Recently, the Ministry of Commerce and Industry has released the data, which showed that the US has surpassed China becoming India's top trading partner in 2021-22.
Major export items from India to the US include petroleum, polished diamonds, pharmaceutical products, jewellery, frozen shrimp, whereas major imports from the US include petroleum, rough diamonds, liquified natural gas, gold, coal, waste and scrap, almonds and so on.
The data showed that China was India’s top trading partner from 2013-14 till 2017-18 and also in 2020-21.
Before China, the UAE was the country’s largest trading partner.
WHAT ARE THE KEY POINTS?
Bilateral Trade with the US:
Bilateral trade between the US and India stood at USD 119.42 billion (2021-2022) as against USD 80.51 billion in 2020-21.
Exports to the US increased to USD 76.11 billion in 2021-22 from USD 51.62 billion in the previous fiscal year, while imports rose to USD 43.31 billion as compared to about USD 29 billion in 2020-21.
America is one of the few countries with which India has a trade surplus.
In 2021-22, India had a trade surplus of USD 32.8 billion with the US.
Bilateral trade with China during the Same Period:
During 2021-22, India’s two-way commerce with China aggregated at USD 115.42 billion as compared to USD 86.4 billion in 2020-21.
Exports to China marginally increased to USD 21.25 billion last FY 2021-22 from USD 21.18 billion in 2020-21.
On the other hand, imports from China jumped to USD 94.16 billion from about USD 65.21 billion in 2020-21.
The trade gap (Import - Export) rose to USD 72.91 billion in 2021-22 from USD 44 billion in the previous fiscal year.
WHAT FACTORS MADE THE US LARGEST TRADING PARTNER?
India is emerging as a trusted trading partner and global firms are reducing their dependence on China for their supplies and are diversifying business into other countries like India.
The US has consistently been India’s largest market for services exports, but the recent overseas sales of merchandise goods to that country overtook China, making it the largest bilateral trading nation of India.
India’s total merchandise exports touched a record USD 418 billion in 2021-22, exceeding the Center’s target by about 5% and clocking a 40% growth over the previous year.
How have been India’s Relations with the US Lately?
The breadth and depth of Indo-US ties remain unmatched and the drivers of this partnership have been growing at an unprecedented rate.
The relationship remains unique insofar as this is driven at both levels: at the strategic elite as well as at the people-to-people level.
Although India and the US have quite contradictory responses towards the Russia-Ukraine crisis.
India and the US have underscored their commitment to continue to build on the momentum of recent years and not lose sight of the larger strategic picture.
WHAT ARE THE ASSOCIATED CHALLENGES OF INDIA-US TIES?
Tariff Imposition: In 2018, the US imposed a 25% tariff on certain steel products and a 10% tariff on certain aluminum products from India.
India retaliated in June 2019, by increasing tariffs on 28 products worth about USD 1.2 billion on US imports.
However, after the imposition of the Section 232 tariffs, steel exports to the US declined by 46% year-on-year.
Misunderstanding Self-Reliance as Protectionism: The Atmanirbhar Bharat Campaign has exacerbated the view that India is increasingly becoming a protectionist closed market economy.
Exemption from US’Generalised System of Preferences: Effective since June 2019, the USA decided to withdraw duty-free benefits to Indian exporters under the GSP programme.
Consequently, special duty treatment on USD 5.6 billion worth of exports to the US was removed, affecting India's export-oriented sectors such as pharmaceuticals, textiles, agricultural products and automotive parts.
US’ Hostility towards Other Countries:
Some of the differences between India and the US are not direct consequences of India-US relationship but due to US’ hostility towards third countries like Iran and Russia – the traditional allies of India.
The other issues that are challenging India-US relationship include India’ ties with Iran and India’s purchase of S-400 from Russia.
The US' call for India to distance itself from Russia may have a far-reaching consequence to South Asia’s status quo.
US’ policy in Afghanistan:
India is also concerned over the US’ policy in Afghanistan as it is jeopardizing India’s security and interest in the region,
The unparalleled Demographic Dividendprovides enormous opportunities for the US and Indian firms for technology transfer, manufacturing, trade and investment.
