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Indo-China Trade War: Undeniable Consequence Awaits

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India-China Trade War: Difficult Choice For Both Nations

Amid the ongoing stand-off along the Ladakh post, India has now initiated an economic war between New Delhi and Beijing.

Indo-China trade relationship saw a downfall since the beginning of the new century wherein with the first two months China’s exports to India were 67.1 billion yuan (USD 9.5 billion), down 12.6 per cent yearly basis and imports from India dropped 11.6 per cent to 18 billion yuan (USD 2.5 billion), as per the report by the Chinese state-run Global Times. Bilateral trade fell by 12.4 per cent to 85.17 billion yuan (USD 12 billion) in the first two months, the report quoted Chinese Customs data.

The initial decline was due to the coronavirus-induced lockdown, resulting in the slowdown of the two economies.

Impact on Indian startups:

The blacklist excludes the country’s most valuable startups, including the 16 billion dollars payments giant Paytm, funded by Ant Financial, as well as education star Byju’s App, which counts Tencent as an investor. In 2017 Tencent made it initially invested in Byju’s accounting to 40 million dollars. Yet in 2019, it once again invested through its entity Proxima Beta by funding Rs 43 crore against which, over 5,000 shared has been issued.

Tencent, a Chinese business giant, have also made their presence in the Indian fintech market, ride-hailing service as well as in online food delivery platform. In November 2019, it was reported that the company had acquired a minority stake of around 10 per cent (150 million dollars) in Policy Bazaar.

Moreover, as per the reports Chinese internet conglomerate Tencent had invested 400-million dollars in ride-hailing major Ola, valuing the Bengaluru-based startup at over 3.8 billion dollar back in 2017.

In April 2020, as per the data given out by Tofler, it also made an additional investment in Swiggy along with other investors from South Korea raising the total capital of the firm around 156 million dollars. Even MeituanDianping, a Chinese group buying website for locally found food delivery services, consumer products and retail services had invested in February 2020.

In total, 18 of India’s 30 unicorns have Chinese funding, Gateway House, a Mumbai-based think-tank reckons. However, new investment rules and rising anti-China sentiment may slow the overall flow of funds from the Beijing, which in turn will affect the growth.

Impact of Boycott on a few Indian industries:

  • Sports industry

The surprising call to boycott Chinese sports items has shook the industry, with them responding “can’t suddenly do it”. “They have more than 50 per cent share in the sports market; We say ‘vocal for local’ but Government policies over the decades have led to Chinese products completely invading our markets.”, says Lokesh Vats, Managing Director of the domestic manufacturing Giant, VATS.

As per the data provided by the Department of Commerce of the Export-Import Data Bank for the financial year 2018-19, China’s share in the total import of each type of sports equipment is as follows:-

Type of sports equipment

China’s share in the Import (INR in crores) Total amount of Import (INR in crores)

Gym, athletics equipment

694.77

1,002.50

Badminton racquets

42.70 130.31

Table Tennis

(mainly TT balls) 11.54

17.77

Football (mostly machine-stitched balls)12.84

18.57

Other equipment 197.25

357.32

  • Technical industry

Even though India manufactures mobile phones, televisions (TVs) and cars, their components are either imported from China or the vendors of the final products are dependent on China to increase their sales. In the mobile phone segment alone, the Chinese dominate 72 per cent of the total products. Moreover, the Chinese hold 45 per cent in the area of smart TVs and around 9 per cent in the non-smart TVs.

B. Thiagarajan, Managing Director of the air-conditioning major Blue Star, had told Financial Express, that China is the biggest component supplier, “The Atmanirmbar initiative has been taken by the government to enable component makers to become self-reliant, but all these will take time.”

  • Pharmaceutical industry

The delays faced in clearing the import consignments from China in India’s ports and airports, may soon create shortages and also lead to increasing costs.

How will a ban affect China?

In case of Indo-China economic relationship, the trade is lopsided in Chinese. If we look at the broader spectrum, economic measures taken by India will hardly hit China, as it is far less dependent on the Indian market than New Delhi is on Chinese imports.

