Suresh Prabhu

Rajya Sabha Passes National Commission for Allied and Healthcare Professions Bill

The Bill seeks to provide for regulation and maintenance of standards of education and services by allied and healthcare professionals.

New Delhi: Rajya Sabha on Tuesday passed a Bill which seeks to provide for regulation and maintenance of standards of education and services by allied and healthcare professionals.

The National Commission for Allied and Healthcare Professions Bill, 2020, was passed by a voice vote.

Replying to a debate on the Bill, Union health minister Harsh Vardhan said that the legislation is aimed at fulfilling long-pending demands for the sector, and will create an institutional structure to enhance employability.

“We acknowledge that there is a global demand. And, the Bill will benefit 8-9 lakh existing allied and healthcare professionals. This manpower will also be more ready to cater to global shortage…demand that is projected to be 1.80 crore by 2030 as per the WHO global workforce report,” he said.

The Bill provides for regulation and maintenance of standards of education and services by allied and healthcare professionals, assessment of institutions, maintenance of a central and a state register and creation of a system to improve research and development and adoption of latest scientific advancement.

The allied and healthcare professions include a wide range of workers for diagnosis, evaluation and treatment of acute and chronic diseases. These professions also work to optimise patient outcomes and attend to overall prevention, promotion, wellness and management of diseases.

As per the statement of objects and the reasons of the Bill, the advancement in the health sector, changing preferences of consumers and service providers, had warranted creation of a fresh vision of healthcare delivery with a patient-centric approach and focus on moving to a multi-disciplinary team-based care.

Also read: COVID-19 Is Boosting Demand for Universal Healthcare – but Won’t Get Us There

“This has necessitated the need to implement new ways of deploying health workers, strengthening the workforce by task-shifting models and improving access to quality services through qualified and competent allied and healthcare professionals,” it added.

Earlier in December 2018, the Allied and Healthcare Professions Bill, 2018, was introduced in Rajya Sabha and the same was referred to the Department Related Parliamentary Standing Committee, which after a detailed examination recommended certain amendments.

Therefore, it was withdrawn and a new Bill called the National Commission for Allied and Healthcare Professions Bill, 2020, incorporating the recommendations made by the panel, was introduced last year.

Vardhan said that of the 110 recommendations made by a parliamentary committee on it, the government accepted 102 while six recommendations were accepted with slight modifications. Only two recommendations were not incorporated.

Earlier participating in the debate, Union minister Suresh Prabhu said that the Bill corrects a long overdue policy gap that existed.

He also suggested that there should be a separate abbreviation to denote such professionals, and should be seen as doctors of a different kind.

Prabhu said the bill bridges the long term policy gap in the healthcare system.

Vardhan said, “On shortage and incentives for these professionals, the making of the Bill, the regulatory body itself is the biggest incentive for these professionals because so far there is a vacuum…when for the first time courses are standardised, their employment opportunities will increase, both nationally and internationally.”

Congress leader L. Hanumanthaiah welcomed the Bill and made certain suggestions around revision of penalty clauses, enhancing availability of elite healthcare professionals.

“It is a very good bill which we are welcoming but taking care of the rural youth, providing them with an attraction to opt for these kinds of professions. We wanted to include in that. That is my demand,” he said.

The Congress leader said elite health professionals are just 5 per cent in India while there is a huge demand for them.

Samajwadi Party leader Ram Gopal Yadav said there were more than 100 recommendations of Parliamentary Standing Committee for health and family welfare and he accepted around 95 per cent of them and therefore the Bill had to be revised.

He countered the suggestion of Hanumanthaiah over reducing penalty norms.

“In the medical profession, if someone gets a forged degree or gets a fake registration then that person should be punished. So far this Bill is concerned, I strongly support it,” Yadav said.

He appreciated the positive attitude of the Union health minister for considering the recommendation of the Parliamentary panel.

Among those who expressed their opinion on the Bill were – BJD’s Muzibulla Khan, Ayodhya Rami Reddy (YSRCP), Ram Chandra Prasad Singh (JDU), Vandana Chavan (NCP), and Sushil Kumar Gupta (AAP).

Faced With Mounting Losses, Indian Railways Starts New Year With a Fare Hike

Currently, the railways operating ratio is hovering over 120%, a situation that is indicative of its poor financial health.

New Delhi: The Indian Railways has hiked fares for AC and non-AC segments across the board, in a move that attempts to shore up the national transporter’s weak passenger revenue.

This development, which excludes only suburban services and will be effective from January 1, comes just one month ahead of the Union Budget.

Aiming to mop up about Rs 2,300 crore in a year, the ordinary non-AC, non-suburban fares have been hiked by 1 paise per km of journey. The hike is 2 paise per km for mail/express non-AC trains and 4 paise per km for AC classes.

The decision to hike fares has been inevitable – losses in the national transporter’s passenger segment is over Rs 35,000 crore a year. Despite introducing many special trains like Vande Bharat, Tejas and Gatimaan with increased fares, the Indian Railways has not been able to stem the loss.

