ADVERTISEMENT

Factbox

Full text: RBI's Fourth Bi-monthly Monetary Policy Statement, 2017-18

RBI logo
 
Following is the text of the Fourth Bi-monthly Monetary Policy Statement, 2017-18 and Resolution of the Monetary Policy Committee (MPC) issued by the Reserve Bank of India (RBI) here today: 
 
On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) decided to:
• keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.0 per cent.
 
Consequently, the reverse repo rate under the LAF remains at 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.25 per cent.
 
The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth. The main considerations underlying the decision are set out in the statement below.
 
Assessment
 
2. Since the MPC’s meeting in August 2017, global economic activity has strengthened further and become broad-based. Among advanced economies (AEs), the US has continued to expand with revised Q2 GDP growing at its strongest pace in more than two years, supported by robust consumer spending and business fixed investment. Recent hurricanes could, however, weigh on economic activity in the near-term. In the Euro area, the economic recovery gained further traction and spread, underpinned by domestic demand. While private consumption benefited from employment gains, investment rose on the back of favourable financing conditions. The Euro area purchasing managers’ index (PMI) for manufacturing soared to its highest reading in more than six years. The Japanese economy continued on a path of healthy expansion despite a downward revision in growth since March 2017 on weaker than expected capital expenditure.
 
3. Among the major emerging market economies (EMEs), strong growth in Q2 in China was powered by retail sales, and imports grew at a rapid pace, suggesting robust domestic demand; investment activity, however, slowed down. The Brazilian economy expanded for two consecutive quarters in Q2 on improving terms of trade, even as the impact of recession persists on the labour market. Economic activity in Russia recovered further, supported by strengthening global demand, firming up of oil prices and accommodative monetary policy. Although South Africa has emerged out of recession in Q2, the economy faces economic and political challenges. 
 
4. The latest assessment by the World Trade Organisation (WTO) indicates a significant improvement in global trade in 2017 over the lacklustre growth in 2016, backed by a resurgence of Asian trade flows and rising imports by North America. Crude oil prices hit a two-year high in September on account of the combined effect of a pick-up in demand, tightening supplies due to production cuts by the Organisation of the Petroleum Exporting Countries (OPEC) and declining crude oil inventories in the US. Metal prices have eased since mid-September on weaker than expected Chinese industrial production data. Bullion prices touched a year’s high in early September on account of safe-haven demand due to geo-political tensions, before weakening somewhat in the second half. Weak non-oil commodity prices and low wage growth kept inflation pressures low in most AEs and subdued in several EMEs, largely reflecting country-specific factors.
 
5. Global financial markets have been driven mainly by the changing course of monetary policy in AEs, generally improving economic prospects and oscillating geo-political factors. Equity markets in most AEs have continued to rise. In EMEs, equities generally gained on improved global risk appetite, supported by upbeat economic data and expectations of a slower pace of monetary tightening in major AEs. While bond yields in major AEs moved sideways, they showed wider variation in EMEs. In currency markets, the US dollar weakened further and fell to a multi-month low in September on weak inflation, though it recovered some lost ground in the last week of September on a hawkish US Fed stance and tensions around North Korea. The euro surged to a two and a half year high against the US dollar towards end-August on positive economic data, whereas the Japanese yen experienced sporadic bouts of volatility triggered by geo-political risks. Emerging market currencies showed divergent movements and remained highly sensitive to monetary policies of key AEs. Capital flows to EMEs have continued, but appear increasingly vulnerable to the normalisation of monetary policy by the US Fed.
 
6. On the domestic front, real gross value added (GVA) growth slowed significantly in Q1 of 2017-18, cushioned partly by the extensive front-loading of expenditure by the central government. GVA growth in agriculture and allied activities slackened quarter-on-quarter in the usual first quarter moderation, partly reflecting deceleration in the growth of livestock products, forestry and fisheries. Industrial sector GVA growth fell sequentially as well as on a y-o-y basis. The manufacturing sector – the dominant component of industrial GVA – grew by 1.2 per cent, the lowest in the last 20 quarters. The mining sector, which showed signs of improvement in the second half of 2016-17, entered into contraction mode again in Q1 of 2017-18, on account of a decline in coal production and subdued crude oil production. Services sector performance, however, improved markedly, supported mainly by trade, hotels, transport and communication, which bounced back after a persistent slowdown throughout 2016-17. Construction picked up pace after contracting in Q4 of 2016-17. Financial, real estate and professional services turned around from their lacklustre performance in the second half of 2016-17. Of the constituents of aggregate demand, growth in private consumption expenditure was at a six-quarter low in Q1 of 2017-18. Gross fixed capital formation exhibited a modest recovery in Q1 in contrast to a contraction in the preceding quarter.
 
7. Turning to Q2, the south-west monsoon, which arrived early and progressed well till the first week of July, lost momentum from mid-July to August – the crucial period for kharif sowing. By end-September, the cumulative rainfall was deficient by around 5 per cent relative to the long period average, with 17 per cent of the geographical area of the country receiving deficient rainfall. The live storage in reservoirs fell to 66 per cent of the full capacity as compared with 74 per cent a year ago. The uneven spatial distribution of the monsoon was reflected in the first advance estimates of kharif production by the Ministry of Agriculture, which were below the level of the previous year due to lower area sown under major crops including rice, coarse cereals, pulses, oilseeds, jute and mesta.
 
8. The index of industrial production (IIP) recovered marginally in July 2017 from the contraction in June on the back of a recovery in mining, quarrying and electricity generation. However, manufacturing remained weak. In terms of the use-based classification, contraction in capital goods, intermediate goods and consumer durables pulled down overall IIP growth. In August, however, the output of core industries posted robust growth on the back of an uptick in coal production and electricity generation. The manufacturing PMI moved into expansion zone in August and September 2017 on the strength of new orders. 
 
9. On the services side, the picture remained mixed. Many indicators pointed to improved performance even as the services PMI continued in the contraction zone in August due to low new orders. In the construction segment, steel consumption was robust. In the transportation sector, sales of commercial and passenger vehicles as well as two and three-wheelers, railway freight traffic and international air passenger traffic showed significant  upticks. However, cement production, cargo handled at major ports, domestic air freight and passenger traffic showed weak performance.
 
10. Retail inflation measured by year-on-year change in the consumer price index (CPI) edged up sequentially in July and August to reach a five month high, due entirely to a sharp pick up in momentum as the favourable base effect tapered off in July and disappeared in August. After a decline in prices in June, food inflation rebounded in the following two months, driven mainly by a sharp rise in vegetable prices, along with the rise in inflation in prepared meals and fruits. Cereals inflation remained benign, while deflation in pulses continued for the ninth successive month. Fuel group inflation remained broadly unchanged in August even as inflation in liquefied petroleum gas (LPG), kerosene, firewood and chips rose. Petroleum product prices tracked the hardening of international crude oil prices.
 
11. CPI inflation excluding food and fuel also increased sharply in July and further in August, reversing from its trough in June 2017. The increase was broad-based in both goods and services. Housing inflation hardened further in August on account of higher house rent allowances for central government employees under the 7th central pay commission award. Inflation in household goods and services in health, recreation and clothing & footwear subgroups increased. Quantitative inflation expectations of households eased in the September 2017 round of the Reserve Bank’s survey. However, in terms of qualitative responses, the proportion of respondents expecting the general price level to increase by more than the current rate rose markedly for the three-month as well as one-year ahead horizons. Farm and industry input costs picked up in August. Real wages in the rural and organised sectors continued to edge up. The Reserve Bank’s industrial outlook survey showed that corporate pricing power for the manufacturing sector remained weak. In contrast, firms polled for the services sector PMI reported a sharp rise in prices charged.
 
