperation has been primarily focussed on promoting Industrial R&D which has potential for application through development of new IP, processes, prototypes or products.
  • Canada was a partner country for the Technology Summit held in New Delhi in November 2017.
  • The Department of Earth Science and Polar Canada have started a programme for exchange of knowledge and scientific research on Cold Climate (Arctic) Studies.
  • Under the “Mission Innovation” program, India is collaborating with Canada in various activities in the areas of Sustainable Biofuels (IC4).
  • ANTRIX, the Commercial arm of ISRO, has launched several nanosatellites from Canada.
  • ISRO in its 100^th Satellite PSLV launched on January 12, 2018, also flew Canadian first LEO satellite, from Indian spaceport Sriharikota, Andhra Pradesh.
• Education and Culture:
  • The Shastri Indo-Canadian Institute (SICI) is a unique bi-national organisation fostering, since 1968, education and cultural cooperation and collaboration between India and Canada.
  • Canada was the Country of Focus at the 48^th International Film Festival of India held in Goa in November 2017.
  • Canada Post and India Post joined hands to issue a commemorative stamp on Diwali in 2017.Canada Post issued Diwali Stamps again in 2020 and 2021.
  • In October 2020, Canada announced the voluntary repatriation of the ancient Annapurna statue which was illegally acquired by a Canadian collector and had been kept at University of Regina.
  • The statue has since been handed over to India and has been placed inside Kashi Vishwanath temple in Varanasi in November 2021.

In New ‘Quad’ Meet With U.S, Saudi and UAE, Doval Discusses Infrastructure Initiatives in Gulf

Why in the news?

Recently, Mohammad Bin Salman, the Saudi prince, and prime minister, hosted a special meeting of the national security advisers (NSAs) of India, the United States, and the United Arab Emirates in the Kingdom of Saudi Arabia. This meeting is being considered as another significant "Quad" in West Asia.

Significance of the meeting

• The focus of the meeting was regional infrastructure initiatives.
• This meeting is particularly noteworthy since it took place only a week after the U.S. NSA's visit to Iran, which recently agreed to restart ties with Saudi Arabia in a meeting brokered by Beijing.
• Growth and Stability: According to the Saudi Ministry of Foreign Affairs, the leaders discussed ways to strengthen relations between their countries to promote growth and stability in the region.
• Interconnectivity: The U.S. White House also released a statement indicating that the meeting aimed to advance their shared vision of a more secure and prosperous Middle East region that is interconnected with India and the rest of the world.
• The news portal Axios from Tel Aviv said the meetings on infrastructure were meant to provide a counter to China’s Belt and Road initiative and other inroads in the region.
• It further added that among the projects is a plan to connect Gulf countries via a railway network and connect to India via shipping lanes from “two ports” in the region”.

India- US bilateral NSA meet

• The White House in its statement also said Sullivan had met Doval separately to “discuss bilateral and regional matters”.
• The bilateral meeting between USA’s National Security Adviser Mr. Sullivan and Mr. Doval is one of a number of meetings set over the next few weeks to prepare for upcoming meetings of Prime Minister Narendra Modi with U.S. President Joseph Biden this month, and the PM’s state visit to the U.S. in June.
• It is the first meeting between Doval and Sullivan after they launched the ambitious India US ICET (Initiative on Critical and Emerging Technology) dialogue in January.
  • The iCET or US-India Initiative on Critical and Emerging Technologies was launched by the two countries in 2022 and has been managed by the National Security Councils of both countries.
  • Under the initiative, 6 areas of cooperation have been identified:
  • Scientific research and development
  • Quantum Computing
  • Artificial intelligence
  • Defence innovation
  • Space
  • Advanced Telecom

How will it benefit India?

