Why is it in the News?

Recently, the Shiromani Akali Dal came out with its poll manifesto and said it would seek the transfer of Kartarpur Sahib from Pakistan to India through mutual land exchange between the two countries.

Context:

• The Shiromani Akali Dal's (SAD) proposal to retrieve Kartarpur Sahib from Pakistan through a negotiated territory exchange reflects a growing desire to transform the India-Pakistan border from a zone of conflict to one of cooperation and economic integration.
• This idea might appear as unlikely as the Bharatiya Janata Party's (BJP) pledge to integrate Pakistan-occupied Kashmir (PoK) into India.
• Nonetheless, it signifies a profound aspiration to transform the India-Pakistan border from a contentious zone into one characterized by cooperation and economic integration.

What is Para Diplomacy?

Origins of Paradiplomacy:

• The concept of para-diplomacy was first proposed in 1990 by John Kincaid, an American scholar who outlined a foreign policy role for local governments within a democratic federal system.
• Economic para diplomacy related to trade and investment in particular has become an institutionalised practice across the world – in federal states like the United States, Canada and Belgium, quasi-federal states like Spain, non-federal states like Japan and even non-democratic states like the People’s Republic of China.

Aims and Objectives of Paradiplomacy:

• Paradiplomacy can be employed with a variety of aims which can range from bringing in a decentralised dimension to international debates to internationalisation of domestic issues by bringing regional issues onto the global stage, promoting trade, tourism, cultural ties and even post-conflict reconciliation to local political activism being sought for international support.
• Subnational relations can also be conducted to promote and attract investments seeking region-specific economic advantages.

Drivers of Paradiplomacy:

• In more ways than one, paradiplomacy owes its origins to globalisation.
• As the world economy has become increasingly global and increasingly integrated in a variety of ways, sub-national units (regions, states, provinces and even cities) find their functions and activities circumscribed by the global system.
• Federalism is also a key contributor to the growth of paradiplomacy.
• Sub-national actors such as states and provinces that have a formal legal personality are necessarily more likely to engage in international activities designed to promote and protect local and international interests and prerogatives.

What are the Challenges Associated with BJP and SAD’s Territorial Ambitions?

• Practical Hurdles in BJP and SAD's Territorial Objectives: The proposals put forth by the SAD to renegotiate the Radcliffe Line in Punjab or the BJP's assertion to reclaim PoK face numerous challenges.
  • Altering the territorial status quo in Punjab or reclaiming PoK, whether through diplomatic negotiations or by force, presents formidable obstacles.
• Complexities and Resistance: Such endeavours would not merely disrupt the already delicate territorial equilibrium but also provoke substantial opposition, given the deep-rooted historical and ongoing tensions between India and Pakistan.
• Pursuing a Pragmatic Approach: A more viable alternative lies in reimagining these borders as conduits for trade and collaboration rather than confrontation.
  • This pragmatic stance resonates with the SAD's additional proposal to reopen the Attari and Hussainiwala borders with Pakistan for trade and tourism, with the aim of fostering economic prosperity in the region.

Obstacles Hindering Economic Cooperation Between India and Pakistan:

• Political and Military Resistance in Pakistan: One of the foremost barriers to economic cooperation stems from the entrenched position of Pakistan's military and political establishment.
  • Over the years, the Pakistani military's steadfast opposition to economic engagement with India, primarily due to unresolved issues surrounding Kashmir, has been a significant deterrent.
  • Despite occasional signs of thaw, such as the February 2021 ceasefire agreement, internal resistance has consistently impeded progress.
  • Even Prime Minister Imran Khan's tentative consideration of resuming trade ties with India faced vehement opposition, highlighting the deep-seated reluctance to normalize relations without addressing the Kashmir dispute.
• Historical Context and Suspicion: The historical animosities dating back to the traumatic partition of 1947 and subsequent wars have entrenched mutual suspicion and distrust between the two nations.
  • These historical grievances have not only shaped national narratives but also influenced contemporary policy decisions.
  • Addressing underlying political tensions becomes imperative for either country to fully commit to economic cooperation.
• Lack of Reciprocal Trade Policies: On the trade front, Pakistan's refusal to grant India the Most Favoured Nation (MFN) status remains a significant hurdle.
  • While India extended this status to Pakistan in 1996 to foster trade ties, the gesture was not reciprocated.
  • Subsequent events, such as India's withdrawal of MFN status post the Pulwama terror attack and the revocation of Jammu and Kashmir's special constitutional status, have further strained bilateral trade relations.
• Economic Rationality vs. Political Baggage: Despite the evident economic benefits of trade, Pakistan's establishment remains wary of engaging with India due to historical conflicts and the overarching Kashmir issue.
  • While there have been instances where the Pakistani business community advocated for resuming trade ties, such appeals often faced resistance from the political and military elite, who prioritize geopolitical concerns over economic pragmatism.
• Regional Stability and Security Concerns: Security concerns, including allegations of cross-border terrorism, complicate the economic relationship between India and Pakistan.
  • Heightened military vigilance and frequent skirmishes along the border hinder trade and perpetuate an environment of hostility and mistrust.
  • The ongoing conflict and the threat of terrorist activities cast a shadow over efforts to normalize trade relations.

Proposing a New Strategy for Improving India-Pakistan Relations:

• Introduction of Special Economic Zones: A significant aspect of the SAD's manifesto is the proposition to convert the Punjab border into a special economic zone, aiming to nurture small and medium enterprises and potentially revolutionize India-Pakistan relations.
  • This innovative vision encompasses the idea of Pakistan establishing a parallel zone on its side, fostering integrated development and economic interdependence.
  • Drawing inspiration from successful models of cross-border economic zones in Southeast Asia and China's collaborative initiatives with neighbouring countries, such an endeavour holds promise for fostering mutual prosperity.
• Leveraging Para Diplomacy: At the heart of these proposals lies the concept of para diplomacy, or sub-state diplomacy, wherein provincial and local governments engage in formal interactions to advance national interests.
  • This approach offers a novel means to navigate around the entrenched positions often held by national governments, presenting fresh avenues for cooperation.
  • While historical attempts at para diplomacy between East and West Punjab have surfaced intermittently, they have struggled to endure amidst overarching national conflicts.
  • Embracing these innovative strategies could pave the way for a constructive dialogue and sustainable cooperation between India and Pakistan, fostering mutual understanding and prosperity in the region.

