Tracing the arc of American ‘exception-ism’ for India
The growth of the relationship between India and the United States is often traced from its nadir 25 years ago, when the U.S. imposed sanctions against India (and Pakistan) after they tested their nuclear weapons in May 1998. Since then the arc of the relationship between India and America has grown year-on-year, some years more than others, built by five American Presidents (Bill Clinton, George W. Bush, Barack Obama, Donald Trump, Joe Biden) and three Indian Prime Ministers (Atal Bihari Vajpayee, Manmohan Singh, Narendra Modi) over the first two decades of the 21st century. While the Clinton-Vajpayee-era gave impetus to summit-level diplomacy in the relationship, the Manmohan-Bush and Manmohan-Obama relationship highlighted nuclear diplomacy and Modi-Obama and Modi-Trump worked on trade and military diplomacy.
After his visit to Washington in earlier this June, Mr. Modi’s meetings with Mr. Biden during his state visit to Washington have led to the two nations forging ahead with technology diplomacy, including the unprecedented new promise of Transfer of Technology (ToT) from the U.S. as a result of the Memorandum of Understanding between General Electric (GE) Aerospace and Hindustan Aeronautics Limited (HAL) “to produce fighter jet engines for the Indian Air Force”.
For India, the rapidly rising arc of ties has been seen in terms of shrugging off what Mr. Modi in 2016 called the “hesitations of history” and of renouncing the government’s Cold War muscle-memory in Indian foreign policy towards the U.S. The more important arc, however, is the shift in the U.S.’s belief in “American exceptionalism”, to a more pragmatic era of “American exception-ism for India”. In other words, it is the U.S.’s decision to make a series of exceptions specifically for India in the first quarter of this century that has been responsible for the big surges in a relationship billed as the most “defining partnership of the century” by Mr. Obama (2009), and Mr. Biden (2023).
The civil nuclear deal
In 1998, just six months after the U.S. imposed sanctions on India mandated by the Arms Export Control Act, in November, Mr. Clinton signed a waiver to the sanctions on both India and Pakistan. The Bush administration’s push for civil nuclear exemptions, resulted in the India-U.S. Joint Statement in 2005, a waiver under the Non-Proliferation Act, the Henry Hyde Act and the 123 Agreement with India, which also led to an India-specific exemption at the Nuclear Suppliers Group in 2008. The Obama visit to Delhi in 2010 saw a breakthrough in implementing all the waivers of the previous decade to make another set of exceptions for India on export controls and high technology trade and transfers under the U.S. Export Administration Regulations (EAR) and International Traffic in Arms Regulations (ITAR).
The significance of all these exceptions was that they were made despite the fact that India never joined the Nuclear Non-Proliferation (NPT) Treaty regime; nor did it sign the Comprehensive Nuclear-Test-Ban Treaty. More importantly, these were “India-specific” waivers not available to other non-NPT countries such as Pakistan, and were crucial indicators of the shift in U.S. alignment in South Asia.
The Russian angle
Over the past decade, the U.S.’s waivers have been on regulations dealing with Russia, such as the Countering America’s Adversaries Through Sanctions Act (CAATSA) of 2017. The Trump administration avoided sanctioning India for the (Russian S-400 missile system, but sanctioned Turkey and China for the same purchases. In 2022, the U.S. House of Representatives passed the “[Ro] Khanna amendment”, which if made law, would exempt India entirely from CAATSA sanctions.
In the wake of the Russian war in Ukraine, the U.S. has ruled out secondary sanctions against India for its considerable oil imports or defence engagement from Russia. This is indeed an exception, given that Mr. Biden ordered sanctions in 2022 on even German entities for the Nord Stream 2 pipeline.
Finally, there are the International Religious Freedom Act exemptions the U.S. has accorded India for the past four years. Despite repeated recommendations from the U.S. Commission on International Religious Freedom to place India on a list of “Countries of Particular Concern” which includes China, Russia, Iran, Saudi Arabia, Pakistan and Myanmar, the State department has not complied.
