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Kartarpur Corridor Reopens

About Kartarpur Corridor

• The corridor links India's Dera Baba Nanak shrine in Gurdaspur district with Kartarpur Sahib gurdwara in Pakistan's Punjab province.  
• It is a 4.7-kilometre-long stretch that allows devotees from India to pay a visit to the Gurudwara without a visa.  
• The Kartarpur Sahib gurdwara is situated across the Ravi River established by Guru Nanak in 1522.  
• It is built on the historic site where Guru Nanak Dev spent his final days.  
• It was at this place that Guru Nanak Dev assembled a Sikh community and lived for 18 years until his death in 1539.  
• During the partition, the region was divided between India and Pakistan. The Radcliffe Line awarded the right bank of the Ravi River, including Kartarpur, to Pakistan, and the Gurdaspur tehsil on the left bank of Ravi to India.

Background

• In 1999, the Indian and the Pakistani governments proposed the idea of the Kartarpur corridor as a part of the New Delhi-Lahore bus diplomacy. However, pilgrims from India had to take a bus to Lahore to get to Kartarpur, which is a 125 km journey. 
• In 2018, the foundation stone of the corridor was laid on the Indian side on November 26. And on November 28, the stone was laid on the Pakistani side. 
• Pakistan PM Imran Khan inaugurated the corridor in November 2019 as part of the commemoration of the 550th birth anniversary of Guru Nanak. 
• India signed the Kartarpur corridor agreement with Pakistan in 2019. Under the pact, Indian pilgrims of all faiths are allowed to undertake round the year visa-free travel through this passage.

Significance

• Emotive Issue For Sikhs in General and Punjab in Particular
  • It is at Kartarpur, Guru Nanak practised the three pillars of Sikhism as the path to liberation:

Concerns
Can be used by ISI to radicalize Indian youths 

• With the Corridor in place, there is a stream of devotees throughout the year. 
• Individuals and smaller groups are more likely to be susceptible to radicalisation by ISI’s machinations.  
• As a route for drug & human trafficking in India Pakistan is a part of Golden Crescent (Iran – Afghanistan – Pakistan) which is famous for narcotics smuggling.  
• Terrorism and terrorist infiltration 
• The religious congregations are often a soft target for terrorists as the attack on devotees can have the maximum impact. It is often feared that, like Amarnath yatra in J&K, these devotees might be targeted. 
• Also, the corridor may be used by terrorist organisations of Pakistan to infiltrate in India.  
• Pakistan can use this corridor to revive separatist movement in Punjab Sikh Referendum 2020’ campaign posters have been displayed at Pakistani gurdwaras during pilgrimage of Sikh jathas in the past.

India-US Digital Tax Pact

What Has Been Agreed Upon?

• The term of the deal will be the same that were thrashed out between the US and Austria, France, Italy, Spain and UK on October 21, 2021.  
• However, the interim period that is applicable will be from 1st April 2022 till implementation of Pillar One of the OECD/G20 Inclusive Framework or 31st March 2024, whichever is earlier.  
• It should be noted that on October 8, 2021, India and US joined 134 other members of the OECD/G20 Inclusive Framework to reform the global tax norms. They agreed to enforce a minimum corporate tax rate (Global tax Deal) of 15%, as well as an equitable system of taxing profits of big companies in markets where they are earned.  
• The final terms of the Agreement shall be finalized by 1st February 2022.

What Was The Issue

• India introduced a 6% equalisation levy in 2016, however, it was restricted to online advertisement services  
• The Finance Bill 2020-21 imposed a 2% digital service tax on trade and services by non-resident e-commerce operators with a turnover of over Rs 2 crore. This step effectively expanded the scope of equalisation levy.  
• As a result, US-based companies such as Google, Amazon, Linkedin and Facebook were supposed to pay the digital service tax in India.

• In January 2021, US had announced that India’s equalisation levy was discriminatory and actionable.  
• In March 2021, it proposed 25% retaliatory tariffs on about 40 Indian products.

Benefits of The Current Deal

• It will provide Indian companies relief from the proposed American retaliatory action, while comforting tech giants such as Amazon, Google and Facebook that face the levy in India.  
• This agreement represents a pragmatic solution that helps ensure that countries can focus their collective effort of successful implementation of OECD/G20 Inclusive Framework.  
• It will also help ensure that the liability does not exceed the computed liability under pillar one with credit available in the home country of the company.