Fostering Consensus and Cooperative Federalism for Sustainable India-Pakistan Relations:

• To foster sustainable and productive economic cooperation between India and Pakistan, nurturing a robust consensus between the central government and state governments, particularly those in the border regions, is imperative.
  • This collaborative approach, known as cooperative federalism, holds the key to innovative diplomatic strategies that prioritize the interests of local populations.
• India's federal structure has historically grappled with tensions between the central and state governments, particularly concerning foreign policy and cross-border cooperation.
• The diverse political landscapes across Indian states often give rise to conflicting interests and priorities.
  • For example, West Bengal's interactions with Bangladesh have been marked by complexities stemming from differing perspectives between the state leadership and the central government.
• Similarly, Tamil Nadu's influence on India's policies towards Sri Lanka has been substantial, occasionally complicating bilateral relations due to the state's concerns for the Tamil population in Sri Lanka.
• Cooperative federalism entails the harmonious collaboration of national and state governments to achieve shared objectives while respecting the autonomy of state governments.
  • By aligning state objectives with national interests, this approach offers a pragmatic framework for managing border relations and fostering economic cooperation with neighbouring countries.
• Embracing consensus and cooperative federalism is paramount for forging a path towards peace, stability, and prosperity in the region, laying the groundwork for enduring and mutually beneficial relations between India and Pakistan.

Why is it in the News?

Recently, the Shiromani Akali Dal came out with its poll manifesto and said it would seek the transfer of Kartarpur Sahib from Pakistan to India through mutual land exchange between the two countries.

Context:

• The Shiromani Akali Dal's (SAD) proposal to retrieve Kartarpur Sahib from Pakistan through a negotiated territory exchange reflects a growing desire to transform the India-Pakistan border from a zone of conflict to one of cooperation and economic integration.
• This idea might appear as unlikely as the Bharatiya Janata Party's (BJP) pledge to integrate Pakistan-occupied Kashmir (PoK) into India.
• Nonetheless, it signifies a profound aspiration to transform the India-Pakistan border from a contentious zone into one characterized by cooperation and economic integration

What is Para Diplomacy?

Origins of Paradiplomacy:

• The concept of para-diplomacy was first proposed in 1990 by John Kincaid, an American scholar who outlined a foreign policy role for local governments within a democratic federal system.
• Economic para diplomacy related to trade and investment in particular has become an institutionalised practice across the world – in federal states like the United States, Canada and Belgium, quasi-federal states like Spain, non-federal states like Japan and even non-democratic states like the People’s Republic of China.

Aims and Objectives of Paradiplomacy:

• Paradiplomacy can be employed with a variety of aims which can range from bringing in a decentralised dimension to international debates to internationalisation of domestic issues by bringing regional issues onto the global stage, promoting trade, tourism, cultural ties and even post-conflict reconciliation to local political activism being sought for international support.
• Subnational relations can also be conducted to promote and attract investments seeking region-specific economic advantages.

Drivers of Paradiplomacy:

• In more ways than one, paradiplomacy owes its origins to globalisation.
• As the world economy has become increasingly global and increasingly integrated in a variety of ways, sub-national units (regions, states, provinces and even cities) find their functions and activities circumscribed by the global system.
• Federalism is also a key contributor to the growth of paradiplomacy.
• Sub-national actors such as states and provinces that have a formal legal personality are necessarily more likely to engage in international activities designed to promote and protect local and international interests and prerogatives.

What are the Challenges Associated with BJP and SAD’s Territorial Ambitions?

• Practical Hurdles in BJP and SAD's Territorial Objectives: The proposals put forth by the SAD to renegotiate the Radcliffe Line in Punjab or the BJP's assertion to reclaim PoK face numerous challenges.
  • Altering the territorial status quo in Punjab or reclaiming PoK, whether through diplomatic negotiations or by force, presents formidable obstacles.
• Complexities and Resistance: Such endeavours would not merely disrupt the already delicate territorial equilibrium but also provoke substantial opposition, given the deep-rooted historical and ongoing tensions between India and Pakistan.
• Pursuing a Pragmatic Approach: A more viable alternative lies in reimagining these borders as conduits for trade and collaboration rather than confrontation.
  • This pragmatic stance resonates with the SAD's additional proposal to reopen the Attari and Hussainiwala borders with Pakistan for trade and tourism, with the aim of fostering economic prosperity in the region.

Obstacles Hindering Economic Cooperation Between India and Pakistan:

• Political and Military Resistance in Pakistan: One of the foremost barriers to economic cooperation stems from the entrenched position of Pakistan's military and political establishment.
  • Over the years, the Pakistani military's steadfast opposition to economic engagement with India, primarily due to unresolved issues surrounding Kashmir, has been a significant deterrent.
  • Despite occasional signs of thaw, such as the February 2021 ceasefire agreement, internal resistance has consistently impeded progress.
  • Even Prime Minister Imran Khan's tentative consideration of resuming trade ties with India faced vehement opposition, highlighting the deep-seated reluctance to normalize relations without addressing the Kashmir dispute.
• Historical Context and Suspicion: The historical animosities dating back to the traumatic partition of 1947 and subsequent wars have entrenched mutual suspicion and distrust between the two nations.
  • These historical grievances have not only shaped national narratives but also influenced contemporary policy decisions.
  • Addressing underlying political tensions becomes imperative for either country to fully commit to economic cooperation.
• Lack of Reciprocal Trade Policies: On the trade front, Pakistan's refusal to grant India the Most Favoured Nation (MFN) status remains a significant hurdle.
  • While India extended this status to Pakistan in 1996 to foster trade ties, the gesture was not reciprocated.
  • Subsequent events, such as India's withdrawal of MFN status post the Pulwama terror attack and the revocation of Jammu and Kashmir's special constitutional status, have further strained bilateral trade relations.
• Economic Rationality vs. Political Baggage: Despite the evident economic benefits of trade, Pakistan's establishment remains wary of engaging with India due to historical conflicts and the overarching Kashmir issue.
  • While there have been instances where the Pakistani business community advocated for resuming trade ties, such appeals often faced resistance from the political and military elite, who prioritize geopolitical concerns over economic pragmatism.
• Regional Stability and Security Concerns: Security concerns, including allegations of cross-border terrorism, complicate the economic relationship between India and Pakistan.
  • Heightened military vigilance and frequent skirmishes along the border hinder trade and perpetuate an environment of hostility and mistrust.
  • The ongoing conflict and the threat of terrorist activities cast a shadow over efforts to normalize trade relations.

