The Aakhya Weekly #38 | India Shining, in a broken world
The Aakhya Weekly #38 | India Shining, in a broken world
In Focus: Crisis in multilateralism and India’s opportunity
At the time of assuming the presidency of G20, India identified global consensus-building with respect to development and security issues as one of its primary objectives. In tandem, multilateral reform has become a top priority of India’s G20 presidency – having been highlighted previously by External Affairs Minister S. Jaishankar at the 77th Session of the United Nations General Assembly in September 2022. The Minister had also observed that the United Nations Security council must reform itself in accordance with today’s geopolitical realities. At present, five Member States - Britain, China, France, Russia and the United States - hold permanent membership at the UN Security Council - which has remained unchanged since its creation in 1945, post the conclusion of the World War II, where these five States were the dominant powers. However, it has been pointed out by many that this does not reflect today’s geopolitical realities and the need to expand the permanent membership to include emerging powers like Brazil, Germany, India, and Japan.
As a prominent voice from the Global South, India is poised to spearhead the priorities of developing countries in the processes of G20. The World Trade Organisation (WTO) has reached out to India for support in building consensus for multilateral reform, and has also urged India to ratify the fisheries agreement at the earliest. WTO director-general Ngozi Okonjo-Iweala, who was at in New Delhi last week to attend the G20 foreign ministers’ meet, highlighted the crisis of multilateralism at the WTO and sought India’s support in reforming multilateralism, which suffered a serious setback due to protectionist policies during the Covid-19 pandemic, particularly with respect to vaccines.
The WTO was plunged into crisis ever since the appointments to the WTO appellate body (the apex dispute settlement body) were blocked by the United States under the Trump administration. WTO Member States have resorted to an interim arbitration mechanism, but only 28 Member States have agreed to this and India is not one of them. A facilitator has been appointed to help build consensus on the issue. Further, the 13th Ministerial Conference (MC-13) is scheduled to be held in the UAE this year, where one of the top items on the agenda will be the proposal for global intellectual property waiver for Covid-19 vaccines. The good news is that while talks have been pushed to this year despite an MC-12 outcome pushing for a decision by December 2022, they are still ongoing and all member states appear to be resolute in their commitment to see it through. Readers will recall that India led the charge in demanding a global intellectual property waiver for the vaccines, along with South Africa and others.
Multilateralism has certainly suffered a serious setback in the post-pandemic era, and evidence suggests that it is getting more and more difficult to build consensus. Dominant countries of the Global North who have traditionally wielded power and influence in multilateral institutions are sluggish on reform because it will tend to diminish their standing. Equally, the Global South has developed a sense of mistrust in multilateralism and is choosing protectionism instead. This is where emerging powers like India, Brazil, South Africa, who are contributing to multipolarity in geopolitical relations, have an opportunity to take things forward and help to build consensus around reforms to multilateralism and strengthening global institutions.
Top Stories of the Week
India registers a surge in H3N2 cases
India has seen a surge in cases of the H3N2 variant of the Influenza A virus over the last few months, prompting health officials to raise concerns. The virus is behind the respiratory illness being observed across much of India. While there is a yearly surge in the virus between October and February every year, this year has seen above average rates of the virus, and its symptoms have been more severe and long-lasting than those in the last few years. The rise in influenza cases potentially owes itself, at least in part, to the fact that rates were suppressed in preceding years due to the widespread social isolation that was triggered by the COVID-19 pandemic.
The rise in cases has pushed the Indian Council of Medical Research (ICMR) to institute pan-India surveillance across 30 viral research and diagnostic laboratories. ICMR has also released an advisory on appropriate behaviour for preventing and controlling the disease. States such as Karnataka have issued guidelines around the illness, while Tamil Nadu has announced a thousand “fever camps” to detect instances of the disease.
Interestingly, in lockstep with the rise in influenza infections, there has also been a recent surge in COVID-19 infections, with India seeing an upward trend in cases for the first time in 97 days. Health officials have highlighted concerns of co-infections of the two viruses, which can amplify the severity of the disease, and has resulted in many patients being admitted to ICUs.
RBI announces the 75 Digital Villages Program
On 6th March, Reserve Bank of India Governor, Shaktikanta Das announced that the central bank will launch the 75 Digital Villages Program to bring digital payments to 75 villages across the country. The initiative aims to raise awareness and support local entrepreneurs and traders under the Har Payment Digital initiative, hoping to promote acceptance of digital payments among the people, compliant with Payment System Operators (PSOs). This, it is hoped, shall transform these villages and help digital payments reach the last mile, in the spirit of 75 years on India’s independence.
Under the initiative, PSOs will adopt these villages, selected from across the country, and conduct two camps in each village to improve awareness and onboard merchants. Launching the initiative, RBI Governor Das said, "the payments ecosystem has a variety of payment systems that have facilitated migration to digital. Unified Payments Interface (UPI) has facilitated digital payments to merchants such as retail outlets, kirana stores, street vendors, etc. across the country".
This Week in Policy
Macroeconomics and Taxation
India’s services PMI hit an astounding twelve-year high of 59.4 in the month of February, up from 57.2 in January. This marks the 19th straight month that the figure has stayed above 50 - which separates contraction and expansion.
Agriculture and FMCG
Despite the government’s best efforts, millet procurement for 2022-23 Kharif marketing season to fall short by as much as 40% against a target of 13.28 lakh metric tonnes.
Exports of agricultural and processed food products rose by 10% to $21.79 billion during the first ten months of the current fiscal (2022-23) compared to the same period last year, driven by a spike in shipment of rice, fruits and vegetables, livestock and dairy products.
Foreign affairs
The BIMSTEC Cooperation, which met virtually this week, is set to sign an agreement on maritime transport cooperation which will assist in boosting trade among Member States.
