Indian – China

Indian diamond traders freed Twelve of the 22 Indian diamond traders, detained in China for nearly 2 years on charges of smuggling, reached India on 5 January 2012 after they were let off following deportation orders by a Chinese court. Twenty-two traders, hailing mostly from Gujarat and Mumbai, were arrested in southern China's Shenzhen city in 2010 and were charged with smuggling diamonds worth 50 million yuan or 7.3 million US Dollars. They were accused of sourcing diamonds illegally from Hong Kong for sale in the Chinese market. The Shenzen Intermediate People's Court which heard the traders' case on 7 December 2011, found 12 of them innocent and ordered their deportation. The rest of the traders have been awarded varied prison terms ranging from six years to three and half years.

India to Develop Facilities Near China Border

Considering the country's strategic and security requirements across the China-India border, the Centre has embarked on works to develop infrastructure, the government said here. Conscious of China developing infrastructure in the border regions opposite India in Tibet and Xinjiang Autonomous Regions there, the government was “giving careful and special attention'' to the devel- India & The Worldopment of infrastructure in the border areas opposite China, “to meet our strategic and security requirements and also to facilitate the economic development of these areas,” Defence Minister A.K. Antony told the Rajya Sabha. Infrastructure development included the Qinghai-Tibet railway line, with proposed extension up to Xigze and Nyingchi besides roads and airport facilities. “The government keeps a constant watch on all developments having a bearing on India's security and takes all necessary measures to safeguard it,” he said. The States, where the government is focussing on include Jammu and Kashmir, Himachal Pradesh, Uttarakhand, Sikkim and Arunachal Pradesh. Among the measures was the development of the two airbases for the frontline air superiority fighters Su-30-MKI in theNortheast, one at Chabua and another at Tezpur.

Chinese-owned Ships Evade Inspection

Two merchant vessels of Chinese ownership left anchorage midway through an inspection by the International Transport Workers' Federation (ITF), fearing action for not having given minimum wages to theircrew. The incident took place during the first day of the Flag of Convenience (FOC) Week of Action being observed by the ITF and its affiliated unions. M.V. Joyful Spirit, owned by the Golden Ocean Group Ltd., and m.v. J. Shine, owned by the Jiangsu Ocean Shipping Company, were FOC ships that flew the flag of Hong Kong. They departed immediately after unloading the cargo. An FOC ship is one that flies the flag of a nation other than the country of ownership to avail cheaper labour, evade taxes and pay a low registration fee. The ITF, set up in 1896, has more than six million workers belongingto 600 transport workers' unions in over 137 countries. Since the launch of the FOC Week of Action 10 years ago, 780 vessels have been inspected and 35 agreements signed with ITF standards.Back wages to the tune of $1.02 million have been realised. A Croatian ship, which flew a Panama flag, was “arrested” by the ITF a year ago and was auctioned for Rs. 13 crore through a court order .

India - Pakistan

India Rejects Pakistan Proposal to Shift Heavy Guns

India has rejected Pakistan's proposal to move heavy artillery and mortars away from the Line of Control citing frequent ceasefire violations. It asked Islamabad to come clear on its nuclear policy, includingcommand and control over nuclear assets. This was conveyed to the Pakistani officials by India during the two-day talks on nuclear and conventional confidence-building measures (CBMs) held in Islamabad after a gap of four years, sources said here on Friday. India conveyed to Pakistan the need to demonstrate restraint and responsibility in the nuclear field and urged it to facilitate talks on the Fissile Material Cutoff Treaty (FMCT). External Affairs Minister S.M. Krishna is slated to visit Pakistan to review the progress in talks and both sides are keen to have the meetings between Home Secretaries, Water Resources Secretaries, Defence Secretaries and Foreign Secretaries before the visit. On the nuclear CBMs, India made it clear to Pakistan that views on nuclear doctrines could be exchangedonly when official documents enunciating the policies were available in the public domain. Officials pointed out that India had announced its nuclear doctrine of credible minimum deterrence in 2003,which placed the command and control of nuclear devices with the civilian leadership. India stressed the need to have transparency and predictability in nuclear policies and the importance of demonstrating, inpractical measure, restraint and responsibility in the nuclear field. Indian officials also asked their Pakistani counterparts to allow discussion on the Fissile Material Cut-off Treaty at the Conference on Disarmament. “This would be a CBM,” sources said.