Proposing a New Strategy for Improving India-Pakistan Relations:

• Introduction of Special Economic Zones: A significant aspect of the SAD's manifesto is the proposition to convert the Punjab border into a special economic zone, aiming to nurture small and medium enterprises and potentially revolutionize India-Pakistan relations.
  • This innovative vision encompasses the idea of Pakistan establishing a parallel zone on its side, fostering integrated development and economic interdependence.
  • Drawing inspiration from successful models of cross-border economic zones in Southeast Asia and China's collaborative initiatives with neighbouring countries, such an endeavour holds promise for fostering mutual prosperity.
• Leveraging Para Diplomacy: At the heart of these proposals lies the concept of para diplomacy, or sub-state diplomacy, wherein provincial and local governments engage in formal interactions to advance national interests.
  • This approach offers a novel means to navigate around the entrenched positions often held by national governments, presenting fresh avenues for cooperation.
  • While historical attempts at para diplomacy between East and West Punjab have surfaced intermittently, they have struggled to endure amidst overarching national conflicts.
  • Embracing these innovative strategies could pave the way for a constructive dialogue and sustainable cooperation between India and Pakistan, fostering mutual understanding and prosperity in the region.

Fostering Consensus and Cooperative Federalism for Sustainable India-Pakistan Relations:

• To foster sustainable and productive economic cooperation between India and Pakistan, nurturing a robust consensus between the central government and state governments, particularly those in the border regions, is imperative.
  • This collaborative approach, known as cooperative federalism, holds the key to innovative diplomatic strategies that prioritize the interests of local populations.
• India's federal structure has historically grappled with tensions between the central and state governments, particularly concerning foreign policy and cross-border cooperation.
• The diverse political landscapes across Indian states often give rise to conflicting interests and priorities.
  • For example, West Bengal's interactions with Bangladesh have been marked by complexities stemming from differing perspectives between the state leadership and the central government.
• Similarly, Tamil Nadu's influence on India's policies towards Sri Lanka has been substantial, occasionally complicating bilateral relations due to the state's concerns for the Tamil population in Sri Lanka.
• Cooperative federalism entails the harmonious collaboration of national and state governments to achieve shared objectives while respecting the autonomy of state governments.
  • By aligning state objectives with national interests, this approach offers a pragmatic framework for managing border relations and fostering economic cooperation with neighbouring countries.
• Embracing consensus and cooperative federalism is paramount for forging a path towards peace, stability, and prosperity in the region, laying the groundwork for enduring and mutually beneficial relations between India and Pakistan.

Conclusion

Irrespective of its political orientation, the upcoming Indian government should regard para-diplomacy as a strategic asset in its foreign policy arsenal. This approach demands not only robust dialogue between the central government and the border provinces but also concerted efforts to align the interests of the inhabitants of these regions with broader national objectives. By embracing para diplomacy, India can lay the groundwork for a more harmonious and economically fruitful relationship with Pakistan, turning contentious borders into conduits of cooperation.

Why is it in the News?

Centre has been meeting its capex targets, but the trajectory of private sector and state governments is less certain.

Context:

• Policymakers in India are grappling with the imperative task of revitalizing the investment cycle. Despite the central government's success in meeting capital expenditure (capex) targets, uncertainty clouds the trajectory of investments from the private sector and state governments.
• Thus, a comprehensive examination of India's current investment landscape is essential, scrutinizing key indicators and trends to identify the hurdles and prospects in reigniting the investment momentum.

Overview of Investment Patterns:

• Fluctuating Investment Rates: The investment rate, representing gross fixed capital formation as a percentage of GDP, has shown variability in recent years.
  • After dropping to 27.2% in 2020-21, there has been a slight improvement, with the rate climbing to 31.3% in 2023-24 from 30.8% in the preceding fiscal year.
  • This increase suggests a possible resurgence in investment sentiment and activity, albeit starting from a relatively low level.
• Composition of Investments: Delving Deeper: Yet, a closer examination of investment composition reveals noteworthy nuances.
  • A significant part of the recent uptick in capital formation stems from dwelling construction, supported by government initiatives to bolster the housing sector.
  • While housing investments spur economic growth and job creation, diversification is essential for sustainable and equitable development.
• Declining Investment in Plant and Machinery: Of particular concern is the diminishing share of investments in plant and machinery, crucial for fostering productivity, innovation, and competitiveness across sectors.
  • The allocation of investment to plant and machinery declined from 36% in 2017-18 to 30.7% in 2022-23, indicating a potential shift in investment priorities or hurdles in attracting investments in manufacturing and industrial domains.