12^th Ministerial-level Meeting of the India-US Trade Policy Forum (TPF)

• 12^th Ministerial-level meeting of the India-United States Trade Policy Forum (TPF) was held in New Delhi. It was held after a gap of 4 years.  
• The goal of this meeting was to develop an ambitious, shared vision for the future of the trade relationship and resolve trade and investment issues between the two countries. 

Significance of The Forum

• Established in 2005, TPF is a premier forum to resolve trade and investment issues between India and the US. 
• It has five focus groups:

India, Sri Lanka Revive Parliament Friendship Association

• India and Sri Lanka have revived their “Parliamentary Friendship Association”. For this forum, Minister Chamal Rajapaksa has been selected as its President.  
• The association would “reinvigorate” Parliamentary exchanges between the two democracies and strengthen bilateral ties.  
• The association existed in the past and is being revived for the current Parliament, elected in August 2020.

India Confers Honorary Rank of General on Nepal Army Chief

• Nepal Army Chief General Prabhu Ram Sharma was conferred the honorary rank of General of the Indian Army by the Indian President.  
• General Sharma was on a four-day visit to India to explore ways to expand bilateral defence cooperation.  
• It is a customary practice by India and Nepal to confer the honorary rank of General on each other’s Army Chiefs.  
• Nepal conferred the honorary rank of 'General of Nepal Army' to Indian Army Chief Gen MM Naravane during his visit to Kathmandu in November 2020.

India, Bhutan To Have More Entry and Exit Points For Trade

• India and Bhutan will have 7 additional entry and exit points for trade as part of measures to increase trade connectivity. These include:
• Trade between India and Bhutan has more than doubled from USD 484 million in 2014-15 to USD 1,083 million in 2020-21.

One China Policy – Taiwan Issue

Background to Taiwan

• ISSUE Present day China is Known as the People’s Republic of China (PRC), while Taiwan is known as China (ROC). 
• The RoC was declared on December 29, 1911, under the leadership of Dr Sun YatKuomintang (KMT) Party. 
• Under the lease Formosa Island, 
• Since 1949 PRC 
• Republic of Taiwan, under the leadership of General Chiang Kaishek, a civil war started between Chinese Communist Party and KMT resulting in victory of the former, which led to retreat of KMT to Taiwan (then known as while Communists taking control of Mainland China (PRC). believes that Taiwan must be reunified with the mainland. 
• During the Cold War ROC was the only ‘China’ recognised at the UN until 1971. US inaugurated ties with the PRC and finally PRC was recognised as the actual China replacing Taiwan. US backs Taiwan’s independence but officially subscribes to PRC’s `One China Policy’, which means there is only one legitimate Chinese government.

India and Taiwan
India has been following the One China Policy with regards to the issue of Taiwan and Hong Kong. However, in the context of turbulence in India China relations, owing to the Galwan Valley clash, there has been a call for reviewing the One China policy that India has followed till date.

One China Policy of India

• The Communist Party of China (CPC), after it occupied mainland China in 1949, pushing out then ruling Kuomintang Party to Formosa, now known as Taiwan, came up with One China policy. 
• It staked claim on a much bigger territory of Tibet, then under a Buddhist order government with practically no military, besides Taiwan. 
• China occupied Tibet by 1950 and consolidated its military stranglehold on the region through the decade. 
• It has been aiming to capture Taiwan since then but in the face of global opposition, China has not dared to carry out its designs across the Formosa Strait in the East China Sea. 
• India was among the first countries to recognise communist rule in China. Through the 1954 SinoIndian Trade Agreement, India also acknowledged Chinese control of Tibet. 
• India's support to One China policy remained in limbo until 2003. It was during this intervening period that China built its south Tibet claim over Arunachal Pradesh. 
• In 2003, then Indian Prime Minister signed a joint declaration with his counterpart in Beijing. This declaration recognised that the Tibet Autonomous Region is part of the territory of the People's Republic of China.

India - Taiwan Relations

• Diplomatic relations have improved between India and Taiwan since 1990s, but they do have official diplomatic relations. 
• India recognises only the People's Republic of China (in mainland China) and not the Republic of China's claims of being the legitimate government of Mainland China, Hong Kong, and Macau. 
• However, Taiwan views India's rising geopolitical standing as a counterbalance to the PRC's dominance in the region. 
• As a part of its "Look East" foreign policy, India has sought to cultivate extensive ties with Taiwan in trade and investment and cultural ties. 
• The India-Taipei Association was established in Taipei in 1995 to promote non-governmental interactions between India and Taiwan. 
• In 2002, the two sides signed the Bilateral Investment Promotion & Protection Agreement. 
• In 2019, India - Taiwan trade volume was US$7 billion, growing at a rate of 20% year on year. 
• Major Taiwanese exports to India include integrated circuits, machinery and other electronic products. India is also keen to attract Taiwanese investment particularly in hi-tech and labour-intensive industries. More than 80 Taiwanese companies and entities currently have a presence in India.

