THE HINDU – CURRENT NOTE 28 February
India, China seek common ground on Afghanistan
•Despite differences on a number of issues, including over the Nuclear Suppliers Group (NSG), U.N. designation of Masood Azhar as a terrorist, and the China-Pakistan Economic Corridor, India and China began to look for a “common ground” on Afghanistan during Foreign Secretary S. Jaishankar’s visit to Beijing last week, official sources told The Hindu.
•Officials reportedly even discussed the possibility of “joint development projects” that could be undertaken despite economic rivalries between the two countries in other parts of the subcontinent.
•The Foreign Secretary’s visit, which saw a restructured “Strategic Dialogue” with Chinese executive Vice-Minister of Foreign Affairs Zhang Yesui, also witnessed an effort by both sides to “stabilise India-China relations” at a time the world is experiencing a new “volatility,” a senior official said.
Shifting calculus
•This indicates a shifting global calculus due to the recent surprise foreign and trade policy moves by the new U.S. administration under Donald Trump.
•“The overarching concern during the talks seemed to be that China had grown economically, and India has been growing because of a predictable international system so far,” one official, privy to the talks, said. “Each one of us is affected by the new unpredictability, and we must do what we can to bring down the volatility, instead of playing up our differences.”
•Officials who were privy to the negotiations told The Hindu that there was still little movement on issues that were most highlighted in the past year, mainly over Masood Azhar, where China has put a technical hold at the U.N. that will lapse in July, and the NSG, where India’s membership will be taken up again at the plenary session in June.
Another irritant
•Another possible flashpoint in May 2017 is Chinese President Xi Jinping’s global conference on the “Belt and Road Initiative (B&RI),” where the China-Pakistan Economic Corridor that runs through Pakistan occupied Kashmir and Gilgit Baltistan will be highlighted and which Pakistan Prime Minister Nawaz Sharif is expected to attend.
•Officials said that India had “made it clear” that it would not take part given the “sovereignty issues.”
•While talks on Azhar and the NSG failed to see any breakthrough, the fact that both the Indian and Chinese delegations included officials dealing with Pakistan and Afghanistan as well as the U.N. and multilateral ties showed that China was “open to finding solutions,” the official said.
•To that end, the strategic dialogue was divided into five different “sub-groups” — Afghanistan, nuclear issues, United Nations including the 1267 designation committee, bilateral issues, and consular and visa matters, or people-to-people ties — with Joint Secretaries Pradeep Rawat for East Asia, Pankaj Sharma for (Nuclear) Disarmament, Rudrendra Tandon for U.N., and Gopal Baglay (appointed MEA spokesperson on Monday) for Pakistan-Afghanistan and Iran leading the discussions on the issues.
•On Afghanistan, it is learnt that the Chinese government, which proposed a separate discussion, had expressed its “admiration” for India’s work on developmental projects, including the Salma Dam in Herat.
Mapping dolphin proteins may benefit human health
.•Mapping all the proteins found in the dolphin genome could pave the way for finding a new way to treat some common diseases that affect humans, say researchers.
•“Dolphins and humans are very, very similar creatures,” Ben Neely of the U.S. National Institute of Standards and Technology (NIST) said in a statement.
•“As mammals, we share a number of proteins and our bodies function in many similar ways, even though we are terrestrial and dolphins live in the water all their lives,” said Mr. Neely, who along with his colleagues created a detailed, searchable index of all the proteins found in the bottlenose dolphin genome.
•A genome is the complete set of genetic material present in an organism. Although a detailed map of the bottlenose dolphin ( Tursiops truncatus ) genome was first compiled in 2008, recent technological breakthroughs enabled the creation of a new, more exhaustive map of all of the proteins produced by the dolphins’ DNA.
•Studies have recently revealed a protein, known as vanin-1, may help the marine mammals protect their kidneys. Humans produce vanin-1, but in much smaller amounts.
•Researchers would like to gather more information on whether or not elevating levels of vanin-1 may offer protection to kidneys.
•“There’s this gap in the knowledge about genes and the proteins they make. We are missing a huge piece of the puzzle in how these animals do what they do,” Mike Janech from the Medical University of South Carolina, said.