Weeks after the introduction of the app ‘Remove Chinese Apps’, 59 applications were banned by Government of India, including the popular ones like TikTok, UC Browser, SHAREit.

Nonetheless, the most significant lever for India is its market itself, which has emerged as one of the relevant overseas markets for Chinese companies in the technology space and telecom. For TikTok, one of the 59 apps banned, India is the biggest foreign market, with around 120 million local users. While the parent company ByteDance reported modest earnings of 5.8 million dollars in 2018-2019, its first full year in India, company officials said the move could cost billions of dollars in future revenue.

As per the reports by Chinese finance magazine Caixin, ByteDance said “the ban could come with a hefty price tag, costing the company more than 6 billion dollars in lost revenue — a sum higher than all the losses suffered by the other 58 banned apps combined.”

The magazine also mentioned that Weibo, the Chinese equivalent of Twitter, “is also feeling a reputational pinch after losing one of its highest-profile local users following the ban.”

Furthermore, it is anticipated that India reportedly assessing whether Huawei and ZTE can participate in its 5G rollout. This would result in a similar effect of costing hundreds of millions of dollars in potential revenue for Chinese companies.

Moreover, though the said move has caused many TikTok “stars” to be unemployed, if India makes a proper strategic plan, it can turn the table in its favour. Through “Make in India” plans and by initiating other programs, the country can give employment to India techies to develop alternatives in place of banned apps. India can also look for alternative sources for its raw materials (For Instance: Taiwan) and thus can reduce the shock of economic war.

Tough Decision:

Former Foreign Secretary Shyam Saran said that India would have to bring about with strategic plans while going for a trade face-off with China. “You have to choose areas where you don’t get hurt more than they do,” he said. India might be able to hurt individual companies but targeting a five-times-larger Chinese economy as a whole, would require well-planned strategy and execution.

Nevertheless, the economic impact on India would largely depend on Chinese calculus as to how they reciprocate. As currently, the Chinese economy is facing the worst crunch, and losing a significant foreign market would be a challenge on its own for China. Moreover, considering various barriers faced by the Chinese economy in the wake of the pandemic will also play a crucial role in its decision.

Founder @NewsAurChai & @RockShaftIND, | @NMIMS_India | Alumnus | Writer | Passionate Chai Drinker | Political Nerd | Traveller #Beingबंजारा | Optimist । Practical

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All You Need To Know About National Institute Of Food Technology Entrepreneurship And Management Bill 2021

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National Institute Of Food Technology Entrepreneurship And Management Bill 2021

On July 26, 2021, Lok Sabha passed a bill under the ministry of Food Processing Industry. The bill is titled as National Institute of Food Technology Entrepreneurship and Management Bill, 2021. The main motive of this bill is to address issues with the Food Processing Industry, Entrepreneurship and one Institution for National Importance. With the passing of this bill, the Indian Institute of Food Processing Technology (IIFPT) and National Institute of Food Technology Entrepreneurship and Management (NIFTEM) is now merged as Institutions of National Importance, and it aims at providing various research and advancement in learning about the Food Industry and its associated branches. The bill was first introduced in the house in February 2019 but was pending due to protest by the opposition.

Significance of Institutions of National Importance (INI)

With the passing of this bill, the institutions enjoy greater autonomy through which they can carry out various courses, research attracting skilled faculties and students from all over the country and overseas. Good standards in education will be adopted to improve the present and future of education in this branch and sector, overcoming the technological gap in the country. This law aims to improve and introduce new changes in food, bio-nanotechnology, cold chain technology etc. The desired efforts will be taken in terms of human resources and infrastructure developments, labs for research etc. Liberty to open centres anywhere in India is also granted to INI and include courses regarding food technology certification and improving the workforce of the country.

Some other important features of this act are the Institution has been authorized with the Board of Government, Senate and other acting Authorities. The Council of Board will include 16 members from different branches from the same field. The Head will be Chairperson, who will be a skilled person from the Food Industry, the Director, Dean and Registrar. Members appointed from Centre and State Governments, Members from FSSAI and Council of Agriculture Research, as mentioned in the bill. The 16 members of the board will carry out work of taking administrative decisions, creating annual budgets and paths for institution progress as an organization, establishing departments, their appointment terms of services, faculties etc. The Board of Council also holds power to grant Honorary Degrees and Diplomas. The Senate shall be the principal academic body of the Institute, consisting of the people such as Director as the Chairperson; Registrar; Full-time skilled level Professor; and Three academically skilled Individuals nominated by the board from the field.