It is pertinent to note all these exceptions have been made for India, despite its disavowal of ever becoming an ally, or alliance partner, and in spite of its strong ties with U.S. adversaries such as Russia and Iran.
The exceptions have come without India accepting conditionalities on cutting ties with these adversaries, withdrawing from groupings such as the Shanghai Cooperation Organisation or BRICS (Brazil, Russia, India, China and South Africa) that pose a challenge to the U.S.-Europe world order, or of any commitments to join U.S. military operations against them. And they have been granted even though very few commercial contracts have fructified for U.S. companies (nuclear power plants, fighter jets, weapons systems) thus far.
Why has the U.S. institutionalised such a broad based waiver policy for India over two-and-a-half decades? The first reason is obviously the promise of ties with India: the world’s most populous nation, that has been an inclusive, pluralistic democracy for most of its history as a republic with a record in non-proliferation. Where there are concerns on these issues, the U.S. calculation is that expressing them is unproductive. In Mr. Obama’s contentious interview to CNN last week, he said that he dealt with Chinese President Xi Jinping and Mr. Modi on the Paris climate accord despite concerns on “authoritarianism”, due to their size. Second, there is India’s attractiveness as an economic market and a military buyer. Third, there is India’s geography in Asia, and its boundary problems from Beijing, that could make it a more dependable partner than European allies in providing a counter to China. Fourth, both Mr. Biden and Mr. Modi acknowledged the Indian-American diaspora, that has distinguished itself as a professional, law-abiding, prosperous and unproblematic community, and is the biggest votary of better India-U.S. ties.
Paradoxically, the biggest challenges to this relationship’s untrammelled arc lie precisely in the mechanism used to strengthen it: the exceptions made for India, which can be reversed at any time. Former close partners of the U.S., such as Pakistan, Egypt, Turkey, Saudi Arabia and even China, today complain about the “fickleness” of American foreign policy towards them. Second, despite India’s growth story, the relationship remains largely one-directional on issues such as investment, hardware or technology transfer, and thus require the U.S. to “give” and India to “take” more than the other way around, at a timetable decided by the U.S. The GE-HAL deal, for example, took more than 13 years after the U.S. had in principle cleared India’s access to high-tech transfers; the next big leaps in high-tech co-production, clean energy transitions, semiconductor technology, and Artificial Intelligence will also go on a case-by-case basis, at an unpredictable pace. The geopolitical context of ties, driven by a desire to counter China, or rein in Russia is also essentially an American construct, not one followed by India. A quantum leap in U.S.-India ties will then follow, not from exceptions that become the rule, but by a change in the rules themselves, that would transform a series of transactions into a relationship between partners equally respectful of each other’s strategic autonomy.
U.S.-India bilateral ties have grown for the past 25 years due to America’s unprecedented exceptions for India — from the nuclear waiver in the 2000s to the transfer of technology in 2023.
A model for quality and inclusive education
The National Institutional Ranking Framework (NIRF), adopted by the Ministry of Education to rank institutions of higher education in India, shows a noteworthy feature of Tamil Nadu. Specifically, the 2023 NIRF ranking of the top 100 colleges in India reveals the consistent success of Tamil Nadu in providing higher education that is both of good quality and inclusive. The Tamil Nadu experience, in congruence with the State’s motto of development with social justice, offers an important insight for other States.
The NIRF employs a ranking metric comprising five parameters with varying weightage to assess the quality of colleges: Teaching, Learning and Resources (40%), Graduation Outcome (25%), Research and Professional Practices (15%), Outreach and Inclusivity (10%) and Perception (10%). Each of these parameters has several components, which again have varying weightage. Though far from perfect, the metric is reasonably robust as it uses broad-based and curated parameters.