Change in Stance of India

• In May 2020, two member Parliament virtually attended s of the Indian the newly elected President Tsai swearing in ceremony and praised Taiwanese democracy, thereby sending what some have termed a warning message to China and signalling a strengthening of relations between the Tsai and Modi administration. 
• In July 2020, the Indian government appointed a top career diplomat, Joint Secretary Gourangalal Das, the former head of the U.S. division in India's Ministry of External Affairs, as its new envoy to Taiwan. 
• Ahead of Taiwan’s National Day on 10 October, the Chinese embassy in India penned a letter to Indian media houses asking them to adhere to the government’s One-China policy. 
• An advertisement in Indian print media carried an image of the Taiwanese President, Tsai Ing-wen, with the slogan “Taiwan and India are natural partners”. 
• The Indian External Affairs Ministry brushed away the Chinese criticism by simply saying that the Indian media is free to carry what they want. Significantly, MEA did not re-iterate India’s One-China policy.

Arguments For Reconsidering One China Policy

• China has never followed the One-India policy. 
• It recently announced that it does not accept Ladakh as a Union Territory, and while ignoring Indian objections constructs roads through disputed Gilgit Baltistan. 
• Simultaneously, it diplomatically census India whenever there are visits by Indian leaders or foreign diplomats to Arunachal Pradesh. 
• China has also blocked foreign funding for developmental projects in Arunachal claiming it to be disputed. 
• China has supported insurgencies in the Northeast.

India – Us Trade Relations

India - Us Economic Relations

• Bilateral trade in goods and services—estimated at just $16 billion in 1999 and $59.5 billion in 2009— topped $146 billion in 2019. 
• The U.S. is India’s largest trading partner, goods and services combined. Bilateral trade in goods and services grew by more than 10% per annum over the past two years to reach US$ 142 billion in 2018. 
• In 2019, India was the ninth-largest trading partner of the United States, while the United States was India’s largest trading partner—surpassing China’s rank for the second consecutive year.

• Chains and are poised to play an increasingly important role when it comes to resilient supply chains and working with other like-minded nations.

India - Us Economic Relations

• Bilateral trade in goods and services—estimated at just $16 billion in 1999 and $59.5 billion in 2009— topped $146 billion in 2019. 
• The U.S. is India’s largest trading partner, goods and services combined. Bilateral trade in goods and services grew by more than 10% per annum over the past two years to reach US$ 142 billion in 2018. 
• In 2019, India was the ninth-largest trading partner of the United States, while the United States was India’s largest trading partner—surpassing China’s rank for the second consecutive year. 
• The US wants to export excess ethanol for India’s ethanol blending with petrol. 
• US concerns include piracy of software, film, and music and weak patent protections. 
• India amended the Patents Act to recognize product rather than process patents. 
• Despite the changes in the Patent act, the US has raised concerns about insufficient patent protections, restrictive standards for patents, and threats of compulsory licensing. 
• India restricts FDI in certain sectors. Under India's FDI regime above a certain cap FDI investors have to take permission for investing in India. US considers this as restrictive. 
• U.S. Trade Representative (USTR) expressed concern for years about customs duties on medical equipment and devices. 
• Issues increased when Indian government applied new price controls on coronary stents and knee implants. 
• India wants cooperation from the US in developing a secure pharmaceutical manufacturing base for augmenting global supply chains. However, COVID-19 pandemic has stalled inspections of Indian pharmaceutical facilities by the US Drug Regulator, Food and Drug Administration (FDA). 
• Issues exist regarding data localization, data privacy, and e-commerce. 
• E-commerce rules of India and Data Equalisation levy have also been contentious trade issues between the two countries. The US feels that these hit global software giants adversely. For ex. Amazon, Apple, Microsoft and Google. 
• Data Protection bill has not been passed in India. 
• India’s rules for Mandatory Testing and Certification of Telecom Equipment (MTCTE) have also been a concern for US. 
• United States, H1B and L1 visas permit highly skilled workers from other countries to be employed. 
• The Indian government continues to object to U.S. laws passed in 2010 and 2015 that apply higher fees on companies with more than fifty employees if more than half of those employees are in the United States as non-immigrants. 
• In 2016, India filed a trade dispute at the WTO over these visa fees, arguing that the higher fees “raised the overall barriers for service suppliers from India.” 
• India has been demanding conclusion of Social Security Totalisation Agreement between India and US, this would allow Indian citizens to repatriate their social security savings once they come back to India. 
• Legal, nursing and accountancy services can facilitate growth in trade and investment, both countries promote engagement in these sectors. 
• US has been pressing for issues such as child labour and forced labour in global supply chains. India does not want to tackle these issues in the framework of trade agreements and trade talks. 
• US has been pressing for bringing in environmental issues in the framework of trade talks. 
• Standards and conformity assessment procedures are often used for trade restrictive practices.

