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Editorials/Opinions Analysis For UPSC 30 June 2022


Editorials/Opinions Analysis For UPSC 30 June 2022


Contents

  1. Implications of India’s new VPN rules
  2. India, EU resume FTA negotiations

Implications of India’s New VPN Rules


Context

  • The Indian government’s cybersecurity agency enacted a law requiring Virtual Private Network (VPN) providers to capture and store their customers’ records for 180 days. It also required these companies to gather and preserve client data for a period of up to five years. It also required that any recorded cybercrime be reported to the CERT-In within six hours of the offence.
  • According to Surfshark VPN, taking such drastic action that affects the privacy of millions of individuals in India will most likely be counterproductive and severely harm the country’s IT sector’s growth.
  • According to the Ministry of Electronics and Information Technology, the laws apply to “any company whatsoever,” regardless of whether it has a physical presence in India or not, as long as it provides services to Indian users.

Relevance

GS-III: Awareness in the fields of IT, Space, Computers, Robotics, Nano-technology, Bio-technology and issues relating to Intellectual Property Rights.

Dimensions of the Article

  • Why do individuals utilize VPN services?
  • What exactly does the new CERT-IN directive state?
  • Who will be affected by the new regulations?
  • What Exactly Is a Virtual Server, And What Are Its Applications?
  • Effect of the Bill Have on India’s IT Sector
  • Way Forward

Why do individuals utilize VPN services?

  • Secure encryption: A VPN connection masks the internet data transmission and protects it from prying eyes. Anyone with network access and a desire to read unencrypted data can do so. Hackers and cyber thieves are unable to decode this data when using a VPN.
  • Hide the location: VPN servers simply work as proxies on the internet. Exact location cannot be established since the demographic location data is obtained from a server in another nation.
  • Data privacy is protected: The majority of VPN providers do not keep logs of the actions. Some providers, on the other hand, record the behaviour but do not share it with third parties. As a result, any potential record of the user behaviour is permanently hidden.
  • Regional Web Content Accessibility: Regional web material is not necessarily available from everywhere. Services and websites frequently contain content that is only available in specific regions of the world.
  • Secure data transfer: If we work from home, we may need to access critical files on the company’s network. This type of information necessitates a secure connection for security reasons. A VPN connection is frequently necessary to obtain network access.

What exactly does the new CERT-IN directive state?

  • VPN providers must keep validated client names, physical addresses, email addresses, phone numbers, and the purpose they are using the service, as well as the dates they use it and their “ownership pattern.”
  • Additionally, Cert is requesting that VPN providers preserve a record of the IP and email addresses used by customers to register for the service, as well as the date of registration.
  • Most crucially, VPN providers will be required to record all IP addresses assigned to a client as well as a list of IP addresses that its customers frequently use.

Who will be affected by the new regulations?

  • Data centres, virtual private server (VPS) providers, cloud service providers, virtual asset service providers, virtual asset exchange providers, custodial wallet providers, and government organisations are all covered by these guidelines. Firms who provide Internet proxy-like services using VPN technology are also subject to the new legislation. Corporate entities are not being investigated.

What Exactly Is a Virtual Server, And What Are Its Applications?

  • A virtual server is a server environment that is constructed on top of a real server. It mimics the operation of a dedicated physical server.
  • The virtual twin operates similarly to a real server, running applications and utilising actual server resources. A single physical server can support several virtual servers.
  • Virtualizing servers’ aids in the reallocation of resources for shifting workloads. Converting a single physical server into numerous virtual servers enables organisations to make better use of processing power and resources by running various operating systems and applications on a single partitioned server.
  • Running numerous operating systems and apps on a single physical computer saves money since it takes up less space and hardware.
  • Virtualisation also saves money since the cost of operating a virtual server infrastructure is lower than that of a physical server infrastructure.
  • Because the operating system and applications are contained within a virtual machine, virtual servers are believed to be more secure than physical server architecture. This aids in the containment of security assaults and bad behaviour within the virtual machine.

Can Server Migration and Virtualization Assist VPN Providers in Skirting the New Regulations?