India is emerging as a leading player in an international system that is undergoing an unprecedented transformation. It shall use its present situation to explore opportunities to further its vital interests.
India and the US are strategic partners today in the true sense of the term - a partnership among mature major powers that is not seeking a complete convergence but managing differences by ensuring a continuous dialogue and channelling these differences into crafting new opportunities.
Russia’s increased alignment with China as a result of the Ukraine crisis only complicates India’s ability to rely on Russia as it balances China. Hence, continuing cooperation in other security areas is in both countries’ interests.
Space governance will become central to the US-India bilateral relationship, driven by mutual concern about the increasing space capabilities of the Chinese Army.
Recently, the Centre has informed the Supreme Court, that quashing of reservation in promotion to Scheduled Caste and Scheduled Tribe (SC/ST) employees in government jobs may cause employee unrest and lead to multiple litigations.
It ensures diversity in advanced education, equality in the workplace and offers protection from hatred.
It helps in the emancipation of disadvantaged individuals and thereby promotes equality for all.
It breaks stereotypes regarding caste, religion, and ethnicity.
It increases social mobility.
It is needed to compensate for centuries of oppression and discrimination and provides level-playing fields.
It seeks to bring equity in society by addressing 'graded inequalities'.
There are concerns that lead to erosion of meritocracy.
It can still reinforce stereotypes as it demeans the achievements of marginalized sections.
People coming under the ambit of reservation, their success is labelled as a result of Reservation, instead of their capabilities and hard work.
There are concerns that reservation can serve as a medium for reverse discrimination.
Reverse discrimination is discrimination against members of a dominant or majority group, in favour of members of a minority or historically disadvantaged group.
Due to vote bank politics, even after discrimination issues have been diminishing, it is difficult to withdraw the reservation.
WHAT ARE THE IMPORTANT RELATED JUDGEMENTS?
Mukesh Kumar and Another vs State of Uttarakhand & Ors. 2020:
In this Case, the Supreme Court held that there is no fundamental right to reservation or promotion under Article 16(4) or Article 16(4 A) of the Constitution rather they are enabling provisions for providing reservation, if the circumstances warrant.
However, these pronouncements in no way understate the constitutional directive under Article 46 that mandates that the state shall promote with special care the educational and economic interests of the weaker sections of the people and in particular Scheduled Castes and Scheduled Tribes.
In fact, sensitivity of the welfare state towards the weaker sections over decades resulted in the gradual expansion of canopy of reservation in the form of increasing classifications under Article 16, a set of actions that created a wave of litigation by which resulted in the ever-evolving jurisprudence of affirmative action in public employment.
Indra Sawhney Judgment (1992):
In the judgment, a nine-judge bench presided by Chief Justice M.H. Kania upheld the constitutionality of the 27% reservation but put a ceiling of 50% unless exceptional circumstances warranting the breach, so that the constitutionally guaranteed right to equality under Article 14 would remain secured.
The Court dwelled on the interrelationship between Articles 16(1) and 16(4) and declared that Article 16(4) is not an exception to article 16(1), rather an illustration of classification implicit in article 16(1).
While Article 16(1) is a fundamental right, Article 16(4) is an enabling provision.
Further, the Court directed the exclusion of creamy layer by way of horizontal division of every other backward class into creamy layer and non-creamy layer.
Later, two more amendments were brought, one to ensure consequential seniority and another to secure carry forward of unfilled vacancies of a year, the former by way of addition to Article 16(4 A) and the latter by way of adding Article 16(4 B).
M Nagaraj Case 2006:
In this case applying the creamy layer concept in SC/ST reservation in promotions, the SC reversed its earlier stance in the Indra Sawhney case (1992), in which it had excluded the creamy layerconcept on SCs/STs (that was applicable on OBCs).
The SC had upheld the Constitutional amendments by which Articles 16 (4A) and 16 (4B) were inserted, saying they flow from Article 16 (4) and do not alter its structure.
It also laid down three conditions for promotion of SCs and STs in public employment.
The SC and ST community should be socially and educationally backward.
The SC and ST communities are not adequately represented in Public employment.
Such a reservation policy shall not affect the overall efficiency in the administration.
