TPP,Immunization,Impact of Refugee Crisis on India,India: Attractive Investment Destination

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Refugee crisis in Germany hurts India too

  • India’s and Germany’s opposing demographic challenges can benefit India. (India’s labour force is humongous and unemployment rates are on steep rise while Germany is facing shortage of labour force)
  • Germany is facing a labour market shortfall, especially in the engineering, manufacturing and IT sectors that could threaten growth in its export-driven economy.
  • Angela Merkel expressed her wish to bring skilled workers from India to Germany.
  • But a mounting refugee crisis in Germany could delay the effort.

India is emerging as the most attractive investment destination

  • India emerged the most attractive investment destination in the world for the next three years in a global survey.
  • The second most favored investment destination is China, followed by Southeast Asia and Brazil.
  • India’s macroeconomic stability has seen a significant improvement.

Reasons behind the increase in investor confidence

  • Relaxation in FDI policy
  • Government’s efforts to ease doing business
  • Financial inclusion
  • Digital India Campaign
  • Government’s proposal to reduce the rate of corporate tax from 30 per cent to 25 per cent
  • Government’s efforts to implement Goods and Services Tax (GST) and legislation on land acquisition.

Reforms that are expected to drive growth in the near future

  • Among specific reforms expected to drive growth, investment in infrastructure projects and the 100 Smart Cities project would be significant.

Services relating to health: Immunization

  • Vaccines are one of the most cost-effective solutions for preventing child mortality and morbidity.

The Universal Immunization Programme (UIP)

  • The Universal Immunization Programme (UIP) started in 1985 by the GOI has achieved a remarkable progress towards reducing child mortality rates.
  • Through the UIP, India has achieved the momentous elimination of diseases such as polio, smallpox and, recently, maternal and neonatal tetanus.
  • Immunization coverage, which was 61 per cent in 2009, increased only to 65 per cent by 2013.
  • But this was not enough. Even a single child without the necessary vaccination has the potential to make other children in the vicinity vulnerable.
  • Thus, the initiative of Mission Indradhanush was envisaged to scale-up immunization in India.

Mission Indradhanush

  • The Indradhanush initiative was launched in December 2014 with the ultimate aim of immunizing every Indian child by 2020.
  • To begin with, 201 high-focus districts, across 28 states, with poor immunisation coverage were identified.
  • Of these high-focus districts, 82 were located in high-focus states, namely, Uttar Pradesh, Bihar, Rajasthan and Madhya Pradesh.
  • The first round started on April 7, which also happens to be World Health Day.

How Indradhanush initiative became a success

  • Indradhanush utilizes 5,00,000 trained frontline workers with an aim to build sustainable health systems.
  • Communication is at the center stage of the whole programme which enables better monitoring and sharing of feedback between all levels of the health system.
  • A sense of primacy and urgency was inculcated right from the top management down to the frontline healthcare workers.
  • Vaccines have to be kept at a particular temperature — right from the moment they are manufactured to the time they are administered to children.
  • To streamline the vaccine-delivery system, an innovative cold supply chain management system is being implemented.

TPP

  • Twelve Pacific-Rim countries have finally agreed on the Trans-Pacific Partnership (TPP), the largest regional trade agreement ever.
  • TPP covers countries that account for 40 per cent of the global economy.
  • The partnership between economic powerhouses like the US, Japan, Australia, Canada and Singapore on the one hand, and Vietnam, Malaysia, Peru, Chile and Mexico on the other, is part of an attempt to balance China, which isn’t part of the deal
Trans-Pacific Partnership
  • TPP has to be ratified by lawmakers in these 12 countries to come into force.
  • EU-India Broad-based Trade and Investment Agreement is under negotiation since 2007 — in contrast, the TPP has been concluded in just five years. (A lesson to be learnt for India)

Likely impact of TPP on India

  • Pacts like the TPP could erode the demand for Indian products in traditional markets such as the US and EU, benefitting the partners to these agreements.
  • According to one estimate, trade worth $2.7 billion will be diverted away from India.
  • This number could increase to $3.8 billion if South Korea joins the club.
  • The costs could be even higher if India is unable to participate in global supply chains due to the TPP’s rules on standards, labour and environment policies.
  • Further, standardization of intellectual property regimes across the TPP countries may make it more difficult for India to attract foreign investment. [Countries like Vietnam, Malaysia etc. will improve their IPR regime to be a part of TPP. Investors feel safer in countries with strong IPR]
  • Vietnam is expected to gain at the expense of India in the garments business in the US market, as it will have zero-duty access to the US for textiles.

Which goods and services have been included?

  • A full range — tariffs will be removed immediately in some cases, and phased out over time in others.
  • Japanese carmakers like Toyota, Nissan and Honda will benefit from cheaper access to the US, their biggest export market.
  • US vehicle exports too would find new markets if tariffs of up to 70% in countries such as Vietnam and Malaysia are slashed.
  • US farmers and poultry firms stand to benefit; other foods that would see lower taxes include dairy, sugar, wine, rice and seafood, with exporter countries such as Australia and New Zealand benefitting.

What is the opposition to the deal?

  • The five-year talks have been largely secret, and campaigners have criticized the lack of transparency.
  • The TPP will intensify competition between countries’ labour forces. Labour groups are worried it would result in jobs moving from economies such as the US to countries with lower wages and less strict labour laws.

How will the larger WTO negotiations be impacted?

  • WTO negotiations have been plagued by missed deadlines and a lack of consensus.
  • The Doha Development Round is clearly dead, and the outlook for upcoming talks at Nairobi in December is not promising.
  • As a forum, the WTO is clearly crumbling, considering there are two other large regional trade agreements currently under negotiation — the Transatlantic Trade and Investment Partnership (TTIP) between the US and the European Union, and the Regional Comprehensive Economic Partnership (RCEP) between the Association of Southeast Asian Nations (ASEAN) and its four free-trade partners, including China and India.

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