Premium trains like Shatabdi, Rajdhani and Duronto trains are also included in the fare hike, even though passengers travelling on these lines already pay up to 40% more than the basic fare under the ‘flexi-fare scheme’. The railways had introduced ‘flexi-fares’ for premier trains in 2016 during railway minister Suresh Prabhu’s regime.

This January 2020 hike by the Narendra Modi government is the first hike in nearly six years. The state-run transporter had increased passenger fares by 14.3% and freight rates by 6.5% in June 2014 when D.V. Sadananda Gowda was the railway minister.

The then railway minister P.K. Bansal had also effected a fare hike across the board in 2013.

Also read: What Piyush Goyal’s Claim of ‘Zero’ Railway Passenger Deaths in FY’20 Leaves Out

Other fare rationalisations have also proven controversial: the fare hike effected by Trinamool Congress leader and then railway minister Dinesh Trivedi in 2012 was reversed by his party supremo Mamata Banerjee.

By the end of November 2019, passenger earnings were behind internal targets by Rs 1,983.22 crore and the shortfall in freight revenue was Rs 17,641.91 crore.

Acknowledging the difficult situation, chairman Railway Board V.K. Yadav has said there was less earning during this period which has resulted in shooting up the operating ratio beyond 100%.

Currently, the railways operating ratio is hovering over 120%, a situation that is indicative of its poor financial health.

Yadav, however, said that earnings were expected to grow in the coming three months and hoped that the operating ratio would be under control.

However, despite facing a nearly Rs 18,000-crore shortfall in the freight business, railways is unlikely to increase the goods rate. The freight rate is already on the higher side and any further increase will drive away goods from rail to road.

In fact, the railways has given concessions in goods loading by waiving off the busy surcharge, which is otherwise applicable during this period.

According to the order issued by the Railways on Tuesday, there will not be any change in the reservation fee and superfast charges. The hike in fares will also not be applicable to tickets already booked. The increase in fare will be on tickets bought on or after January 1, 2020 and no excess fare will be charged from passengers who have booked tickets before January 1, 2020.

The Railways Budget, which has been merged with the Union Budget, is slated to be presented on February 1, 2020 and with the fare hike, the government is expecting some respite from the downslide in earnings.

However, insiders maintain that the further increase in fares in premier trains like Rajdhani will not be beneficial for railways as it would be almost at par with the fares offered by a few airlines.

Also read: Indian Railways Sees ‘Alarming’ Shortfall in Expected Freight Traffic Revenue

Despite the onset of the festive season, passenger booking has not increased as expected and a further fare hike can harm its business.

The fare hike in January is likely to be followed by floating of tenders for private train operations. The national transporter has decided to offer 150 trains to private players in different routes across the country.

Besides this, the second IRCTC-operated Tejas Express will be launched on January 17 between Mumbai and Ahmedabad. The first Tejas is currently running between Lucknow and New Delhi.

Arun Kumar Das is a senior journalist who covers the Indian Railways and can be contacted at akdas2005@gmail.com.

As Parliament Session Starts, Veteran Politicians to Vacate Prime Lutyens’ Bungalows

The directorate of estate, which is part of the urban housing ministry, is currently in charge of the matter and is finalising the list of bungalows to be allotted to new entrants.

New Delhi: With the new Narendra Modi government’s first parliament session starting on Monday, the massive task of vacating and allotting about 80 bungalows, all located in the 19 square kilometres that comprise ‘Lutyens’ Delhi’, is underway.

The residences of former ministers including Sushma Swaraj (8 Safdarjung Road), Suresh Prabhu (12 Akbar Road), Ram Kirpal Yadav (18 Mother Teresa Crescent), Anupriya Patel (5 Safdarjung Road), Rajen Gohain (20 Mother Teresa Crescent) and M.J. Akbar (9 Teen Murti Lane) will likely be allotted to new ministers in the NDA government, according to sources in the urban housing ministry.

The directorate of estate, which is part of the urban housing ministry, is currently in charge of the matter and is finalising the list of bungalows to be allotted to new entrants.

There are a total of over 300 bungalows in Lutyens’ Delhi, out of which ‘Type VII’ and ‘Type VIII’ residences are highly sought-after because of their their huge size and lawn area.

Also read: Playing Musical Chairs with Lutyens Bungalows

Besides the directorate of estate, which is responsible for accommodating ministers, the housing committees of the Lok Sabha and Rajya Sabha also allot houses to their respective members.

While 7 Akbar Road, a Type VIII bungalow, is already vacant, the residences of Mahesh Sharma (10 Akbar Road), Jyotiraditya Scindia (27 Safdurjung Road), Mallikarjun Kharge (9 Safdarjung Road), K H Muniappa( 7 Tyagraj Marg) and Subhash Ramrao Bhamre (9 Teen Murti Marg) will also be vacated in short order.

As per the list prepared by the urban housing ministry, Hansraj Gangaram Ahir (2 Safdarjung Lane), Chandrakant Khaire (2 Teen Murti Marg), Vijay Sampla (8 Teen Murti Lane), P.P. Chaudhary (19 Teen Murti Lane) Ashok Chavan (4, South Avenue lane) and Shiv Pratap Shukla (1 KG Marg) may have to move out for new entrants.

All the occupants will be given one month time to vacate their respective bungalows, sources added.

