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India's goods exports reached US$451 bn in the Financial Year 23 (FY23) and US$394.99 bn in April-February FY24, with a share of 1.8 percent in global exports and 2.8 percent in imports. Digitally delivered services rose 6.0 percent in 2023, while global commercial services exports hit US$344 bn, up 11 percent year-on-year. The World Trade Organization forecasts a gradual recovery in global goods trade after a 1.2 percent contraction in 2023, cautioning against geopolitical tensions and protectionism. Trade fragmentation in services is noted, with shifts in US imports, and rising protectionism poses a risk to global trade recovery.
WTO Director-General Ngozi Okonjo-Iweala said: “We are making progress towards global trade recovery, thanks to resilient supply chains and a solid multilateral trading framework, which are vital for improving livelihoods and welfare” adding that risks like geopolitical strife and trade fragmentation must be mitigated to maintain economic growth and stability.
China Shock 2.0: What the West should and should not worry about
Major Western governments grapple with balancing consumer demand, environmental goals, protectionism, and reducing Chinese dependency in trade policy. Rising Chinese exports, particularly in green technology like EVs and solar panels, spark concerns about domestic industry and strategic autonomy. Despite the complexities, the real challenge lies in China's stealthy dominance in AI, services, and infrastructure investment, overshadowing traditional trade concerns.
7th Round of the India-Peru Trade Agreement Negotiations Concludes in New Delhi
The seventh round of India-Peru Trade Agreement negotiations in New Delhi focused on mutual priorities and respect. Key officials highlighted the historical ties dating back to the 1960s and recent diplomatic efforts. Both sides stressed the need for effective negotiations, emphasising flexibility and pragmatism. Discussions covered various chapters including Trade in Goods, Services, and Movement of Natural Persons.
With sixty delegates participating, substantial convergence was achieved, reflecting the commitment to deeper economic cooperation. The agreement aims to strengthen the trade relationship, which has grown significantly over the past two decades, reaching around US$3.68 bn in 2023.
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The latest UN Conference on Trade and Development (UNCTAD) report released on April 16, 2024 forecasts global economic growth at 2.6 percent in 2024 barely above the 2.5 percent threshold commonly associated with a recessionary phase. However, amid the gloomy global scenario, it states that India’s economy is buoyed by strong public investment and service sector growth, with a forecasted expansion of 6.5 percent in 2024.
The report highlights inflation's dominance in global concerns, overshadowing trade disruptions, climate change, and inequality. It advocates for structural reforms and coordinated efforts to address these issues. Global merchandise trade declined by 1.0 percent in 2023 due to trade tensions and shifting consumption patterns. Developing countries face increasing debt challenges amid high-interest rates. Commodity prices, though down by 6.8 percent, remain high, impacting importing nations. Regional outlooks vary, with Asia's growth buoyed by China and India, while Europe struggles with weak activity.
The US Slaps Sanctions on Over a Dozen Firms, Including 3 From India, for ‘Illicit Trade’ with Iran
The United States has imposed sanctions on multiple companies, including three from India, for facilitating illicit trade and the transfer of unmanned aerial vehicles (UAVs) on behalf of the Iranian military. Sahara Thunder, a main front company, oversees Iran's commercial activities supporting these efforts.
These companies are involved in financing and facilitating the clandestine sale of Iranian UAVs to Russia's war in Ukraine. The US Treasury emphasises cooperation with British and Canadian partners to combat Iran's destabilising activities, including support for Russia's war and proliferation of military hardware to terrorist proxies.
NATO Discussing US$100 bn Dollar Fund to Aid Ukraine Over Five Years
NATO is considering establishing a fund to aid Ukraine, particularly in light of the potential return of Donald Trump to the U.S. presidency. At the recent NATO ministerial summit, Secretary General Jens Stoltenberg proposed transforming Ukraine's assistance package into a multi-year program, potentially totalling US$100 bn over five years. This move aims to ensure more consistent and substantial support, moving away from short-term offers. However, the proposal is still under discussion, with further deliberation expected before a potential agreement at the NATO summit in July.