Highlights From Recent Trade Policy Forum Meeting
India and USA held the 12th Ministerial level meeting of the India-US Trade Policy Forum (TPF). India’s Minister of Commerce and Industry and US Trade Representative participated in the meeting. This was the first meeting of the Trade Policy Forum since 2017. Political agreement between India and USA on the issue of Digital Services Tax during the interim period prior to full implementation of Pillar I of the OECD agreement.

Way Forward

• Both are emerging as strategic partners and as such there is a need for convergence on all issues concerning both the countries. Trade forms a foundation of such strategic partnership. 
• Reinstatement of the GSP - It would benefit the Indian exports to USA. India can act as an alternative for Chinese goods in the US markets. 
• Delinking Issues - US reportedly considered capping the issuance of H1B visas to about 15% for any country that “does data localisation.” This goes against the spirit of having an overall improvement in trade between the two. 
• Like the 2+2 dialogue, there is a need for institutionalisation of the economic dialogue between USTR and Ministry of Commerce and Industry. 
• India needs to boost manufacturing sector and make exports more competitive to become a major trade partner of USA replacing China. 
• Both nations must actively work towards deescalating trade tensions. 
• Regular convening of Trade Policy Forum and its working groups to iron out trade issues. 
• Collaboration on emerging technologies such as cyberspace, semiconductors, AI, 5G 6G and future generation telecommunications technology. 
• Participation and collaboration between private sector in both countries in building critical linkages in critical sectors. 
• Regular exchange of information on standards and conformity assessment procedures to ensure that all requirements are no more trade restrictive than necessary. There is a need for transparency in the rulemaking process and focus on enhanced good regulatory practices.

S-400 Deal and Caatsa

About Caatsa Law

• The US Congress in 2017 passed the Countering America’s Adversaries through Sanctions Act (CAATSA) to impose sanctions on Russia, Iran, and North Korea. 
• Section 231 of the CAATSA mandated secondary sanctions to any nation entering high-value deals to procure military hardware from Russia.

Implications of Caatsa for India

• Impacts India’s security and strategic interests as Russia is one of the principal suppliers of critical defence system to India. 
• Erodes India’s Sovereignty as US can use CAATSA as tool for arm twisting and preventing India from having trade relations with countries like Russia, Iran etc. 
• Puts constraints on India to purchase critical defence equipment. 
• Adversely Impacts India- Russia relations. 
• It is a unilateral law, not grounded in international law and neither is backed by UN.

Implications For India-Us Relations

• CAATSA is a unilateral law of US which seeks to impose sanctions on India without taking into consideration India’s concerns. 
• Heightens India’s traditional insecurity about reliability of US as bilateral partner. 
• Undermines trust of US in India on the larger question of Indo – Pacific security. 
• Such sanctions would be counterproductive to USA’s larger aim of countering China. 
• Undermines the stand of both countries on the issue of Multilateralism. 
• Throws questions about consistency of US policy. Ex - Arbitrary imposition of sanctions on Iran. 
• According to such sanctions amounts to becoming a party to a bilateral dispute and challenges the India’s principles of sovereignty and strategic autonomy.

Way Forward
Short term goal of India should be getting a waiver from the US for its S-400 deal. However, in the long term it needs to be highlighted that this law goes against the “rules-based international order” that is the foundation of the India-U.S. global strategic partnership.

BSF – Change in Jurisdiction

Amended Jurisdiction of BSF
The BSF jurisdiction now comprises the whole area States of Manipur, Mizoram, Tripura, Nagaland and Meghalaya along the Bangladesh border.