The Union Minister of Food Processing Industry, Mr Pashupati Kumar Paras, expressed his gratitude to PM Modi for this landmark step in this industry from his Twitter handle, indicating new opportunities in Food Technology Industries. Therefore, this Act looks promising on paper with new opportunities and in Educational Development. Amidst the Pegasus Spyware and repeal of the farm laws, this looks positive from the Modi Government.

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Curious Case Of Pegasus: Explained

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Pegasus II News Aur Chai

Pegasus is a spyware that can hack the victims’ mobile phones and read their SMS messages and emails. The Pegasus spyware is owned by an Israeli software company named NSO Group. According to the various reports, this company has targeted more than 50,000 phone numbers at the Global level, of which 300 are in India for surveillance.

The news broke out after the 17 media partners investigated. This investigation brought into the picture information about a leaked database of mobile telephone numbers of Indian Ministers, Opposition leaders, journalists, the legal community, business people, government officials, scientists, activists and many influential personalities of the nation.

Pegasus Spyware and India

According to the report by the agency, the Israeli company which sells Pegasus around the world says that its clients are confined to ‘vetted governments”, believed to number 36. The NSO Group also says that ‘the target list in India is not ours, never was.’ Their refusal of the leaked database has created a loophole in understanding this case.

This whole case has violated the integrity of democratic institutions. According to the report by the agencies, after the mobile phones of the opposition leader Rahul Gandhi and various other leaders were hacked under the Pegasus spyware surveillance. Multiple tweets were made against the Bharatiya Janata Party(BJP) government in India. This whole case has become one of the major threats in the political arena and the Indian Democracy.

Though at the start, it was used for national security purposes. The explosive expansion of surveillance technology vendors has become a vast human rights and a global security issue. If such surveillance technologies increase, it might cause a lot of problems to countries around the globe. Hence, as a precaution, all these countries need to work on regulating this technology.

According to the reports by the agency, one of the targeted phones by the Pegasus spyware was of the former election commissioner of India, Ashok Lavasa. Various such people and such opposition leaders were somehow against the BJP government having their phones hacked with the NSO-owned spyware. All these instances and the names in the leaked list have pointed figures towards the Modi Government.

The Modi government’s stand on this case was put forward in Lok Sabha by two serving ministers, Ashwini Vaishnaw and Prahlad Singh Patel. These two leaders were also featured in the leaked database. The recent Information Technology Minister, Ashwini Vaishnaw defended the BJP government in the parliament by saying, “the expose was an attempt to malign Indian democracy and its well-established institutions.” She even said, ‘any form of illegal surveillance is not possible with the checks and balances in our laws and robust institutions.’

This case has adjourned the parliament proceedings due to the protests inside and outside the house of parliament by the opposition party.

Pegasus Spyware and World.

 In the statement given to the agency, Access Now, an organisation defending the digital rights of global users, said it was outraged that products sold by NSO were allegedly “used to hack and invade the private communications” of thousands of people across the globe.

At a global level, France’s Emmanuel Macron was targeted in the Pegasus spyware case. As the phone of French President Emmanuel Macron was hacked, the investigation was carried out and later on was published which was directed by the Paris-based non-profit journalism group Forbidden.  After this case came in front of the whole world, the Pegasus spyware surveillance came into the picture.

If this continues for some more time, it will ruin India’s Democratic values at a global level. As well as this might become a huge technological threat between the different nations around the globe.

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Modi Cabinet 2.0: Young and Dynamic Leadership or Otherwise

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Cabinet II News Aur Chai

On the 7th of July, the union government announced the biggest cabinet expansion in the 7 years of NDA rule. The recent expansion increased the size of the Council of Ministers from 53 to 77. About 43 new ministers were sworn in, 15 of which were Cabinet Ministers and 28 Ministers of State (MoS). This is the first cabinet overhaul in the second term of NDA governance.