12. Surplus liquidity in the system persisted through Q2 even as the build-up in government cash balances since mid-September 2017 due to advance tax outflows reduced the size of the surplus liquidity significantly in the second half of the month. Currency in circulation increased at a moderate pace during Q2, by Rs. 569 billion as against Rs. 1,964 billion during Q1, reflecting the usual seasonality. Consistent with the guidance given in April 2017 on liquidity, the Reserve Bank conducted open market sales operations on six occasions during Q2 to absorb Rs. 600 billion of surplus liquidity on a durable basis, in addition to the issuances of treasury bills (of tenors ranging from 312 days to 329 days) under the market stabilisation scheme (MSS) during April and May of Rs. 1 trillion. As a result, net average absorption of liquidity under the LAF declined from Rs. 3 trillion in July to Rs. 1.6 trillion in the second half of September. The weighted average call rate (WACR), which on an average, traded below the repo rate by 18 basis points (bps) during July, firmed up by 5 bps in September on account of higher demand for liquidity around mid-September in response to advance tax outflows.
 
13. Reflecting improving global demand, merchandise export growth picked up in August 2017 after decelerating in the preceding three months. Engineering goods, petroleum products and chemicals were the major contributors to export growth in August 2017; growth in exports of readymade garments and drugs & pharmaceuticals too returned to positive territory. However, India’s export growth continued to be lower than that of other emerging economies such as Brazil, Indonesia, South Korea, Turkey and Vietnam, some of which have benefited from the global commodity price rebound. Import growth remained in double-digits for the eighth successive month in August and was fairly broad-based. While the surge in imports of crude oil and coal largely reflected a rise in international prices, imports of machinery, machine tools, iron and steel also picked up. Gold import volume has declined sequentially since June 2017, though the level in August was more than twice that of a year ago. The sharper increase in imports relative to exports resulted in a widening of the current account deficit in Q1 of 2017-18, even as net services exports and remittances picked up. Net foreign direct investment at US$ 10.6 billion in April-July 2017 was 24 per cent higher than during the same period of last year. While the debt segment of the domestic capital market attracted foreign portfolio investment of US$ 14.4 billion, there were significant outflows in the equity segment in August-September on account of geo-political uncertainties and expected  normalisation of Fed asset purchases. India’s foreign exchange reserves were at US$ 399.7 billion on September 29, 2017.
 
Outlook
 
ADVERTISEMENT
14. In August, headline inflation was projected at 3 per cent in Q2 and 4.0-4.5 per cent in the second half of 2017-18. Actual inflation outcomes so far have been broadly in line with projections, though the extent of the rise in inflation excluding food and fuel has been somewhat higher than expected. The inflation path for the rest of 2017-18 is expected to be shaped by several factors. First, the assessment of food prices going forward is largely favourable, though the first advance estimates of kharif production pose some uncertainty. Early indicators show that prices of pulses which had declined significantly to undershoot trend levels in recent months, have now begun to stabilise. Second, some price revisions pending the goods and services tax (GST) implementation have been taking place. Third, there has been a broad-based increase in CPI inflation excluding food and fuel. Finally, international crude prices, which had started rising from early July, have firmed up further in September. Taking into account these factors, inflation is expected to rise from its current level and range between 4.2-4.6 per cent in the second half of this year, including the house rent allowance by the Centre. 
 
15. As noted in the August policy, there are factors that continue to impart upside risks to this baseline inflation trajectory: (a) implementation of farm loan waivers by States may result in possible fiscal slippages and undermine the quality of public spending, thereby exerting pressure on prices; and (b) States’ implementation of the salary and allowances award is not yet considered in the baseline projection; an increase by States similar to that by the Centre could push up headline inflation by about 100 basis points above the baseline over 18-24 months, a statistical effect that could have potential second round effects. However, adequate food stocks and effective supply management by the Government may keep food inflation more benign than assumed in the baseline.
 
16. Turning to growth projections, the loss of momentum in Q1 of 2017-18 and the first advance estimates of kharif foodgrains production are early setbacks that impart a downside to the outlook. The implementation of the GST so far also appears to have had an adverse impact, rendering prospects for the manufacturing sector uncertain in the short term. This may further delay the revival of investment activity, which is already hampered by stressed balance sheets of banks and corporates. Consumer confidence and overall business assessment of the manufacturing and services sectors surveyed by the Reserve Bank weakened in Q2 of 2017-18; on the positive side, firms expect a significant improvement in business sentiment in Q3. Taking into account the above factors, the projection of real GVA growth for 2017-18 has been revised down to 6.7 per cent from the August 2017 projection of 7.3 per cent, with risks evenly balanced.
 
17. Imparting an upside to this baseline, household consumption demand may get a boost from upward salary and allowances revisions by states. Teething problems linked to the GST and bandwidth constraints may get resolved relatively soon, allowing growth to accelerate in H2. On the downside, a faster than expected rise in input costs and lack of pricing power may put further pressure on corporate margins, affecting value added by industry. Moreover, consumer confidence of households polled in the Reserve Bank’s survey has weakened in terms of the outlook on employment, income, prices faced and spending incurred. 
 
18. The MPC observed that CPI inflation has risen by around two percentage points since its last meeting. These price pressures have coincided with an escalation of global geopolitical uncertainty and heightened volatility in financial markets due to the US Fed’s plans of balance sheet unwinding and the risk of normalisation by the European Central Bank. Such juxtaposition of risks to inflation needs to be carefully managed. Although the domestic food price outlook remains largely stable, generalised momentum is building in prices of items excluding food, especially emanating from crude oil. The possibility of fiscal slippages may add to this momentum in the future. The MPC also acknowledged the likelihood of the output gap widening, but requires more data to better ascertain the transient versus sustained headwinds in the recent growth prints. Accordingly, the MPC decided to keep the policy rate unchanged. The MPC also decided to keep the policy stance neutral and monitor incoming data closely. The MPC remains committed to keeping headline inflation close to 4 per cent on a durable basis.
 
19. The MPC was of the view that various structural reforms introduced in the recent period will likely be growth augmenting over the medium- to long-term by improving the business environment, enhancing transparency and increasing formalisation of the economy. The Reserve Bank continues to work towards the resolution of stressed corporate exposures in bank balance sheets which should start yielding dividends for the economy over the medium term.
 
20. The MPC reiterated that it is imperative to reinvigorate investment activity which, in turn, would revive the demand for bank credit by industry as existing capacities get utilised and the requirements of new capacity open up to be financed. Recapitalising public sector banks adequately will ensure that credit flows to the productive sectors are not impeded and growth impulses not restrained. In addition, the following measures could be undertaken to support growth and achieve a faster closure of the output gap: a concerted drive to close the severe infrastructure gap; restarting stalled investment projects, particularly in the public sector; enhancing ease of doing business, including by further simplification of the GST; and ensuring faster rollout of the affordable housing program with time-bound single-window clearances and rationalisation of excessively high stamp duties by states.
 
21. Dr. Chetan Ghate, Dr. Pami Dua, Dr. Michael Debabrata Patra, Dr. Viral V. Acharya and Dr. Urjit R. Patel were in favour of the monetary policy decision, while Dr. Ravindra H. Dholakia voted for a policy rate reduction of at least 25 basis points. The minutes of the MPC’s meeting will be published by October 18, 2017.
 
22. The next meeting of the MPC is scheduled on December 5 and 6, 2017.
 
NNN
ADVERTISEMENT
 

India-Japan Joint Statement

Prime Minister Narendra Modi with Japanese Prime Minister Shinzo Abe, at Mahatma Mandir, in Gandhinagar, Gujarat for the 12th  India-Japan Annual Summit, on September 14, 2017.
Prime Minister Narendra Modi with Japanese Prime Minister Shinzo Abe, at Mahatma Mandir, in Gandhinagar, Gujarat for the 12th India-Japan Annual Summit, on September 14, 2017.
Following is the text of the Joint Statement issued by India and Japan during visit of Prime Minister Shinzo Abe of Japan to India on September 14, 2017:
 
Toward a Free, Open and Prosperous Indo-Pacific
 
H.E. Shinzo Abe, Prime Minister of Japan is paying an official visit to India from 13 September to 14 September, 2017 at the invitation of H.E. Narendra Modi, Prime Minister of India. On 14 September, the two Prime Ministers held strategic discussions on a wide range of issues under the Special Strategic and Global Partnership between the two countries.
 
1. The two Prime Ministers welcomed significant deepening of bilateral relations in the past three years and the growing convergence in the political, economic and strategic interests, based on the firm foundation of common values and traditions, as well as on an emerging consensus on contemporary issues of peace, security and development. They decided to work together to elevate their partnership to the next level to advance common strategic objectives at a time when the global community is faced with new challenges.
 
