Investment lessons from the India-EFTA trade deal

India must have a clear FTA policy, particularly when it comes to international trade and laws governing foreign investments.

Why does India need to rebuild its Free Trade Agreement policy?

• For Comprehensive Economic Treaties: India has strong bargaining leverage when trade and investment discussions are combined, enabling advantageous agreements to be reached.
• India can use it to leverage trade concessions for investment advancements and vice versa. In free trade agreements, this strategy strengthens India’s negotiating position.
• To ensure foreign investors’ trust in investing in India, India should include provisions for their protection under international law, thereby expanding the scope of investment issues.
• It will assist India in creating a successful international law-based dispute resolution process for investment disputes.
• Enforcing legal protection for international investors is essential to restoring their trust, particularly in light of India’s dropping levels of foreign direct investment.
• To tackle the reduction in FDI: The policy ought to tackle the reduction in foreign direct investment in India by fostering trust among international investors by providing strong legal safeguards and processes for resolving disputes.

Investment lessons from the India-EFTA Trade deal:

• A thorough investment component is present in the India-EFTA FTA, but it is absent from more recent Indian FTAs with nations like Australia, the United Arab Emirates, and Mauritius.
• The agreement codifies an obligation of conduct rather than an obligation of result, with measures requiring EFTA nations to make sincere efforts to increase FDI to India and assist job growth.
• Economic theory emphasizes how closely commerce and investment are related. Previous Indian free trade agreements (FTAs) combined investment protection with legally binding trade regulations; however, more recent FTAs separated trade law from investment law.
• The India-EFTA free trade agreement (FTA 3.0 Approach) departs from the decoupling strategy used in other recent free trade agreements by emphasizing the integration of trade and investment discussions into a single comprehensive economic treaty.

Way Forward:

• Building Capacity: Increase Indian policymakers’ and negotiators’ understanding of intricate trade and investment matters, such as international best practices, legal frameworks, and dispute resolution procedures.
• Integrated Negotiation Approach: To ensure coherence and synergy between trade and investment components, adopt an integrated approach to FTA negotiations in which they are discussed together within a single agreement.

Quadrilateral Security Dialogue (Quad) is transforming itself into a trade bloc from a military alliance, in present times Discuss.

19th Session of the United Nations Forum on Forests (UNFF19) in New York

Not too long ago, at the United Nations Forum on Forests’ 19th Session (10 May 2024) in New York, a major study titled “International Forest Governance” was released.

The report exposes the rising trend of ‘Climatization’ of forests:

About Forest Climatization:

• Change in Emphasis: The trend is characterized by a noticeable change in emphasis from acknowledging the vital ecological and social roles of forests to appreciating them primarily as carbon sinks.
• Priority for Carbon Sequestration: As a way to solve climate change challenges, carbon sequestration in forests has gained importance in political and financial spheres. Other aspects of forest management are frequently overshadowed as a result of this emphasis.
• Ignorance of Long-Term Sustainability: The focus on sequestering carbon dioxide may cause the long-term viability of forests to be overlooked. Prioritizing carbon storage in forest management plans might not always be in line with more general objectives of ecological and social sustainability.

Risks and their impacts:

• Ongoing Crises: Despite initiatives to curb deforestation, major issues like socioeconomic inequality, biodiversity loss, and climate change continue to exist. Significant risks to the sustainability and well-being of the world are posed by these issues.
• Dangers Associated with Commodification: The commercialization of forests for the sake of capturing carbon emissions poses potential threats to current disparities and obstacles to the efficient administration of forests.

Market-based Versus Non-market Approaches:

• Market-Based Solutions: Initiatives like forest carbon trading and supply networks with zero deforestation have gained a lot of attention. These strategies seek to use financial incentives to promote environmentally friendly forest management techniques.
• Exacerbation of disparities: Although market-based solutions are widely adopted, they have the potential to worsen already-existing disparities in forest governance systems. While some stakeholders or geographical areas might gain excessively, others might experience marginalization or disadvantage.
• Non-market methods: These mechanisms, which include community-led projects and state control, are proposed as an alternative that provides more equitable and efficient means of governing forests.

Policy suggestions based on the report:

• Policymakers should reassess forests’ multiple ecological, social, and economic values in addition to their role as carbon sinks. This is known as the holistic valuation of forests.
• Equitable Governance: In order to guarantee that the opinions of marginalized groups, such indigenous and local communities, are heard and respected, policymakers should place a high priority on inclusive decision-making procedures.
• Protection of Rights and Livelihoods: Communities that depend on natural resources should have their rights and means of subsistence protected as a top priority in policy.