There are over 250 newly-elected MPs who have to be allotted houses. Most first-time MPs are currently staying at their respective state bhawan and guest houses.

Some of the new ministers – such as Ramesh Pokriyal Nishank and Suresh Angadi – will have to vacate their current accommodation (13 Teen Murti Lane and 3 South Avenue respectively) to be allotted bigger bungalows.

Also read: Confessions of a Lutyens’ Child

The new parliament session started on Monday, June 17, for the Lok Sabha and will start from June 20 for the Rajya Sabha.

Meanwhile, the Central Public Works Department, which is the housing ministry’s construction wing, has completed 36 new duplex flats with modern amenities like modular kitchens, four bedrooms and an office area in the North Avenue for MPs.

These flats are ready to receive newly-elected MPs such as Gautam Gambhir, Hans Raj Hans, Nusrat Jahan and Mimi Chakraborty.

Arun Kumar Das is a senior journalist and can be contacted at akdas2005@gmail.com

Suresh Prabhu to Piyush Goyal: What’s the Way Forward for Trade and Industry?

Piyush Goyal is aware that the trade portfolio is at the heart of the economy and a key part of creating jobs both in urban and rural areas.

The decision to drop former commerce and industry minister Suresh Prabhu from the new Union cabinet is inexplicable. He was thought of as one of the more hard-working ministers of the first Modi government.

A few others have also been dropped, and some non-performers have been retained. One does not know why. As usual, many rumours are making the rounds.

While some sectors of industry, trade and civil aviation under Prabhu’s charge have not done as well as they could have, it is difficult to place the blame solely on his shoulders. External factors, internal incoherence and vested interests did not allow the desired results.

All Central ministries and state governments are aware of the resolution to make India a $10 trillion economy by 2030. This means adding nearly $7 trillion to our economy over the next decade, a challenging but not impossible task.

Also Read: India May Privatise or Shut 46 PSUs in Coming Months, Says NITI Aayog’s Rajiv Kumar

The NITI Aayog has prepared action plans for the first three years, then seven years. It will have another long-term plan to show what has to be done to achieve this goal.

The Modi 2.0 administration will have to be stronger on reforms given the huge mandate – it has no choice but to provide economic security to India’s teeming poor.

Piyush Goyal. Credit: PTI

The key issue

India needs a sustained growth rate of 8-9% over the next two decades. To ensure that, many things have to be done with vigour and rigour. Modi will have to channel China’s Deng Xiaoping, who pulled the country out of the pits in 1970s and 80s.

In this quest, trade and industry has a vital role, and Piyush Goyal has proven credentials as a minister to take it forward.

Exports play an important role in economic development, which is not to say that ‘exports are good and imports are bad’. Imports are necessary for both exports and for consumer welfare. Today, two-thirds of international trade is through value chains, where India is weak. Being a part of a value chain means we need to import to add value and then export. Some of these value-chain operations would mean technological work and some would mean manual work.

In fact, exports of labour intensive goods and services (including tourism) help create jobs, our great priority to eradicate poverty. Our exports, including tourist arrivals, have been coming down which is a cause for concern. We need not rely upon our traditional markets but explore new markets. For this purpose we need a mission approach through an inter-ministerial agency with representation from states.

As we stand today, the US-China trade war opens up new opportunities for our trade and investment goals. We need to target both American and Chinese enterprises to invest in India which can help them to access global markets.

For this purpose we need to identify and target such enterprises on a mission mode. For ease of trade relations, we should also push the Regional Comprehensive Economic Partnership Agreement which includes China, and also launch a mission to attract Chinese tourists (both Buddhists and others) to India as they reduce their travel to the US. Today, Chinese tourists are expanding rapidly.

Free trade agreement

India also need to look at a free trade agreement with the US as a desirable possibility. The American economy is doing well on a consistent basis and is a big market for us. We also have a common resolve to raise the bilateral trade from the current $147 billion to $500 billion by 2025. In this effort, we need a stronger economic diplomacy which can fortunately be provided by our competent new foreign minister, K. Jaishankar who has dealt with both US and China hands on.

In recent times, India’s foreign direct investment (FDI) inflows have been going down, but the steps suggested above can help improve the scenario. If this progresses, then domestic private investment flows will also improve.

Of course, most banks remain wary due to NPAs, but it is here that the Finance Ministry and the RBI have to be more imaginative so we can move forward.

Another dynamic minister, now in charge of Finance and Corporate Affairs, Nirmala Sitharaman, will also be very useful. Her experience in defence, where India is inviting investment in local manufacturing, will also help push the agenda. For example, Lockheed Martin’s offer to manufacture F-21s exclusively in India and export them from here is a good opportunity.

S. Jaishankar takes charge as minister of external affairs, at South Block in New Delhi, May 3, 2019. Credit: PTI/Twitter

Goyal’s big agenda

The big agenda for Piyush Goyal will need sustained effort from many government departments.

In this context, there are pressing macro issues as well. The Modi government needs to bring in convergence between our industrial policy, trade policy and competition policy so that India becomes more competitive.