•Vanin-1 is just one example of how genomic information about this mammalian cousin might prove useful. There may be hundreds of other similar applications.
•“Once you can identify all of the proteins and know their amounts as expressed by the genome, you can figure out what’s going on in the bottlenose dolphin’s biological systems in this really detailed manner,” Mr. Neely explained.
The IS challenge
.•The arrest of two suspected Islamic State associates on Sunday from Gujarat once again raises the question whether the terrorist group is finding support in India. Coincidentally, the arrests happened the same day that Hafeezudin T.K., one of the 21 persons who went missing from Kerala last year and were believed to have joined the IS, was reported to have been killed in a drone strike in Afghanistan. If these allegations and reports are correct, it would show that the IS is gaining some influence at least among a handful of youth in India. In recent months, anti-terror officials have arrested young people from different parts of the country — in Kerala, Tamil Nadu, Telangana, West Bengal and Rajasthan. The IS thrives on support from foreign jihadists, largely the young. Ever since the organisation declared a ‘Caliphate’ in 2014, it has attracted tens of thousands of fighters from around the world. It used two tactics — urging sympathisers either to travel to Iraq or Syria, its strongholds, and join the war, or carry out terror attacks in their own countries after declaring allegiance to the ‘Caliph’, Abu Bakr al-Baghdadi. India has remained largely insulated from this trend. The number of Indians to have joined the ranks of the IS is very small. According to a December 2015 report by the intelligence company Soufan Group, the number of Indians who have joined the IS was 23, compared to 760 from the U.K. and 150 from the U.S.
•The IS’s puritanical, one-size-fits-all brand of Islam hasn’t found much resonance in India. Given the syncretic nature of Indian Islam, it is extremely difficult for groups such as the IS to become popular among Muslims, as it did in parts of Iraq and Syria. But lone- wolf attacks, inspired by the IS world view and tactics, could pose security risks. The IS is not recruiting people through local communities as in the case of other terror organisations or, as in Pakistan and Afghanistan, through madrasas. The IS’s medium is the Internet. It reaches out through online propaganda. This is all the more significant at a time when the IS is under attack in its core territories and is desperate to expand its reach beyond West Asia. Of late it has carried out major terrorist attacks in India’s neighbourhood — in Afghanistan, Bangladesh and Pakistan, including the deadly bombing at the Sehwan Sufi shrine in Sindh. This outreach to South Asia should worry India. To prevent the group from gaining a foothold on its territory, India needs high-level intelligence and counter-terror operations to continue. Equally important is better coordination between the state and Muslim religious leaders in countering radicalisation and having in place specific de-radicalisation programmes, as western governments do. It is important to not let these isolated arrests be blown out of proportion to target the larger Muslim population, which right-wing elements often try to do. Bigotry cannot be checked with bigotry.
NOTA and the Indian voter
•Three years, one Lok Sabha election and four rounds of Assembly elections have passed since the introduction of ‘None of The Above’ (NOTA) option in the Indian electoral system. The 2016 Assembly elections also saw some active canvassing for NOTA, which allows voters to express their dissent against all the contestants. In Kerala, a group of women activists hit the road urging people not to elect any candidate if no woman was present in the fray. In Tamil Nadu, a youth group campaigned for NOTA as a protest vote against corruption.
The patterns
•NOTA polling figures are still small. On an average, the maximum NOTA vote share has not crossed 2.02% of the total votes polled in any election cycle. The perceived cynicism of Indian voters against the political class thus seems exaggerated. However, it is worthwhile to look at the patterns of NOTA voting to find out how the voters have used this option of negative voting.
•NOTA was introduced in India following the 2013 Supreme Court directive in the People’s Union for Civil Liberties v. Union of India judgment. Thus, India became the 14th country to institute negative voting. However, NOTA in India does not provide for a ‘right to reject’. The candidate with the maximum votes wins the election irrespective of the number of NOTA votes polled.