2. The two Prime Ministers affirmed strong commitment to their values-based partnership in achieving a free, open and prosperous Indo-Pacific region where sovereignty and international law are respected, and differences are resolved through dialogue, and where all countries, large or small, enjoy freedom of navigation and overflight, sustainable development, and a free, fair, and open trade and investment system.
 
3.  The two Prime Ministers underlined that India and Japan could play a central role in safeguarding and strengthening such a rules-based order. To this end, they pledged to reinforce their efforts to:
 
- align Japan’s Free and Open Indo-Pacific Strategy with India’s Act East Policy, including through enhancing maritime security cooperation, improving connectivity in the wider Indo-Pacific region, strengthening cooperation with ASEAN, and promoting discussions between strategists and experts of the two countries;
- enhance defence and security cooperation and dialogues, including the MALABAR and other joint exercises, defence equipment and technology cooperation in such areas as surveillance and unmanned system technologies, and defence industry cooperation.
- ensure partnerships for prosperity through the India-Japan Investment Promotion Partnership, speedy implementation of key infrastructure projects including the Mumbai Ahmedabad High Speed Railway (MAHSR), and advancing cooperation in the fields of energy, smart cities, information and communication technology, space, science and technology, bio-technology, pharmaceuticals and health.
- strengthen people-to-people and cultural ties through enhanced Japanese language teaching in India and collaboration in the fields of tourism, civil aviation, higher education, women’s education, skills development and sports;
- work together on global challenges such as proliferation of Weapons of Mass Destruction (WMDs), terrorism, space and cyber security, United Nations Security Council (UNSC) reform, climate change and environment;
- strengthen trilateral cooperation frameworks with the United States, Australia and other countries.
 
Reinforcing Defence and Security Cooperation
 
4. The two Prime Ministers emphasised the significance of defence and security cooperation in enhancing the strategic partnership between the two countries. In this context, they welcomed the regular and institutionalised engagement through the annual Defence Ministerial Dialogue, the National Security Advisers' dialogue, the "2+2” Dialogue, the Defence Policy Dialogue and Service-to-Service staff talks.
 
5. The two Prime Ministers commended the significant progress achieved in maritime security cooperation evidenced by the expansion in scale and complexity of the MALABAR Exercise in the Bay of Bengal in July 2017 (MALABAR-17). They noted the ongoing close cooperation between the Indian Navy and Japan Maritime Self-Defence Force (JMSDF) in various specialised areas of mutual interest, including anti-submarine aspects. They also acknowledged the importance of bilateral cooperation in maritime security by strengthening and enhancing exchanges in expanding maritime domain awareness (MDA) in the Indo-Pacific region.
 
6. The two Prime Ministers shared the intention to expand joint exercises and cooperation in such areas as humanitarian assistance and disaster relief (HA/DR), peacekeeping operations(PKOs), counter-terrorism including the possibility of joint field exercises between Indian Army and Japan’s Ground Self-Defence Force (JGSDF) in 2018, and reciprocal visits by air assets to each other’s country. They welcomed significant development in the long-standing partnership between the two Coast Guards, including the 16th High Level Meeting and the joint exercise in Yokohama in January 2017 between the two coast guards.
 
7. The two Prime Ministers noted recent progress in bilateral cooperation on defence equipment and technology, including the commencement of the technical discussion for the future research collaboration in the area of Unmanned Ground Vehicles and Robotics. Japan’s readiness to provide its state-of-the-art US-2 amphibian aircraft was appreciated as symbolising the high degree of trust between the two countries. The two governments decided to continue their discussions in this regard.
 
8. The two Prime Ministers welcomed the recently held annual Defence Ministerial Dialogue and the first Defence Industry Forum in Tokyo on 5 September, which was addressed by the two Defence Ministers as well as the discussions covering other promising initiatives in defence industry cooperation. They recognised the importance of enhancing interactions between governments and defence industries of the two countries in order to encourage equipment collaboration including defence and dual-use technologies.
 
9. The two Prime Ministers welcomed the holding of the Second India-Japan Cyber Dialogue in New Delhi on 17 August this year and reaffirmed their commitment to an open, free, secure, stable, peaceful and accessible cyberspace, enabling economic growth and innovation as well as mutual cooperation in this regard. 
 
Working Together for a Better Connected World
 
10. The two Prime Ministers expressed their strong commitment to work together to enhance connectivity in India and with other countries in the Indo-Pacific region including Africa. They welcomed the deepening of their connectivity dialogue aimed at achieving concrete progress, and decided to further accelerate such an initiative.
 
11. The two Prime Ministers also underlined the importance of all countries ensuring the development and use of connectivity infrastructure in an open, transparent and non-exclusive manner based on international standards and responsible debt financing practices, while ensuring respect for sovereignty and territorial integrity, the rule of law, and the environment. They also reaffirmed the importance of "quality infrastructure” which, among others ensures alignment with local economic and development strategies, safety, resilience, social and environmental impacts, and job creation as well as capacity building for the local communities.
 
12. The two Prime Ministers welcomed the efforts to explore the development of industrial corridors and industrial network for the growth of Asia and Africa, which will benefit various stakeholders in the Indo-Pacific region including Africa. They shared the desire to further promote cooperation and collaboration in Africa in line with the priority measures identified through the India-Japan dialogue on Africa and the processes of the India Africa Forum Summit (IAFS) and Tokyo International Conference on African Development (TICAD).
 
13. The two Prime Ministers welcomed the India-Japan cooperation on development of India’s North Eastern Region (NER) as a concrete symbol of developing synergies between India’s Act East policy and Japan’s Free and Open Indo Pacific Strategy. In this context, they noted with satisfaction the setting up of the India-Japan Act East Forum. They appreciated the cooperation between Japan and North Eastern Region of India, ranging from key infrastructure such as road connectivity, electricity, water supply and sewage, to social and environmental sustainability such as afforestation and community empowerment, as well as people-to-people exchanges including the "IRIS Program” inviting youth from the NER to Japan.
 
14. The two Prime Ministers also stressed the importance of the development of the smart islands to enhance regional connectivity and decided to further accelerate consultations to identify technologies, infrastructure and development strategies for the purpose.
 
Partnership for prosperity
 
15. The two Prime Ministers welcomed the commencement of the project on the ground at the Sabarmati Station for the Mumbai-Ahmedabad High Speed Rail (MAHSR), which will be an important symbol of a new era marked by the 75th Anniversary of India’s Independence. Expressing satisfaction at the steady progress, they directed their teams to multiply their efforts for achieving the target schedule.
 
16. The two Prime Ministers welcomed the exchange of notes for 100 billion yen as the first ODA loan for the MAHSR project. They also witnessed commencement of the construction of the HSR training institute in Vadodara. They appreciated the commencement of the JICA technical cooperation program for the capacity development of the National High Speed Rail Corporation.
 
17. The two Prime Ministers committed to advancing "Make in India” and transfer of technology in HSR projects, and expressed optimism in this direction. They welcomed the series of business matching efforts to establish India-Japan cooperation, such as the prospective technology collaboration between Kawasaki and BHEL. Both sides will explore further strengthening of partnership in high speed railways. They also recognised that there is potential for further collaboration between India and Japan in the modernisation and expansion of the conventional railway system and the construction of metro rails in India. They also highlighted the importance of the safety of conventional railways, and appreciated the commencement of the JICA technical cooperation program by the dispatch of railways safety experts of Japan in August 2017,followed by a railway safety seminar and other programs.
 
18. Prime Minister Modi updated Prime Minister Abe about his Government’s efforts for the country’s economic and social development. Prime Minister Abe reiterated Japan’s strong support for the initiatives such as "Make in India”, "Digital India”, "Skill India”, "Smart City”, "Clean India,” and "Start-Up India”. Prime Minister Abe highly appreciated Prime Minister Modi’s economic reforms, especially the historic introduction of the Goods and Services Tax (GST), which facilitates ease of doing business and promotes market integration in India by realising a simple, efficient and nation-wide indirect tax system.
 
