Daily News Simplified - DNS

24 06 20 Notes

SL. NO. TOPICS

THE HINDUPAGE NO.

1 Country of origin’ must on GeM platform: Government 01

2 Trump suspends H1B visas till year end 01

3 The sharp end of military power – Article 07

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Title 1. Country of origin’ must on GeM platform: Government (The Hindu – Pg. 1)

Syllabus Prelims: Economy Mains: GS Paper III – Economy

Theme Promoting Make in India – Sellers to mention country of origin Highlights

Context: In a push to promote local products, the Union government has made it mandatory for all sellers on the Government e-Marketplace (GeM), a platform for public procurement, to list the country of origin while registering new products.

Steps taken by GeM portal to promote Make in India and Atmanirbhar Bharat:

1. Updation of Country of Origin - GeM portal has made it mandatory for sellers to enter the Country of Origin while registering all new products on the portal. Further, sellers who have already uploaded their products before the introduction of this new feature on GeM have been asked to update the Country of Origin, with a warning that their products shall be removed from GeM if they fail to update the same.

2. Percentage of local content in products: Sellers on GeM portal have to indicate percentage of local content in products.

3. Make in India filter: This filter will enable byers to choose to buy only those products that meet the minimum 50% local content criteria. 

4. Reservation of bids: In case of Bids, Buyers can now reserve any bid for Class I Local suppliers (Local Content > 50%). For those Bids below INR 200 crore, only Class I and Class II Local Suppliers (Local content > 50% and > 20% respectively) are eligible to bid, with Class I supplier getting purchase preference.

  About Government e-Marketplace

It is the National Public Procurement Portal. It is a dedicated e-market for different goods and services procured by Government Organisations/Departments/PSUs for procurment of common use goods and services in transparent and efficient manner.

GeM SPV builds, operates and maintains the GeM portal. It functions under the Department of Commerce under Ministry of Commerce and Industry.

GeM marketplace has facilitated entry of small sellers in Public Procurement, while implementing 'Make in India' and MSE Purchase Preference Policies of the Government.

Purchases through GeM by Government users have been authorised and made mandatory by Ministry of Finance by adding rule in General Financial Rules, 2017.

 Other Initiatives on GeM

1. Startup Runaway 2.0 which provides an opportunity for Startups to showcase their innovative products and services to Government buyers and engage in public procurement.

2. MSME SC/ST entrepreneurs on GEM: GeM is collaborating with various stakeholders from the Micro, Small and Medium Enterprises [MSME] ecosystem with special focus on entrepreneurs from the Scheduled Caste/ Schedule Tribes [SC/ ST]. The partnership is based on the objective of achieving the mandatory procurement goal of 25 percent from MSMEs and a sub target procurement of 4 percent goods and services from MSME entrepreneurs within SC/ ST communities, by all government departments

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and public sector enterprises [PSE]. 3. Womaniya Initiative seeks to showcase products made by women

entrepreneurs and women self-help groups and spur women entrepreneurship.

4. Saras Collection is collection of handicrafts, textiles, office décor, furnishings, accessories and other products from Self Help Groups in India. Social inclusion is on the core objectives of GeM.

 Government Procurement and WTO

Government Procurement accounts for 10-15% of the GDP of an economy on average. It constitutes a significant market and an important aspect of international trade. Government agencies need to purchase goods and services with public resources and for public purposes to fulfil their functions.

Achieving value for money is a primary aim of most procurement regimes. Open, transparent and non-discriminatory procurement is generally considered to be the best tool to achieve this goal as it optimises competition among suppliers.

At the same time, there are competing policy goals: many governments make use of government procurement to achieve domestic policy goals, such as the promotion of specific local industry or social groups. Providing preferential treatment for domestic goods, services and suppliers discriminates against foreign suppliers and therefore acts as a trade barrier in this sector.

These barriers are not addressed by the multilateral rules of the WTO as government procurement is explicitly exempted from the main disciplines of both GATT and GATS.

Some member countries of WTO have entered into Government Procurement Agreement under WTO to liberalise government in terms of procurement efficiency and commercial interests.

 Government Procurement Agreement (GPA) under WTO:

India is not a party to Government Procurement Agreement within the framework of WTO.