•NOTA button saw its debut in the 2013 Assembly elections held in four States — Chhattisgarh, Mizoram, Rajasthan and Madhya Pradesh and the former Union Territory, Delhi. In these States and Delhi, NOTA constituted 1.85% of the total votes polled. The average NOTA vote share dropped to 0.95% in the 2014 Assembly elections held in eight States — Haryana, Jharkhand, Andhra Pradesh, Sikkim, Odisha, Arunachal Pradesh, Jammu & Kashmir and Maharashtra. It increased to 2.02% in the 2015 Assembly elections held in Delhi and Bihar. While Delhi polled a mere 0.40%, Bihar saw 2.49% of NOTA votes, which remains the highest NOTA votes polled so far in any State in Assembly elections. In the 2016 Assembly elections held in Assam, West Bengal, Kerala, Puducherry and Tamil Nadu, NOTA vote share dropped again to 1.6%. In the 2014 Lok Sabha polls, NOTA constituted 1.1% of the total votes.
•Across the elections, the number of NOTA votes polled was larger than the winning margin in 261 Assembly constituencies which went to the polls since 2013, and in 24 constituencies in the Lok Sabha elections. One can argue that in these constituencies the NOTA votes did make a difference to the election results assuming that in the absence of this option a majority of NOTA voters would have preferred one or the other candidate in the fray.
Some early pointers
•A quick analysis of NOTA usage in all elections so far does suggest some interesting early pointers. First, reserved constituencies have seen a relatively larger number of NOTA votes, which points to the continued social prejudice against political reservation for SC/STs. Second, constituencies affected by left-wing extremism have also recorded higher NOTA performance and here probably it served as an instrument of protest against the State itself. The Assembly constituencies of Gadchiroli, Jhargram, Kalyan Rural, Jagannathpur, Chatra, Umarkote and Chhattarpur figured in the list of top NOTA polling constituencies in the Assembly elections of 2014, while in the Lok Sabha elections, Bastar, the Nilgiris and Nabarangpur occupy three top slots in terms of NOTA votes polled. Given the disaffection among the people in these areas against the Indian state, these numbers are expected. At the same time, it is important to note that these voters have used the democratic means of NOTA to express their resentment rather than boycotting the polls outright. Last, NOTA figures are comparatively higher in those constituencies which have seen a direct contest between the Congress and the Bharatiya Janata Party. One may read into this some indication of the people’s disenchantment with two mainstream political parties and yearning for alternatives. Overall, Indian voters seem to be using NOTA not just to show their disapproval of the candidates in the fray but to express their protest against many things they perceive wrong in the political system.
•The early trends of NOTA need to be explored further with more elaborate statistical and ethnographic analysis. So far, a small number of Indian voters have come to see NOTA as an instrument of protest. This electoral option will become a meaningful means of negative voting only if it becomes a ‘right to reject’ rather than being a symbolic instrument to express resentment as it is now. A PIL has already been filed in Madras High Court seeking the full right to reject in place of NOTA.
Seeing the light
•India and the U.S. have been filing a number of disputes against each other, challenging the other’s domestic content requirement in the renewable energy sector. The last was in September 2016 when India requested consultations with the U.S. under the dispute settlement system regarding alleged domestic content requirements and subsidies provided by eight U.S. states. This request came three days after India lost the case brought by the U.S. India in the present case claims that California, Connecticut, Delaware, Massachusetts, Michigan, Minnesota, Montana and Washington are providing renewable energy subsidies similar to those of the domestic content requirement under the Jawaharlal Nehru National Solar Mission (JNNSM), which, the U.S. claims, violates World Trade Organisation (WTO) law.
•India alleges that these states have been granting subsidies to local manufacturers in the renewable energy industry along with the requirement that the products be made domestically. As India lost the case filed by the U.S. at the WTO, critics claim that the present case has been filed by India as a reciprocation. India seems to be charging the U.S. of the same issues in the same field to leverage a settlement in the case that it lost.
The WTO ruling
•JNNSM required that 20 gigawatt (GW) of solar power should be generated from domestically produced modules or solar cells. The WTO found that the mandatory domestic content requirement under JNNSM violated the National Treatment provision of Article III:4 of the WTO agreement. The Indian government has significantly reduced the domestic content requirement after the initiation of proceedings at the WTO. At the beginning of the mission, the domestic content requirement in the auctioned contracts was as much as 50% of the total output generating capacity. This value dropped significantly through the auctions and is currently down to 5%. The U.S. is still unsatisfied with the measures undertaken by the government.