• Strategic partnership: India has been working to enhance its strategic partnerships with the Gulf countries, and the Quad provides a platform to take this cooperation to the next level.
• Security: The new Quad can make sure that India’s interests are not left unguarded because of the vacuum created in the Middle East by Washington’s focus on peer competition with China and on Russia’s actions in Eurasia.
• Commerce: The Middle East can act as a gateway to Europe and Africa. For instance, Indian companies can leverage the UAE as a hub to tap into nearby regional markets of West Asia, Eastern Europe, and Africa.
• Indian Diaspora: Instability threatens Indian energy imports and diaspora. India’s past inability to influence geopolitics in the Middle East, combined with its lack of security presence, led to costly evacuations of its diaspora. This included the largest evacuation in history when 200,000 Indians were airlifted out of Kuwait during the Gulf War.
• Expansion of strategic influence: India has traditionally had strong economic ties with the Gulf countries but has been less successful in expanding its strategic influence in the region. The Quad can provide India with an opportunity to forge stronger political and strategic partnerships with these countries, while also enhancing regional stability.
• Interconnectivity: The alliance can be an answer to China’s Border Road Initiative which is crictized for being non transparent. This presents an opportunity for India to expand its regional influence and offer an alternative to China's growing presence in the region.

Conclusion

• The Middle East is a critical source of investment, energy, and remittances for India.
• Platforms like this offer a very constructive and progressive stage to India in particular and other member countries in general to counter the aggressive and assertive behavior of China that is posing a serious threat to regional security.
• The rise of the new ‘Quad in West Asia could provide Washington with a geostrategic solution to the pressing challenge of the U.S. presence in the region and how to do more with less while connecting the bloc with the new U.S. Indo-Pacific strategy.

Arab League

Why in News?

Recently, the Arab League has re-admitted Syria into the organization, after a suspension over a decade.

Why has Syria Readmitted to the Arab League?

• Suspension:
  • Syria was suspended from the Arab League in 2011 after it violently cracked down on anti-government protests.
  • The Arab League accused Syria of not complying with a peace plan that called for a withdrawal of military forces, the release of political prisoners, and the start of a dialogue with opposition groups.
  • Despite attempts at peace negotiations and ceasefire agreements, the violence continued, leading to Syria's suspension.
  • This had economic and diplomatic consequences for Syria.
• Readmission:
  • The move signifies softness in relations between Syria and other Arab governments and is seen as the start of a gradual process to resolve the crisis in Syria.
  • The Crisis in Syria has resulted in the displacement of roughly half of the pre-war population of 21 million and the deaths of over 300,000 civilians.
  • A committee involving Egypt, Saudi Arabia, Lebanon, Jordan, and Iraq will be established to help Syria achieve these goals.
  • But the decision does not mean a resumption of relationships between Arab states and Syria as it is up to each country to decide this individually.
  • It calls for a resolution of the crisis resulting from Syria's civil war, including the flight of refugees to neighboring countries and drug smuggling across the region.

What is the Arab League?

• About:
  • Arab League, also called League of Arab States (LAS), is an intergovernmental pan-Arab organisation of all Arab states in the Middle East and North Africa.
  • It was formed in Cairo, Egypt on 22nd March 1945, following the adoption of the Alexandria Protocol in 1944.
• Members:
  • Currently, there are 22 Arab countries: Algeria, Bahrain, Comoros, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, the United Arab Emirates, and Yemen.

• Objective:
  • It aims to strengthen and coordinate the political, cultural, economic, and social programs of its members and to mediate disputes among them or between them and third parties.
  • The signing on 13^th April 1950, of an agreement on joint defense and economic cooperation also committed the signatories to coordination of military defense measures.
• Concerns:
  • The Arab League has been criticized for its inability to effectively address the issues it was created to handle. Many question the relevance of the institution, with its slogan of “one Arab nation with an eternal mission” being seen as outdated.
  • This has led to instances where important events, like the annual leaders' summit, have been postponed or canceled.
  • The League has also been criticized for its lack of effectiveness in enforcing decisions and resolving conflicts among its members. It has been accused of disunity, poor governance, and being more representative of autocratic regimes than of the Arab people.

CPEC's Extension to Afghanistan

Context

• Following a recent meeting in Islamabad, China & Pakistan agreed to extend the China-Pakistan Economic Corridor (CPEC) to Afghanistan.
• The move comes in spite of opposition from India on issues of sovereignty and territorial integrity.