6th Round of Talks Between India & Pakistan

India and Pakistan concluded their Sixth Round of Expert Level Talks on Nuclear Confidence Building Measures in Islamabad on 27 December 2011. In this meeting, both the nations agreed to recommend to their foreign secretaries to extend the validity of the agreement on reducing the risk from accidents relating to nuclear weapons. Pakistan suggested to India that heavy artillery should be removed from the Line of Control in Jammu and Kashmir.India and Pakistan also reviewed the implementation and strengthening of CBMs in the framework of Lahore MoU. The nations also agreed to explore possibilities for mutually acceptable additional CBMs. India and Pakistan discussed a proposal seeking a cooperative mechanism to deal with a crisis like Fukushima.

India-Russia

India-Russia Ties, An Anchor of Peace & Stability

Global politics will be high on the agenda of Prime Minister Manmohan Singh's visit to Russia in the context of shifting power equations in the world, said India's envoy to Russia. “The world is witnessinga profound transformation and a shift in the global balance of power,” said Ambassador Ajai Malhotra. “Our relationship serves as an anchor of peace and stability during this transitions phase.” Theinternational agenda of talks acquires special relevance in the light of India taking the Chair of BRICS in 2012 and hosting the group's next summit in late March, Mr. Malhotra told the media ahead of the summit here on December 15-17. It will be the 12th bilateral summit since 2000 when the two countries agreed to hold top-level meetings annually. Noting that India and Russia have “identical, close or common” perspectives on a wide range of international issues, the Indian envoy urged the two countries to step up cooperation on the global stage. “Global challenges make it imperative that we further intensify our dialogue on issues such as the need to revive the world economy, the situation in West Asia and North Africa, challenges in neighbouring Afghanistan, cooperation within BRICS, as well as new threats posed by climate change and piracy.”

Indo-Russian Cooperation Can Push Global Changes in The Right Direction

“Together India and Russia can help shape global responses,” he said. “The changes under way offer an opportunity to bring about an international order that is democratic, inclusive, based on the supremacyof international law and consistent with the objectives and principles contained in the U.N. Charter.” During his talks with President Dmitry Medvedev and Prime Minister Vladimir Putin, the Indian Premier isexpected to discuss bilateral cooperation in defence, space, atomic energy, hydrocarbons, and science and technology, he said. He pointed out that the ongoing protests that have held up the commissioning of the first of two Russian-built nuclear reactors at Kudankulam will not impact on collaboration with Russia in nuclear energy. “We will fulfill our commitments as regards Indo-Russian cooperation in atomic power energy.” It is understood that a contract for the construction of two more reactors of the Russian design at Kudankulam has been finalised but may not be signed at the Moscow summit. “Both sides understand that we need to proceed with due care and caution” in regard of the Kudankulam protests, he said. The outgoing year has seen an encour aging growth in people-to-people contact, with the Indian embassy in Russia issuing 25 per cent more tourist, business and conferencelinked visas compared with last year, said the Indian envoy. India has liberalised visa rules for Russian visitors since June, and Russia reciprocated the move on December 1.

5 Agreements Signed Between India & Russia

The Prime Minister of India visited Russia on 15-17 December 2011 to participate in the 12th Indo-Russian annual summit. India and Russia signed five major agreements during this summit, which includes licensed production of an additional 42 Sukhoi combat planes and to manage fly ash residue at thermal plants in Siberia. A MoU was signed on increasing cooperation and exchanges between anti-monopolies agencies and another MoU was signed to oversee the safety and quality issues by the drug standards and safety organisations to increase trade in the pharma sector. India andRussia also signed an educational exchange programme to share experiences in the field of pedagogy and to form a joint working group to monitor the agreement's implementation. During this visit, India andRussia also issued a joint declaration.

The main features of this joint declaration are as following:

• India and Russia decided to commemorate the 65th anniversary of establishment of diplomatic relations between India and Russia in 2012 in both the countries in a fitting manner.

• The sides commended the successful launch, by India, of the jointly built YouthSat for space science studies; and expressed satisfaction on the progress in implementation of the joint lunar exploration project.