Private Sector Investment:

• Insights from CMIE Data: Examining private sector investment trends often involves analyzing data provided by the Centre for Monitoring the Indian Economy (CMIE), offering valuable insights into the investment intentions and actions of private enterprises.
• Mixed Signals in Investment Intentions: Recent CMIE data reveals a nuanced picture of private sector investment in India.
  • While new investment announcements dipped to Rs 27.1 lakh crore in 2023-24 from the previous year's Rs 39 lakh crore, they still represented the second-highest figures in a decade.
  • However, it's essential to recognize that these announcements signify intentions rather than realized investments, potentially leading to disparities between planned projects and actual investments.
• Prevalence of Private Sector Intentions: The bulk of investment intentions—around 85%—originated from the private sector, underscoring its pivotal role in driving investment dynamics.
  • Furthermore, foreign companies contributed 11% of the total investment intentions, reflecting a certain degree of confidence in India's business landscape among international investors.

Analyzing Investment Trends Across Sectors:

• Power Sector Dynamics: Investment inflows into the power sector have surged, reflecting a strategic focus on bolstering infrastructure, particularly in renewable energy projects like solar and wind power, driven by initiatives such as the Production Linked Investment (PLI) scheme.
  • This expansion not only enhances energy security and environmental sustainability but also stimulates job creation and technological advancements.
• Transportation Sector Insights: Investment intentions in transportation services, notably aviation, have risen sharply due to ambitious expansion plans by major airlines.
  • While these investments promise improved connectivity and economic growth, concerns persist about reliance on imported aircraft, emphasizing the need for initiatives to foster domestic manufacturing and technological capabilities.
• Diverse Industry Investment Trends: Various industries, including chemicals, machinery, metals, and automotive sectors, have attracted substantial investment commitments, reflecting a broad spectrum of opportunities for private sector investment.
  • However, the absence of significant investments in consumer goods industries raises questions about the depth and breadth of sectoral investments.
• Challenges in Consumer Goods: Consumer goods industries face challenges such as excess capacity, subdued demand, and high inflation, which dampen investment enthusiasm despite government incentives like the PLI scheme.
  • Lingering issues in job creation and rural demand further contribute to the subdued investment outlook in this segment.
• Impact of State Government Spending: Reduced capital expenditure by state governments in 2022-23 to meet fiscal targets poses a challenge to the investment cycle, given their significant contribution to overall investments.
  • Budgetary constraints in state governments have a ripple effect on the broader investment landscape in the country.

Way Forward:

• Promoting Sustainable Growth: While the rise in capital formation is encouraging, ensuring its sustainability and fostering long-term growth hinges on achieving a balanced distribution of investments across sectors.
  • Over-reliance on specific industries, like construction, may impede the economy's adaptability and hinder innovation and technological progress.
• Policy Imperatives for Investment Stimulus: Effective policy measures are imperative to stimulate private sector investment and cultivate a favorable investment environment.
  • Streamlining regulatory frameworks, bolstering infrastructure, fostering innovation and entrepreneurship, and addressing sector-specific hurdles can incentivize private enterprises to invest in vital areas crucial for fostering economic growth and advancement."

Conclusion

Revitalizing India's investment cycle demands collaborative action from public and private stakeholders. Despite promising sectors, obstacles like sectoral disparities, muted consumer demand, and fiscal limitations at the state level impede a comprehensive rebound. Tackling these hurdles via tailored policies to spur demand, foster sectoral variety, and bolster the investment environment will be pivotal for nurturing enduring economic progress and advancement.

Why is it in the News?

Regulatory panic could do more harm than good. Rather than poor risk management today, rules should anticipate the greater risks that lie ahead.

Context:

• The year 2024 will see 4.2 billion people go to the polls, which, in the era of artificial intelligence (AI), misinformation and disinformation may not be the democratic exercise intended.
• The Global Risks Report 2024 named misinformation and disinformation a top risk, which could destabilise society as the legitimacy of election results may be questioned.
• Therefore, it is crucial to scrutinise the possible drawbacks of swiftly formulated regulations to counter AI-driven disinformation during this crucial period.

What are the Major Challenges Arising from Hasty Regulatory Responses to AI?

Escalation of Disinformation: Unintended Ramifications of Resource Allocation

• The surge in disinformation, demonstrated by manipulated videos impacting political figures, presents a formidable obstacle.
  • For instance, consider the case of Tarique Rahman, a leader of the Bangladesh Nationalist Party, whose manipulated video suggested a reduction in support for Gaza's bombing victims—an action with potential electoral repercussions in a Muslim-majority country.
• Meta, the parent company of Facebook, exhibited delayed action in removing the fabricated video, raising concerns about the effectiveness of content moderation.
• Moreover, the reduction in content moderation staff due to widespread layoffs in 2023 exacerbates the challenge.
• The pressure to prioritize interventions in more influential markets may leave voters in less prominent regions, such as Bangladesh, vulnerable to disinformation, potentially leading to a global surge in disinformation due to the focus on catching misinformation from powerful governments.

Reinforcement of Industry Dominance: Amplifying Concentration and Ethical Concerns

• While well-intentioned, AI regulations risk bolstering industry concentration. Mandates such as watermarking (which are not foolproof) and red-teaming exercises (which are expensive) may inadvertently favour tech giants, as smaller companies encounter compliance obstacles.
• Such regulations could further entrench the power of already dominant players by erecting barriers to entry or rendering compliance unfeasible for startups.
• This concentration not only consolidates power but also raises apprehensions regarding ethical lapses, biases, and the centralization of consequential decisions within a select few entities.

Navigating Ethical Quagmires: Pitfalls of Sincere Guidelines

• The formulation of ethical frameworks and guidelines introduces its own complexities.
• The question of whose ethics and values should underpin these frameworks gains prominence in polarized times. Divergent perspectives on prioritizing regulation based on risk levels add layers of complexity, with some viewing AI risks as existential threats while others emphasize more immediate concerns.
• The absence of laws mandating audits of AI systems raises transparency issues, leaving voluntary mechanisms vulnerable to conflicts of interest.
• In the Indian context, members of the Prime Minister's Economic Advisory Council have even argued that the concept of risk management itself is precarious concerning AI, given its non-linear, evolving, and unpredictably complex nature.