China-Pakistan Economic Corridor (CPEC) 

• About:
  • The CPEC is a collection of infrastructure projects that have been under construction throughout Pakistan beginning 2013. 
  • The initiative is planned to be completed by 2049.
  • The CPEC is part of China's larger Belt and Road Initiative, which aims to spread Chinese investments in trade and connectivity infrastructure to bring Central Asian and European markets closer.
• Details: 
  • The CPEC is a 3,000 km route of infrastructure projects that seek to create a series of contiguous economic and trade hubs with road and rail infrastructure.
  • It will link places like China's restive western province of Xinjiang Uyghur Autonomous Region and the new Gwadar port in Pakistan's equally unquiet Balochistan state.
• Funding:
  • Originally valued at $47 billion, the value of CPEC projects bumped up to $62 billion as of 2020. 

Mutual Benefit for China and Pakistan: 

• For China:
  • For China, the project will bypass the Strait of Malacca, which can be a choke point in case of a conflict with the US or other adversaries. 
• For Pakistan:
  • On the other hand, Pakistan expects CPEC to be a lifeline for its deteriorating economy, leading to a multiplier effect on production and employment generation and sustainable economic growth. 
  • The move is expected to pave way for investment of billions of dollars for infrastracture projects in the country which is hit by sanctions and is facing an economic crisis.

Challenges for the Project:

• Laxity:
  • The project is behind schedule and only three of the total 15 projects announced have been completed so far.
• China’s debt trap policy:
  • Critics also foresee that the weak economic indicators of Pakistan might lead to a possibility of the country defaulting on debt repayments, as Chinese loans have high interest rates.
• Safety & security of Chinese citizens:
  • China has voiced its concerns to Pakistan over the safety and security of Chinese citizens working on various CPEC projects. 
  • The number of incidents targeting Chinese citizens in Pakistan has been worrying to Beijing. 

India’s Concerns

• Violation of Indian Sovereignty: 
  • The project violates the sovereignty of India as it passes through Pakistan-occupied Kashmir (PoK), which is a disputed territory between India and Pakistan. 
  • As per well-established international conventions, no construction is allowed in any disputed territory, without taking the other country into confidence.
• Exploitation of Natural Resources: 
  • Under CPEC, China plans to build two mega-dams on the Indus, named Bunji Dam and Bhasha Dam. 
  • This will put a heavy strain on the Indus Water Basin.
• Security Concerns for India: 
  • Increase in China’s Activities in IOR: 
    • With Gwadar being a part of CPEC, India fears an escalation of PLA Navy activities in the Indian Ocean Region (IOR). 
  • Threat to Indian Trade and Connectivity: 
    • Majority of Indian tangible imports pass through the Strait of Hormuz. 
    • China can easily create impediments to its access to the Middle-east in case of a conflict, jeopardizing India’s energy security.
  • Enhanced threat from Pakistan: 
    • With the overhauling of the Karakoram Highway, Pakistan will enjoy an advantage in mobilizing troops as well as heavy military equipment to PoK. 
    • At the same time, an increase in financial returns to Pakistan through CPEC may expand its ability to fund military infrastructure as well as state-sponsored terrorism in Kashmir, thus destabilizing the region.

Suggestions for India

• Maintain Communication: 
  • Experts have advocated that India maintain communication and cordial relations with its neighbors. 
  • In such a context, India has done well to keep participating in forums like Shanghai Cooperation Organization to maintain communication with both Pakistan and China.
• International Collaboration: 
  • It is well settled that India cannot compete with China in the matter of financing developmental projects like CPEC in other developing countries. 
  • Therefore, it needs to collaborate with agencies like Japan International Cooperation Agency (JICA) to offer soft loans to save them from falling into the Chinese debt trap.
• Maintaining Security: 
  • Developing countries, especially the countries of Southeast Asia have pinned their hopes on India to counter China’s hegemony in the region. 
  • Here, India needs to build on alliances like Quad to maintain the balance of power in the Indo-pacific region.

Way ahead

• While the Indian position remains unchanged, China and Pakistan are keen to invite third parties into the CPEC, highlighting China’s insensitivities to India’s concerns.
• Connectivity initiatives must be based on universally recognized international norms, good governance, rule of law, openness, transparency, and equality, and must be pursued in a manner that respects sovereignty and territorial integrity.

India-Singapore Ties

Why in News?

The Union Education Minister of India recently embarked on a three-day visit to Singapore with the aim of strengthening existing ties and exploring opportunities for widening bilateral engagement in education and skill development.

What are the Key Highlights of the Meeting?