The number of colleges participating in the NIRF ranking has grown from 535 in 2017 to 1,659 in 2020, and 2,746 in 2023. This five-fold increase notwithstanding, the participating colleges constitute only a paltry proportion of the actual number of colleges in India. Since NIRF ranking has already gained wide traction and credibility, it is likely that many good-quality colleges participate in the exercise. A place in the top 100 would bring them repute and increase demand for admission. On the contrary, the non-participating colleges are likely to be poor in quality and seriously lacking in most of the parameters of the ranking metric. Therefore, it is reasonable to assume that many good-quality colleges participate in the ranking.
Share of colleges
Of the top 100 NIRF-ranked colleges in 2023, Tamil Nadu has the largest share (35). Delhi (32) comes next, followed by Kerala (14) and West Bengal (8). These four States collectively contribute to 89% of the top colleges, which speaks volumes about other regions. Bigger States such as Uttar Pradesh, Bihar, Madhya Pradesh, Rajasthan, and Odisha do not have a single college in the top 100. Even the share of the other southern States is abysmal: Karnataka has two colleges, Telangana has one, and Andhra Pradesh has none. The share of Tamil Nadu (35%) is more than double the combined share of the other four southern States (17%).
Is the stellar performance of Tamil Nadu consistent or sporadic? The NIRF ranking of colleges since 2017 reveals that Tamil Nadu has been consistent as the lead contributor of top-ranking colleges in India. Even if we confine the focus to the last five years, when the number of colleges participating in the NIRF ranking grew rapidly, Tamil Nadu retained its top position (with the exception of 2022, when Delhi was on a par with Tamil Nadu).
Though the larger pattern of four States (Tamil Nadu, Delhi, Kerala, and West Bengal) holding the larger chunk of top colleges has remained for all the years, there have been variations in the share of the rest of the States in some years. For instance, Andhra Pradesh had one top college in both 2022 and 2021 in the ranking, whereas Karnataka’s share went up to three in 2021. Barring Gujarat and Maharashtra, the big States hardly had representation in most years.
Concentrated or dispersed?
Is the performance of Tamil Nadu in congruence with its motto of development with social justice? Specifically, are the top-ranked colleges largely confined to Chennai and thereby catering primarily to the urban elites and advantaged social groups or are they dispersed and catering to rural and socially disadvantaged groups? Chennai accounts for only nine (26%) colleges. Coimbatore, with an equal share, competes with Chennai quite consistently. Tiruchirappalli, with five colleges (14%), is next. The remaining 12 (out of 35) colleges are widely spread across 11 places. This broad pattern was seen in other years too. The largest beneficiaries from Chennai, Coimbatore, and Tiruchirappalli are likely to be urban dwellers. Yet, it is also likely that the top-ranked 23 colleges from these three cities, which belong to three different regions, might be equally serving the poor and disadvantaged social groups both from these regions as well as those contiguous to them. This is because Tamil Nadu not only has one of the highest reservation quotas, but also has been quite effective in its implementation of the reservation policy.
Additionally, since more than one-third of the top-ranked colleges are dispersed across places, they not only cater largely to the rural and under-served areas, but also provide an opportunity for quality education for students from poor and disadvantaged social groups who do not have the economic resources and social networks to study in colleges from Chennai, Coimbatore, and Tiruchirappalli. Thus, the colleges based out of Chennai in general and other districts in particular promote both quality and inclusion, and thereby contribute to the goal of development with social justice. Here too, Tamil Nadu’s experience is consistent over the years. The only other State which comes somewhat close is Kerala.
Tamil Nadu’s impressive and consistent performance in higher education shows that quality and inclusion can be achieved together and consistently. This finding should prompt other southern States, which also have a reasonably inclusive and effective social welfare architecture, to introspect why they lag far behind and inspire them to take action to rectify issues.
The 2023 National Institutional Ranking Framework shows the consistent success of Tamil Nadu in providing both good quality and inclusive higher education.
The concerns about India-U.S. digital trade
What has come out of PM Modi’s recent state visit to the U.S.? What concerns have U.S. companies flagged about India’s digital laws? Why is India’s equalisation levy on e-commerce an issue? What are the criticisms of the draft Telecom Act? What are the concerns on data localisation?