Navigating the Complexity of AI Regulation: Strategies for Policymakers

• Acknowledge and Address Democracy's Inherent Challenges Alongside AI Threats:
  • Before delving into the intricacies of AI-related risks, policymakers must acknowledge the persistent challenges facing democracy globally.
  • Instances of unjust political imprisonments, threats to electoral processes, and disruptions to communication networks underscore the vulnerability of democratic systems.
  • Furthermore, the enduring issues of vote-buying and ballot-stuffing tarnish the integrity of elections.
  • These entrenched challenges within the democratic process provide context for evaluating the novelty of AI threats.
• Strike a Balance Between Addressing AI Risks and Implementing Sensible Regulation:
  • The rush among regulators to enact AI regulations ahead of the 2024 elections, following the AI fervour of 2023, underscores the need for caution.
  • While it is essential to confront the emerging threats posed by AI, hastily devised regulations may inadvertently worsen the situation.
  • Policymakers must carefully consider the potential for unintended consequences and the complexities inherent in regulating a swiftly evolving technological landscape.
  • It is crucial for regulators to appreciate the delicate balance required to manage AI risks without unintentionally creating new challenges or hindering democratic processes.
• Prepare for Future Challenges: Policymakers must adopt a forward-thinking approach to AI regulation, anticipating and formulating rules that not only address current risks but also proactively tackle future challenges.
  • Recognizing the rapid evolution of technology, regulatory frameworks must evolve accordingly.
  • By planning several steps ahead, regulators can contribute to the resilience of democratic processes, ensuring that voters in elections beyond 2024 benefit from an adaptive, proactive, and effective regulatory environment.

How Major Tech Companies Join Hands to Combat AI Misuse in Elections?

• On February 16th, 2024, a major step was taken in the fight against AI misuse in elections.
• 20 tech giants, including Microsoft, Google, Meta, and Adobe, signed a voluntary agreement called the "Tech Accord to Combat Deceptive Use of AI in 2024 Elections."
• This agreement marks a significant step towards collective action against the potential manipulation of democratic processes through deepfakes and other AI-generated content.

Key features of the Tech Accord:

• Collaborative detection and labelling: Companies pledge to develop tools and techniques for identifying and labelling deepfakes, fostering transparency and facilitating content removal.
• Transparency and user education: The accord emphasizes transparency in company policies regarding deepfakes and aims to educate users on identifying and avoiding them, raising public awareness about the technology's capabilities and limitations.
• Rapid response and information sharing: The signatories commit to sharing information and collaborating on takedown strategies for identified deepfakes, aiming for faster removal and a unified front against malicious actors.
• Additional measures: The agreement includes further commitments to invest in threat intelligence, empower candidates and officials with reporting tools, and collaborate on open standards and research.

However, critical analysis reveals potential limitations:

• Voluntary nature: The accord's voluntary character raises concerns about its enforceability and long-term effectiveness.
  • Companies may prioritize competing interests over their goals.
• Technical challenges: Deepfake detection remains an evolving field with limitations.
  • Continuous innovation by malicious actors can outpace detection capabilities.
• Potential for bias: Concerns exist about potential biases in detection algorithms, particularly regarding marginalized groups, further complicating the issue.
• Freedom of expression and censorship: Balancing the need for content moderation with upholding freedom of expression requires careful consideration and potential legal challenges.

Conclusion

Balancing immediate concerns with long-term implications, and addressing AI-related electoral risks requires careful regulatory foresight. While the Tech Accord offers promise in combatting AI-driven election interference, its effectiveness depends on rigorous implementation and continuous adaptation to evolving threats. Ongoing research and dialogue are crucial to address ethical concerns and ensure a balanced approach to safeguarding democracy and individual rights.

Why is it in the News?

While presenting the interim Union budget, Finance Minister Nirmala Sitharaman stated that India will be negotiating Bilateral Investment Treaties (BITs) with its trade partners to boost the inflow of foreign direct investment.

Background:

• India's economic terrain is undergoing a significant shift following the Finance Minister's announcement of plans to negotiate Bilateral Investment Treaties (BITs) during the interim Union budget presentation.
• This decision arrives at a critical juncture, coinciding with India's struggle to address declining levels of foreign direct investment (FDI) and the aftermath of adopting the 2016 Model BIT.
• Given these circumstances, it becomes imperative to explore the evolution of India's BITs, assess the implications of the 2016 model, and analyze the recent policy shift to gauge its potential impact on FDI.

Evolution of Bilateral Investment Treaties (BITs) in India:

• Origins of BITs in India (1990s): During the mid-1990s, India embarked on a significant economic policy shift by initiating Bilateral Investment Treaties (BITs) to attract foreign direct investment (FDI) and create an enabling environment for economic growth.
  • The primary aim was to demonstrate India's commitment to protecting investments made by individuals and companies from partner countries.
  • The signing of the first BIT between India and the UK in 1994 laid the groundwork for a series of agreements that would play a pivotal role in India's global economic integration.
• Expansion of BITs as Economic Diplomacy (Late 90s to 2000s): BITs in India evolved into strategic tools to mutually encourage and safeguard investments in each other's territories.
  • As India sought to position itself as a premier investment destination, these treaties became instrumental in signaling its dedication to safeguarding the rights and interests of foreign investors.
  • This period witnessed a proliferation of BITs, reflecting India's acknowledgement of the importance of foreign capital in stimulating domestic industries and infrastructure development.
• Emerging Challenges and Disputes (2010s): The significance of BITs became evident in 2010 with the settlement of the first-ever investor treaty claim in India.
  • Subsequent events, including the unfavorable award in the Australia-India BIT dispute (White Industries v Republic of India) in 2011, underscored the complexities and challenges associated with managing disputes arising from these agreements.
  • By 2015, India found itself embroiled in 17 known BIT claims, with the Cairn Energy Plc case being particularly notable.
  • These challenges prompted a critical reassessment of India's approach, leading to the adoption of the 2016 model BIT.
• Adoption of the 2016 Model BIT and Policy Shift: The adoption of the 2016 model BIT signalled a significant shift in India's approach to BITs.
  • It was viewed as a protective measure, resulting in the termination of numerous existing treaties.
  • However, the 2016 model BIT faced criticism for its exclusion of key international law principles, such as 'fair and equitable treatment' and 'most favoured nation.'
• Additionally, it introduced a requirement for investors to exhaust local remedies before resorting to international arbitration, potentially delaying the dispute resolution process.