• The Union Education Minister met various key Ministers of the Singaporean Government and visited Spectra Secondary School.
  • It includes a constructive meeting with DPM & Minister for Finance, Singapore, on strengthening cooperation and focusing on skill development.
  • The meeting emphasized creating opportunities for lifelong learning, building a future-ready workforce, and making knowledge and skill development a key pillar of strategic partnership.
• The minister highlighted the National Education Policy (NEP) 2020 and its focus on vocational education, market relevance of training, and integration of skills qualifications framework with higher education qualification framework.
• The Minister stressed on learning from the best practices of Singapore, collaborate and customize it to meet Indian needs.

How are India’s Relations with Singapore?

• Background:
  • The close ties between India and Singapore have a history rooted in strong commercial, cultural and people-to-people links across a millennium.
  • The more modern relationship is attributed to Sir Stamford Raffles who, in 1819, established a trading station in Singapore on the route of the Straits of Malacca which later became a crown colony and governed from Kolkata till 1867.
  • After independence, India was one of the first countries to recognize Singapore in 1965.
• Trade and Economic Cooperation:
  • Singapore is among India's largest trade and investment partners in ASEAN and accounted for 27.3 % of our overall trade with ASEAN in 2021-22.
  • Singapore is also the leading source of Foreign Direct Investment into India.
  • Over the last 20 years the total investment into India from Singapore is almost 136.653 billion and accounts for nearly 23% of the total FDI inflows.
  • The Comprehensive Economic Cooperation Agreement (CECA) between India and Singapore was signed in 2005.
  • India and Singapore have also collaborated on several initiatives to promote trade and investment, such as the India-Singapore Business Forum and the India-Singapore CEOs Forum.
  • Recently, India’s Unified Payments Interface (UPI) and Singapore’s PayNow have been integrated in February 2023 to enable faster Remittances between the two countries.
• Defence and Security Cooperation:
  • Both countries share common concerns about regional stability and maritime security in the Indo-Pacific region.
  • In 2015, they elevated their relationship to a Strategic Partnership on the occasion of the 50^th anniversary of the establishment of diplomatic relations.
  • They have also signed several agreements to enhance their defence ties, such as the Defence Cooperation Agreement (2003) and the Naval Cooperation Agreement (2017).
• Military Exercises:
  • Navy: SIMBEX
  • Air Force: SINDEX
  • Army: Bold Kurukshetra
• Education, Science and Technology Cooperation:
  • The 28^th edition of the DST-CII India-Singapore Technology Summit was held in February 2022.
  • It highlighted collaboration of India and Singapore in AI, IoT, fintech, healthcare, biotech, smart manufacturing, green mobility, logistic and supply chain solutions, smart manufacturing, and sustainable urban development.
  • ISRO also launched Singapore’s first indigenously built micro-satellite in 2011.
  • Singapore is looking at collaborating with India in the area of digital public infrastructure on the lines of a national identity system like Aadhaar.
  • Another potential opportunity could be the integration of Singapore's 'Proxtera' (global digital hub of MSME ecosystems) with India's Open Network for Digital Commerce (ONDC)
  • Cultural and People-to-People Ties: Both countries share a rich heritage of cultural diversity, linguistic affinity and religious harmony.
  • Ethnic Indians constitute about 9.1% or around 3.5 lakhs of the resident population of 3.9 million in Singapore. They have contributed significantly to Singapore’s economic development, social fabric and cultural diversity.
  • ASEAN-India Pravasi Bharatiya Divas (PBD) was held in Singapore on 6-7 January 2018 as part of commemoration of 25 years of ASEAN-India Partnership, with the theme, “Ancient Route, New Journey”.
• Cooperation in Infrastructure Development:
  • Singapore's expertise in infrastructure development, smart cities, and urban planning aligns with India's goals of sustainable development and building smart cities.
  • Singaporean companies have been actively involved in infrastructure projects in India, including the development of industrial parks, airports, and urban infrastructure.

IPEF Ministerial Meeting

Context

The second Indo-Pacific Economic Framework for Prosperity (IPEF) Ministerial Meeting concluded with successful negotiations under the Supply Chains (Pillar II) and good progress in the other pillars.

About IPEF

Reforming UNSC and Bretton Woods

Why in News?