19. The two Prime Ministers welcomed the expansion of Japan’s Foreign Direct Investment in India under the "India-Japan Investment Promotion Partnership”, committed to by both sides in 2014. They shared the view that the India-Japan Roadmap for Investment Promotion will provide greater impetus to "Make in India” through investment promotion activities, expanding the scope of professional services and assistance provided by JETRO to Japanese Small and Medium-sized Enterprises (SMEs) operating in India, Review Mechanisms for Issue Resolution and Approvals, Single Window Clearance Procedures, Japan Industrial Townships and infrastructure development. Prime Minister Abe expressed appreciation for the facilitation provided by "Japan Plus”, and the coordination by the Core Group. They also welcomed the progress in the projects of the Western Dedicated Freight Corridor (DFC), through JICA, the Delhi-Mumbai Industrial Corridor (DMIC) including the DMIC Logistic Data Bank Project and expressed expectations of promoting industrial investment in DMIC cities. They welcomed the signing of "the Joint Statement on the Development of the New Capital City and Industrial Cooperation in Andhra Pradesh”. They also welcomed Japanese cooperation for smart city projects in Ahmedabad, Chennai as well as Varanasi.
 
20. The two Prime Ministers welcomed the signing of the Memorandum of Cooperation on the joint development of the "Japan and India Special Program for Make in India” in Mandal-Becharaj-Khoraj, Gujarat, as a regional development project driven by manufacturing cluster, and the plan to establish a JETRO’s Business Support Centre in its Ahmedabad office to promote Japanese SMEs investment in Gujarat.
 
21.  The two Prime Ministers welcomed the start of the first four Japan-India Institutes for Manufacturing (JIMs) in the States of Gujarat, Karnataka, Rajasthan and Tamil Nadu in 2017,under the Manufacturing Skill Transfer Promotion Program, and looked forward to more JIMs. They also welcomed the commencement of the first Japanese Endowed Courses (JEC) in Andhra Pradesh from September 2017. They strongly hoped that this program will introduce Japanese manufacturing practices and accelerate training of future shop floor leaders and engineers.
 
22. The two Prime Ministers expressed the confidence that synergy between Japan’s advanced technology and India’s rich human resources can transform both countries into new centres of production in the global industrial network. They underscored the potential to further cooperate in human resources development and exchanges, including through utilising such frameworks as Japan’s "Innovative Asia” initiative and the Technical Intern Training Program(TITP).
 
23. The two Prime Ministers noted with satisfaction the significant contribution of Japan’s ODA to the socio-economic development of India, especially the historically highest ever amount of ODA loan provided through JICA in the last two consecutive years. Prime Minister Abe expressed Japan’s intention to continue to support India’s efforts for social and industrial development including building key infrastructure projects.
 
24.  Prime Minister Modi appreciated the provision of ODA loan to the following projects, in addition to the Mumbai-Ahmedabad High Speed Railway (MAHSR) Project and its related training institute:
 
- Project for Upgradation of Environmental Management for Ship Recycling in Alang and Sosiya in Gujarat
 
- North East Road Network Connectivity Improvement Project (Phase 2)
 
- Kolkata East-West Metro Project (III)
 
- Gujarat Investment Promotion Program
 
In this regard, the two Prime Ministers welcomed progress in the ODA projects in urban transportation sector such as the Delhi, Chennai, Mumbai, Bangalore, Kolkata and Ahmedabad Metro, the Mumbai Trans-Harbour Link Project, and the introduction of the Intelligence Transport System along with the Eastern Peripheral Highway in Delhi.
 
25. The two Prime Ministers expressed satisfaction at the entry into force of the Agreement between the Government of the Republic of India and the Government of Japan for Cooperation in the Peaceful Uses of Nuclear Energy. They looked forward to a working group to strengthen bilateral cooperation in this field and reiterated their shared view that the Agreement reflects a new level of mutual confidence and strategic partnership in the cause of clean energy, economic development and a peaceful and secure world.
 
ADVERTISEMENT
26. The two Prime Ministers recognised that access to reliable, clean and affordable energy is critical for the economic growth of both countries. In this regard, they decided to strengthen bilateral energy cooperation and welcomed the India-Japan Energy Partnership Initiative as well as early convening of 9th Energy dialogue. They appreciated Japan’s proposal for India-Japan Clean Energy and Energy Efficiency Cooperation Plan. They also welcomed the efforts to promote renewable energy, including the establishment of the International Solar Alliance (ISA), and the progress of New Energy and Industrial Technology Development Organization (NEDO)’s demonstration project such as a micro grid system using solar power in Neemrana. They looked forward to further acceleration of cooperation in areas of energy saving, energy efficiency and energy storage as well as manufacturing of eco-friendly vehicles including hybrid and electric vehicles.
 
27. In this regard, the two Prime Ministers welcomed the opening of the first lithium-ion battery factory in India by a joint venture of three Japanese companies – Suzuki, Toshiba and Denso as well as a new automotive factory this year. They decided to further promote public and private sector collaboration to make environmentally friendly and energy efficient technologies accessible and affordable to the general public, recognising that such investments facilitate India’s National Electric Mobility Mission Plan 2020 (NEMMP) and Faster Adoption of Manufacturing of Hybrid and Electric Vehicles (FAME) vision, and underlined the importance of support measures to promote eco-friendly vehicles including in terms of "Make in India” and transfer of technology.
 
28. The two Prime Ministers also stressed that sustainable ship industry is one of the key areas for sustainable growth of India, and reaffirmed their intention to achieve an early conclusion of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009.
 
29. The two Prime Ministers recognised the important role of science and technology in dealing with both developmental and societal challenges, and underlined the importance of enhanced bilateral cooperation in such fields as IoT, ICT, marine science, biomedical sciences, genetics, stem cell technology, and heavy ion radiotherapy. In this regard, they welcomed the successful holding of the 9th India-Japan Joint Committee on Science and Technology Cooperation in January 2017 in Delhi.
 
30. The two Prime Ministers welcomed the progress made in the bilateral IT and IoT cooperation through the bilateral Joint Working Group on IT and Electronics, in particular by the signing of the Memorandum of Understanding (MoU) between the National Association of Software and Services Companies (NASSCOM) of India and IoT Acceleration Consortium (ITAC) of Japan.
 
31. The two Prime Ministers directed their respective sides to work closely to establish an India Japan Startup Hub, which will serve as a platform for promotion of information exchange, business collaboration and investments between the vibrant and innovative Startup ecosystems of two countries.
 
32. The two Prime Ministers acknowledged that outer space is an ever-expanding frontier of human endeavour and welcomed the deepening of cooperation between the space agencies of the two countries in the field of earth observation, satellite based navigation, space sciences and lunar exploration. They welcomed establishment of the ISRO-JAXA Joint Working Group under the space cooperation MoU signed in November 2016. They also welcomed co-hosting by India and Japan of the 24th Session of the Asia-Pacific Regional Space Agency Forum (APRSAF-24) in November 2017 in India. They stressed the importance of enhancing comprehensive space cooperation.
 
33. The two Prime Ministers noted with satisfaction the progress in the health sector and the joint efforts by their medical experts on medical device development. They also noted the opportunities for collaboration between Indian and Japanese pharmaceutical companies in light of the target regarding the quantitative share of generic medicines in Japan.
 
34. The two Prime Ministers shared the importance of strengthening cooperation in the fields of agricultural and food related sectors. They welcomed Japan’s participation in World Food India 2017 as a partner country.
 
35. The two Prime Ministers welcomed the efforts to develop cooperation in disaster prevention, response, recovery and reconstruction as envisaged in the Memorandum of Cooperation on disaster risk reduction between the Ministry of Home Affairs of the Government of India and the Cabinet Office of the Government of Japan . They underlined the importance of identifying and disseminating best practices to "build better” and thus reducing losses arising from infrastructure damage during natural disasters, as aimed by the international coalition proposed by Prime Minister Modi at the Asia Ministerial Conference on Disaster Risk Reduction(AMCDRR)-2016.
 
36. The two Prime Ministers recognised the importance of the empowerment of women to maximise their national potential, and decided to strengthen cooperation in this area, including through conferences such as the World Assembly for Women (WAW!). They welcomed the convening of the "Indo-Japan Consultation on ‘Women at Work and Changing Social Norms’” in Delhi in July 2017.
 