The court held that the government cannot introduce a quota in promotion for its SC/ST employees unless it proves that the particular community was backward, inadequately represented and providing reservation in promotion would not affect the overall efficiency of public administration.
The opinion of the government should be based on quantifiable data.
Jarnail Singh Case 2018:
Later in 2018, in the Jarnail Singh case, SC modified the Nagaraj judgement to the extent that State need not produce quantifiable data to prove the “backwardness” of a Scheduled Caste/Scheduled Tribe community in order to provide quota in promotion in public employment.
The Constitution (103rd Amendment) Act, 2019:
The 10% reservation for Economically Weaker Sections (EWS), other Scheduled Castes, Scheduled Tribes and backward classes for government jobs and admission in educational institutions is currently under challenge before the Supreme Court which has referred the same to a constitution bench.
The adjudication awaited in this regard may also turn to be a critical milestone in the jurisprudence of reservation as traditional understanding of backwardness is broadened to specifically include economic backwardness without social backwardness as is traditionally seen.
Dr. Jaishri Laxmanrao Patil vs Chief Minister (2021):
Despite the Indra Sawhney ruling, there have been attempts on the part of many States to breach the rule by way of expanding the reservation coverage.
Interestingly, the Supreme Court not only affirmed the Indra Sawhney decision, but also struck down Section 4(1)(a) and Section 4(1)(b) of the Act which provided 12% reservation for Marathas in educational institutions and 13% reservation in public employment respectively, citing the breach of ceiling.
WHAT ARE THE CONSTITUTIONAL PROVISIONS FOR PROMOTION IN RESERVATION?
Article 16 (4): Provides that the State can make any provision for the reservation of appointments or posts in favour of any backward class of citizens who, in the opinion of the state, are not adequately represented in the services under the State.
Article 16 (4A): Provides that the State can make any provision for reservation in matters of promotion in favour of the Scheduled Castes and the Scheduled Tribes if they are not adequately represented in the services under the State.
Article 16(4B): Added by the 81st Constitutional Amendment Act, 2000 which enabled the unfilled SC/ST quota of a particular year to be carried forward to the next year.
Article 335: It recognises that special measures need to be adopted for considering the claims of SCs and STs to services and posts, in order to bring them at par.
82nd Constitutional Amendment Act, 2000 inserted a condition at the end of Article 335 that enables the state to make any provision in favour of the members of the SC/STs for relaxation in qualifying marks in any examination.
The portal focuses on creating and nurturing a unified AI ecosystem in the country to drive excellence and leadership in knowledge creation to develop an AI-ready robust workforce for the future and use AI to foster economic growth.
Over the past two years, the portal has played a crucial role in evangelising and nurturing the AI ecosystem through numerous impactful initiatives such as the lab2market, Women in AI Roundtable, AI patent report, Responsible AI handbook for startups, Responsible AI Startups survey, podcasts, and the AI Standards.
WHAT IS ARTIFICIAL INTELLIGENCE?
It describes the action of machines accomplishing tasks that have historically required human intelligence.
It includes technologies like machine learning, pattern recognition, big data, neural networks, self algorithms etc.
AI involves complex things such as feeding a particular data into the machine and making it react as per the different situations.
AI is being used across different industries including finance and healthcare.
Limited understanding of AI: Many Indian companies may have not yet understood the full benefits of leveraging AI in their companies.
Low Investments and Less Evolved Startup Ecosystem: Startup/investment funding ecosystem in India is yet to scale up in terms of AI startups and service providers.
Limited Availability of AI Trained Talent: There is limited infrastructure to ‘democratise’ and scale-up important AI skills such as deep learning and neural networks.
Recent Examples of Use of AI in India:
For the Covid-19 Response: An AI-enabled Chatbot was used by MyGov for ensuring communications.
In Judicial System: An AI based portal ‘SUPACE’ is aimed at assisting judges with legal research.
In Agriculture: ICRISAT has developed an AI-power sowing app, which utilises weather models and data on local crop yield and rainfall to more accurately predict and advise local farmers on when they should plant their seeds.
In Disaster Management: An AI-based flood forecasting model that has been implemented in Bihar is now being expanded to cover the whole of India to ensure that around 200 million people get alerts and warnings 48 hours earlier about impending floods.