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The 14-member Indo-Pacific Economic Framework (IPEF) bloc will host an investor forum in Singapore on June 5-6, for domestic climate tech entrepreneurs to pitch products to global investors. The Indo-Pacific Economic Framework for Prosperity (IPEF) aims to enhance regional economic growth and cooperation among 14 partner countries.
Its Clean Economy Investor Forum mobilises investments in sustainable infrastructure and climate technology. Managed by Invest India, the forum showcases India's leadership in the clean economy. It offers opportunities for climate tech companies to pitch to global investors and for Indian investors to engage in sustainable infrastructure projects across the region.
The Biden administration announced that it had completed a plan to lower project fees for wind and solar energy on federal property and that the United States had exceeded a target of approving more than 25 gigawatts of sustainable energy projects on public lands by 2025. With this declaration, President Joe Biden's administration is making yet another attempt to utilise the 250 million acres of public land in the country to help him achieve his goal of decarbonising the American electricity grid by 2035. A 2020 congressional demand that the Interior Department permit at least 25 gigawatts of renewable energy by 2025 appears to have been satisfied by the approved projects.
Where Global Governance Went Wrong—and How to Fix It
Global governance faces challenges due to power imbalances and conflicting interests. Neoliberal economic policies failed to deliver promised prosperity, exacerbating inequality and crises. Powerful countries flout rules, undermining trust in the system. To restore balance, agreements must prioritise fairness, constrain powerful actors, and address global challenges like climate change and pandemics, benefiting all.
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Simon Stiell, UN climate chief, urges G7 nations to take bold action on climate change and increase climate finance. He dismisses claims that G7 shouldn't lead, emphasising their responsibility. Stiell urges G7 to triple renewable capacity and transition away from fossil fuels, warning against investing in fossil fuel subsidies. He calls for concrete action plans and increased climate funds.
Asia's Largest Economies Set to Drive US$180 bn Green Hydrogen Market by 2050, Report Finds
The latest report from the Asia Society Policy Institute on getting Asia to Net Zero indicates that the four largest economies in Asia, namely China, India, Japan, and South Korea, could significantly contribute to the growth of the green hydrogen market. Titled "Green Hydrogen for Decarbonising Asia’s Industrial Giants," the report suggests that these nations have the potential to create a market valued at US$180 bn by 2050, primarily focusing on industrial applications. Convened by the Asia Society Policy Institute, the commission aims to accelerate Asia's transition to net zero emissions while maintaining economic growth.
Revised Tariffs Make Clean Energy Compelling for Bangladesh
The government of Bangladesh revised tariffs to make clean energy increasingly attractive. It highlights the government's efforts to incentivise renewable energy adoption through tariff adjustments, making it more cost-effective compared to traditional fossil fuels. The revised tariffs aim to stimulate investment in clean energy infrastructure and reduce dependence on costly imported fuels. This shift towards renewables aligns with Bangladesh's commitment to sustainable development and mitigating climate change impacts. The article emphasises the economic and environmental benefits of transitioning to clean energy in Bangladesh's energy sector.
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The US, UK, and Australia plan to expand the Aukus security pact, aiming to include Japan, amid concerns over China. Talks on Pillar II, focusing on technology collaboration, will begin, but Pillar I, centred on Australia's submarine procurement, won't expand. US-Japan security upgrades coincide with the announcement. Despite Japan's investment in defence, concerns persist about its security systems. A joint statement on future Japanese involvement is anticipated, though no formal decision has been made. Debates between the Aukus allies and Japan continue.
India-US jet engine deal is revolutionary, says Defence Secretary Austin
The India-US deal to jointly produce fighter jet engines announced during Prime Minister Narendra Modi's visit to the US is hailed as revolutionary by US Defence Secretary Lloyd Austin. Under the agreement, General Electric will co-produce F-414 engines in India with Hindustan Aeronautics, empowering the Indian Air Force's Tejas light combat aircraft Mk2. Austin emphasised the strong bilateral relationship, highlighting other collaborative efforts such as co-producing armoured vehicles. This move signifies a significant advancement in defence cooperation between the two nations.