Ease of doing business is crucial and India should not be taking the World Bank’s rankings as our sign of progress. Our experience on the ground is quite different. One of the worst indicators is on enforcement of contracts, i.e. judicial delays or incompetence. Specialised commercial courts have been established but the judges need training on microeconomics so that they adjudicate sensibly, and swiftly.

Many of the Supreme Court’s orders have caused havoc in the economy. They could have been handled differently, penalising the wrongdoers but not upsetting the larger ecosystem.

Watch: How Can Modi 2.0 Revive India’s Economic Slump?

Much is possible if attention is given to state capacity to implement. Administrative reforms to allow bureaucrats to work as executives, coupled with lateral entry and exit, is vital to improve our states’ capacity. Accountability has to be tightened, and promotions happen on merit. More than half of our problems happen due to bureaucratic ineptitude or insouciance.

Finally, the need to build state capacity to be able to implement various initiatives in a ‘whole of government approach’ by demolishing the siloes.

For this purpose, the Cabinet Committee on Economic Affairs, chaired by the Prime Minister, should be turned into an actual empowered body, with the Niti Aayog providing it the knowledge and oversight support.

Pradeep Mehta is the Secretary General of CUTS International, a global public policy research and advocacy group.

RSS Affiliate and Civil Society Ask India Not to Give in on RCEP Trade Talks

RSS’s Swadeshi Jagran Manch, in a letter to Modi, wrote that “RCEP is not in the interest of the people of India” and advocated for India to quit participating.

New Delhi: As Prime Minister Narendra Modi arrived in Singapore on Wednesday to attend what was hoped to be one of the last rounds of negotiations in the Regional Comprehensive Economic Partnership (RCEP), the RSS’s Swadeshi Jagran Manch released a letter it sent to the prime minister today. In it, the RSS affiliate has asked that India quit participating in the RCEP.

Ashwani Mahajan, the convener of the body, wrote in the letter that RCEP is a “major threat and not a major opportunity” for India. “RCEP is not in the interest of the people of India. There is no sector, no constituency, or no region in India that will benefit from RCEP,” the letter reads.

Civil society groups and HIV patient groups in India have also written to Suresh Prabhu, the minister of commerce and industry, asking him to ensure that the RCEP agreement does not interfere with India’s patent regime and alter India’s ability to manufacture generic medicines.

In a letter to Prabhu, they said India should reject certain proposals which could change India’s policy on intellectual property rights for pharmaceuticals. “Failure to do so would severely restrict or block generic competition, the only proven mechanism for reducing the prices of medicines, which, in turn, would severely undermine access to affordable generic medicines in India,” a letter written by civil society organisations reads.

Also read: As RCEP Negotiations Hit Final Stretch in Singapore, Will India Take the Plunge?

The RCEP is a 16-member free trade agreement (FTA) consisting of the ten ASEAN member states – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. In addition to this, there are six countries with which these countries already have free trade agreements – Australia, China, India, Japan, South Korea and New Zealand. Formal negotiations began in 2012.

A range of economic issues are discussed at RCEP including livestock, dairy, fisheries, e-commerce and patents. If these 16 countries get together on all these issues via RCEP, it would create the world’s largest free trade bloc, impacting on nearly 45% if the world’s population.

Is India’s independence being compromised?

The Swadeshi Jagran Manch says in its letter that, “India is being asked to improve its offer to RCEP partners including the ASEAN, China, New Zealand, Australia, Japan and South Korea.”

They say that India’s trade deficit with China will increase manifold and will threaten India’s growth potential and that the survival of Indian small and medium sized enterprises will be in question.

Mahajan says that Australia’s competitiveness in export of wheat, dairy and meat products, and New Zealand’s competitiveness in dairy export, could make Indian agriculture and dairy sectors very vulnerable.

How public health may be impacted?

Mahajan also makes a note about how access to affordable medicines may be hampered by what India agrees to at RCEP: “The country can not afford to compromise the access to medicines by agreeing to any TRIPS plus provision in IPR chapter either and must build alliances with specific ASEAN countries like Indonesia and the Philippines, and get them to support its position.”

The letter by civil society organisations list the specific provisions in the RCEP which seek to change India’s approach to intellectual property. It cites the provisions on patent term extension (which would extend a pharmaceutical patent beyond the current limit which is 20 years), data exclusivity (where patent holders are given the right to not disclose trial data information) and investor dispute settlements (which would allow pharmaceutical corporations to sue governments like India for applying existing flexibilities to protect the right to health).

Their letter notes that India has so far been on the side of keeping pharmaceuticals cheap: “India in the past has resisted to proposals that could impose greater restrictions on generic medicines.”

Also read: RSS Affiliate Writes to Government on Department of Pharmaceuticals, Alleges Industry Collusion

The Wire reported on this in October 2017 when government officials told The Wire that India would not at all be crossing any “red lines” and would instead be committed to keeping pharmaceuticals affordable.

In September 2018, The Wire also reported on India taking the lead in protecting rights of governments to keep prices of pharmaceuticals down. This was at another negotiation – the United Nations high-level meeting on tuberculosis and another one on non-communicable diseases.

If India agrees to conservative positions at RCEP which impinge on India’s ability to provide affordable healthcare, it would create a policy inconsistency in Indian bureaucracy across the board – which would become untenable in its implementation.