Issues with the 2016 Model of BIT and their Consequences:

• Protective Nature: The introduction of the 2016 Model BIT marked a significant shift in India's approach to bilateral investment treaties, aiming for greater protection.
  • Positioned as a response to past disputes, it led to the termination of numerous existing treaties, signalling a desire to recalibrate engagement terms with foreign investors.
  • However, concerns arose about its potential impact on India's attractiveness as an investment destination.
• Absence of Key International Law Doctrines: Criticism was directed at the 2016 model BIT for deviating from established international law doctrines.
  • Notably, it lacked principles like "fair and equitable treatment" and "most favoured nation," raising doubts about fairness and protection for foreign investors.
  • This omission complicated the interpretation and enforcement of investment agreements, adding uncertainty for investors.
• Requirement for Exhausting Local Remedies: The 2016 model BIT introduced a requirement for investors to exhaust local remedies before pursuing international arbitration.
  • While this aimed to promote domestic dispute resolution, it created delays and challenges.
  • Investors found navigating local legal systems time-consuming and ineffective, potentially discouraging investment.
• Adverse Impact on FDI and Renegotiation Challenges: The consequences of the 2016 model BIT were evident in declining FDI in India.
  • FDI equity inflows dropped by 24% to $20.48 billion in April-September 2023, reflecting investor concerns.
  • The termination of existing treaties and challenges with the new model hindered India's ability to renegotiate terms, affecting its attractiveness to foreign investors.
  • The Cairn Energy Plc case, resulting in a significant award against India, highlighted the difficulties under the 2016 model BIT.

Government Recommendations and Policy Reforms Following Challenges with the 2016 BIT Model:

• Acknowledgement of Limitations and Policy Adjustment: Recognizing the constraints and hurdles posed by the 2016 Model BIT, the Indian government has signalled a shift towards more adaptable and practical strategies.
  • The announcement during the presentation of the interim Union budget, highlighting the negotiation of Bilateral Investment Treaties with trading partners, signifies a departure from rigid approaches.
  • This acknowledgement underscores the necessity for a nuanced approach that considers evolving international investment dynamics and global economic shifts.
• Parliamentary Standing Committee Proposals: In 2021, the Parliamentary Standing Committee on External Affairs proposed several key recommendations to reevaluate the existing BIT framework.
  • These recommendations aimed to tackle challenges associated with the 2016 model BIT and foster a more investor-friendly environment.
  • One notable recommendation emphasized the importance of timely dispute resolution through pre-arbitration consultations and negotiations.
  • This proactive stance aims to streamline the dispute-resolution process and alleviate pressure on both foreign investors and the Indian legal system.
• Addressing India's Contract Enforcement Ranking: India's low ranking in contract enforcement, currently at 163 out of 190, remains a significant concern.
  • Recognizing the link between an efficient legal framework and foreign investment attractiveness, recommendations from the Parliamentary Standing Committee serve as a call to action.
  • A timely review of treaties and alignment with global best practices becomes crucial to improving the ease of doing business, reinforcing India's commitment to fostering an investment-friendly climate.
• Free Trade Agreement (FTA) with the UK: As part of ongoing policy reforms, India is working towards finalizing a free trade agreement (FTA) with the UK.
  • This strategic endeavour has undergone over 14 rounds of negotiations, with disputes being a major obstacle.
  • The proposed FTA is expected to eliminate the requirement for exhausting local remedies, offering a mechanism for swift dispute resolution through international arbitration.
• This pragmatic approach acknowledges the importance of rapid dispute resolution in nurturing international trade relationships.

Conclusion

Achieving a $5 trillion economy hinges on robust international trade and secure investments in India. A forward-looking strategy for BITs is essential to attract and maintain long-term foreign investments, and the government's recent initiative is a positive move. Nevertheless, adopting a more tailored approach, rather than a one-size-fits-all model, is necessary to facilitate rapid yet sustainable growth in cross-border flows.

Why is it in the News?

In her Interim Budget speech, Finance Minister Nirmala Sitharaman announced a Rs 1 lakh crore fund to provide long-term, low-cost or zero-interest loans for research and development.

Context:

• Finance Minister, Nirmala Sitharaman in her Interim Budget speech, announced a Rs 1 lakh crore fund to provide long-term, low-cost, or zero-interest loans for research and development.
• A new scheme to strengthen deep-tech capabilities in the defence sector that is likely to be followed up later was also announced.
• The separate announcements on the fund and defence deep tech are intricately linked and must be seen together with the government’s other plans for the R&D sector.

What is Deep Tech?

• Deep tech refers to advanced and disruptive technologies, many of which are still under development, that have the potential to trigger transformative change and provide solutions for the future.
• The term is used to describe cutting-edge research in nanotechnology, biotechnology, material sciences, quantum technologies, semiconductors, artificial intelligence, data sciences, robotics, 3D printing, etc.

What are the Advantages of Deep Tech?

• These technologies are expected to play a key role in addressing complex global challenges like climate change, hunger, epidemics, energy access, mobility, physical and digital infrastructure, and cyber security including:
• Economic Implications: Advanced capabilities in deep tech are also likely to enhance productivity drive economic growth create jobs in coming years, and offer a competitive advantage to countries with strong foundations in these areas.
• Opportunities for India: With its large base of relatively high-quality science and engineering manpower and a fairly well-established technology culture, India feels it is well-placed to be one of the frontrunners in these areas.
• Potential Benefits: There is scope to contribute to the development of these technologies, which can ensure early adoption, shares in intellectual property, indigenous know-how, and self-reliance.
  • Major associated benefits in terms of spin-off technologies, trained manpower, entrepreneurship and technology exports can accrue as well.