• The nations welcomed the outcome of the eleventh meeting of the India-Russia Inter Governmental Commission on Military-Technical Cooperation in addressing issues of mutual concern.

• As an important element of their Strategic Partnership, both sides reaffirmed their commitment to work together to strengthen the central coordinating role of the United Nations in international affairs as well as the crucial role of its Security Council in the maintenance of international peace and security.

• The sides expressed concern over negative trends in the globaleconomy.

• The nations identified successful completion of the IMF reform under the terms and conditions agreed in the framework of the G-20 as a key element of the general reform of the international financial architecture.

• In the context of the situation in the Middle East and North Africa, the sides reaffirmed their commitment to the principles of: searching the way to overcome crises in the region in compliance with law, exclusively through peaceful means, avoiding violence and outside intervention, through broad, inclusive national dialogue on democratic reforms, taking into account the legitimate rights and aspirations of the peoples of the region.

• The sides agreed that the Shanghai Cooperation Organization (SCO) had become an important factor for regional security and cooperation.

• The sides attached importance to strengthening cooperation among BRICS countries. » India and the Russian Federation, as responsible states, possessing advanced nuclear technologies, share the objective of preventive proliferation of weapons of mass destruction and their means of delivery, including preventing their possible acquisition by terrorist groups.

• The sides recalled the bilateral Moscow Declaration between India and the Russian Federation on International Terrorism signed on November 6, 2001 in Moscow.

• Both sides reaffirmed the need for all states to combine efforts to vanquish terrorism.

• The sides emphasized the importance of joint bilateral and multilateral efforts in the fight against illicit drug trafficking which poses a growing threat to international peace and stability.

• India and the Russian Federation expressed concern over the situation emerging around Iran’s nuclear programme. Both sides support a comprehensive and long-term settlement of the situation through exclusively political and diplomatic means by promoting dialogue.

India, Russia to Focus on Strategic Communications

India and Russia will focus on deliverables in defence and strategic communications besides taking forward talks on partnerships in nuclear energy and hydrocarbons spheres during Prime Minister Manmohan Singh's visit to Moscow. As is the tradition during summits in Moscow, Dr. Singh will also meet Prime Minister Vladimir Putin, architect of restoring India-Russia ties that were in disarray during the Yeltsin era. Briefing newspersons,Foreign Secretary Ranjan Mathai painted a wide canvas of issues that would be taken up during the Prime Minister's two substantial interactions with Mr. Medvedev and Mr. Putin scheduled on Friday. This is the twelfth time the two countries will maintain the ritual of holding standalone annual summits every year besides meeting regularly on the sidelines of international meets.Having expressed disinterest in gas deposits in Yamal Peninsula on account of extreme weather conditions, given its energy woes, India is now keen on discussing modalities for teaming up with Novatechfor exploration. Talks will also be held on other opportunities as Russia opens up its strategic deposits though there are stiff terms. The two sides will try sorting out the taxation problems facing Imperial Energy, bought in haste by ONGC and an important vehicle for taking forward India's quest for fossil fuels in Russia. An important event taking place on a day Russia joins the World Trade Organisation, will be an important event taking place on that day will be an India-Russia CEOs meet with Tata Motors MD Ravi Kant and Sistema chief V.P. Evtushenkov in the chair. Dr. Singh and Mr. Medvedev will have a brief interaction with 20 CEOs and ask them to prepare the ground for a Comprehensive Economic Partnership Agreement. “Energetic efforts have been under way to not only maintain the momentum but also infuse greater content in our bilateral ties. In the last few months, bilateral visits and talks have taken place at the levels of Home, External Affairs, Defence, Commerce, Health, Tourism, Steel and PowerMinisters,'' said Mr. Mathai. On the next two units of Kudankulam, Mr. Mathai said discussions “are in advanced stages and there were prospects for taking them forward very soon”.

India and Nepal

India and Nepal on 27 November 2011 signed a revised Double Taxation Avoidance Agreement (DTAA). This will help prevent tax evasion and facilitate exchange of information on banking between the two countries. DTAA, will allow Indian traders and investors to enjoy tax relaxation in India once they pay taxes in Nepal. The agreement is also likely to increase confidence of investors and help Nepal attract more investment from India. The revised DTAA between India and Nepal will replace an earlier agreement signed between India and Nepal in 1987.