RCEP talks to continue into next year

This round of RCEP talks in Singapore is important because it was hoped that a consensus would have been reached by now.

The presence of the prime minister at the ‘Leaders Summit’ today also increased its public profile, explaining the pushback from the Swadeshi Jagran Manch and civil society.

Also read: Delay in Mega Asian Trade Deal Comes as Boon to Modi Govt in Run-Up to 2019

Those who have been watching RCEP closely like Swadeshi Jagran Manch and the various civil society organisations, had been off the apprehension that it was reaching its final round of talks.

However, news reports said that the talks had actually failed to reach consensus on issues of e-commerce and investment. As such, this means the talks will have to keep going on to yet another round.

Air India Plane Hits Wall During Takeoff at Trichy, Continues to Fly For Four Hours

All passengers and crew members who were on board the Air India Express Trichy-Dubai flight are safe and the two pilots have been derostered pending investigation

Tiruchirappalli: Passengers of a Dubai-bound Air India Express flight had a miraculous escape when their aircraft’s wheels hit a perimeter wall during take off here in the early hours of Friday, officials said.

The plane, with 136 passengers and crew members on-board, continued for Dubai and was eventually diverted to Mumbai after Trichy airport officials reported to the pilots that the aircraft might have come in contact with a wall.

Trichy- Dubai Air India flight with 136 passengers on board hit the ATC compound wall at Trichy Airport yesterday and was diverted to Mumbai. The flight had got damaged under the belly, was declared fit for operations after inspection at Mumbai Airport. pic.twitter.com/8cczII46Mp

— ANI (@ANI) October 12, 2018

Nobody was hurt in the incident and the aircraft landed in Mumbai at 5:35 am after being in flight for four hours, officials said.

The pilots of the aircraft have been “derostered” pending investigation, Air India Express said in a statement.

“Flight IX-611 took off from Trichy for Dubai around 1.30 am Friday. It was reported by Trichy airport officials that they have observed that the aircraft might have come in contact with the airport perimeter wall.

“The matter was conveyed to the pilot in command. The pilot in command reported that the aircraft systems were operating normally,” it said.

Officials said the plane’s wheels had hit the wall.

It was decided to divert the aircraft to Mumbai as a precautionary measure, the airline said.

“The flight diverted to Mumbai, landed safely around 5.35 am in Mumbai, and taxied on its own power to the parking stand,” it said.

“The 130 passengers and six crew members on-board the aircraft were alighted safely. No one suffered any injuries,” according to the Air India Express statement.

It said a relief aircraft and a fresh crew was arranged to continue the flight from Mumbai to Dubai.

“The pilot in command, Captain D. Ganesh Babu, has flying experience on the B737 aircraft of 3,600 hours, including about 500 hours as commander.

“The First Officer, Captain Anurag, has an experience of about 3,000 hours on the B737. The two pilots have been derostered pending investigation,” it said.

The matter has been reported to the Directorate General of Civil Aviation (DGCA) and the airline is cooperating in the investigation, the statement said.

On Twitter, aviation minister Suresh Prabhu said, “Air India has constituted a Sub-Committee of the Board headed by an Independent Director of the Board for looking at all safety related issues within the organisation including subsidiaries.”

Air India has constituted a Sub-Committee of the Board headed by an Independent Director of the Board for looking at all safety related issues within the organisation including subsidiaries.

— Suresh Prabhu (@sureshpprabhu) October 12, 2018

Officials said DGCA is probing the matter and the damage to the aircraft’s belly, including the wheels, is being assessed.

“DGCA officers are at site for preliminary inquiry and Aircraft Accident Investigation Bureau officers have also been deputed,” the minister tweeted.

Tamil Nadu minister Vellamandi Natrajan visited the spot and inspected the damages to the wall, which is adjacent to a state highway.

As RCEP Negotiations Hit Final Stretch, India’s Domestic Misgivings Continue

With the world’s largest free trade bloc moving closer to reality, many stakeholders still harbour doubts, particularly as FTAs signed earlier by India have not yielded the desired results.

Even as clouds of uncertainty hang over the World Trade Organisation (WTO)-supervised multilateral trading system due to growing US unilateralism, the idea of Regional Comprehensive Economic Partnership (RCEP), the world’s largest free trade bloc, is moving closer to reality.

The RCEP would cover nearly 50% of the global population, 32% of the world GDP and 29% of the international trade and 26% of foreign direct investment (FDI) flows.

Trade ministers from RCEP countries, at the end of their meeting in Singapore on August 30-31, have vowed to come out with a package of deliverables by December end, even if, as Indian trade minister Suresh Prabhu recently put it, it is unlikely to be signed this year.

This has given a new hope to proponents of trade liberalisation.

The uncertainties at hand

But after negotiating for over six years, there remain serious misgivings from various stakeholders within India about joining this upcoming trade block. This, sources tell The Wire, includes concerns raised by domestic industry and a handful of government departments including the ministries of steel, agriculture and chemicals.

India Inc feels that FTAs signed by India with Japan and Korea have not yielded desired results for it. On the contrary, exporters from these countries have used concessional tariffs to push their products into India, hurting the domestic industry.