Initiatives by the GOI to Build a Deep Tech Ecosystem

• Over the past few years, the government has tried to incentivise research in some of these areas by setting up a National Mission on Transformative Mobility and Battery Storage and, more recently, a National Quantum Mission.

National Mission on Transformative Mobility and Battery Storage:

• This mission is aimed at fostering innovation in the mobility and energy storage sectors.
  • The government encourages research and development in electric vehicles, advanced battery technologies, and sustainable mobility solutions through focused platforms and financial incentives.
  • It targets challenges related to environmental sustainability and energy efficiency.

National Quantum Mission:

• Recognizing the transformative potential of quantum technologies, the government has initiated the National Quantum Mission.
  • This effort concentrates on promoting research and development in quantum computing, communication, and sensing.
  • Quantum technologies hold promise for revolutionizing various industries, and the mission aims to position India as a leader in global quantum advancements.

National Deep Tech Startup Policy (NDTSP):

• In addition to mission-oriented strategies, the government has devised a policy framework to create a conducive environment for deep tech companies.
  • The NDTSP addresses specific challenges faced by technology startups and aims to nurture a thriving ecosystem for their growth.
  • Currently awaiting government approval, it embodies a comprehensive approach to cultivating a vibrant deep-tech startup ecosystem in India.
• Objectives and Key Components of NDTSP: The NDTSP is designed to achieve several objectives, including:
  • Competitiveness: Fostering innovation to enable startups to compete globally.
  • Collaboration: Facilitating partnerships between startups and international counterparts.
  • Incentives: Providing appropriate incentives for companies investing in innovation and research.

The policy outlines key components to achieve its goals, such as:

• Funding Opportunities: Creating avenues for long-term funding to support sustained innovation.
• Intellectual Property Rights: Establishing a simplified yet robust intellectual property rights regime.
• Tax Incentives: Offering tax incentives to encourage investment in deep tech startups.
• Regulatory Framework: Developing a conducive regulatory environment to streamline operations.
• Standards and Certifications: Establishing standards and certifications to ensure quality and reliability.
• Talent Nurturing: Focusing on nurturing talent through skill development and educational initiatives.
• Industry-Academia Collaboration: Facilitating linkages between industry, research centres, and educational institutions to promote knowledge exchange.

The Challenge of Funding in Deep Tech Research:

• Challenges in Research Funding Landscape: There's a persistent concern within the scientific community regarding the need for more research funding.
  • India's investment in research lags behind the global average, particularly in comparison to scientifically advanced nations that serve as direct competitors.
• Disparity Between Targets and Actual Spending: For more than two decades, the Indian government has set a target of allocating at least 2% of the GDP for research and development.
  • Despite an increase in absolute spending, the proportion of GDP dedicated to research has dwindled in recent years.
  • Currently, India allocates a mere 0.65% of its national GDP to research and development activities, significantly below the global average of approximately 1.8%.

Government's Initiatives to Address the Funding Challenges:

• Harnessing Public-Private Collaboration: Recent governmental directives reflect a recognition that significant boosts in research and development expenditure may only be attainable through effective partnerships with the private sector.
  • Initiatives are underway to forge synergies among industry, research laboratories, and educational institutions, aimed at bolstering both research activities and the financial resources available to support them.
• Introduction of the National Research Foundation (NRF): The establishment of the National Research Foundation (NRF), operational in recent times, stands as a key component of this strategy.
  • With an objective to tackle the funding hurdle, the NRF is set to procure approximately 70% of its Rs 50,000 crore allocation over the next five years from the private industry.
  • This collaborative model is envisioned to cultivate a more sustainable and resilient ecosystem for deep tech research and development in India.

The 1 Lakh Crore Fund: Anticipations, Enthusiasm, and Doubts:

• Anticipations: The provision of a Rs 1 lakh crore fund for financing research and development is deemed crucial in fortifying the research landscape.
  • This fund holds particular promise for startups and private sector ventures in need of initial funding to kickstart their projects.
  • Anticipations are high that these initiatives will gain momentum with the injection of funds.
• Enthusiasm and Doubts: While the government expresses optimism regarding the potential impact of this substantial fund, there exists scepticism within the scientific community.
  • Past expectations of significant private sector contributions to research have not materialized, leading to uncertainties and reservations among researchers.
  • Scientists argue that there's an imbalance in expectations, with excessive reliance on the private sector without a corresponding increase in government funding.
  • The unpredictability and inadequacy of private-sector financing present significant challenges.
  • Currently, the government appears to heavily rely on the success of its new funding initiatives for research.
• However, the budgetary allocations for science and research departments in the Interim Budget show only nominal increases.

Conclusion

• The recent initiative promises startups and other private sector ventures access to seed funding, offering potential benefits for their projects, yet, to boost R&D expenditure, fostering deeper partnerships with the private sector is essential. Initiatives are underway to enhance collaboration among industry, research laboratories, and educational institutions, aiming to diversify research activities and amplify available funding.

Why is it in the News?

With antimicrobial resistance on the rise, the Union Health Ministry has urged doctors to write down the exact reason when prescribing antibiotics.

New Summary:

• The Union Health Ministry urged all doctors in medical colleges and medical associations to make it a mandatory practice to "write indication/reason/justification" while prescribing antibiotics.
• The Director General of Health Services also appealed to all pharmacists to strictly implement Schedule H and H1 of the Drugs and Cosmetics Rules and stop the over-the-counter sale of antibiotics.
• Antimicrobials are listed under Schedule H and H1 of the Drugs and Cosmetics Act, both of which are categories of medicines that cannot be sold without a prescription.

What is Antimicrobial Resistance?

