India

Government-To-Government Defence Deals For India

Government-To-Government Defence Deals For India

The Indian government recently announced its intent to increase direct defence deals with other Governments, citing several benefits of doing such. Let us take a look at the types of defence deals, and how India plans to achieve ‘self-reliance’ in the sector.

Crux of the Matter

Direct Deals
The Indian government recently announced its intent to encourage “government-to-government” defence deals. The move comes in the light of the Government’s aim to have defence exports of $5 billion by 2025. The display of an increasing number of indigenous products at international shows will also be encouraged.

The target has been set for Defence PSUs (Public Sector Undertaking) and the Ordnance Factory Board to have 25% of their revenue by exports within the next 5 years, with the Government also encouraging the Indian private sector to get more involved in the defence sector amidst the latest aid scheme for the MSME.

Expected Exports
While India already exports arms to other nations, the following are expected to be exported in larger quantities which would significantly increase the defence export revenue:


Government To Government Deals
The Indian government would now be aiming for direct defence deals with other Governments, with an aim to reduce direct deals with private firms of other countries. Direct deals between Governments reduce direct dealings between one Government and the manufacturing company of the other country, which reduces corruption as the “middle-men” are removed from dealings. The manufacturing firm also becomes free to make deal with the private firms of the receiving country, making Transfer-of-Technology (ToT) for home production or any other investments in the private sector of the receiving country possible.

Examples

  • The recent deal of India concerning the Rafale jets was directly between the Governments of India and France. In 2015, Indian Govt withdrew from the previous deal between India and Dassault Aviation, and agreed on a €7.87 billion deal in 2016 with the French Government for 36 Rafale jets. Afterward, Dassault and Reliance formed the Dassault Reliance Aerospace Ltd (DRAL) to manufacture several jet components in India.
  • 22 Apache helicopters arrived in India from the US in July 2020 as the result of a 2015 contract for 22 helicopters for the Indian Air Force. Afterward, India and US signed another deal for six Apache helicopters, this time coming for the Indian Army. The Apache deals are hybrid in nature, consisting of:
    • Direct Commercial Sale (DCS) between Boeing and Ministry of Defence, covering “the aircraft (less engines/sensors), logistic support, spares and services”, and
    • Foreign Military Sale (FMS) or Govt-to-Govt deal between government of India and the US government, covering “munitions, training, aircraft certification, engines, radar” etc.
  • The Bofors Deal of 1986 was signed between Indian Government and the Swedish arms manufacturer Bofors, with India receiving 400 Howitzer guns worth ₹1,430 crores. However, it was later revealed that Indian politicians including Rajiv Gandhi allegedly received more than ₹60 crores in bribe.

Curiopedia
  • A war economy is the set of contingencies undertaken by a modern state to mobilize its economy for war production. Philippe Le Billon describes a war economy as a “system of producing, mobilizing and allocating resources to sustain the violence.”
  • Military Keynesianism is an economic policy based on the position that the government should raise military spending to boost economic growth. This type of economy is linked to the interdependence between welfare and warfare states, in which the latter feeds the former, in a potentially unlimited spiral.
  • Hughes Helicopters was a major manufacturer of military and civil helicopters from the 1950s to the 1980s. The Apache began as the Model 77 developed by Hughes Helicopters for the United States Army’s Advanced Attack Helicopter.
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Mobile Cos Going Big On PLI

Mobile Cos Going Big On PLI

With India wanting to emerge as one of the manufacturing hubs of the world, the government announced Production Linked Incentive (PLI) Scheme has become a centre of attraction for domestic and foreign mobile phone and electronic parts manufacturers. Let us demystify PLI that has become the talk of the town.

Crux of the Matter

What Is PLI?
The government of India introduced PLI under the National Electronics Policy, 2019 with the aim to boost local production and make India a global mobile manufacturing hub. Under the scheme, electronics manufacturing companies making mobile phones and electronic items like transistors, diodes, thyristors, resistors, capacitors, and nano-electronic parts will be given a 4-6% percent incentive on incremental production each year, justifying the title ‘Production Linked Incentives”.