India, Iran to sign Chabahar contract after 2024 elections
India and Iran have finalised a long-term contract for the development of the Chabahar port, marking a significant milestone after decades of negotiations. The contract, expected to be signed after India's general election, aims to fully exploit the strategic port, facilitating Indian goods' access to Afghanistan and Central Asia markets. The agreement underscores the importance of Chabahar in India's regional connectivity plans and its potential as a revenue-generating facility. Amid geopolitical disruptions in West Asia, the deal strengthens India's presence in key infrastructure along crucial trade routes.
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During a media interaction to underscore India's diplomatic strides in the region, Jaishankar said India's relationship with China was "challenging," but the country was "confident" and capable of protecting its interests.
India's External Affairs Minister S Jaishankar highlighted improved ties with all neighbours except China and Pakistan. Stressing India's capability to protect its interests, he acknowledged challenges with China but emphasised competitive engagement. Jaishankar cited India's support during crises in neighbouring countries and dismissed claims of increased unfriendly neighbours. He praised strong relations with Bangladesh and reiterated India's stance on Pakistan-Occupied Kashmir. Terrorism remains a central issue in Indo-Pak relations. Overall, he underscored India's diplomatic strides in the region.
India and Japan discuss disarmament, non-proliferation, export control
The 10th round of India-Japan consultations on disarmament, non-proliferation, and export control occurred in Tokyo on April 24, 2024. Discussions encompassed nuclear, chemical, and biological disarmament, outer space security, non-proliferation, conventional weapons, and export control. India's delegation, led by Muanpuii Saiawi, Joint Secretary of Disarmament, engaged with Japan's team, led by Katsuro Kitagawa, Director General for Disarmament. The dialogue underscores bilateral cooperation in addressing global security challenges.
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During Prime Minister Fumio Kishida's recent meeting with President Joe Biden, Japan and the United States unveiled plans for enhanced cooperation in cutting-edge domains, notably artificial intelligence (AI) and semiconductor technologies. Termed as a "global partnership," this alliance underscores a commitment to collaborative research and development in AI, with potential involvement from leading companies such as Nvidia and Amazon. In alignment with this collaboration, the US seeks to limit the export of AI chips to China. While Japan joins forces with the EU to diminish reliance on Chinese resources for advanced chip and battery production.
Microsoft has unveiled Phi-3-mini, the latest addition to its Phi-3 series of open AI models, boasting just 3.8 billion parameters. Despite its compact size, Phi-3-mini stands out as a highly capable and cost-effective small language model (SLM). It surpasses models twice its size, excelling across language, reasoning, coding, and math benchmarks. Language models like Phi-3-mini serve as the backbone for AI applications such as ChatGPT and Claude, tackling tasks like text classification, question answering, and text generation. These models come in varying scales, with Large Language Models (LLMs) featuring extensive training data and parameters, while SLMs offer more streamlined versions.
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The Semiconductor Industry Association (SIA), a trade association and lobbying group representing the United States reported global semiconductor sales of US$46.2 bn in February 2024, up 16.3 percent from February 2023 but down 3.1 percent from January 2024. Sales remained strong, with significant year-to-year growth, especially in China (28.8 percent) and the Americas (22.0 percent), but decreased month-to-month across all regions. SIA President John Neuffer highlighted continued market growth, projecting it to persist throughout the year. Regional year-to-year sales varied, with increases in China and the Americas but decreases in Europe and Japan.
U.S. and UK Announce Partnership on Science of AI Safety
The United States and the United Kingdom have forged a recent pact to collaborate on the advancement of testing procedures for highly sophisticated artificial intelligence (AI) models. This agreement marks a continuation of promises made during the Bletchley Park AI Safety Summit in the previous year. The initiative arises amidst global efforts to establish safeguards around the swift expansion of AI technologies, which present both promising prospects and substantial risks, including challenges related to misinformation and electoral integrity.
ITRI Partners with Arm to Open IoT Certification Lab in Taipei
The Industrial Technology Research Institute (ITRI) and global semiconductor and software designer Arm have teamed up to establish the new ITRI-Arm Lab in Taipei, focusing on Artificial Intelligence of Things (AIoT) certification. This collaboration aims to integrate AI and IoT ecosystems across Taiwan’s industries. The lab will provide comprehensive certification services to ensure local manufacturers meet international standards. It builds on previous successful partnerships between ITRI and Arm, emphasising Taiwan’s position in the AIoT market and fostering global competitiveness. The initiative highlights Arm’s commitment to the Taiwanese market and aims to advance the region’s AIoT industry through standardisation.