It is a binding international treaty. Fundamental aim of GPA is to mutually open government procurement

markets among its parties. The text of the Agreement establishes rules requiring that open, fair and

transparent conditions of competition be ensured in government procurement. However, these rules do not automatically apply to all procurement activities of each party. Rather, the coverage schedules play a critical role in determining whether a procurement activity is covered by the Agreement or not. Only those procurement activities that are carried out by covered entities purchasing listed goods, services or construction services of a value exceeding specified threshold values are covered by the Agreement.

The agreement at present has 20 parties. Personal Notes

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Title 2. Trump suspends H1B visas till year end (The Hindu Pg. No. 1) Syllabus Prelims: Current events of International Importance

Mains: GS Paper II – International Relations Theme Suspension of H1B Visa by Trump Administration Highlights

Context: The US Economy has been severely hit by COVID-19 leading to increase in the unemployment rate to around 13%. In response, the Trump Administration has decided to restrict the issuance of various categories of non-immigrant work visa, including H1 B Visa for the rest of the calendar year. The idea behind such a move is to restrict the entry of foreign workers into USA and instead promote greater employment opportunities for the US youths. Now, even though such a move is temporary and valid until the end of the year, such a move would have adverse impact on both Indian and US based IT Companies. 

Understanding the H1B VisaThe H1B Visa is a special form of non-immigrant work visa. It enables the companies based in USA to temporary employ the foreign employees for the specialized job designation. They can hire the non-residential worker in the specialized occupations like architecture, engineering, mathematics, science, and medicine which requires technical expertise. Further, the students who are pursuing their higher Education in USA can also get H1B Visa to work in USA after their graduation.Apart from the H-1B visas, the US government also issues L1 visas which allows companies to transfer highly skilled workers to US to work for a certain duration. 

Increasing Importance of H1B Visa for India and USAThe rapid growth of the technology and Internet during the 1990s increased the demand for the highly skilled work force in USA. Accordingly, the number of Indians entering into US on H1B visa also steadily increased. Presently, the Indian nationals receive nearly 70% of the 85,000 H1-B visas issued each year. These Indians are hired in USA by both Indian based Companies (Infosys, TCS, WIPRO etc) as well as the US based companies such as Google, Amazon, Microsoft etc. This benefits almost all the stakeholders: 

1. The US-based Companies are able to have access to highly skilled workforce from India at relatively lower wages.

2. The Indian-based IT Companies are mainly export-oriented wherein they get number of work contracts from USA. These IT Companies are able to send their employees from India to USA to work on the client site for a temporary period through the H1B Visa. The cost of hiring Indian workers is much lower for the Indian IT Companies as compared to hiring American workers. Hence, H1B Visa significantly reduces their operating cost, enables them to efficiently manage their employees and improve their productivity.

3. It provides for employment opportunities to highly skilled Indians to work in USA.

4. It enables the Indian students who obtain Masters/Ph.D. degree in USA to work on H1B Visa

 Why is there an opposition to H1B Visa Regime in USA?

Rising Unemployment: The Trump Administration believes that the H1B Visa has

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led to replacement of US workers with the foreign workers who have H1B Visa. Misuse of H1B Visa: The majority of the work done by H1B employers is really not specialist work. In spite of having less years of experience, they go on to work for large IT companies in USA.  

How the recent move would have an impact on various Stakeholders?

Indian IT Companies: As you can be seen in the figure,the Indian Companies are the major beneficiaries of the H-1B visa programme. Thus, such a move by the Trump Administration would force them to employ US Nationals at much higher wages leading to increase in their operating costs. US Based Companies: The US Based companies such as Google have also opposed the Trump Administration's move. The US based Companies have highlighted that it is immigration through H1B visa which has led to America's economic success making it the leader in Technology. Hence, such a move is counterproductive.Reduced Employment Opportunities for Indian Nationals in USA: As on April 1, 2020, USA had received around 2.5 lakh applications for H1B Visa. Out of this, Indians alone accounted for 1.84 lakh applications. Hence, the recent move by Trump Administration would lead to reduced Employment Opportunities for Indian Nationals in USA.Indians Pursuing Higher Education in USA: The new move would make it difficult for the Indian nationals pursuing their higher Education in USA to gain employment in USA after their graduation.

