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19th June Current Affairs

Contents

  1. China investments, supplies and walling off market
  2. China’s Galwan claim and freeing Indian soldiers
  3. India is back in the UN Security Council
  4. Fitch cuts India’s sovereign rating outlook to negative
  5. U.S. Bill pressuring China over Uighur Muslim crackdown

CHINA INVESTMENTS, SUPPLIES AND WALLING OFF MARKET

Focus: GS-III Indian Economy

Why in news?

  • Investments from China have been under heightened government scrutiny.
  • The India-China border standoff has put the spotlight back on our near-total dependence on China for crucial raw materials used in medicines.

India looks to wall off market from China

  • The government is looking to fast-track several decisions to whittle down the share of Chinese goods and companies in the Indian market.
  • These decisions include putting in place domestic standards to check cheap imports, apart from restricting the award of contracts in projects being executed by the Centre and the states.

Increasing Import Duties

In the past, increasing Import Duties hasn’t reduced shipments from other countries due to the free trade agreements that India has signed and there are fears that Chinese companies use this window to route their products into the Indian market.

Non-Tariff Options, and more

  • Non-tariff options are seen to be a more potent weapon in the battle against Chinese products.
  • Work has already begun on setting standards for products identified by the commerce department, with technical regulations formulated for many products, whose imports added up to more than 45 billion $.
  • These moves come along with schemes to boost domestic manufacturing of electronics and basic drugs.
  • Other options, such as using security clause to restrict some imports, are also available.

China investments come under greater scrutiny

  • Union home ministry had raised concerns about potentially sensitive investments in critical sectors from “certain countries”, given the blurred ownership lines between state-owned and privately held companies in China.
  • Given the threat of opportunistic acquisitions by Chinese companies, the government made its clearance mandatory for all foreign direct investment (FDI) inflows from countries with which it shares land borders.
  • There have been instances when India declined to clear telecom equipment imported from China after security concerns were raised.
  • India had also imposed import duty on power generation equipment from China.

Chinese supply of pharma raw materials

  • Imports from China account for 80% of total raw materials for making medicines, also called APIs (active pharmaceutical ingredients).
  • For certain life-saving antibiotics like cephalosporins, azithromycin and penicillin, the dependence is as high as 90%.
  • A huge jump in certain API prices imported from China during the COVID-19 Outbreak highlights the risk of a single source for supplies, which can potentially disrupt procurement of essential medicines in emergency-like situations.
  • Nearly two decades ago, India was self-dependent on key ingredients used in antibiotics and fermentation products. But over the years, API imports spiked from around 1% in 1991 to about 70% in 2019.

Way Forward to support the Pharma Sector

  • Experts say that the pharma industry needs a sort of ‘single-window clearance’ to expedite its implementation.
  • India needs to step up in terms of API manufacturing for its own captive use.
  • The government should provide subsidies for greenfield investment.
  • India’s focus has to be on manufacturing life-saving penicillin G and antibiotics.
  • Idle capacity lying with MSMEs can be utilized to support the pharma industry by manufacturing chemicals which can be produced by the synthetic process.
  • Government can help by extending incentives to these units, without insisting on minimum investment.

-Source: Livemint, The Hindu, Times of India


CHINA’S GALWAN CLAIM AND FREEING INDIAN SOLDIERS

Focus: GS-II International Relations

Why in news?

After clashes in the Galwan Valley of Ladakh left 20 Indian soldiers dead, the Chinese released 10 Indian Army personnel from their custody.

Soldiers were armed

  • The clashes in the Galwan Valley of Ladakh left 20 Indian soldiers dead, and it is noted that though the soldiers were armed, they followed the Long-standing practice (as per 1996 & 2005 agreements) not to use firearms during faceoffs.
  • The 1996 agreement between India and China on “Confidence-Building Measures (CBMs) in the military field along the Line of Actual Control in the India-China border areas” says that neither side shall open fire, cause bio-degradation, use hazardous chemicals, conduct blast operations or hunt with guns or explosives within two kilometers from the line of actual control.

China’s Galwan claim will hurt de-escalation process

  • After China claimed sovereignty over the Galwan Valley, India warned Beijing that making “exaggerated and untenable” claims were contrary to the understanding between senior military commanders for de-escalation and disengagement along the Line of Actual Control.
  • Chinese foreign ministry repeated its accusation that Indian troops had crossed the line.
  • China has twice made the claim since the clashes along LAC which comes in the absence of any intrusion for decades.
  • India was very clear that all its activities were always within Indian side of the LAC.