In Banking & Financial Services Industry: Few banks in India have adopted AI to increase digitisation to improve customer experience and use algorithms in risk management (for example, fraud detection).
TheMinistry of Tribal Affairs (MTA) has inked a MoU with Microsoft to support the digital transformation of schoolssuch as Eklavya Model Residential Schools (EMRS) and Ashram Schools, among others under the Ministry.
The larger aim of the program “Responsible AI for Youth” is to provide an equal opportunity to all Indian youths - in urban, rural and remote corners of India - to become human-centric designers who can create real AI solutions to solve economic and social impact issues of India.
Global Lessons: Countries like China, USA and Israel currently lead the way in terms of AI adoption. India can consider a few learnings from these countries to further scale-up its AI ecosystem while keeping in mind the overall social development and inclusiveness agenda.
Clear Central Strategy and Policy Framework: AI adoption in India can be accelerated through the formulation of more focused policies related to innovation, for example, patent control and security. Malicious use of AI should be managed as well.
Collaboration among Government, Corporates and Academia: These three critical stakeholders need to work synergistically to undertake actions like nurturing entrepreneurship, promoting re-skilling, encouraging research and development, and driving the policies on the ground.
The current steps of privatisation, along with setting up an Asset Reconstruction Company (Bad Bank)entirely owned by banks, underline an approach of finding market-led solutions to challenges in the financial sector.
The Centre had announced the privatisation of two public sector banks in the Budget for 2021-22 but is yet to amend the relevant banking laws to enable the sale of its majority stake in them.
WHAT ARE THE REASONS FOR PRIVATISATION?
Degrading Financial Position of Public Sector Banks:
Years of capital injections and governance reforms have not been able to improve the financial position of public sector banks significantly.
Many of them have higher levels of stressed assets than private banks, and also lag the latter on profitability, market capitalization and dividend payment record.
Part of a Long-Term Project:
Privatisation of two public sector banks will set the ball rolling for a long-term project that envisages only a handful of state-owned banks, with the rest either consolidated with strong banks or privatised.
The initial plan of the government was to privatise four. Depending on the success with the first two, the government is likely to go for divestment in another two or three banks in the next financial year.
This will free up the government, the majority owner, from continuing to provide equity support to the banks year after year.
Through a series of moves over the last few years, the government is now left with 12 state-owned banks, from 28 earlier.
The government is trying to strengthen the strong banks and also minimise their numbers through privatisation to reduce its burden of support.
Recommendations of Different Committees:
Many committees had proposed bringing down the government stake in public banks below 51%:
An RBI Working Group recently suggested the entry of business houses into the banking sector.
Creation of Big Banks:
One of the objectives of privatisation is also to create big banks. Unless privatised PSBs are merged with existing large private banks, they cannot ultimately attain the kind of scale and size to develop higher risk appetite and lending capacity.
Hence, privatisation is a multifaceted task considering all angles to tackle multiple challenges and exploring new ideas but it can pave the way for developing a more sustainable and strong banking system benefitting all stakeholders.
WHAT ARE THE RELATED ISSUES?
Rewarding Crony Capitalism:
The privatisation of the PSBs is tantamount to selling the banks to private corporates, many of whom have defaulted on loans from the PSBs, and will only reward crony capitalism.
The privatisation will also result in job losses, branch closures and financial exclusion.
The private sector banks concentrate on the more affluent sections of the population and the metropolitan/urban areas, leading to financial exclusion of weaker sections of the society, particularly in the rural areas.
Public sector banks were taking banking to the rural areas and ensuring financial inclusion.
Bank unions have termed the privatisation process a “bailout operation” for corporate defaulters.
Private sector is responsible for the huge bad loans. In fact, they should be punished for this crime. But the government is rewarding them by handing over the banks to the private sector.
The governance and management of PSBs has to improve. The way to do this was outlined by the PJ Nayak committee, which recommended distancing between the government and top public sector appointments (everything the Banks Board Bureau was supposed to do but could not).
Rather than blind privatisation, PSBs can be made into a corporation like Life Insurance Corporation (LIC). While maintaining government ownership, this will give more autonomy to PSBs.
WHAT IS THE UNIQUE IDENTIFICATION AUTHORITY OF INDIA?