Various industry associations, in multiple petitions and in closed-door sessions with government officials, have cited the bilateral trade deficit with these countries to make its point.

However, India’s biggest trade deficit is not with countries that it has signed FTA with but with China, with whom it has not entered into any free trade pact. Moreover, trade deficit with China has increased rapidly – from $16 billion in 2007-08 to nearly $63 billion in 2017-18.

In comparison, India’s trade deficit with Korea and Japan stood at the relatively modest levels of $12 billion and $6.24 billion in 2017-18, respectively.

Yet another example is US-India trade relations. India has the highest trade surplus with the US, though there is no FTA between the two countries.

So the argument that FTAs are responsible for India’s burgeoning trade deficit does not hold water. Naushad Forbes, former president, Confederation of Indian Industry, has also tried to dispel this misperception in an article published in Business Standard recently.

Trade experts emphasise the problem lies in low competitiveness of the Indian manufacturing sector, which can be improved through higher investment in research and development (R&D). Indian companies invest just 0.3% of GDP in in-house R&D compared with 1.5% their peers in developed countries, show data. Looking inward, therefore, is no solution.

The RCEP has envisaged including ten ASEAN group members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam) and their six FTA partners – India, China, Japan, South Korea, Australia and New Zealand.

The proposed agreement, for which negotiations started in Cambodian capital Phnom Penh in November 2012, aims to cover goods, services, investments, economic and technical cooperation, competition and intellectual property rights.

Trade ministers pose for a photo during a Regional Comprehensive Economic Partnership ministerial meeting in Hanoi, Vietnam, on May 22, 2017. Credit: Reuters

Giving up on tariffs

Another source of unease for India is what it has to give up on tariff line elimination. Tariff lines, put simply, are sets of goods and products defined at highly detailed levels for the purpose of setting import duties.

RCEP countries want India to commit duty cuts on at least 92% of tariff lines.

Fearing that it would cede too much ground to China, India’s initial proposal during negotiations was a three-tier tariff reduction plan. Countries that came under the third tier, which would include China, would only be offered 42.5% liberalisation.

Under pressure from other countries, and hoping perhaps to gain something on the services front, India back-tracked and took back its three-tier proposal. The problem now is that India’s new offer (tariff liberalisation on 74% of goods for China and a few other countries and up to 86% for all other RCEP members) is not being viewed favourably either.

After missing the previous meet, an Indian delegation led by commerce minister Suresh Prabhu did participate in the Singapore ministerial last week. However, it is not clear if it is ready to play ball with other RCEP countries over tariff reductions.

What will it get back?

In return for tariff liberalisation on goods, India has sought greater commitment from RCEP members on liberalisation of the services sector, especially easy movement of its professionals to other countries in the proposed trade bloc.

It has pushed for adopting Asean-Australia-New Zealand FTA as the template. However, its demand has failed to find traction with other RCEP members, resulting in a lowering of its ambitions.

In remarks to the media, Prabhu reportedly stated that the Singapore meet resulted in concessions made to India on the service sector, but did not clarify on what shape or form they would take.

“We have emphasised on the inclusion of services under goods in the economic agreement,” Suresh Prabhu, minister of commerce & industries and civil aviation, told The Week magazine on Tuesday.

“Our argument has been accepted and now services would also be included under the ambit of RCEP,” Prabhu added. India had earlier faced criticism for stalling the RCEP talks by insisting on services to be included.

According to commerce ministry sources, India is looking to take a final call by November, when Prime Minister Narendra Modi is expected to visit Singapore for the 33rd ASEAN Summit.

Open or closed?

India’s experiment with the command economy in the pre-liberalisation era has been nothing short of disastrous. Inflation was hovering at a peak of 16.7% in August 1991, while foreign currency assets were depleted to the level hardly enough to cover two weeks’ imports. The 1990 Gulf crisis triggered by the US invasion of Iraq forced India to abandon the command economy structure and set out on the path of economic liberalisation.

Starting in 1991, India has progressively liberalised its economic and trade policies, reaping benefits in terms of increased share in world trade, higher per capita income and stable forex reserves.

India’s GDP increased from $278.4 billion in 1991 to $2.85 trillion in 2017-18, registering more than tenfold growth. During the same period, per capita GDP increased by more than six times – from $310 to $1977.

In 1991, India accounted for just 0.5% of the global trade, which has increased to 1.5% in 2018.

Prior to 1991 liberalisation, foreign direct investment was negligible. It has progressively increased since then and reached nearly $62 billion in 2017-18.

But in a reversal of the trend, the Modi government has increased import duty on several items including mobile handsets, purportedly to support its flagship Make in India programme. The Centre’s alternatively hot-and-cold stance on RCEP is also being as a return to protectionist policies.

US and WTO

US President Donald Trump last week threatened to withdraw the US from the WTO, saying it treats his country unfairly.

“If they don’t shape up, I would withdraw from the WTO,” Trump said in an interview to Bloomberg News.

The United States has also been blocking appointment to the WTO’s appellate body, in a move that experts said could render it incapable of hearing and resolving disputes arising out of America’s unilateral tariff hikes on steel and aluminium and other protectionist measures.