To execute this scheme a nodal agency will be established and it will work as a Project Management Agency (PMA). The Ministry of Electronics and Information Technology (MeitY) will assign tasks and responsibilities to PMA. Moreover, this scheme will be implemented for 5 years and 2019-20 will be taken as the base year.


Criteria For Incentive

  • Any Indian registered electronic company and any foreign company having a registered unit in India can apply.
  • A company must be producing mobile phones or electronic items like transistors, diodes, thyristors, resistors, capacitors, and nano-electronic parts.
  • Must manufacture it in India.
  • The incentive will be only given on additional expenditure on plant, machinery, equipment, research and development, and transfer of technology.
  • Maximum 5 domestic companies having consolidated global manufacturing revenue (CGMR) more than ₹100 crores in the base year will be given incentives (given all criteria are met).
  • Maximum 5 mobile manufacturing companies, producing mobile phones of the invoice value of ₹15,000 and above, and having CGMR more than ₹10,000 crores in the base year will be given incentives (given all criteria are met).

  • PLI conditions for investment by a mobile manufacturer

  • Condition for incremental sales under PLI for mobile manufacturers


Benefits
The government has introduced it with a vision to achieve mobile production worth ₹11.50 lakh crore in five years. It will also create 3 lakhs direct jobs and 3 times more indirect jobs. Additionally, this scheme will help increase the domestic value addition of mobile phones from 15-20% to 35-40%.

If there are 5 applicants in both the mentioned categories, then the government is directly bringing investment worth ₹6,000 crores over a period of 4 years in the domains of research and development, ToT, etc. to strengthen India’s electronic manufacturing ability. If all the sales criteria for incentives are met, then India can expect a rise of at least ₹1.5 lakh crores in mobile manufacturing output.

  • Companies applying for PLI
Curiopedia
  • Steve Jobs, the co-founder of Apple Inc., suffered from koumpounophobia (phobia of buttons). Some have speculated that his condition influenced the trend towards touch screens and virtual keyboards in the design of Apple devices.
  • The Freedom 251 is a smartphone that was initially offered for sale in India at the promotional price of ₹251. It was sold by Ringing Bells Private Limited and was marketed as the world’s cheapest smartphone. Although the whole thing turned out to be a Ponzi scheme.
  • The Gujarat Lions were a franchise cricket team based in the city of Rajkot, that represented Indian state Gujarat in the Indian Premier League (IPL). The franchise was owned by the Indian smartphone manufacturing company, Intex Technologies.
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Article 370: 1 Year Of Abrogation

Article 370: 1 Year Of Abrogation

With the abrogation of article 370 in Jammu & Kashmir completing first anniversary on 5 August, let us take a look at its history and the impact of its removal.

Crux of the Matter

History Of Article 370

  • 1808: Jammu won by the Sikhs under Maharaja Ranjit Singh.
  • 1819: Kashmir was added to the Sikh territory.
  • 1822: Ranjit Singh appointed General Gulab Singh as the “Raja of Jammu”.
  • 1846: After the Anglo-Sikh war, Britain grants Gulab Singh the rule of J&K in exchange for a sum of ₹75 lakh. The Dogra dynasty is established.
  • October 1947: Maharaja Hari Singh signed the Instrument of Accession (IoA) in favour of India after Pakistani armed men attack the state. Initially granted the Indian Parliament the “power to legislate in respect of J&K only on the matters of defence, external affairs, and communications”.
  • 1948: India and Pakistan go to the United Nations over the occupation of Kashmir, and Sheikh Abdullah appointed the Prime Minister of J&K in March.
  • 1950: The Constitution of India is formed, containing Article 370 under the heading of ‘Temporary, Transitional and Special Provisions’ to provide special status to J&K. Except “defence, foreign affairs, finance, and communications”, the Centre required approval of the state government to implement any laws. The Constitution also contained Article 35A which allowed J&K to define “permanent residents” and provide “special rights and privileges” to them.
  • 1956: J&K implements its own constitution.
  • 1965: The title of the Prime Minister of J&K is changed to Chief Minister. Sheikh Abdullah became the CM with Congress support, but removed and reinstated several times, with Central rule being imposed at times.
  • 1980s-90s: Increase in activities of separatist militants. The targeted killing of Kashmiri Pandits forces them to flee the state.
  • 2019: Indian govt “abrogated” Article 370 using provisions of Article 370 to the point of making it defunct – J&K to be treated as any other state/UT. The state was turned into 2 UTs – J&K a UT with legislature, and Ladakh without legislature.