Personal Notes

Title 3. The sharp end of military power – Article (Page number 7) Syllabus Prelims: Internal Security

Mains: GS Paper III – Internal Security Theme Comprehensive Maritime Strategy for India – Threat from China Highlights

Two important Issues Geo-politics of South China Sea and its importance for India Why India needs a Comprehensive Maritime Strategy.

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Geopolitics of South China Sea

Importance Indo-Pacific in general and South China Sea in particular has recently

emerged as the geopolitical centre of gravity. With nearly 1/3rd of world trade transiting, rich oil and natural gas resources

and about 10% of world’s fishery South China Sea has been a region of contestation among the coastal states surrounding it.

Major Players China has claimed 90% of the area with its conception of 9-dash line. US has increased in military presence in the region under the concept of

‘Freedom of Navigation Operations’ in order to enforce rule-based navigation of high seas in accordance with the UNCLOS.

This is in line with the principle of ‘Freedom of Navigation’ under the UNCLOS which provides for free movement of vessels in the High Seas.

Japan has increased in presence as a result of disputed Senkaku/Diaoyu Island.

Philippines, Vietnam have emerged as regional players asserting their rights in Spartly and Paracel Islands respectively.

Other players include Malaysia, Indonesia and Brunie.

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Power-game in South China Sea

With Indo-Pacific emerging as the centre of gravity of geopolitics, USA has its presence in the region both in terms of economics and military presence.

China has recently in the past decade has challenged the hegemony of US in the region by asserting its dominance through the nine-dash line claiming South China Sea to be its territorial waters.

In that direction China has increased its military presence resulting in a tiff with the littoral states in the region like Vietnam, Philippines, Malaysia etc.

Relevance for India

India and other South East Asian countries have always treated South China Sea as a global common.

Besides it has acted as an important sea lane of communication historically where India had its trading presence from Kedah in Malaysia to Quanzhou in China.

Besides given that we aim at increasing partnership with ASEAN countries security of South China Sea is of paramount importance to us

Nearly $200 billions of our trade passes through the South China Sea and thousands of our citizens study, work and invest in ASEAN, China, Japan and the Republic of Korea.

We have stakes in the peace and security of this region in common with others who reside there, and freedom of navigation, as well as other normal activities with friendly countries, are essential for our economic well-being.

Why India needs a maritime strategy?  China has been using the excuse of carrying out scientific research in the

EEZs of other countries to increase its Naval presence and gathering important oceanic data.

It has done so in the South China Sea without heed to protests by claimant states or international law.

China has also been increasing its maritime survey missions in the Indo-pacific regions.

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 Recent Instances –

Our navy has interdicted Chinese maritime research and survey vessels that entered our Exclusive Economic Zone (EEZ) and Continental Shelf (CS) without our prior consent.

Australia raised concerns about Chinese marine science research ship of studying submarine routes from Australia into the South China Sea.

Chinese research vessels have also been spotted south of Andaman &Nicobar islands.

PLA Navy (PLAN) intelligence-gathering ships have sailed our coast-line to gather information on naval facilities and ships.

  It has exploited the UNCLOS provisions

 The Law of the Sea Convention says that military vessels have “right to innocent

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passage” to traverse the territorial sea of a coastal state without entering internal waters so long as they are not prejudicial to peace, good order and security of the coastal state. Some of the threats posed by Chinese presence  

It can be presumed that in the coming 12-24 months, the Chinese could step up their efforts to secure significantly improved data in the seas between the Malacca Straits and Djibouti, especially in the Bay of Bengal and Arabian Sea.

The Chinese might try to send another survey vessel without our permission into our EEZ

They might deploy unmanned underwater drones in our EEZ, while the mother vessel remains just outside

China might sail PLAN intelligence-gathering ships along our coasts or in the waters off our island territories, just outside the 12 nautical mile limit, on grounds that this is “innocent passage” by naval vessels permissible under relevant provisions of the Convention; in other words the Chinese version of Freedom of Navigation operations.

  Way forward

Presently we have the necessary capacity to monitor and interdict survey vessels well before they enter our EEZ.

However There is need for a comprehensive Underwater Domain Awareness (UDA) strategy is pressing.

This will need coordination between our national security agencies, the navy, and the government departments responsible for the marine environment and disaster management, but also collaboration with like-minded countries who share our concerns.

Personal Notes