The story so far:
During Prime Minister Narendra Modi’s U.S. state visit, cooperation on technology emerged as a prominent talking point and yielded some of the most substantive outcomes, according to Foreign Secretary Vinay Kwatra. However, digital trade is also the area where some of the biggest U.S. tech companies have recently flagged multiple policy hurdles, including “India’s patently protectionist posture”. Earlier this year, the Washington D.C.-headquartered Computer & Communications Industry Association (CCIA), with members like Amazon, Google, Meta, Intel, and Yahoo, flagged 20 policy barriers to trading with India in a note titled “Key threats to digital trade 2023”.
What is the current status of India-U.S. technology trade?
Notably, in FY2023, the U.S. emerged as India’s biggest overall trading partner with a 7.65% increase in bilateral trade to $128.55 billion in 2022-23. However, digital or technology services did not emerge as one of the sectors at the forefront of bilateral trade. The CCIA points out in its report that “despite the strength of the U.S. digital services export sector and enormous growth potential of the online services market in India, the U.S. ran a $27 billion deficit in trade in digital services with India in 2020”.
In the recent past, however, the two countries have been ramping up their tech partnership through moves like the Initiative on Critical and Emerging Technology (iCET) announced by President Joe Biden and Prime Minister Narendra Modi last year. Additionally, under the iCET, India and the U.S. also established a Strategic Trade Dialogue with a focus on addressing regulatory barriers and aligning export controls for smoother trade and “deeper cooperation” in critical areas.
What have U.S. tech firms flagged?
The CCIA, while appreciating the reinvigorated efforts to ramp up trade through bilateral initiatives, has flagged in its note, the “significant imbalance” and “misalignment” in the U.S.-India economic relationship. “The U.S.’s extension of market access, trade and openness to Indian companies to operate and succeed in the U.S. has not been reciprocated by the Indian side,” it reads, adding that the Indian government has deployed a range of “tools to champion their protectionist industrial policy”, tilting the playing field away from U.S. digital service providers in favour of domestic players.
To describe these “discriminatory regulation and policies”, it cites the example of India’s guidelines on the sharing of geospatial data, which it accuses of providing preferential treatment to Indian companies. It has also expressed discontent over India’s veering away from “longstanding democratic norms and values, and seeking greater government censorship and control over political speech”, which it argues has made it “extremely challenging for U.S. companies to operate in India”.
What taxation measures has the CCIA raised concerns about?
One of the taxation tools that U.S. tech firms have long taken exception to is the expanded version of the “equalisation levy” that India charges on digital services. India in 2016, with the goal of “equalising the playing field” between resident service suppliers and non-resident suppliers of digital services imposed a unilateral measure to levy a 6% tax on specific services received or receivable by a non-resident not having a permanent establishment in India, from a resident in India who carries out business.
In 2020, the Centre came out with the ‘Equalisation Levy 2.0’, which imposes a 2% tax on gross revenues received by a non-resident “e-commerce operator” from the provision of ‘e-commerce supply or service’ to Indian residents or non-resident companies having a permanent establishment in India.
The equalisation levy, when it was first introduced in 2016, led to double taxation and further complicated the taxation framework. Besides, it also raised questions of constitutional validity and compliance with international obligations. The 2020 amendment again led the levy to become sweeping and vague in its scope. Further, in 2021, instead of introducing an amendment, the government issued a “clarification” to say that the expression ‘e-commerce supply or service’, inter alia, includes the online sale of goods or the online provision of services or facilitation of the online sale of goods or provision of services.
What about India’s IT Rules 2021?
The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, has been flagged by the consortium of foreign tech firms under the some of the most “problematic policies”. The IT Rules place compliance burden on social media intermediaries (SMIs) and platforms with five million registered users or more, which means several U.S. firms end up falling under the ambit.