Technology, Media and Telecommunications
The Telecom Regulatory Authority of India (TRAI) is planning to publish a new consultation paper on issues relating to regulatory framework for the broadcasting sector.
Minister of State for Electronics and Information Technology Rajeev Chandrasekhar has said that the new Digital India Bill, which is expected to come out by the end of the month for public consultations, shall be principle-based and prescriptive in nature.
International trade and commerce
India and Russia held a high-level virtual meeting to strengthen investment and trade ties through addressing trade deficit and market access issues.
India and the United States have agreed to launch a strategic trade dialogue to deal with tariff barriers, facilitation of technology transfers, and exploring ways of growing high technology commerce.
Banking, Finance and Insurance
SEBI places restrictions on placement of bids, price and volume on companies going for buyback of securities through stock exchange route, mandating that a company “shall not purchase more than 25% of the average daily trading volume (in value) of its shares or other specified securities in the ten trading days preceding the day in which such purchases are made”.
As liquidity deficit in the banking system widens, RBI to hold 14-day variable rate repo (VRR) auction on 10th March to inject 1 trillion rupees ($12.19 billion) into the system.
Manufacturing
India aims to manufacture $300 billion electronics goods by 2026 and take on a significant role in the global electronics supply chain.
The Centre is expected to launch an updated version of its production linked incentive (PLI) scheme for IT hardware which would increase the overall outlay for the scheme to around Rs 20,000 crore.
Logistics and Infrastructure
India has started upgrading standards for critical infrastructure to bolster their lifespan and resilience to disasters, as the country aims to ramp up spending on capital assets by 37.4% in 2023-24 to ₹10 lakh crore.
Indian Railways has commenced a project which will now enable real time tracking of train movements with the assistance of satellite imagery under the Real Time Train Information System (RTIS) project.
Using the Gati Shakti master plan, the Centre has zeroed in on about 100 industrial clusters for all-round development of infrastructure in close coordination with states.
Sustainability and Energy
Goa sets target for 100% renewable energy usage across all sectors by 2050.
National Highways for EVs to come out with new bidding model for the upgradation of existing highways into electric highways.
European Investment Bank and Indian Renewable Energy Development Agency (IREDA) exploring partnership for financing renewable energy and green hydrogen projects in India.
Tracking the G20
Despite Prime Minister Narendra Modi’s appeal to member countries “to rise above their differences” and focus on “what unites us”, deep divisions between the U.S.-led western countries and the Russia-China grouping brought down any hopes of a consensus emerging from the G20 foreign ministers meeting. The meeting ended without a communique, making it the second group to emerge without one in quick succession.
Despite ending in a similar fashion the week before, the finance ministers and central bank governors meeting made definite, tangible progress on major issues, argue V. Anantha Nageswaran and Anoopa Nair. Also, the G20 may be missing an opportunity to help Sri Lanka in its ongoing debt crisis, Sanhita Ambast writes.
The second education working group meeting will take place in Amritsar next week.
Upcoming Events
Future of Work
March 17 | Mumbai
Business Insider is hosting an annual business conclave on the “Future of Work - Human Capital at an Inflection Point” on March 17th, 2023 in Mumbai. As organisations aim to make workplaces more humane amidst digital adoption, find a balance between hybrid and physical work space and create a more equitable environment overall, the event aims to provide a knowledge sharing platform for the same. This year’s event will focus on aspects of human capital, upskilling, technology and cultural intelligence in defining the times ahead. More Information | Registration Link.
India Flexible Workspace Summit 2023
March 16 | The Trident, Nariman Point
FICCI is organizing second edition of India Flexible Workspace Summit 2023 on 16th March, 2023 at The Trident, Nariman Point. The theme of the summit is “Accelerating Transformation of Flexspace – Trends and Innovation”. While flexible and hybrid working arrangements were forced on employers by the pandemic, this “new normal” is here to stay. The event seeks to deliberate on the trends and technology innovation driving the transformation of flexspace, and bring out a policy road map for the same. More Information | Registration Link
Book Talk – Strongmen Saviours: A Political Economy of Populism in India, Turkey, Russia and Brazil
March 17 | Hybrid
Carnegie India is hosting a book talk on the Strongmen Saviours: A Political Economy of Populism in India, Turkey, Russia and Brazil on March 17th in a hybrid format. The authors of the book, Deepanshu Mohan and Abhinav Padmanabhan, will present the arguments in their book and discuss the emerging trends of populism outside the West. The presentation will be followed by brief remarks from Ambreen Agha and Siddharth Singh, and the seminar will conclude with an open discussion moderated by Suyash Rai. More Information | Registration Link
A Few Good Reads
Happymon Jacob explains why India must make geopolitical hay while its diplomatic sun shines.
What must India in order to not squander its demographic dividend? Neeraj Sahai and Dr. Arun Singh have three proposals.
For policies to work, they must keep in mind the circumstances and experiences of women. The best way to do so is to listen, writes Dr. Sameena Dalwai.
Vandana Menon, Humra Leeq and Raghav Bhikchandani recount the Indian Government’s efforts to resurrect Satyam, once Ramalingam Raju confessed to fraudulent behaviour.
Gavin Leech and Misha Yangdin explore how much policy-makers can benefit from expert advice, “super-forecasters”, prediction markets, or a combination of them all.
Tweets of the Week
Madhav Khosla shares some thoughts on how we can target our judicial pendency rates:
A women’s day thread on women in ancient India, by the Bhandarkar Oriental Research Institute:
Moritz Rudolf captures Xi Jinping’s new mantra:
Key Notifications
The Advertising Standards Council of India has released a report, “Wielding Influence, Nurturing Trust”, which dives into the space of influencer marketing.