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16th June Current Affairs

Doval attends meeting hosted by China

(GS-II: India and the neighbourhood, Bilateral, regional and global grouping)

In News:

National Security Adviser(NSA) recently attended a virtual BRICS meeting hosted by the Chinese NSA, aimed at strengthening “political and security cooperation” within BRICS.

Recommendations by India during the meeting:

Cooperation on terrorism without reservations.

Preventing the use of Information & Communication Technology(ICT) by terrorists.

Need for urgent reform of the multilateral system

Importance of resilient supply chains.

BRICS: Areas of Cooperation:

Economic Cooperation

People-to-People exchange

Political and Security Cooperation

Cooperation Mechanism

New Development Bank(NDB):

NDB is headquartered in Shanghai.

During the Sixth BRICS Summit in Fortaleza (2014) the leaders signed the Agreement establishing the New Development Bank (NDB) by the Fortaleza Declaration.

The NDB functions on a consultative mechanism among the BRICS members with all the member countries possessing equal rights.

Issues between India and China: Galwan Valley

The valley refers to the land that sits between steep mountains that buffet the Galwan River.

The river has its source in Aksai Chin, on China’s side of the Line of Actual Control (LAC), and it flows from the east to Ladakh, where it meets the Shyok river on India’s side of the LAC.

The valley is strategically located between Ladakh in the west and Aksai Chin in the east, which is currently controlled by China as part of its Xinjiang Uyghur Autonomous Region.

Proposed reforms to WTO will hurt developing nations: India

(GS-III: Effects of liberalisation on the economy)

In News:

India has expressed concern that some suggestions on reforming the World Trade Organization (WTO) could eventually damage the developing nations more.

What are the concerns raised by India at WTO:

On issues of Fisheries and E-commerce: Revmoval of subsidies will hurt fishermen. So, India demanded to make extensive exceptions on a 20-year negotiation to cur harmful government fishery subsidies.

India is seeking broad exemptions for its fishing industry, including a 25-year phase-in period and a 200-nautical-mile exclusion for its artisanal anglers.

On E-commerce: India fears that new rules could provide the pretext for unfair mandatory market access to foreign companies. This will hurt the rapidly growing domestic e-commerce sector, which is still developing in India.

On Food: WTO should renegotiate subsidy rules for government-backed food purchasing programs aimed at feeding poor citizens in developing and poor countries.

India wants assurances that its public stock-holding program, which buys exclusively from the nation’s farmers and has exported in the past, cannot be challenged at the WTO as illegal.

On vaccines: India wants to waive IP rights for vaccines and extend the WTO ban on digital duties

Special and differential treatment (S&D) must continue, as such treatment has been a treaty-embedded and non-negotiable right for all developing members

Principles are sacrosanct: Ensure that multilateral rule-making processes are neither bypassed nor diluted. The principles of non-discrimination, predictability, transparency and most importantly, the tradition of decision-making by consensus need to remain sacrosanct.

U.S. Fed raises rate by 75 bps to tame inflation

(GS-III: Basic Economics)

In News:

The US Federal Reserve announced the most aggressive interest rate increase in almost 30 years, raising the benchmark borrowing rate by 0.75 percentage points.

Details:

Basics: Increasing interest rate will make US bonds more attractive and investors/citizens will invest in them rather than spend. Also, borrowings will become costly, this will rein in inflation. Also, FII from emerging markets may take out their money and invest in US bonds. This will strengthen the US currency against others.

Impact on India: It could have a three-pronged impact on India.

When the Fed raises its policy rates, the difference between the interest rates of the two countries narrows, thus, making countries such as India less attractive for the currency carry trade.

Higher returns in the US debt markets may also lead to the flight of foreign investors from India

It could weaken the Indian currency vis a vis US Dollars.

5G will drive ‘significant’ advancements

(GS-III: Science and Tech; Mobilization of Resources)

In News:

Cabinet has cleared the way for the auction of the 5G spectrum

Benefits from the auction:

Newer avenues: The auction and steps outlined for bidding would open up newer avenues for deeper penetration, access and rich user experience.

Option of surrender: Operators would have the flexibility to surrender the spectrum after 10 years without any liabilities.

Wider choices: Wide availability of spectrum across all bands will help potential bidders to opt for spectrum bands and quantum as per their strategy.

Benefits from captive 5G networks: Captive networks would drive digital transformation, augment industry efficiencies and lead to greater economic benefits.

Millimetre-waveband: Auction of the millimetre-waveband, would not only help unlock the ‘true’ potential of 5G but would also help strategically manage costs for the operators.

What are spectrum auctions?

A spectrum auction is a process whereby a government uses an auction system to sell the rights to transmit signals over specific bands of the electromagnetic spectrum and to assign scarce spectrum resources.

Spectrum auctions in India:

Devices such as cellphones and wireline telephones require signals to connect from one end to another. These signals are carried on airwaves, which must be sent at designated frequencies to avoid any kind of interference.

The Union government owns all the publicly available assets within the geographical boundaries of the country, which also include airwaves.

With the expansion in the number of cellphones, wireline telephones and internet users, the need to provide more space for the signals arises from time to time.

To sell these assets to companies willing to set up the required infrastructure to transport these waves from one end to another, the central government through the DoT auctions these airwaves from time to time.

These airwaves are called a spectrum, which is subdivided into bands which have varying frequencies.

All these airwaves are sold for a certain period of time, after which their validity lapses, which is generally set at 20 years.