  • The Ministry of Electronics and Information Technology (MeiTY) FAQs on cybersecurity guidelines provide some clarification on relocation and virtualization.
  • It states that the laws apply to “any entity whatever” in the case of cyber events and cyber security incidents, whether or not they have a physical presence in India, as long as they provide services to Indian consumers.
  • Service providers that do not have a physical presence in India but provide services to Indian users must designate a point of contact to communicate with CERT-In.
  • Furthermore, logs may be held outside of India as long as the companies meet their commitment to provide logs to CERT-In within a reasonable time frame.
  • VPN businesses, on the other hand, feel that by relocating their physical servers to countries other than India, they will be in compliance with the rules that govern their activities.

Effect of the Bill Have on India’s IT Sector

  • VPN providers leaving India is bad for the country’s developing IT sector. Taking such drastic action, which has a significant impact on the privacy of millions of individuals in India, will most certainly be counterproductive and severely harm the country’s IT sector’s growth, the business stated in a press release last week.
  • It calculated that 254.9 million Indians’ accounts have been compromised since 2004, and expressed worry that gathering large volumes of data inside Indian jurisdiction without effective protection methods may result in even more breaches.
  • The corporation located in the Netherlands also stated that they have never received a comparable instruction on preserving client logs from any other government in the globe.

Way Forward

  • According to experts, governments and their agencies may easily abuse such a restriction, and it may actually drive such people to the dark and deep web, which are far more difficult to regulate than VPN services.
  • It is also unclear whether the Centre would use this to take action against people who use VPNs to access content that is restricted in India.

Source – The Hindu


India, EU Resume FTA Negotiations


Context

After an eight-year hiatus, India and the European Union (EU) started discussions for a Comprehensive Free Trade Agreement, with the goal of boosting economic connections between the two areas. India began discussions with the EU on a trade deal in 2007, but the talks halted in 2013 due to disagreements on key points.

Relevance

GS-II: Bilateral, Regional and Global Groupings and Agreements involving India and/or affecting India’s interests.

Dimensions of the Article

  • The Important Advantages of Free Trade Agreements
  • What are the main characteristics of FTAs?
  • The Significance of FTAS
  • Drawbacks
  • India’s efforts to enhance existing FTAs
  • Way Forward

The Important Advantages of Free Trade Agreements

  • Tariff reduction or abolition on qualifying products. This increases the market competitiveness.
  • Intellectual Property Protection: intellectual property rights are protected and enforced in the FTA partner nation.
  • Product Standards: Exporters’ capacity to participate in the formulation of product standards in the FTA partner nation.
  • Selling to the government: a company’s capacity to bid on specific government procurements in the FTA partner nation.
  • Service providers: the capacity of service providers to provide their services in the FTA partner countries.
  • Investors are treated fairly if they are treated as favourably as the FTA partner nation treats its own investors and their investments, as well as investors and investments from any third country.
  • Free trade agreements increase trade flows while strengthening connections with our trading partners.
  • Free trade agreements remove behind-the-border barriers that impede the movement of products and services between parties, boost investment, and improve collaboration, as well as address other concerns such as intellectual property, e-commerce, and government procurement.
  • Free trade agreements may boost productivity and GDP growth by providing domestic firms with cheaper inputs, introducing new technology, and encouraging competition and innovation.
  • Free trade agreements foster regional economic integration and the development of shared approaches to trade and investment, including the adoption of common Rules of Origin and greater acceptance of product standards.
  • Free trade agreements can boost export competitiveness in the partner market and increase the appeal of the country as an investment destination.
  • Free trade agreements can boost commercial possibilities and help to the long-term economic growth of developing economies.
  • Free trade agreements can continue to benefit parties even after they are implemented, such as through phase-ins and built-in agendas that stimulate continued domestic reform and trade liberalisation.

What are the main characteristics of FTAs?