Recently, at a press conference in Hiroshima, Japan, the UN Secretary-General has called for reforms in UNSC (United Nations Security Council) and Bretton Woods Institutions, citing that the current order is outdated, dysfunctional and unfair.

• In the face of the economic shocks from the Covid-19 pandemic and the Russia-Ukraine Conflict, the said institutions have failed to fulfil their core function as global safety nets.

What is the Bretton Woods System?

• About:
  • The Bretton Woods system was a monetary framework created in 1944 by representatives of 44 nations at the Bretton Woods Conference in New Hampshire, USA. It aimed to establish stability and cooperation in international Monetary after World War II.
  • The Bretton Woods Agreement created two important organizations—the International Monetary Fund (IMF) and the World Bank.
    • While the Bretton Woods System was dissolved in the 1970s, both the IMF and World Bank (Bretton Woods institutions) have remained strong pillars for the exchange of International Currencies.
• Need for Reforming Bretton Woods Institutions:
  • While these institutions performed well over their first 50 years – they have been struggling in more recent times as problems of rising inequality, financial instability and Protectionism have re-emerged.
  • The threat of Climate Change and ecological stress, rising disasters and a more interconnected world with new threats like cyber-security and pandemics require a new International Financial Architecture.
  • There has been biases in fund allocation and unregulated Special Drawing Rights (SDRs), the IMF allocated USD 650 billion in SDRs during the pandemic.
    • The G7 countries, with a population of 772 million people, received USD 280 billion. The African continent, with 1.3 billion people, received only USD 34 billion.

What is the United Nations Security Council?

• About:
  • The UN Security Council was established by the UN Charter in 1945 and is one of the 6 principal organs of the United Nations.
  • UNSC has 15 members: 5 permanent members (P5) and 10 non-permanent members elected for 2-year terms.
  • The P5 are: US, Russia, France, China and the UK.
  • India has been a non-permanent member of the Council during 1950-51, 1967-68, 1972-73, 1977-78, l984-85, 1991-92, 2011-12 and for the 8^th time, entered the UNSC in 2021 and was on the council for the term 2021-22.

Issues with the UNSC

• Creating Problems for the Developing Countries:
  • Developing countries are facing problems in three dimensions: Moral, power-related, and practical.
  • A systemic and unjust bias in global economic and financial frameworks in favour of rich countries is generating “great frustration in the developing world”.
• Limits the Representation:
  • The absence of Africa, as well as countries like India, Germany, Brazil, and South Africa, from the permanent membership of the UN Security Council is seen as a significant drawback.
  • It limits the representation of important nations and their perspectives on global issues, hindering effective decision-making on complex and interconnected problems.
• Misuse of Veto Power:
  • The P5 have anachronistic veto power in the UNSC which has faced criticism for being undemocratic and limiting the Council's ability to make important decisions when any of the P5 disagrees.
  • Many argue that such elite decision-making structures are not suitable for the current global security landscape.

What can be done to Address these Issues?

• Bretton Woods:
  • There is a need to reshape and revitalize three global institutions -the IMF, WBG and the WTO (World Trade Organization) where:
  • The IMF will focus on macroeconomic policy and financial stability, with stricter surveillance of advanced economies and their impact on global crises.
  • The restructured WBG will prioritize sustainability, shared prosperity, and leveraging private capital effectively. It should work with others to address global challenges and act as a wholesaler of finance.
  • A stronger WTO is needed for fair trade, faster dispute resolution, and the ability to respond swiftly to emergencies.
  • The system needs more automatic and rule-based financing mechanisms to avoid delays and political influences.
  • There needs to be regular calibrated SDR issues, global pollution taxes, and financial transaction taxes.
  • A well-structured G-20 could provide overarching guidance to the Bretton Woods system and its interactions with other institutions.
• UNSC:
  • There is a need to ensure equal representation for all regions, including Africa, along with decentralization of power and authority, which will allow nations from all regions to voice concerns related to peace and democracy in their countries, making decision-making more representative and democratic.
  • The focus should be on addressing global issues rather than preserving the privileges of the P5 nations.
  • Urgent correction is needed to balance power between the P5 and the rest of the world, ensuring a more democratic and legitimate governance of the UNSC for international peace and security.
  • The IGN (Intergovernmental Negotiation) process, which discusses UNSC reform, should be revised and re-energized, avoiding procedural tactics that hinder progress.