Expanding vistas of People-to-People Cooperation
 
37. The two Prime Ministers renewed their commitment to strengthening human and cultural ties commensurate with their Special Strategic and Global Partnership.In this context, the two Prime Ministers welcomed a series of cultural events successfully held through the Year of India-Japan Friendly Exchanges in 2017.
 
38. The two Prime Ministers recognised the importance of expanding Japanese language education in India, for achieving wider and closer industrial cooperation. In this regard, they decided to endeavour towards establishing Japanese language certificate courses at 100 higher educational institutions in India as well as training1,000 Japanese language teachers, over the next five years.
 
39. The two Prime Ministers welcomed the exchange of notes for the construction of a state-of-art Convention Centre in Varanasi as a symbol of friendship between India and Japan and expressed their hope for its early completion.
 
40. The two Prime Ministers expressed satisfaction at the increased interaction at all levels of the government, between Members of Parliament, and between prefectures and states. They welcomed the strengthening of parliamentary exchanges through mutual visits of parliamentarians from both sides.
 
41.With a view to achieving greater policy coordination and deepening intellectual exchanges between the two countries, the two Prime Ministers encouraged interactions among senior officials, strategists and experts in leading think tanks and universities on wide-ranging issues in the Indo-Pacific region.
 
42. Prime Minister Modi welcomed the growing interest in celebrating the International Day of Yoga in Japan and, in particular, welcomed the first-ever Parliamentary League for Promotion of Yoga set up in the Japanese Diet in April 2017.
 
43. The two Prime Ministers underscored the importance of promoting tourism exchange between the two countries and hoped that the opening of the Japan National Tourism Organisation (JNTO) office in Delhi in March 2017 and further relaxation of visa requirements will facilitate business and tourism links between the two countries.
 
44. The two Prime Ministers welcomed the expansion of civil aviation connectivity between India and Japan, utilising the recently updated open sky policies between the two countries.
 
45. The two Prime Ministers noted the steady increase in the number of Indian students in Japan. They welcomed the SAKURA Science Plan (Japan-Asia Youth Exchange Programme in Science) and the Japan East Asia Network of Exchange for Students and Youths (JENESYS) which contributed to increase in numbers of young Indian students and researchers in science and technology visiting Japan and hoped for further strengthening of collaboration in these fields.
 
46. Aiming to enhance the positive influence of traditions of non-violence, tolerance and democracy in Asia, the two Prime Ministers welcomed the SAMVAD II conference held in Yangon, Myanmar, in August 2017 and looked forward to the next conference in 2018.
47. Prime Minister Abe welcomed the support offered by Prime Minister Modi for Japan’s efforts towards the successful organisation of the Tokyo 2020 Olympic and Paralympic Games. The two Prime Ministers noted with satisfaction the institutional linkages set up between India and Japan. They also acknowledged that the Olympic and Paralympic Games offer a unique opportunity for the two countries to further deepen their cooperation.
 
Working with Partners on Regional and Global Challenges
 
48. Welcoming the 50th anniversary of the establishment of ASEAN, the two Prime Ministers renewed their commitment to strengthening political, economic, and security cooperation with ASEAN countries, with a view to supporting the ASEAN’s unity and its centrality to regional architecture. They welcomed deepening bilateral policy coordination, including the launch of the India-Japan Dialogue on ASEAN in March 2017, and determined to work together to shape and strengthen the evolving regional architecture through ASEAN-led fora such as the ASEAN Regional Forum (ARF), ASEAN Defence Ministers’ Meeting Plus, the Expanded ASEAN Maritime Forum.
 
49. The two Prime Ministers reaffirmed that regular convening of the East Asia Summit (EAS) Ambassadors Meeting in Jakarta and the establishment of EAS Unit within the ASEAN Secretariat have contributed to ensuring that the EAS process, as the premier leaders-led forum to discuss broad strategic, security and economic issues of common concern, continues to retain its dynamic proactiveness in responding to emerging issues of global importance. They decided to work in unison to enhance physical and digital connectivity within the EAS framework while striving to ensure greater economic benefits to all in an equitable and balanced manner. They also decided to continue to enhance their cooperation in the maritime domain bilaterally as well as in multilateral fora.
 
50. The two Prime Ministers reaffirmed the importance of freedom of navigation, overflight and unimpeded lawful commerce in accordance with international laws. They also highlighted the importance of peaceful resolution of disputes, including through full respect for legal and diplomatic processes, without resorting to the threat or use of force, and in accordance with the universally recognised principles of international law, notably the United Nations Convention on the Law of the Sea (UNCLOS). The two Prime Ministers also reiterated their desire and determination to work together to maintain and promote peace, stability, and development in the Indo-Pacific region.
 
ADVERTISEMENT
51. The two Prime Ministers reaffirmed the importance of securing the maritime domain and combating piracy, armed robbery at sea and other transnational organised crimes through regional and international mechanisms such as the ARF, the Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP), the Contact Group on Piracy off the Coast of Somalia (CGPCS) and Shared Awareness and Deconfliction (SHADE) Mechanism, and expressed their commitment to pursue regional and international cooperation to combat these activities.
 
52. The two Prime Ministers welcomed the renewed momentum for trilateral cooperation with the US and Australia. They stressed on the strategic importance of these cooperative frameworks and shared willingness to expand concrete cooperation. They resolved to work with other countries and regional partners to ensure a rule-based order in the Indo-Pacific Region.
 
53. The two Prime Ministers condemned in the strongest terms North Korea’s continued development of its nuclear weapons and ballistic missile programs, including the latest nuclear test conducted by North Korea on 3 September as well as its uranium enrichment activities. Recognising that North Korea’s continued pursuit of nuclear and ballistic missile programmes and its proliferation links, including the launch of a ballistic missile flying over Japanese territory on 29 August 2017, pose grave and real threat to international peace and stability and the international non-proliferation efforts, the two Prime Ministers strongly urged North Korea to abandon its nuclear and ballistic missile programmes and not to take any further provocative actions, and to fully comply with its international obligations under relevant UNSC resolutions including the newly and unanimously adopted resolution 2375, and other international commitments. They pledged to work together to deal with the current serious situation and called on the international community to rigorously and fully implement relevant UNSC resolutions to maximise pressure on North Korea. They stressed the importance of holding accountable all parties that have supported North Korea’s nuclear and missile programmes. They also urged North Korea to address at the earliest the abductions issue.
 
54. The two Prime Ministers also condemned in the strongest terms the growing menace of terrorism and violent extremism. They shared the view that terrorism in all its forms and manifestations is a global scourge that must be forcefully combatted through concerted global action in the spirit of "zero tolerance”. Accordingly, the two Prime Ministers called upon all UN member countries to implement the UNSC Resolution 1267 and other relevant resolutions designating terrorist entities. They also called upon all countries to work towards rooting out terrorist safe havens and infrastructure, disrupting terrorist networks and financing channels and halting cross-border movement of terrorists. They underlined the need for all countries to ensure that their territory is not used to launch terrorist attacks on other countries. They emphasised the need for stronger international partnership in countering terrorism and violent extremism, including through increased sharing of information and intelligence. They called for enhanced bilateral cooperation in this regard. The two Prime Ministers also called for Pakistan to bring to justice the perpetrators of terrorist attacks including those of the November 2008 terrorist attack in Mumbai and the 2016 terrorist attack in Pathankot. They looked forward to the convening of the fifth India-Japan Consultation on Terrorism and to strengthening cooperation against terrorist threats from groups including Al-Qaida, ISIS, Jaish-e-Mohammad, Lakshar-e-Tayyiba, and their affiliates.
 
55. The two Prime Ministers reaffirmed their shared commitment to expedite the reform process of the United Nations, in particular the UN Security Council, in order to make it more legitimate, effective and representative, given the contemporary realities of the 21st century, and emphasized the importance of building upon the recent developments in the Intergovernmental Negotiations (IGN) aimed at launching text-based negotiations during the 72nd session of the General Assembly. In this regard, they also called for collaboration among reform-oriented countries through the "Group of Friends” on UNSC reform. They reiterated their support for each other’s candidature, based on the firmly shared recognition that India and Japan are legitimate candidates for permanent membership in an expanded UNSC.
 