The following are the key characteristics of Free Trade Agreements (FTAs):

  • FTA members clearly state the charges and tariffs that will be levied on member countries for imports and exports.
  • FTAs normally encompass trade in (a) goods, such as agricultural or industrial products, (b) services, such as banking, construction, commerce, and so on, (c) intellectual property rights (IPRs), (d) investment, (e) government procurement, and so on.
  • FTAs also, for the most part, include a criterion known as the ‘Rules of Origin (RoO),’ which is necessary for determining the country of origin of a product in order to impose favourable tariffs on international commerce.
  • FTAs are an exception to the WTO’s Most Favoured Nation principle (World Trade Organization).

The Significance of FTAS

  • Global competition: FTAs promote global competition by boosting the efficiency of local industries, specialisation within countries, and the availability of cheaper and higher-quality products for consumers. Global monopolies are removed as a result of FTAs because of greater competition.
  • Possibilities for India in a post-COVID world: (a) Structural developments, such as the rise of remote learning and work from home, have the potential to increase demand for India’s tradable services. (a) Regardless of how slowly global product imports grow, India is small enough to gain market share while maintaining high rates of export growth. (c) India has enormous potential to boost unskilled labour-based exports, particularly in areas where China is quickly losing ground, such as apparel, clothing, leather, and footwear.
  • Global Value Chains (GVCs): Free trade agreements (FTAs) have the potential to accelerate economic integration among nations, making India an important cog in the Global Supply Chain.

Drawbacks

  • Tariff: India’s commitment was to reduce tariffs on 2% imports, but the tariff reduction it provided in its FTAs were in the range of 74-86 percent, which proved unattainable for India. It lags behind nations such as Japan and Singapore in terms of industrial growth and local industry capacity to compete on global platforms.
  • Non-tariff hurdles: Indian exporters continue to encounter a variety of non-tariff barriers in partner countries, including import restrictions, import licences, sanitary and phytosanitary measures, product standards, and technical impediments.
  • Lack of Trading Ease: Inadequate information on FTAs, difficult principles of origin requirements, low preference margins, greater compliance costs, and regulatory deferrals restricted exporters from accessing preferred channels.
  • Services component: India’s success under FTAs is impeded by the lack of Mutual Recognition Agreements (MRAs). It should be highlighted that services are seen as the country’s strong suit. MRAs enable competent individuals in one region to fulfil all standards for providing services in any partner nation organically.
  • Less competitive in the world market: India’s exporters confront a number of internal challenges, including greater logistical costs and supply-side limitations, which make them less competitive in the global market.
  • Spaghetti bowl impact: India has separate FTAs with Malaysia and Singapore, both of which are members of India’s ASEAN CECA.

India’s efforts to enhance existing FTAs

  • Improving the RoO mechanism: The Ministry of Finance, Government of India, has issued the Custom (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR 2020) to tighten the authorisation of RoO standards under FTAs.
  • Bilateral Investment Treaties (BITs): India evaluated its existing BITs in 2015 and issued a Model BIT in 2016. This updated methodology will be used to renegotiate current investment chapters in CECAs/CEPAs/FTAs and other treaties.
  • Examining existing FTAs: In 2019, India and ASEAN met in Thailand and resolved to begin reviewing the ASEAN-India Trade in Goods Agreement, which has been in effect since January 2010.
  • Free trade agreements have been implemented for foreign policy reasons rather than for bilateral economic gain.
  • Free trade agreements do not have the same impact on trade liberalisation as multilateral accords.
  • Free trade agreements just foster broad, competitive trading blocs, which may lead to economic volatility.

Way Forward

  • To summarise, Free Trade Agreements are one method of promoting integration among various countries. Over the previous few decades, the number of FTAs has increased substantially and currently accounts for the bulk of global commerce. Economic scholars see free trade agreements as a crucial trade policy tool for the United States and other major trading nations.
  • India’s trade policy framework must be supported by economic reforms that result in an open, competitive, and technologically inventive Indian economy.
  • Nationalism, populism, nativism, and protectionism exploit people’s sense of being left behind and alienated from the system.
  • As a result, we must promote universal participation in economic networks that allow people and families to attain financial stability and explore chances for advancement.

Source – The Hindu


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