Some points of concern raised are the “impractical compliance deadlines and content take-down” protocols — the IT Rules require intermediaries to take down content within 24 hours upon receiving a government or court order. The platforms are also required to appoint a local compliance officer. Moreover, with the amendments made to the Rules late last year, SMIs are now obligated to remove, within 72 hours, information or a communication link in relation to the six stipulated prohibited categories of content as and when a complaint arises. There is also major criticism against the government’s institution of the three-member Grievance Appellate Committees (GAC), which will hear user complaints about the decisions of SMIs regarding their content-related issues and have the power to reverse those decisions.
What has been flagged in the new draft of the data protection law?
While the firms appreciate a “notable improvement” in the government’s new draft (and the fourth iteration) of the Digital Personal Data Protection Bill released in November 2022, ambiguities about cross-border data flows, compliance timelines, and data localisation still remain.
India, with more than 759 million active internet users representing more than 50% of its population is a gold mine for data. The country is also planning to become a hub for data processing, wanting to host data centres and cloud service providers. This means that India’s policy on the flow of data across borders will impact the same on a global level, as was seen with the European Union’s landmark General Data Protection Regulation (GDPR). While there are various arguments in favour of data localisation requirements by governments, such requirements also tend to significantly increase operating costs of companies and can be seen as discriminatory by foreign companies.
Foreign tech companies like Meta or Amazon operating in India find it convenient to store their data, say in the U.S. or wherever they have their servers. This means that such data has to leave Indian borders. The new draft has only one line about cross-border data flows — Section 17 of the Act says that cross-border flow of data will only be allowed for a list of countries notified by the Centre. On what basis will these countries be notified and what will the terms for such transfers be is not mentioned in the draft. Industry experts wonder whether whitelisting some countries for allowing data transfers would mean that other countries are automatically blacklisted. The CCIA argues that instead of taking this “opaque” approach, the law could be strengthened by “proactively supporting cross-border data flows through certifications, standard contractual clauses and binding corporate rules”.
What have firms said about the Telecom bill?
The CCIA contends that the draft Telecommunications Bill, 2022, has a sweeping regulatory ambit in that it “would redefine “telecommunication services” to include a wide range of internet-enabled services that bear little resemblance to the telephony and broadband services previously governed by this regulatory regime”.
The current draft of the Bill puts both Telecom Service Providers (TSPs) and Over-the-top (OTT) communication services under the definition of “telecommunication services”. OTT communication services include messaging platforms such as Whatsapp, Telegram, Signal, Google Meet etc., which use the network infrastructure of TSPs like Airtel and Jio to provide features that compete with telecommunication services such as voice calls and SMS services.
The CCIA contends in its note that the proposed law if passed in its current form, would subject a number of platforms to “onerous obligations including licensing requirements; government access to data; encryption requirements, internet shutdowns, seizure of infrastructure, and possibly monetary obligations for the sector”. The industry body contends that the law would “impose a first of the kind global authorisation/licensing requirement for any digital firm”.
What are the other policy barriers?
Last year, the Parliamentary Committee on Finance, in order to address anti-competitive practices by big tech companies, proposed the adoption of a “Digital Competition Act”. This, the CCIA says would include estimated taxes for big or significant digital intermediaries, arguing that the proposal appeared “to be largely targeted at U.S. tech companies”.
The Washington D.C.-headquartered Computer & Communications Industry Association (CCIA), with members like Amazon, Google, Meta, Intel, and Yahoo, flagged 20 policy barriers to trading with India in a note titled “Key threats to digital trade 2023”.
The CCIA, while appreciating the reinvigorated efforts to ramp up trade through bilateral initiatives, has flagged in its note, the “significant imbalance” and “misalignment” in the U.S.-India economic relationship.
The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, has been flagged by the consortium of foreign tech firms under the some of the most “problematic policies”.
Registration of birth, death by Aadhaar authentication allowed
The Centre has allowed the Office of the Registrar-General of India (RGI) to perform Aadhaar authentication during registration of births and deaths in the country. However, it is not mandatory.