56. The two Prime Ministers reaffirmed their shared commitment to the total elimination of nuclear weapons. Prime Minister Abe stressed the importance of early entry into force of the Comprehensive Nuclear-Test-Ban Treaty (CTBT). They called for an immediate commencement and early conclusion of negotiations on a non-discriminatory, multilateral and internationally and effectively verifiable Fissile Material Cut-off Treaty (FMCT) on the basis of Shannon Mandate. They expressed their resolve towards strengthening international cooperation to address the challenges of nuclear proliferation and nuclear terrorism.
 
57. Prime Minister Abe welcomed India's accession to the Missile Technology Control Regime (MTCR) and the Hague Code of Conduct against Ballistic Missile Proliferation (HCOC) and its intensified engagement with the export control regimes. The two Prime Ministers reaffirmed their commitment to work together for India to become a full member in the remaining three international export control regimes: Nuclear Suppliers Group, Wassenaar Arrangement and Australia Group, with the aim to strengthen the international non-proliferation efforts.
 
58. The two Prime Ministers emphasised the need for concerted global action to combat climate change reflecting the principle of common but differentiated responsibilities and respective capabilities, in the light of different national circumstances and to preserve the environment for future generations. They reiterated their commitment to work together to finalise the work programme for implementation of the Paris Agreement adopted under the UN Framework Convention for Climate Change by 2018. They also decided to accelerate further consultations on the Joint Crediting Mechanism (JCM). Prime Minister Modi welcomed Japan’s cooperation on Clean India, including the Clean Ganga project.
 
59. The two Prime Ministers underlined the crucial role of the rules-based multilateral trading system, and enhancing free, fair, and open trade, for achieving sustainable growth and development. They committed to resist protectionism including unfair trade practices and underlined the need to remove trade-distorting measures. They reaffirmed their commitment to work together to implement the Bali and Nairobi Ministerial decisions and make the eleventh WTO Ministerial Conference a success. They also decided to steadily implement WTO’s Trade Facilitation Agreement.
 
60.  Recognising India as the largest democracy and a fast growing large economy in the Asia-Pacific region, and acknowledging India’s robust macro-economic stability and its efforts at financial reforms, Japan reaffirmed its support to India’s membership in the APEC. The two Prime Ministers decided to work towards liberalisation and facilitation of trade and investment in the Asia-Pacific region. They reaffirmed to cooperate towards conclusion of a modern, comprehensive, high quality and mutually beneficial Regional Comprehensive Economic Partnership (RCEP) Agreement, in order to achieve a balanced outcome. They reaffirmed their commitment to further strengthening cooperation and to working with partners to tackle excess capacity in steel. In this regard, they called for the removal of market-distorting subsidies and other types of support by governments and related entities. They also reaffirmed their commitment to developing concrete policy solutions at the Global Forum on Steel Excess Capacity by November 2017.
 
Conclusion
 
Prime Minister Abe thanked the Government and the people of India for their warm hospitality and extended a cordial invitation to Prime Minister Modi to visit Japan at a mutually convenient time for the next annual summit meeting. Prime Minister Modi accepted the invitation with appreciation. 
 
Prime Minister of the Republic of India             ----               Prime Minister of Japan 
Signed at Gandhinagar, Gujarat on 14 September 2017.
 
ADVERTISEMENT
 

Union Council of Ministers

President Ram Nath Kovind, Vice-President M. Venkaiah Naidu and Prime Minister Narendra Modi with the newly inducted Ministers after a swearing-in ceremony, at Rashtrapati Bhavan, in New Delhi on September 3, 2017.
President Ram Nath Kovind, Vice-President M. Venkaiah Naidu and Prime Minister Narendra Modi with the newly inducted Ministers after a swearing-in ceremony, at Rashtrapati Bhavan, in New Delhi on September 3, 2017.
The following is the composition of the Union Council of Ministers as on September 3, 2017 after Prime Minister Narendra Modi carried out a major expansion and reshuffle of his Ministry:
 
Narendra Modi: Prime Minister and also in-charge of: Ministry of Personnel, Public Grievances and Pensions; Department of Atomic Energy; Department of Space; and
All important policy issues; and all other portfolios not allocated to any Minister.
 
CABINET MINISTERS
 
1.   Raj Nath Singh: Minister of Home                                                                                                                  Affairs.
2.   Sushma Swaraj: Minister of External Affairs.
3.   Arun Jaitley: Minister of Finance; and Minister of Corporate Affairs.
4.   Nitin Jairam Gadkari: Minister of Road Transport and Highways; Minister of                                                        Shipping; and Minister of Water Resources, River                                                              Development and Ganga Rejuvenation.
5.   Suresh Prabhu: Minister of Commerce and Industry.
6.   D.V. Sadananda Gowda: Minister of Statistics and Programme Implementation.
7.   Uma Bharati: Minister of Drinking Water and Sanitation.
8.   Ramvilas Paswan: Minister of Consumer Affairs, Food and Public Distribution.
9.   Maneka Sanjay Gandhi: Minister of Women and Child Development.
10. Ananthkumar: Minister of Chemicals and Fertilizers; and Minister of Parliamentary                                   Affairs.
11.  Ravi Shankar Prasad: Minister of Law and Justice; and Minister of Electronics and                                              Information Technology.
12. Jagat Prakash Nadda: Minister of Health and Family Welfare.
13.  Ashok Gajapathi Raju Pusapati: Minister of Civil Aviation.
14.  Anant Geete: Minister of Heavy Industries and Public Enterprises.
15.  Harsimrat Kaur Badal: Minister of Food Processing Industries.
16.  Narendra Singh Tomar: Minister of Rural Development; Minister of Panchayati Raj;                                                and Minister of Mines.
17.  Chaudhary Birender Singh: Minister of Steel.
18.  Jual Oram: Minister of Tribal Affairs.
19.  Radha Mohan Singh: Minister of Agriculture and Farmers Welfare.
20.  Thaawar Chand Gehlot: Minister of Social Justice and Empowerment.
21.  Smriti Zubin Irani: Minister of Textiles; and Minister of Information and Broadcasting.
22.  Harsh Vardhan: Minister of Science and Technology; Minister of Earth Sciences;                                        and Minister of Environment, Forest and Climate Change.
23.  Prakash Javadekar: Minister of Human Resource Development.
24.  Dharmendra Pradhan: Minister of Petroleum and Natural Gas; and Minister of Skill                                               Development and Entrepreneurship.
25.  Piyush Goyal: Minister of Railways; and Minister of Coal.
26.  Nirmala Sitharaman: Minister of Defence.
27.  Mukhtar Abbas Naqvi: Minister of Minority Affairs.
 
MINISTERS OF STATE (INDEPENDENT CHARGE)
 
1.   Rao Inderjit Singh: Minister of State (Independent Charge) of the Ministry of                                                    Planning; and Minister of State in the Ministry of Chemicals and                                        Fertilizers.
2.   Santosh Kumar Gangwar: Minister of State (Independent Charge) of the Ministry of                                                    Labour and Employment.
3.   Shripad Yesso Naik: Minister of State (Independent Charge) of the Ministry of                                                     Ayurveda, Yoga and Naturopathy, Unani, Siddha and                                                         Homoeopathy (AYUSH).
4.  Jitendra Singh: Minister of State (Independent Charge) of the Ministry of                                                   Development of North Eastern Region; Minister of State in the Prime                               Minister’s Office; Minister of State in the Ministry of Personnel, Public                               Grievances and Pensions; Minister of State in the Department of                                        Atomic Energy; and Minister of State in the Department of Space.
5.  Mahesh Sharma: Minister of State (Independent Charge) of the Ministry of Culture;                                       and Minister of State in the Ministry of Environment, Forest and                                         Climate Change.
6. Giriraj Singh: Minister of State (Independent Charge) of the Ministry of Micro, Small                               and Medium Enterprises.
7. Manoj Sinha: Minister of State (Independent Charge) of the Ministry of                                                   Communications; and Minister of State in the Ministry of Railways.
8. Col. Rajyavardhan Singh Rathore: Minister of State (Independent Charge) of the                                                                     Ministry of Youth Affairs and Sports; and Minister                                                               of State in the Ministry of Information and                                                                           Broadcasting.
9. Raj Kumar Singh: Minister of State (Independent Charge) of the Ministry of Power;                                      and Minister of State (Independent Charge) of the Ministry of New                                    and Renewable Energy.
10. Hardeep Singh Puri: Minister of State (Independent Charge) of the Ministry of                                                   Housing and Urban Affairs.
11.  Alphons Kannanthanam: Minister of State (Independent Charge) of the Ministry of                                                    Tourism; and Minister of State in the Ministry of Electronics                                                and Information Technology.
 