RCEP Negotiations Will Not End in 2018, Says Suresh Prabhu

The Regional Comprehensive Economic Partnership talks, which were launched in Phnom Penh in November 2012, have dragged on as the member countries want an agreement over the removal of customs duties on the maximum number of products traded between them.

New Delhi: Negotiations for the mega-trade deal Regional Comprehensive Economic Partnership (RCEP) will continue in 2019 as more rounds of talks are required to sort out issues pertaining to goods and services, commerce and industry minister Suresh Prabhu said Tuesday.

Trade ministers of 16 members of the RCEP met last week in Singapore to review the progress of negotiations.

The mega trade pact aims to cover goods, services, investments, economic and technical cooperation, competition and intellectual property rights.

Prabhu said that India in the Singapore meeting emphasised on three important issues, including establishing linkage of services to goods negotiations as the agreement is a comprehensive one and does not focus only on goods.

The services sector is a key area for India as the segment accounts for about 55% of the country’s GDP.

He said that it is an economic partnership agreement and services must be an integral part of it.

“The RCEP negotiations will not end in 2018. It has been agreed at the level of leaders, it will go on in 2019 as well and we will have opportunity to work on all the issues,” the minister told reporters here.

He also said that there are 16 countries in the group and India does not have free trade agreements with Australia, New Zealand and China.

With rest of the members, including Japan and ASEAN countries, India already has a trade agreement.

India has stated that “we cannot negotiate through RCEP route with these three countries and we have to separately negotiate with them,” adding that “India’s insistence has been accepted and we will now be negotiating with China, Australia and New Zealand separately along with the RCEP negotiations”.

Prabhu said that the leaders in Singapore have also accepted the demand of India for having 20 years implementation period of the agreement.

The commerce ministry will also hold discussions with stakeholders on the inclusion of products.

The RCEP bloc comprises of ten ASEAN members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam) and their six FTA partners — India, China, Japan, South Korea, Australia and New Zealand.

The talks, which were launched in Phnom Penh in November 2012, have dragged on as the member countries want an agreement over the removal of customs duties on the maximum number of products traded between them. However, countries like India have certain reservations on this as the grouping includes China, with which New Delhi has a huge trade deficit.

Indian industry and exporters are apprehensive about the presence of China in the grouping. They have stated that lowering or eliminating duties for China may flood Indian markets with Chinese goods.

Meanwhile, in a statement, the ministry said that trade ministers in Singapore tasked the negotiators to go into the details of ASEAN’s “non-paper on trade in goods market access negotiations”.

In the meeting, the Indian commerce minister reiterated the need for providing adequate flexibilities on various elements of the non-paper, such as exclusion, reduction, staging and deviations.

“Accordingly, it was agreed that member countries will intensify bilateral pairing process on requests and offers, these elements and determine the ambition level of each country to the mutual satisfaction,” it said.

The ministers directed that the negotiations on all these issues will be intensified during the 24th RCEP Auckland Round from 17-24th October.

India is looking for a balanced trade agreement as it would cover 40% of the global GDP and over 42% of the world’s population.

Will India’s Draft E-commerce Policy Help Give it a Firmer Stand in WTO Talks?

While the policy may help it defend its position, its contentious provisions may trigger a separate battle at the WTO while drawing the ire of the Donald Trump administration.

New Delhi: The Narendra Modi government’s draft e-commerce policy – which critics have panned for the manner in which it tightens restrictions on global giants like Amazon while favouring local players like Reliance – will likely help cement India’s efforts to fight off the need for negotiations on the same at the World Trade Organisation (WTO).

However, some of the draft policy’s provisions are contentious and may be challenged at the WTO.

The proposed e-commerce rules also come at a time when the US is seeking full reciprocity in trade ties with all its partners and India is squarely in its crosshairs.

Trade experts and people familiar with the negotiations told The Wire the Modi government is hoping that the policy will give them a firmer position to negotiate from at the WTO. However, the move risks having the issue become a contentious trade matter for the Trump administration.

In the last two months, media reports have noted how the e-commerce policy has been largely shaped by Indian retail and technology companies, including Reliance Jio. The backlash after the policy was leaked has prompted commerce minister Suresh Prabhu to state that a further round of consultations will be held before anything is finalised.

These delays, among other issues, have seen India hard-pressed to have a national policy on e-commerce in place even as developed countries have strongly pushed for building a global consensus on establishing rules for electronic trade.

As The Wire has reported, while the Indian team at the WTO has been firm on its demand for no negotiations on e-commerce norms, it has been unable to make forceful arguments without having a clearly defined national policy.

In the last year, India has strongly opposed various proposals to negotiate rules for global e-commerce trade at the WTO. It has flagged its serious concern over cross-border flow of data, which is the centrepiece of proposals floated by key WTO members like the US and Japan.

However, with nearly half of WTO’s 164 members already in favour of negotiating rules for e-commerce, India appears to be fighting a losing battle.

The Modi government’s draft e-commerce policy has favoured local storage of personal and community data, though after a sunset period of two years. The policy document also pushes for prohibiting bulk purchases of branded products like mobile phones, white goods and fashion items by related party sellers for sale in a marketplace.