• According to the World Health Organisation (WHO), antimicrobial resistance occurs when bacteria, viruses, fungi and parasites change over time and no longer respond to medicines.
• This makes infections harder to treat, increasing the risk of disease spread, severe illness and death.
  • As a result, the medicines become ineffective and infections persist in the body, increasing the risk of spreading to others.
• AMR affects countries in all regions and at all income levels.
  • Its drivers and consequences are exacerbated by poverty and inequality, and low- and middle-income countries are most affected as per WHO.
• Currently, AMR is one of the top global public health threats facing humanity.
  • It is estimated that bacterial AMR was directly responsible for 1.27 million global deaths in 2019 and 4.95 million deaths were associated with drug-resistant infections.
• According to the Indian Council of Medical Research (ICMR), 1.25 million lives were lost to drug resistance in 2019.
• India has one of the highest rates of antimicrobial resistance worldwide.
  • Despite being prescription drugs, antibiotics are commonly available over-the-counter (OTC) at retail pharmacies.
• In a recent survey, conducted by the National Centre for Disease Control (NCDC) under the Union Health Ministry, over half of the antibiotics prescribed in the country cause antimicrobial resistance.
• Treatment failures also lead to longer periods of infectivity and the prohibitively high cost of second-line drugs may result in failure to treat these diseases in many individuals.

Scenarios in Which Antimicrobials are Most Commonly Misused?

• There are two common scenarios in which antimicrobials are misused or overused even by doctors.
  • One is when they cannot make a diagnosis on whether an infection is caused by a bacteria or virus and prescribe antibiotics to err on the side of caution.
  • Two, when they know it is a bacterial infection but want to avoid secondary infection.
    • This is where antibiotics can be conserved because very few people get such secondary bacterial infections.
• In the case of a serious patient, who is admitted to the hospital, broad-spectrum antibiotics may be prescribed for 48 hours, during which they can be tested for which pathogen is causing the infection.
  • The antibiotics needed to be switched after that.
• Prescription for antimicrobials before and after a procedure or surgery is another way that antibiotics are commonly overused.
  • Just a single dose of antibiotic 60 to 120 minutes before surgery is enough to prevent surgical site infections.
• However, doctors end up prescribing antibiotics for seven to 14 days.
  • If proper sterilization of equipment, and preparation of the surgical site are done, infections cannot happen.
  • Shaving the surgical site before surgery should be avoided because it can lead to abrasions that can get infected

The Result of Antimicrobial Overuse and Misuse?

• Common infections are not curable anymore.
• Tuberculosis and urinary tract infections have become multi-drug resistant.
• In hospitals, infections are resulting in longer treatment times with the use of costlier and more toxic antibiotics.
  • Despite all efforts and successful surgeries, people are dying

Factors contributing to Antimicrobial Resistance (AMR):

• Unnecessary Prescriptions: In many cases, antibiotics are prescribed when they are not necessary or are not used correctly.
  • This can lead to the survival and proliferation of resistant bacteria.
• Agricultural use: The use and overuse of antimicrobials in agriculture, including to promote growth and prevent disease in livestock, is also a major contributor to the development and spread of AMR.
• Selective pressure: In the presence of antimicrobials, microbes that carry resistance genes can survive, replicate, and quickly dominate the microbial population.
• Mutation: Rapid microbial reproduction allows for swift-evolution, and mutations during replication may aid individual microbes in surviving antimicrobial exposure.
• Inappropriate use: Unnecessary and injudicious use of antibiotic fixed dose combinations may lead to the emergence of bacterial strains resistant to multiple antibiotics.
• State of the Environment: There is growing evidence that the environment plays a key role in the development, transmission and spread of AMR. Its proliferation is linked to the triple planetary crisis of climate change, nature and biodiversity loss, pollution and waste.
  • For example, higher temperatures, storms and floods can fuel the spread of bacterial, viral, parasitic, fungal and vector-borne diseases.
  • Severe weather events can also cause wastewater and sewage to overwhelm treatment plants, allowing untreated sewage rich in antimicrobial-resistant microbes to contaminate surrounding communities.
  • As well, wastewater laced with medicines, including that from animal production facilities, hospitals and pharmaceutical companies, can feed drug resistance.

Measures Taken by the Government of India to Address AMR:

• National Action Plan on AMR: The National Action Plan on Containment of Antimicrobial Resistance (NAP-AMR) was launched in 2017.
  • Emphasis is placed on a One Health approach, involving various stakeholder ministries/departments.
• AMR Surveillance and Research Network (AMRSN): ICMR has set up the AMR Surveillance and Research Network (AMRSN) comprising 30 tertiary care hospitals, both private and government.
  • Its purpose is to generate evidence and capture trends and patterns of drug-resistant infections in the country.
• Research and International Collaboration: Initiatives by ICMR aim to develop new drugs and medicines through international collaborations.
  • This is intended to strengthen medical research in the field of AMR.
• Red Line Campaign: The Union health ministry initiated the "Red Line Campaign."
  • It urges people not to use medicines marked with a red vertical line, including antibiotics, without a doctor’s prescription.
  •  The campaign aims to discourage unnecessary prescription and over-the-counter sales of antibiotics, addressing drug resistance for diseases like TB, malaria, urinary tract infections, and HIV.

Way Forward

• Antimicrobials have saved countless lives and are essential to modern medicine but we need to use them more judiciously.
• Healthcare professionals should only prescribe antibiotics when necessary and at the right dosage and duration.
• The use and overuse of antibiotics in agriculture must also be limited.
• Countries must adopt the One Health approach, which recognizes that the health of people, animals, plants and the environment are interdependent.
• Preventative measures, such as improving water, sanitation and hygiene, as well as putting in place strong international and national regulatory frameworks to enforce controls on the sale and distribution of antibiotics, will go a long way in reducing AMR.

Conclusion

AMR is a global problem; therefore, international cooperation among nations is essential. Developing multi-stakeholder national action plans is key. Countries must also work together on strategies, information sharing and surveillance of antimicrobial use and resistance. However, fixing the AMR crisis is not just dependent on governments alone. Pharmaceutical companies, the chemical industry, regulators, municipal governments, human and animal healthcare professionals and students, scientists and the public all have a role to play.