MINISTERS OF STATE
 
1. Vijay Goel: Minister of State in the Ministry of Parliamentary Affairs; and Minister of                           State in the Ministry of Statistics and Programme Implementation.
2.  Radhakrishnan P.: Minister of State in the Ministry of Finance; and Minister of State                                       in the Ministry of Shipping.
3.  S.S. Ahluwalia: Minister of State in the Ministry of Drinking Water and Sanitation.
4.  Ramesh Chandappa Jigajinagi: Minister of State in the Ministry of Drinking Water and                                                         Sanitation.
5.  Ramdas Athawale: Minister of State in the Ministry of Social Justice and                                                          Empowerment.
6. Vishnu Deo Sai: Minister of State in the Ministry of Steel.
7.  Ram Kripal Yadav: Minister of State in the Ministry of Rural Development.
8.  Hansraj Gangaram Ahir: Minister of State in the Ministry of Home Affairs.
9.  Haribhai Parthibhai Chaudhary: Minister of State in the Ministry of Mines; and
                                                        Minister of State in the Ministry of Coal.
10. Rajen Gohain: Minister of State in the Ministry of Railways.
11. General (Retd.) V. K. Singh: Minister of State in the Ministry of External Affairs.
12. Parshottam Rupala: Minister of State in the Ministry of Agriculture and Farmers                                                Welfare; and Minister of State in the Ministry of Panchayati Raj.
13. Krishan Pal: Minister of State in the Ministry of Social Justice and Empowerment.
14.  Jaswantsinh Sumanbhai Bhabhor: Minister of State in the Ministry of Tribal Affairs.
15. Shiv Pratap Shukla: Minister of State in the Ministry of Finance.
16.  Ashwini Kumar Choubey: Minister of State in the Ministry of Health and Family                                                         Welfare.
17.  Sudarshan Bhagat: Minister of State in the Ministry of Tribal Affairs.
18.  Upendra Kushwaha: Minister of State in the Ministry of Human Resource                                                           Development.
19.  Kiren Rijiju: Minister of State in the Ministry of Home Affairs.
 20. Virendra Kumar: Minister of State in the Ministry of Women and Child Development;                                   and Minister of State in the Ministry of Minority Affairs.
21.  Anantkumar Hegde: Minister of State in the Ministry of Skill Development and                                                   Entrepreneurship.
22.  M. J. Akbar: Minister of State in the Ministry of External Affairs.
23.  Sadhvi Niranjan Jyoti: Minister of State in the Ministry of Food Processing                                                            Industries.
24.  Y. S. Chowdary: Minister of State in the Ministry of Science and Technology; and
                                 Minister of State in the Ministry of Earth Sciences.
25.  Jayant Sinha: Minister of State in the Ministry of Civil Aviation.
26.  Babul Supriyo: Minister of State in the Ministry of Heavy Industries and Public                                          Enterprises.
27.  Vijay Sampla: Minister of State in the Ministry of Social Justice and Empowerment.
28.  Arjun Ram Meghwal: Minister of State in the Ministry of Parliamentary Affairs; and
                                         Minister of State in the Ministry of Water Resources, River
                                         Development and Ganga Rejuvenation.
29.  Ajay Tamta: Minister of State in the Ministry of Textiles.
30.  Krishna Raj: Minister of State in the Ministry of Agriculture and Farmers Welfare.
31.  Mansukh  L. Mandaviya: Minister of State in the Ministry of Road Transport and                                                      Highways; Minister of State in the Ministry of Shipping; and
                                               Minister of State in the Ministry of Chemicals and                                                              Fertilizers.
32. Anupriya Patel: Minister of State in the Ministry of Health and Family Welfare.
33. C.R. Chaudhary: Minister of State in the Ministry of Consumer Affairs, Food and Public Distribution; and Minister of State in the Ministry of Commerce and Industry.
34.  P.P. Chaudhary: Minister of State in the Ministry of Law and Justice; and Minister of                                  State in the Ministry of Corporate Affairs.
35.  Subhash Ramrao Bhamre: Minister of State in the Ministry of Defence.
36.  Gajendra Singh Shekhawat: Minister of State in the Ministry of Agriculture and                                                              Farmers Welfare.
37.   Satya Pal Singh: Minister of State in the Ministry of Human Resource                                                           Development; and Minister of State in the Ministry of Water                                               Resources, River Development and Ganga Rejuvenation.
 
NNN
ADVERTISEMENT
 

President’s Address on the eve of Independence Day, 2017

President Ram Nath Kovind addressing the nation on the eve of Independence Day 2017, in New Delhi on August 14, 2017.
President Ram Nath Kovind addressing the nation on the eve of Independence Day 2017, in New Delhi on August 14, 2017.
The following is the text of President Ram Nath Kovind's address to the nation today on the eve of India’s 71st Independence Day, 2017:
 
Dear Fellow Citizens engaged in the task of nation building
 
My greetings to you as we complete 70 years of our Independence
 
Our country will be celebrating its 71st Independence Day tomorrow. On the eve of this anniversary I extend my good wishes to all of you.
 
On August 15, 1947, we became a free nation. Sovereignty and the responsibility for our destiny moved from the British crown to the people of India. Some have called this process a “transfer of power”.
 
It was much more than that. It was the culmination of a dream for our country – a dream seen by our forefathers and freedom fighters. We were free to imagine and build our nation anew.
 
It is crucial to understand that this dream for a free India was rooted in our ordinary villages, in the well-being of our poor and underprivileged, and in the all-round development of our country.
 
For this we owe so much to the countless freedom fighters who made great sacrifices to bring us here.
 
Chennamma, the Rani of Kittur. Lakshmibai of Jhansi. Matangini Hazra, the heroine and martyr of the Quit India Movement. There are so many examples.
 
Matangini Hazra was an elderly woman, into her 70s. She was shot by the colonial police in Tamluk, in Bengal, while leading a peaceful protest march. She died with “Vande Mataram” on her lips and with the hope of a free India in her heart.
 
Freedom fighters like Sardar Bhagat Singh, Chandrashekhar Azad, Ram Prasad Bismil, Ashfaqullah Khan, Birsa Munda and thousands of others gave their lives for us. We can never forget them.
 
From the earliest days of our freedom struggle, we were blessed with a galaxy of revolutionary leaders who guided our country.
 
They spoke of not just political freedom. Mahatma Gandhi emphasised the moral character of India and of Indian society. The principles that Gandhiji spoke about are relevant even today.
 
Gandhiji was not alone in this nationwide struggle for freedom and reform. Netaji Subhas Chandra Bose exhorted our people, saying: “Give me blood and I will give you freedom”. At his word, millions of Indians joined the freedom movement under his leadership and gave their all.
 
Nehruji emphasised that India’s age-old heritage and traditions – so dear to us – could co-exist with technology and a quest to modernise our society.
 
Sardar Patel instilled in us the importance of national unity and integrity. And of a disciplined national character.
 
Babasaheb Bhim Rao Ambedkar urged upon us the virtues of constitutional governance, of the rule of law – and of the vital need for education.
 
I have given only a few examples of illustrious leaders. I could give you many more. The generation that brought us to freedom was diverse. They were men and women who represented all parts of our country and a variety of political and social thought.
 
We need to draw inspiration from such brave freedom fighters, many of whom sacrificed even their lives for the country. We need to invoke the same spirit today in the task of nation building.
 