Click Here to read all about the Current India China Border situation

-Source: The Hindu, Times of India, Hindustan Times


INDIA IS BACK IN THE UN SECURITY COUNCIL

Focus: GS-II International Relations

Why in news?

India is back in the UN Security Council with a non-permanent seat for the eighth time – winning the election unopposed.

Highlights of India’s asporations

  • India would want to “reform” the multilateral system based on the following principles— (5S) Samman, Samvad, Sahyog, Shanti and Samriddhi (respect, dialogue, cooperation, peace & develpment).
  • India’s overall objective during this tenure in the UN Security Council will be the achievement of N.O.R.M.S: a New Orientation for a Reformed Multilateral System.
  • The call for “reformed multilateralism” will not involve the UNSC itself which is a larger battle.
  • The position will give India useful leverage to push some key objectives, especially of playing a role in global governance which heading a UN body entails. India can use the next couple of years to pick up deserving candidates to maneuver them to be electable.

How does this play for our defence against China?

  • China’s actions in Ladakh have now completely eroded its position as a supposed “impartial” interlocutor on Kashmir.
  • India can use that to neutralise China’s needling on Pakistan’s behalf.
  • However, it is a difficult ask for India to contemplate any big steps in the UNSC.

Click Here to read more about The United Nations Security Council (UNSC) (2nd Article)

Click Here to read more about India’s Case for Permanent seat at UNSC

-Source: Times of India, The Hindu


FITCH CUTS INDIA’S SOVEREIGN RATING OUTLOOK TO NEGATIVE

Focus: GS-III Indian Economy

Why in news?

Global ratings agency Fitch revised the outlook on India’s sovereign rating to negative from stable.

Details

  • Fitch has downgraded sovereign rating, but retained the rating at BBB (minus).
  • Reason being that- the coronavirus pandemic has significantly weakened India’s growth outlook for this year and exposed the challenges associated with a high public debt burden.
  • Fitch expects economic activity to contract by 5% in the fiscal year ending March 2021 (FY21).
  • However, Fitch also forecasts a rebound by 9.5% in FY22, mainly driven by a low-base effect.

Other Ratings

  • Moody’s had downgraded the country’s sovereign rating to a level just above the junk bond status and retained the outlook as negative.
  • S&P has affirmed the rating at BBB (minus) and has a stable outlook.

What Fitch said?

  • Fitch said India’s fiscal metrics have deteriorated significantly, notwithstanding the government’s expenditure restraint.
  • It expects general government debt to jump to almost 85% of GDP in FY21 from about 70% of GDP in FY20.
  • Fitch said India’s mediumterm GDP growth outlook may be negatively affected by renewed asset-quality challenges in banks and liquidity issues in non-banking financial companies (NBFCs).

-Source: Times of India, The Hindu


U.S. BILL PRESSURING CHINA OVER UIGHUR MUSLIM CRACKDOWN

Focus: GS-II International Relations

Why in news?

U.S. President Donald Trump signed legislation calling for sanctions over the repression of China’s Uighur Muslims.

Details

  • The bill was intended to send China a strong message on human rights by mandating sanctions against those responsible for oppression of members of China’s Muslim minority.
  • The United Nations estimates that more than a million Muslims have been detained in camps in the Xinjiang region.
  • China denies mistreatment and says the camps provide vocational training.
  • The bill also calls on U.S. companies operating in Xinjiang to take steps to ensure they do not use parts made with forced labour.

Who are Uyghurs?

  • Uyghurs are predominately Turkic-speaking Sunni Muslims who live primarily in the autonomous region of Xinjiang. Islam came to the region in the 10th century. Prior to Islam, the Uyghurs embraced Buddhism, Shamanism, and Manicheism.
  • Uyghurs embraced Islam in 934 during the Karahanid Kingdom. Kashgar, the capital of the Kingdom, quickly became one of the major learning centers of Islam.
  • Art, the sciences, music and literature flourished as Islamic religious institutions nurtured the pursuit of an advanced culture. In this period, hundreds of world-renowned Uyghur scholars emerged.
  • Uyghurs played an important role in cultural exchanges between the East and West and developed a unique culture and civilization of their own based on Islam.

What are the accusations Levelled against China?

  • China is accused of encouraging internal migration into the Xinjiang province to increase the non-Uyghur population and power in the region.
  • In recent years, there have been many reports of students, teachers, and civil servants have been forbidden from fasting during Ramadan, forbidden from wearing their traditional dress and even keeping a beard.
  • Uyghurs continue to be the only population in China consistently subjected to executions for political crimes, and these executions are often both summary and public. With the rise of China as the expected superpower of the 21st century, such repressive policies against the Uyghur Muslims are likely to get worse.

-Source: The Hindu

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