Impact Of Removal

  • People from all over India would now be able to purchase property in the state and settle there (under certain conditions).
  • Non-permanent residents of the state are now eligible to apply for government jobs in the state.
  • J&K assembly would have to comply with the national laws, just like all other Indian states.
  • End of discrimination against women concerning property. Earlier, a woman from the state would lose her property rights if she married a person from outside the state.
  • Prohibition of Child Marriage Act now applicable in the state.
  • Increase in democratic functioning: Block development polls occurred in Oct, 2019 for the first time in J&K with a 98.3% voter turnout.
  • Private Universities are expected to open in the state for the first time, and industrialization would now be possible in the state.

Case Of Valmikis
Valmikis belonging to the Scheduled Caste (SC) from Punjab were brought for sanitation work in the state in 1957. However, they were not provided the ‘permanent residency’. Consequently, they had no right to vote in the state elections, and could not avail reservation benefits as the state did not provide their SC certificates. The absence of certificate also rendered them ineligible for promotions as only the post of ‘safai karamcharis’ was available to them. The plight of the children of the Valmiki community was exacerbated as they were eligible to study only up to graduation in the state, and were consequently eligible only for the position of a sweeper.

The removal of Articles 370 and 35A ended all the mentioned discriminations faced by the Valmiki and other non-permanent resident communities in J&K.

Curiopedia
  • Naya Kashmir was the name given to the memorandum by Sheikh Abdullah, the leader of Kashmir’s leading political party in 1944. It was the outline of a plan to convert the Jammu and Kashmir state from an absolute monarchy to a constitutional democracy.
  • Our Moon has Blood Clots: The Exodus of the Kashmiri Pandits is a 2013 memoir by Indian author Rahul Pandita about the exodus of Kashmiri Hindus in the late 1989 and early 1990.
  • Pheran is the traditional outfit for both males and females in Kashmir. The pheran consists of two gowns, one over the other. According to some sources, the pheran was introduced by Mughal emperor Akbar when he conquered the valley in 1586.
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History Of Ayodhya Ram Temple

History Of Ayodhya Ram Temple

With the date of inauguration of the construction of the Ram Temple in Ayodhya on 5th August, let us take a look at the long history of the temple, permeated by conflicts at certain intervals.

Crux of the Matter

Foundation
The Ceremony for the Ram Mandir in Ayodhya would be held on 5th August, 2020 to initiate the construction of the temple by “the installation of a 40 kg silver brick as the foundation stone by the Prime Minister”.

Only 5 people are expected to be on stage including PM Modi and UP CM Yogi Adityanath to maintain social distancing. The Temple construction is expected to be done in “3 to 3.5 years”. The dimensions of the temple are expected as follows:
Width: 270- 280 feet
Height: 161 feet
Length: 280-300 feet

With such dimensions, it is expected to be the 3rd largest Hindu temple of the world after the Angkor Wat temple complex in Cambodia and the Sri Ranganatha Swamy temple in Tiruchirapalli, Tamil Nadu.

Soil and holy water from temples and rivers across India have reached the temple site as “blessings”, including contributions from the Sangam – the confluence of Ganga, Saraswati, and Yamuna rivers – and soil from Kamakhya temple (Assam), Char Dhams and several other places of worship.