Statutory Authority: The UIDAI is a statutory authority established on 12th July 2016 by the Government of India under the jurisdiction of the Ministry of Electronics and Information Technology, following the provisions of the Aadhaar Act 2016.
The UIDAI was initially set up by the Government of India in January 2009, as an attached office under the aegis of the Planning Commission.
Mandate: The UIDAI is mandated to assign a 12-digit unique identification (UID) number (Aadhaar) to all the residents of India.
As of 31st October 2021, UIDAI had issued 131.68 crore Aadhaar numbers.
WHAT WAS THE INITIAL WARNING FROM UIDAI?
The UIDAI warned the “general public not to share photocopy of one’s Aadhaar with any organisation, because it can be misused”.
Rather, it recommended using "a masked Aadhaar, which displays only the last four digits of the Aadhaar number,".
It also asked the public to avoid using public computers to download their e-Aadhaar.
In that case, they were reminded to "permanently delete" any downloaded copies of the same.
Only those organisations that have obtained a User License from the UIDAI can use Aadhaar to establish the identity of a person.
Moreover, hotels and movie theatres are not allowed to collect or maintain copies of the Aadhaar cards, due to the Aadhaar Act.
WHAT ARE THE CONCERNS RELATED TO AADHAAR?
Misuse of Aadhaar Data:
Many private entities in the country insist on an Aadhaar card, and users often share the details.
There’s no clarity on how these entities keep these data private and secure.
More recently with Covid-19 testing, many would have noticed that most labs insist on Aadhaar card data, including a photocopy.
It should be noted that it is not mandatory to share this for getting a Covid-19 test done.
In 2018, the Supreme Court ruled that Aadhaar authentication can be made mandatory only for benefits paid from the Consolidated Fund of India and that alternative means of identity verification must always be provided when Aadhaar fails.
Children were exempt but aadhaar continues to be routinely demanded from children for basic rights such as anganwadi services or school enrolment.
Central and state governments have made routine use of the “ultimatum method” to enforce the linkage of welfare benefits with Aadhaar.
In this method, benefits are simply withdrawn or suspended if the recipients fail to comply with the linkage instructions in good time, such as failing to link their job card, ration card or bank account with Aadhaar.
Fraud-prone Aadhaar-enabled Payment System (AePS):
AePS is a facility that enables someone who has an Aadhaar-linked account to withdraw money from it anywhere in India through biometric authentication with a “business correspondent” – a kind of mini-ATM.
There have been rampant abuses of this facility by corrupt business correspondents.
Promoting Transparency and Good Governance: Aadhaar number is verifiable in an online, cost-effective way.
It is unique and robust enough to eliminate duplicates and fake identities and thus used as a basis/primary identifier to roll out several Government welfare schemes thereby promoting transparency and good governance.
Helping Bottom of the Pyramid: Aadhaar has given identity to a large number of people who did not have any identity earlier.
Neutral: Aadhaar number is devoid of any intelligence and does not profile people based on caste, religion, income, health and geography.
The Aadhaar number is a proof of identity, however, it does not confer any right of citizenship or domicile in respect of an Aadhaar number holder.
People-Centric Governance: Aadhaar is a strategic policy tool for social and financial inclusion, public sector delivery reforms, managing fiscal budgets, increasing convenience and promoting hassle-free people-centric governance.
Permanent Financial Address: Aadhaar can be used as a permanent Financial Address and facilitates financial inclusion of the underprivileged and weaker sections of the society and is therefore a tool of distributive justice and equality.
Thus, the Aadhaar identity platform is one of the key pillars of ‘Digital India’.
Abide by the Supreme Court Ruling:
The government must abide by and enforce Supreme Court directions, including (1) restriction of mandatory Aadhaar to permissible purposes, (2) provision of an alternative whenever Aadhaar authentication fails, (3) unconditional exemption for children.
Ensure Benefits to Needy not Withdrawn:
Benefits should never be withdrawn or suspended without (1) advance disclosure of the names that are likely to be deleted along with reason for proposed deletion, (2) issuing a show cause notice to those concerned and giving them an opportunity (with ample time) to respond or appeal, (3) ex-post disclosure of all cases of deletion, with date and reason.