Way Forward:

• Governments and international organizations must to embrace integrated approaches to forest management that acknowledge and strike a balance between the economic, social, and ecological advantages of forests.
• Strengthening Governance institutions: To promote more fair decision-making procedures, policymakers should endeavor to develop governance institutions at the local, national, and international levels.

Examine the status of forest resources of India and its resultant impact on climate change. (UPSC 2020)

What is Interim Bail?

In order to allow Delhi Chief Minister Arvind Kejriwal to campaign for the Lok Sabha elections, the Supreme Court has granted him temporary bail in the liquor policy issue.

Interim Bail: What is it?

• In India, an accused individual may be granted interim bail, which is a provisional release from custody under Section 439 Cr.
• In order to handle pressing concerns like family problems, medical difficulties, or other important personal situations, permission may be granted.

Legal Provisions for Interim Bail

• In India, the concept of interim bail is derived from the discretionary powers that judges are allowed under various legal rules rather than being specifically specified by a statute.

The most relevant laws and principles include:

• Criminal Procedure Code of 1973 (CrPC): The CrPC offers the guidelines for granting bail generally, even though it makes no mention of “interim bail.” Based on their discretion, courts use sections such as 437 (bail in non-bailable matters by Magistrate), 438 (anticipatory bail), and 439 (special powers of High Court or Court of Session regarding bail) to award bail, including interim bail.
• Articles of the Constitution: The right to bail is frequently viewed as a component of the fair and just legal process under Article 21 of the Indian Constitution, which guarantees the right to life and personal liberty.

With reference to India, consider the following statements :​ [2021]

1. Judicial custody means an accused is in the custody of the concerned magistrate and such accused is locked up in police station, not in jail.​
2. During judicial custody, the police officer in charge of the case is not allowed to interrogate the suspect without the approval of the court.​

Which of the statements given above is/are correct?​

1. 1 only ​
2. 2 only​
3. Both 1 and 2 ​
4. Neither 1 nor 2​

Export-import in agri sector

India’s fiscal year ended March 31, 2024, saw an 8.2% decline in agricultural exports due to restrictions on a variety of commodities, including sugar, grains, and onions.

Context:

• According to the Department of Commerce, the value of farm exports decreased to $48.82 billion in 2023–24 from a record $53.15 billion in 2022–23 and $50.24 billion in the preceding fiscal year.

Key takeaways

• During the first several years of the Modi administration, exports fell (from $43.25 billion in 2013–14 to $35.60 billion in 2019–20), while imports increased (from $15.53 billion to $21.86 billion).
• That was mainly due to a collapse in the price of agricultural commodities globally. Low global prices increased the nation’s vulnerability to imports while lowering the cost competitiveness of its exports.
• However, as a result of the worldwide price recovery that followed the Covid-19 outbreak and Russia’s invasion of Ukraine, both India’s agriculture imports and exports soared to record highs in 2022–2023 before falling in the most recent fiscal year.
• Export-related factors: Sugar and non-basmati rice have been the main contributors to the decline in exports.Since October 2023, the government has prohibited the export of any sugar during the current crop year.
• Similar concerns about local supply and food inflation led to the export of any white non-basmati rice banned as of July 2023. In the non-basmati category, shipments of just parboiled grain are currently allowed and will be subject to a 20% tariff.
• Wheat and onions are two more commodities that have been hardest hit by export limitations, which were once again brought on by shortages at home and growing costs.
• Import-related factors: In 2023–2024, there is a 7.9% decrease in total agricultural imports because of a single commodity: edible oils. As a result of declining worldwide prices, the import bill for vegetable oil was less than $15 billion in the previous fiscal year.
• Nonetheless, imports of pulses nearly quadrupled to $3.75 billion in 2023–24, the largest since the $3.90 billion and $4.24 billion levels of 2015–16 and 2016–17, respectively, while the foreign exchange outflow due to cooking oil has decreased.

Policy takeaways

• Like any businessmen, farmers and agri-traders desire predictable and stable policies.
• Governments that resort to outlawing or regulating agricultural exports typically prioritize the needs of consumers over those of producers. When these things happen overnight, such with wheat exports, they cause more pain.
• Establishing export markets requires work and patience. Many economists would advise a more regulated and predictable approach, such as the introduction of temporary tariffs in place of total prohibitions or quantitative restrictions.
• Likewise with regard to imports. The Modi administration eliminated import taxes on the majority of pulses, including pigeon peas (arhar), black gram (urad), red lentils (masoor), yellow and white peas, and, as of this month, chickpeas (chana). It maintained the import levies on crude palm, soybean, and sunflower oil at 5.5%.