Timeline Of Dispute

  • 1528: Babri Mosque constructed in Ayodhya by Mir Baqi, the commander of Mughal emperor Babur. Hindus allege that Ram temple at the site was demolished to construct the mosque, and claim the place claimed as the place of birth of Lord Ram (Janmbhoomi).
  • 1859: Fence to separate places of worship constructed by British, with the Inner court provided to Muslims and the Outer court provided to Hindus.
  • 1885: Court rejected Mahant Raghubir Das’s plea to construct a temple on Ram chabootra.
  • 1949: Idol of Lord Ram ‘resurfaces’, and the Government declares it a “disputed site” and locks up the premises.
  • 1950: Plea filed by Gopal Singh Visharad to allow worship of idols installed at ‘Asthan Janmabhoomi’.
  • 1959: Nirmohi Akhara, a denomination of Hindu religion worshipping Lord Ram, files suit to claim possession of the disputed land, and claims itself a “custodian” of Ram Janmbhoomi.
  • 1961: The UP Central Sunni Waqf board files suit claiming possession of the mosque and disputed land, and demands the removal of Lord Ram idols from the Mosque.
  • 1983: The Vishwa Hindu Parishad (VHP) starts nationwide movement demanding construction of temple at the disputed site.
  • 1986: Local court directs the gates to be opened and allows Hindus to worship inside the Mosque. The Babri Masjid Action Committee is set up by Muslims.
  • 1989: Shilanyas ceremony performed by the VHP, where the first stone is placed in the plan of construction of the Ram temple.
  • 1990: BJP leader LK Advani leads Rath Yatra (procession) from Somnath to Ayodhya to demand construction of the temple.
  • 1992: The Babri Mosque is demolished by ‘Kar Sewaks’ comprising of VHP, Shiv Sena and BJP workers.
  • 2002: Allahabad High Court begins hearings concerning the ownership of the disputed land.
  • 2010: Allahabad HC directed a 3-way division of land between the Sunni Waqf board, Nirmohi Akhara, and Ram Lalla (infant form) represented by Hindu Mahasabha.
  • 2011: The Supreme Court (SC) stays the Allahabad HC order.
  • 2019: In August, the SC starts daily hearings after the mediation failed.
  • November 2019: The SC orders the disputed 2.77-acre land to be given to a trust for the construction of Lord Ram temple and allots 5 acres of land for Mosque construction at a different site in Ayodhya.
  • February 2020: The Shri Ram Janmabhoomi Teertha Kshetra Trust (Temple Trust) is announced for the construction of the temple.
  • March 2020: First phase of construction begins, as idols of deities are shifted to temporary places where they would be kept till the construction of the temple is complete.
  • May 2020: The Temple Trust claims the discovery of “a five-foot Shivlinga, seven pillars of black touchstone, six pillars of red sandstone, structures of flowers and broken idols of deities” at the Ram Janmabhoomi.

Curiopedia
  • The word “Ayodhya” is a regularly formed derivation of the Sanskrit verb yudh, the initial ‘a’ is the negative prefix; the whole, therefore, means “not to be fought”. This meaning is attested by the Atharvaveda, which uses it to refer to the unconquerable city of gods.
  • Angkor Wat is a temple complex in Cambodia and the largest religious monument in the world. It was built by the Khmer King Suryavarman II in the early 12th century in Yaśodharapura, the capital of the Khmer Empire, as his state temple and eventual mausoleum. Since around 1850, the Cambodian flag has featured a depiction of Angkor Wat in the center.
  • Shri Ram Janmabhoomi Teerth Kshetra is a trust set up for the construction and management of Shri Ram temple in Ayodhya. It was created as per the verdict of the Supreme Court of India. Prime Minister Narendra Modi announced the formation of the trust in the Lok Sabha on 5 February 2020. The trust is led by Mahant Nrityagopal Das.
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On SII & Its Big Gamble On Covid Vaccine

On SII & Its Big Gamble On Covid Vaccine

The Serum Institute of India (SII) announced mass production of Covid-19 vaccine even before its clearance, taking a chance to ensure speedy delivery of vaccines if they clear the tests. Let us take a look at the history of the firm, with several achievements already in its collection.