A Gazette notification published on Tuesday said the Ministry of Electronics and Information Technology (MEiTY) has allowed the RGI office to use the Aadhaar database for authenticating the identity details provided during registration of births and deaths.
It said the Registrar “shall be allowed to perform Yes or No Aadhaar authentication, on voluntary basis, for verification of Aadhaar number being collected along with other details as sought in the reporting forms of births or deaths, as the case may be, for the purpose of establishing the identity of child, parent and the informant in case of births, and of the parent, spouse and the informant in case of deaths during registration of births or deaths.”
The State governments and Union Territories shall adhere to the guidelines with respect to the use of Aadhaar authentication as laid down by the Ministry.
In 2020, it notified rules stating that the Centre may allow Aadhaar authentication by requesting entities, in the interest of good governance, prevention of leakage of public funds and to promote ease of living.
The Ministry or States desirous of utilising Aadhaar authentication shall prepare a proposal to justify such authentication and submit it to the Centre for making a reference to the Unique Identification Authority of India (UIDAI).
84 serving and retired personnel get awards
PRESS TRUST OF INDIA
President Droupadi Murmu on Tuesday conferred the distinguished service awards, including 52 Ati Vishisht Seva Medals, on 84 serving and retired personnel of the armed forces and the Indian Coast Guard, the Defence Ministry said.
The awards were presented at the Rashtrapati Bhavan. Lt. Gen. ADS Aujla, former Commander of the Srinagar-based Chinar Corps responsible for guarding the Line of Control (LoC) in the Kashmir Valley, was awarded the Uttam Yudh Seva Medal (UYSM), according to the official list of awardees.
The President awarded 52 Ati Vishisht Seva Medals (AVSMs), one Bar to AVSM, three UYSMs and 28 Param Vishisht Seva Medals (PVSMs) to the personnel for distinguished service of exceptional order. “Ms. Murmu presented Ati Vishisht Seva Medal to Maj. Gen. K. Narayanan, The Infantry (Retired),” the Rashtrapati Bhavan tweeted.
Seven products from U.P. get GI tag
The Geographical Indications Registry in Chennai has given tags to seven different products from Uttar Pradesh. ‘Amroha Dholak’, ‘Mahoba Gaura Patthar Hastashlip’, ‘Mainpuri Tarkashi’, ‘Sambhal Horn Craft’, ‘Baghpat Home Furnishings’, ‘Barabanki Handloom Product’ and ‘Kalpi Handmade Paper’ are the products that been given the Geographical Indication (GI) tag.
The Amroha Dholak is a musical instrument made of natural wood. Mango, jackfruit and teakwood is preferred for making the dholak. Wood from mango and sheesham trees are used to carve the multiple sized and shaped hollow blocks, which are later fitted with animal skin, mostly goatskin, to create the instrument.
The application for Baghpat Home Furnishings says Baghpat and Meerut are famous for their exclusive handloom home furnishing product and running fabrics in cotton yarn since generations, and only cotton yarn are used in the handloom weaving process.
According to the details filed for the Barabanki Handloom Product, there are around 50,000 weavers and 20,000 looms at Barabanki and adjoining area.
Historical details for Kalpi Handmade Paper show that Munnalal ‘Khaddari’, a Gandhian, formally introduced the craft here in the 1940s, though many locals say that Kalpi’s association with paper-making dates further back into history. The handmade paper-making cluster at Kalpi is a huge cluster, engaging more than 5,000 craftsmen and approximately 200 units.
The Mahoba Gaura Patthar Hastashlip is a stone craft. It is a very unique and soft stone with scientific name, the ‘Pyro Flight Stone’. Gaura stone craft is made of radiant white-coloured stone that is predominantly found in this region. It is used for making craft items.
Tarkashi, a popular art form from Mainpuri, is primarily brass wire inlay work on wood. It was mainly used for khadaous (wooden sandals), a necessity for every household, since leather was considered unclean. And for the Sambhal Horn Craft, the raw material is procured from dead animals. They are hand-made.