Further, the draft policy also suggests banning discounts offered by e-marketplace sellers to consumers, which have been critical in pushing their sales.

The policy also pitches for Indian-owned and Indian-controlled online marketplaces be allowed to hold inventory as long as products are 100% locally produced. This flexibility has not been extended to companies controlled by foreign players.

This discriminatory regime for foreign players can be easily challenged at the WTO.

“The draft policy is a knee-jerk reaction to what is happening at the WTO. Besides, it appears to have been influenced by vested interests,” said Pratibha Jain, partner at Nishit Desai Associates, a Delhi-based law firm.

“It is very protectionist and one-sided toward domestic corporates,” she added.

She also did not find merit in the provision to prevent e-commerce players from offering discounts to buyers.

“If discount is provided and it is not predatory (the Competition Commission of India is there to check predatory pricing), the government should not intervene in the market,” Jain told The Wire.

She also questioned the rationale behind promoting domestic players over foreign ones. “Foreign players are creating jobs in India and innovation is happening in India. So, why discriminatory treatment?” she asked.

The Indian e-commerce market has been growing at a fast pace due to inflows of foreign funds. But the draft makes a case for giving differential voting rights to Indian founders with minority stakes, which could put foreign investors at disadvantage vis-a-vis Indian founders.

India permits 100% foreign direct investment (FDI) in the marketplace model but prohibits foreign investment in the inventory-based model (where e-commerce players can directly sell their products to consumers).

The draft proposes a separate wing be set up in the Enforcement Directorate to handle grievances related to Press Note 3, which details guidelines for foreign investment in ecommerce.

Where foreign investment does not exceed 49%, where the founder/promoter is a resident Indian, and the platform company is controlled by Indian management qualifies as an Indian e-commerce firm, according to the draft policy.

The draft document has pushed for enhanced regulatory scrutiny of mergers and acquisitions that may “distort competition’ and a relook has been suggested on what constitutes entry barriers and anti-competitive practices.

The draft e-commerce Bill will force e-commerce players to list the (NPCI’s) RuPay card as an option for payment in-ecommerce transaction. Anyway, the provision is discriminatory and apparently aimed at promoting RuPay over Visa and Mastercard. It is likely to run afoul of the WTO rules, if implemented.

Growing at a fast pace, the Indian e-commerce market is expected to hit $200 billion by 2026 from $38.5 billion as of 2017. This is not surprising that multinational players have their sights set on the Indian e-commerce market. However, the draft policy, if implemented, could tilt the playing field against foreign e-commerce players and spoil the growth prospects of the Indian market.

The draft e-commerce Bill will force e-commerce players to list the (NPCI’s) RuPay card as an option for payment in-ecommerce transaction. Credit: Reuters

Direct clash on international talks

At least two provisions in the draft-ecommerce policy already show that India is preparing to draw a lakshmana rekha in international trade negotiations. For instance, at one point, it notes that any future international trade negotiations should retain “preferential treatment to digital products created within India” .

“In the context of international trade negotiations, policy space for granting preferential treatment to digital products created within India would be retained. (Implementing Ministry/ Department: DOC),” the policy says.

Another key demand by developed countries is to make permanent the current ban on customs duties on ‘global electronic transactions’ that were suspended in 1998. If the ban is overturned, it would give countries the right to impose tariffs on downloads of mobile applications, streamed music from Spotify or videos from Netflix.

India has been wary of this demand, as The Wire has noted, because it believes an earlier WTO deal on domestics electronic manufacturing worked against the country’s interests.

The draft e-commerce policy now specifically states India’s position on this issue in all global trade talks.

“In the context of international trade negotiations, the policy space to impose customs duties on electronic transmissions in the future would be retained. (Implementing Ministry/ Department: DOC and DOR),” it states.

US targets India’s trade policies

In March this year, the US has moved to seek WTO consultations with India over the latter’s export subsidy programmes – Export Oriented Units (EoUs) scheme and sector-specific schemes including the Electronics Hardware Technology Parks Scheme, Special Economic Zones (SEZs), Export Promotion Capital Goods Scheme and a Duty Free Imports for Exporters Programme.

Consultations are the first step in the resolution of disputes at the WTO. If the US is not satisfied with India’s response, the WTO will set up a panel to hear the case.

The US has claimed that these apparent export subsidies provide financial benefits to Indian exporters that allow them to sell their goods more cheaply to the detriment of American workers and manufacturers.

India provides exemptions from certain duties, taxes and fees that benefit numerous Indian exporters, including producers of steel products, chemicals, pharmaceuticals, textiles and information technology products, Robert Lighthizer, the USTR, said while explaining allegations.

The US has already successfully challenged India’s policy for procurement of equipment for projects being built under the national solar mission.

Government reviews draft e-commerce policy

The government is taking a fresh look at proposed e-commerce rules after the draft policy invited widespread criticism from stakeholders.

On August 11, commerce minister Suresh Prabhu tweeted that his ministry had received a “few concerns” on the draft e-commerce policy and will reach out to stakeholders to address them.

Tag: Suresh Prabhu