Crux of the Matter

Serum Against Covid
The Drugs Controller General of India (DGCI) recently cleared the Serum Institute of India (SII) to conduct Phase II and III trials of Covid-19 vaccine in India, after successfully clearing the Phase-I. The vaccine is named ‘AZD1222’, and is being developed by the Oxford University in tie up with the British-Swedish pharma giant AstraZeneca.

SII CEO Adar Poonawalla had announced to start production as soon as the Phase-I was cleared, and the institute has initiated the production after the recent clearing of Phase-I. The aim to make the vaccine available on a large-scale in a short time is cited as the reason for starting the production before the clearance, and the vaccines would be available to public only after the clearance of all requisite tests.

Poonawalla recently declared that he would be spending $450 million on the mass production of the Oxford-AstraZeneca vaccine.

Serum Testing
Mylabs Discovery Solution and the SII recently launched Covid-19 testing kits that can conduct 32 tests/hr.


History Of The Serum Institute Of India

  • The Serum Institute of India (SII) is the largest vaccine producer in the world, producing over 1.5 billion vaccine doses per year against diseases like Polio, Tetanus, Hepatitis-B, etc.
  • The company was founded in 1966 by Dr. Cyrus Poonawalla, who started with a fund of $12,000 to “diversify” his income from ‘horse-breeding’. The Poonawalla family owns the largest stud farm in India.
  • Currently, Dr. Cyrus is the 165th richest man in the world with a worth of $11.8 billion, and was ranked 19th in the list of the richest Indians (2019).
  • The company started with the production of ‘Tetanus Antitoxin’ in 1967.
  • The SII recorded a revenue of $840 million as of November 2019.
  • The Poonawallahs invested $4.1 billion to open the Poonawalla Biotech Park in Majari, Pune, which is the largest vaccine facility in the world.


Vaccine Empire

  • 65% of children worldwide are estimated to receive at least one vaccine dose produced by the SII.
  • 2010: The SII launched the Nasovac nasal vaccine for H1N1 (Swine flu) virus, which is a single dose vaccine to be sniffed once in each nostril.
  • 2012: The SII acquired Bilthoven Biologicals of Netherlands, and obtained technology to make the IPV (Injectable Polio Vaccine, Salk) which was possessed by only 3 other vaccine producers earlier.
  • November 2014: Serum signed a deal with Cipla to market its paediatric vaccines across the world.
  • May 2015: Cipla agreed to market the influenza drug made by Serum across India.
  • 2017: The SII launched Rabishield (Rapid action drugs against Rabies) in partnership with the University of Massachusetts Medical School.
  • July 2020: The SII developed the first Indian vaccine against pneumonia, named the “Pneumosil” or ‘Pneumococcal Polysaccharide Conjugate Vaccine (PPSV23)’.
    The firm is expected to produce 100 million doses per year, with 40-50 million doses being reserved for Indians.
  • SII has received approbation for its low cost of vaccines, with doses of several of Serum’s vaccines costing as low as ₹5 per dose.


Curiopedia
  • Dr. Cyrus S. Poonawalla is an Indian Parsi businessman, also known as the “vaccine king of India”. Hurun Global Rich List – 2019 listed Dr. Poonawalla as the 4th richest person in India and 100th in the world with a net worth of $13 billion.
  • Adar Poonawalla is the chief executive officer (CEO) of Serum Institute of India. He initiated and launched in 2014 Serum Institute’s oral polio vaccine, which became a bestseller for the company. In 2017, Modi nominated Adar Poonawalla as brand ambassador for Swachh Bharat.
  • Serum is the fluid and solute component of blood which does not play a role in clotting. The study of serum is serology. Serum is used in numerous diagnostic tests as well as blood typing.
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