•Before the final judgment was delivered by the WTO, there was a lot of chatter about the case being settled by the two governments. Assurances were given by high-ranking officials from both nations that a settlement would be reached. The Indian government also offered to restrict the domestic content requirement to government-owned companies, saying that only public sector undertakings would be mandated to use domestically produced modules.
•After the WTO ruling was delivered, India asked the U.S. not to implement it. Under WTO law, the complainant can give 15 months to the defendant to implement the ruling. If 15 months were provided, India would be able to complete the JNNSM without having to painstakingly restructure the entire mission. After the 15-month period, the ruling would be applicable.
•However, nothing meaningful came from from these negotiations. The Indian government then announced that it had decided to file many cases against the U.S. because eight of the latter’s states had domestic content requirements in the renewable energy sector. Few imagined that India would pursue the dispute and ask the WTO to establish a panel.
•The decision to not pursue the formation of a WTO dispute resolution panel came after Indian officials met the transition team of U.S. President Donald Trump and were assured that a settlement would be reached. It was decided that the cases would not be pursued further and that the Trump administration would seriously consider the settlement once in office.
•The request for the establishment of a panel came on January 24, 2017. The reasons stated by India include that the eight U.S. states were giving “performance-based incentives” for generating renewable energy. These incentives were contingent on the fact that domestically produced goods were being used and were given to offset the investment cost. India claims that this violates Article III:4 because the measures provide less favourable treatment to imported products than domestically produced goods.
•Even though India has requested establishment of the panel, is it still possible that an amicable solution may be found. However, with the new Trump administration and its ‘America First’ policy, there is a good chance that the panel will be established and the case argued before the WTO. This would affect relations between the U.S. and India. Both the cases are in fact the same, so it would be in the best interest of both nations to settle it.
•Armin Rosencranz is professor of law at Jindal Global Law School. Aditya Vora is a third-year law student there.
SEBI to tighten algo trading rules
•The Securities and Exchange Board of India (SEBI) plans to further tighten the regulations for algorithmic trading to minimise instances of misuse of such systems that can be used to execute complex trading strategies at a very high speed.
•SEBI chairman U.K. Sinha said that while India was one of the few countries in the world to regulate algorithmic trading — popularly called algo trading — the market watchdog is looking to further strengthen the norms so that instances of flash crashes that have happened overseas, and also in India a few times, could be minimised.
•“India is one of the very few countries in the world which have some mechanism for controlling the misuse of algo. SEBI has been able to come out with some minimal regulations on algos. For instance, we have provided for high order to trade ratio penalty system. We are reviewing whether that penalty should be enhanced further,” the outgoing SEBI chief, whose tenure ends on Wednesday, told reporters at a media conference.
•Algorithmic trading refers to the use of software programmes to execute trading strategies at a much faster pace. On the National Stock Exchange (NSE), algo trades accounted for close to 16% of all trades. On the BSE, it was 8.56% in January.
•The SEBI chairman also said that while many countries and regulators, including the International Organization of Securities Commissions (IOSCO), have been debating on this issue for many years, only India had been able to come out with proper regulations.
•Mr. Sinha, who got an extension twice, spent a total of six years at the helm and will be succeeded by Ajay Tyagi, an officer of the Indian Administrative Service (IAS) who served as Additional Secretary (Investment) in the Department of Economic Affairs.
•Mr. Sinha also highlighted the fact that the regulatory body has tried to bring transparency and consistency in its own actions against entities indulging in market malpractices while cleansing the market by providing an exit option to regional stock exchanges and delisting non-compliant companies.
•He said that the one regret he has is that not one Infrastructure Investment Trust (InvIT) or Real Estate Investment Trust (REIT) was launched while he was the chairman. He, however, added that he expected these to be unveiled in the next two months.
•“The reason why it has not been launched is not because of SEBI. It has something to do with other regulators because they have to take some decisions about allowing their regulated entities to participate in InvIT and REITs market,” he said.