• Whole of the area of Union Territories of Jammu and Kashmir (J & K) and Ladakh. 
• The area within a belt of 50 km in the States of Gujarat, Rajasthan, Punjab, West Bengal and Assam, running along the borders of India. 
• The new changes have increased the area of jurisdiction of the BSF in Punjab, West Bengal and Assam km. 
• There is to 50 km from existing 15 km, while has reduced the area in Gujarat to 50 km from existing 80 no change in jurisdiction of the BSF in the northeastern states and the union territories of Jammu & Kashmir and Ladakh.

Rationale Behind Modification

• It is based on the new security concerns because of Taliban’s takeover Afghanistan. 
• Fear of heightened incidents of cross-border terrorism in future. 
• Rise in terrorist attacks in J&K as well as an increase in the incidents of arms being dropped by Pakistani drones in Punjab. 
• Concerns regarding illegal migration, cattle smuggling, trafficking in person and narcotics as well as smuggling in fake Indian currency notes (FICN) along the Bangladesh border continue to persist. 
• Now, with the increase in their operational limits, the force will be able to conduct raids and make arrests deep inside the state. 
• Use of Drones by terrorist groups which allow trafficking of drugs and arms deep inside Indian territory.

Changes in Power of BSF

• The new Notification empowers the BSF to search, seize and arrest only in respect to the Passport Act of 1967, the Passport (Entry into India) Act of 1920, and specified sections of the Criminal Procedure Code (CrPC) in the extended area of its jurisdiction. 
• The BSF’s powers and duties regarding other central acts such as the Customs Act, the Central Excise and Salt Act, the Narcotics and Psychotropic (NDPS) Act, the Foreign Exchange Regulation Act, 1947, etc., do not apply to the extended area of jurisdiction and remain same as earlier, that is, 15 km for Punjab, West Bengal and Assam and 80 km for Gujarat 
• The Notification does not provide the BSF the power to investigate and prosecute, which implies that the BSF still has to hand the arrested person and the seized consignment over to the State Police within 24 hours after minimal questioning.

Issues Raised by States Against the Changes

• Some states like Assam have welcomed the changes, while others like Punjab and West Bengal have raised concerns about the infringement of rights of the state and is seen as affecting the Federal structure. 
• Since law and order is state subject, the extension of policing powers with increased jurisdiction is seen as usurpation of the rights of the States. 
• States like Punjab have argued that notification has been brought without due consultation with the State government.

Policing Powers

• The extension in jurisdiction has been done with the purpose of bringing uniformity in securing the border areas. 
• Delegation of police powers has been done to the BSF in the past – 1969, 1973 and 2014. 
• These powers were considered essential in view of circumstances like the terrain, population composition, crime pattern besides presence and effectiveness of the police in border areas. 
• However, the issues faced by states vary and as such one size fits all approach does not reflect the ground reality.

State Specific Issue
Rajasthan and Gujarat These states have a low population density and an absence of any population centres up to a large distance from the border, and a limited police presence— necessarily required that police powers delegated to the BSF be larger in these two states. West Bengal, Punjab, Assam 

• These states have much higher population density and a stronger police presence and better infrastructure. 
• In the interior areas, the police have a better presence and effectiveness. 
• Enhancement of jurisdiction in these three states to 50-km border belt may lead to confusion unless close coordination with the police is not ensured. 
• On many occasions, close coordination may not even be feasible, especially in the case of hot pursuit because of necessity of swiftness and secrecy. 
• Lack of coordination may lead to tussles because the concurrent jurisdiction of two forces, controlled by two different governments may lead to turf wars, especially if the ruling parties in the state and centre are different. 
• Core function of the BSF will get adversely effected by enhancement of jurisdiction as the troops deployed on Border Outposts (BOPs) will have to be withdrawn for operations in depth. This might leave the borders vulnerable.

Way Forward

• New threats of tunnels and drones should be addressed by augmenting the capabilities of the BSF through induction of technology to detect these at the borders itself. 
• Police is better equipped to handle the drones landing in interior areas away from borders because of vicinity to the sites. 
• Strengthening the BSF intelligence wing through induction of technology, and focused tasking to collect information about trans-border criminals 
• Collection of intelligence in an area as large as 50 km from the border in densely populated states can be better coordinated by the state and central intelligence agencies and acted upon by the local police. 
• BSF is better trained for border guarding rather than policing functions.