Important Information:

• Indian firms are the biggest investors in Nepal. They account for about 47.5 per cent of total approved FDIs (Foreign Direct Investments).

• India is the biggest source of foreign investments in Nepal and its largest trading partner. However, Nepal accounts for only 0.44 per cent of India's total trade.

• The bilateral trade between India and Nepal increased from USD 1.98 billion US dollars in 2009-10 to around 2.70 billion US dollars in 2010-11, which is an increase of 37 per cent.

India - Japan

Allaying apprehensions regarding nuclear cooperation in the wake of the Fukushima accident, Japan on Wednesday expressed keenness to expand ties in the sector after taking into consideration the safetyaspects. Seeking to expand cooperation in the 60th year of establishing diplomatic ties, India and Japan decided to expedite work on infrastructure projects and agreed to enhance the currency swap arrangement from $3 billion to $ 15 billion. This was finalised during the talks between Prime Minister Manmohan Singh and his visiting Japanese counterpart Yoshihiko Noda. “We shall proceed with the negotiations on the [civil nuclear] agreement after giving due consideration to nuclear safety, nuclear disarmament and non-proliferation,” Mr. Noda said at a joint press conference with Dr. Singh after the talks.

Combating Terrorism

The two leaders resolved to develop greater cooperation in combating terrorism through sharing information and utilising the India-Japan Joint Working Group on Counter-Terrorism, as well as multilateral fora such as the Financial Action Task Force and the Global Counter-Terrorism Forum. Reaffirming the importance of counter-terrorism cooperation at the UN, they recognised the urgent need to finalise and adopt the Comprehensive Convention on International Terrorism and called upon all states to cooperate in resolving the outstanding issues expeditiously. Nuclear Tests He said Japan attached importance to the voluntary commitments and actions India had expressed with regard to testing of nuclear devices. At the same time, Mr. Noda said it was Japan's duty to share the experiences and the lessons learnt fromthe nuclear power accident at Fukushima and continue to contribute to nuclear safety around the world. Mr. Noda's comments assume significance as there have been questions on the fate of the proposed deal, which is under negotiation, after the radiation scare in Fukushima when tsunami hit a nuclear plant there on March 11.

Maritime Security

Dr. Singh and Mr. Noda agreed to expand cooperation in maritime security including safety and freedom of navigation and anti-piracy activities, by promoting bilateral and multilateral exercises, and through information sharing, as well as dialogues. They also welcomed the joint exercises between the Coast Guards of the two countries proposed to be held in January 2012, a joint statement issued after the talkssaid.

More Investment Sought

Noting that FDI from Japan accounted for just over one per cent of its total outward FDI flows, Dr. Singh said “we would like to see much more Japanese investment and technology transfer in India, whichwe will facilitate.” Mr. Noda said cooperation regarding peaceful uses of nuclear energy was conducive to Japan's efforts to address climate change and to strengthen the global partnership with India. Rail Technology Dr. Singh welcomed the interest shown by Japan in sharing high speed rail technology for passenger networks in India.

India and Australia

India and Australia on 16 December 2011 signed an agreement to amend DTAA (Double Taxation Avoidance Agreement) with the objective of ensuring more effective exchange of financial information between the two countries. DTAA was signed between India and Australia in 1991. The revised tax agreement will facilitate the exchange of information on banking related information and taxation policies. The revised agreement also has a provision that India and Australia can assist each other in the collection of revenue claims. The agreement states that nationals of one country will not be discriminatedagainst the nationals of the other country, a feature absent in the earlier agreement. Moreover, there was no threshold limit for determining permanent establishment. In the revised agreement, thethreshold limit has been rationlised to avail the exemption for service and exploration to boost cross border movement of capital and services.

Uranium Exports to India Approved

Australia’s ruling Labour Party on 4 December 2011 in its annual policy conference approved plans to open up uranium sales to India. This cleared the way for talks on a bilateral nuclear agreement between India and Australia. The conference held in Sydney overturned its own ban, which prohibits Australia to sell uranium to nations such as India that have not signed Nuclear Non-Proliferation treaty. The policy change does not need to be approved by Parliament. Australia possesses approximately 40 percent of the world’s known uranium reserves.