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The UAE-India CEPA Council (UICC) was launched on the sidelines of the Vibrant Gujarat Summit in January. The two countries implemented the Comprehensive Economic Partnership Agreement (CEPA) in May 2022.
The UAE-India CEPA Council anticipates partnerships in sectors like aviation, fintech, edtech, health tech, and clean energy tech to drive bilateral growth. Trade surged by 16 percent, reaching USD 84.5 billion in 2022-2023. Both nations aim to enhance air transportation and cargo links, leveraging digital connectivity. Despite limited seat capacity, the council envisions liberalising aviation partnerships to boost economic ties. Additionally, the focus is on supporting Indian MSMEs to catalyse bilateral economic cooperation.
G7 Leaders Condemn Iran Attack on Israel as Issue Expected to Top EU Agenda
G7 leaders unanimously condemned Iran’s unprecedented attack on Israel on 14 April, calling for “restraint” from all sides to prevent a regional war, as international concerns keep growing, pushing the issue to the top of the EU’s agenda for next week.
In a joint statement after the talks, G7 leaders accused Iran of further stepping “toward the destabilisation of the region”, adding that Tehran “risks provoking an uncontrollable regional escalation”. “This must be avoided,” the statement said.
US Senate Passes US$95.3 bn package for Ukraine, Israel, Taiwan and Indo-Pacific
The US Senate has overpoweringly voted to provide a US$95.3 bn aid package to Israel and Ukraine to strengthen the security of the US and its allies in the Indo-Pacific, including Taiwan. The final approval on Tuesday night by the Senate ends months of uncertainty and delays about whether the US would continue to back Kyiv in its fight against Russian aggression.
The bill broadly has four parts: First, a US$60.8 bn Ukraine aid measure, a US$26.4 bn bill for Israel and humanitarian relief, a US$8.1 bn package for Taiwan and other Indo-Pacific region allies and a “sidecar” bill dealing with issues ranging from TikTok to frozen Russian assets.
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This edition of CUTS Occasional News Wrap (ONW) contains articles and news covered in print and electronic media offering a comprehensive overview.
The United States of America welcomed the leaders of Japan and the Philippines for a trilateral summit, highlighting the enduring partnership among the Indo-Pacific nations. Led by Prime Minister Kishida Fumio and President Ferdinand Marcos Jr., the summit underscored a shared commitment to economic prosperity and regional stability.
The discussions aimed to strengthen maritime security and defence cooperation, reaffirming the trio’s dedication to a free and open Indo-Pacific. Notably, the summit also witnessed major U.S. investments announced in the Philippines, signalling a deeper integration of economies among the three nations.
India Scores Ahead of China in Digital Services Exports in 2023, According to WTO Report
India has emerged as a leader in digital services exports, surpassing China in 2023, according to the latest World Trade Organization (WTO) report. India ranks fourth globally in digitally delivered services, with exports totalling US$257 bn in 2023, a 17 percent increase. Unlike goods trade, digitally delivered services saw a 9.0 percent rise globally, reaching US$4.25 tn. Business, professional, and technical services dominated, comprising 41.2 percent of exports. AI adoption surged, promising efficiency and economic growth. Despite a 1.2 percent decline in goods trade, the WTO forecasts a 2.6 percent increase in 2024. Digital services are revolutionising global trade, offering diverse opportunities for growth and innovation.
World’s Billionaires Should Pay a Minimum 2 Percent Wealth Tax, say G20 Ministers
Ministers from Brazil, Germany, South Africa, and Spain proposed a global 2 percent tax on billionaires' wealth to combat poverty, inequality, and climate change. The tax aims to raise £250 bn annually, countering economic shocks like the pandemic. French economist Daniel Zucman supports the plan, citing low tax rates for billionaires. Measures to prevent tax evasion are included. Despite public support, resistance from the wealthy is expected.
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