Experts however claim that the new cabinet expansion is a pre-emptive measure to balance electoral formulae in different states ahead of the 2022 State Assembly elections. It is also conjectured that the reshuffle comes as rectification of prolonged criticism about BJP’s governance in the past 2 years, including the Healthcare management during the Pandemic.

The Performance Paradox

This recent cabinet expansion is a report card of the BJP government’s performance in the last 2 years. Major ministerial changes, such as the resignation and replacement of Dr. Harshvardhan as the Health Minister indicate a confession of their mismanagement of the pandemic.

He has been replaced by Mansukh Mandaviya, a 2 time Rajya Sabha MP who has also been awarded by the UN for initiatives in Women’s healthcare in the past. His appointment as the Health Minister is one of hope for BJP, to change and streamline (a.) the COVID-19 Pandemic response and (b.) BJP’s image in the name of healthcare management.

On the contrary, Anurag Thakur’s promotion from MoS Finance to a Cabinet Minister defies all logical explanations for awarding performance. Not only has India’s economic condition worsened under his management, his controversial statements like “Desh ke Gadaaro ko…” do not present a strong case for him. His appointment is a political investment by BJP in Himachal Pradesh’s state elections next year which happens to be Thakur’s home state.

Similarly, Sitharaman’s finance ministry has remained untouched, after historical mismanagement of our Finance capabilities. All of this reflects a selective approach adopted by BJP, which is one of political hesitation and hyperopic ignorance.

BJP’s Political Calculator

Apart from the ‘punishment’ narrative, the new cabinet expansion has also given an insight into BJP’s political planning.  This expansion has incorporated key leaders from several states that go to elections next year. Moreover, it has also been carefully planned to cover the losses BJP has incurred in the past two years.

As a reward for dismantling the elected Madhya Pradesh government and tipping scales in BJP’s favor, Jyotiraditya Scindia was appointed as the Cabinet Minister for Civil Aviation (a post held by his father as well in ’91) almost after 3 years.

On the contrary, Pashupati Kumar Paras got an early reward for breaking down Lok Janshakti Party’s (LJP) representation in Lok Sabha. He was appointed as the Union Minister for Food Processing, after the attempted coup on Chirag Paswan’s leadership.

Sarbananda Sonowal, who was replaced by Himanta Biswa Sharma as the Chief Minister of Assam after the fresh elections, was also awarded a berth in the Cabinet. It is conjectured that this development was in talks ever since Himanta Biswa Sharma was chosen as the CM.

As the Uttar Pradesh elections near, BJP also made sure to improve representation from the state. Major appointments such as Niranjan Jyoti (MoS Food Processing), Anupriya Patel (Mos Commerce and Industry), and Bhanu Pratap Singh Verma (MoS MSME) were made majorly because of their heavy support base in UP.

Following the same lead, Ajay Bhatt from Uttarakhand was appointed as MoS Defence and Tourism. As seen earlier, BJP has made major organizational changes in Uttarakhand which goes to elections next year.

Some Positives

In the mirage of calculated placements and image reconstruction, BJP has hit a few rights with this organizational change. The new cabinet includes a maximum number of women to have ever served in a Union Cabinet, a first in a nation with largely patriarchal tendencies.

The cabinet has also tried to focus on bringing people with commendable background experience and education on board. Ashwini Vaishnav, former IAS and an alumnus of Wharton School have been given major ministries such as Railways, Communications, and IT. Similarly, Anupriya Patel who has been given the Commerce and Industry as an MoS has also served as an educator at Amity University.

Moreover, the diffused reliance on regional strength has become the overarching theme in this cabinet reshuffle. Even though the ruling party intends to balance the voter dynamics, this regional unity has become something to watch out for.

Yet, the big story remains the ouster of major politicians who have served loyally and faithfully to this government. Ravi Shankar Prasad, Prakash Jaavedkar, and Dr. Harshvardhan are major losers in this dynamic reshuffle. While the current government has tried to modernize the leaders of this nation, it has set a new precedent that loyalty is not the most critical virtue anymore; Election Commission’s schedule is.

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