The stress on the moral basis of policy and action, belief in unity and discipline, faith in a synthesis of heritage and science, and promotion of the rule of law and of education – all of it was located in a partnership between citizen and government.
 
That is how our nation has been built – by a partnership between citizen and government, between individual and society, between a family and the wider community.
 
Fellow Citizens
 
A tradition I remember from my childhood was that when there was a wedding in any one family, the entire village shared the responsibility and contributed. Regardless of the caste or community, the bride became the daughter of not just a single family but of the entire village.
 
Neighbours and others living in the village looked after guests, and took charge of different arrangements. Contributions came from many families. One family would send food-grains for the wedding, another would send vegetables, a third would arrive with some other item.
 
There was a sense of caring and of sharing, and of interdependence. If you helped your neighbours in their times of need, they instinctively helped you in turn.
 
Today, in big cities we may not even know our neighbours. Whether in cities or villages, it is important to renew that sense of caring and sharing. This will make us a gentler and happier society and help us understand each other with greater empathy.
 
Fellow Citizens
 
This spirit of empathy and of social service and volunteerism is very much alive in India. There are so many people and organisations that work quietly and diligently for the poor and the disadvantaged.
 
They could be running schools for street children, caring for stray animals and birds, and providing water to hard-to-reach tribal communities in remote areas. Or cleaning rivers and public places. They are nation builders in action, and we need to draw inspiration from them.
 
ADVERTISEMENT
We should also work with unity and purpose to ensure that the benefits of government policies reach all sections of society. For this, the partnership between citizens and government remains essential:
 
·         The government has started the Swachchh Bharat campaign – but it is for each of us to ensure a Swachchh Bharat
 
·         The government is building toilets or helping build toilets – but it is for each of us to use those toilets and make India open-defecation free
 
·         The government is enabling communication infrastructure – but it is for each of us to use the Internet for the right purposes: to bridge knowledge gaps, create opportunities, and enhance educational and information access
 
·         The government is promoting the idea of Beti Bachao–Beti Padhao – but it is for each of us to ensure that our daughters are not discriminated against and get the best education
 
·         The government can frame laws and strengthen law enforcement – but it is for each of us to be a law-abiding citizen. And to build a law-abiding society
 
·         The government is pushing transparency and eliminating corruption in public recruitment and procurement – but it is for each of us to answer to our inner conscience in everyday life
 
·         The government is implementing GST to eliminate multiple taxes and simplify transactions – but it is for each of us to make this an essential part of our everyday transactions and business culture
 
I am happy that the transition to the GST system has been smooth. It should be a matter of pride for all of us that the taxes we pay are used for nation building – to help the poor and the marginalised, to build rural and urban infrastructure, and to strengthen our border defences.
 
Fellow Citizens
 
In the year 2022, our country will complete 75 years of Independence. It is our national resolve to attain certain desired milestones for a New India by then.
 
When we speak of a New India, what do we mean? There are some obvious parameters – like a house for every family, power on demand, better roads and telecom, a modern railway network, rapid and sustained growth.
 
And yet there is more. New India must include that integral humanist component that is in our DNA, and which has defined our country and our civilisation. New India must be a society rushing towards the future, but also a compassionate society.
 
·         A compassionate society where the traditionally disadvantaged, whether SCs, STs or OBCs, are part of our national developmental process
 
·         A compassionate society where populations in our frontier areas and states, who may sometimes feel a sense of alienation, are embraced as our brothers and sisters
 
·         A compassionate society where the deprived child, the aged and the ailing senior citizen, and the poor and the under-privileged are always in our thought – not an afterthought. And where we take special care to ensure that our divyang brothers and sisters get equal opportunities in all walks of life
 
·         A compassionate and egalitarian society that does not discriminate on gender or religious background
 
·         A compassionate society that enriches our human capital and equips our young people by promoting accessible, affordable and world-class educational institutions. And where quality health-care and nutrition are not a challenge
 
It is only with all this that we will build the New India we can cherish – where every Indian is equipped to fulfil his or her potential and do so in a manner that leaves each one of us content and happy. And helps each of us contribute to society and our country.
 
I am confident that a strong partnership between citizens and the government will allow us to meet the goals of New India.
 
Your immense patience and understanding in the days following demonetisation – and your whole-hearted support in the battle against corruption and black money – reflected a responsible and enlightened society.
 
Demonetisation has boosted our efforts to build an honest society. We must sustain this spirit and this momentum.
 
Fellow Citizens
 
There is also need to adopt technology. We must use technology to empower our people and achieve the goal of poverty elimination in a single generation. Poverty and New India are simply not compatible.
 
Today, the world is looking at India with admiration. Our country is seen as a responsible global citizen, a growing economy, and a solution provider to various international challenges – such as climate change, disasters, conflicts, humanitarian crises, radicalism and terrorism.
 
The Tokyo Olympics of 2020 offer another opportunity for us to raise our standing in the world’s eyes. Over the coming three years, we should absorb ourselves in this national mission. Government agencies, sports bodies and business enterprises need to join hands to identify and support our talented sportspersons and provide them world-class training facilities – so that they can be even more successful in Tokyo.
 
As citizens and children of India – whether we live at home or abroad – we must ask ourselves how we can add to our country’s pride.
 
Fellow Citizens
 
It is natural for us to think of our families, but we must also think of society. We must heed the call for that extra degree of selflessness, that extra something beyond just duty. A mother who nurtures and brings up her child is not just doing a duty. She is displaying a unique selflessness.
 
·         Our soldiers who guard our borders, on a hot day in the desert or high up on a cold mountain, are not just doing their duty. They are displaying an extra degree of selflessness
 
·         Our police and paramilitary forces that brave death to combat terrorism or crime and keep us safe are not just doing their duty. They are displaying an extra degree of selflessness
 
·         Our farmers who labour under extremely tough conditions to grow food to feed fellow Indians whom they have never met, and who live in the other corner of the country, are not just doing a job. They are displaying an extra degree of selflessness
 
·         After natural disasters, so many motivated people, civil society groups and public agencies work day-and-night in rescue and relief operations. They display an extra degree of selflessness
 
Can each of us not imbibe this spirit of selflessness?
 
We can and we have.
 
On an appeal from the Prime Minister, more than one crore families voluntarily gave up their LPG fuel subsidy – so that a gas cylinder could reach the kitchen of a poorer family of fellow Indians. And so that members of that family, particularly women, were saved from smoke from chulhas that damaged their eyes and lungs.
 
I salute those families that gave up their subsidy. No law or government order made them do what they did. Their response came from within.
 
We should draw inspiration from these families. Each of us must find a way to give back to society. Each of us must choose one thing we can do to help another, less-fortunate Indian.
 
The single most critical factor for building our nation is to equip our coming generation. We need to ensure that not one child is left behind. As such I would urge you, as fellow nation builders, to help educate less-privileged children in our society. Help teach a child other than your own. Enrol and pay the school fees or buy the books of at least one child other than your own. Just one!
 
Our India is at the door of great achievements. In a few years, we will become a fully literate society. We must set the bar higher, and aim to become a fully educated society.
 
We are all stake-holders in this mission. If we achieve it, our country will change before our eyes. And we will become agents of this defining change.
 
Two thousand five hundred years ago Gautam Buddha said, “Be a lamp unto yourself.” If we follow his teachings, acting together, with the passion of our freedom movement, we can collectively be the 125 crore lamps that light up the path to a New India.
 
Once more, I wish all of you the very best on the eve of our 71st Independence Day.
 
Jai Hind
 
Vande Matram
 
ADVERTISEMENT
 

Full Text: RBI's Third Bi-monthly Monetary Policy Statement, 2017-18

RBI logo
 
Following is the text of the Third Bi-monthly Monetary Policy Statement, 2017-18 and Resolution of the Monetary Policy Committee (MPC) issued by the Reserve Bank of India (RBI) here today: 
 
Resolution of the Monetary Policy Committee (MPC), Reserve Bank of India
 
On the basis of an assessment of the current and evolving macroeconomic situation at
its meeting today, the Monetary Policy Committee (MPC) decided to:
 
• reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis
points from 6.25 per cent to 6.0 per cent with immediate effect.
 
Consequently, the reverse repo rate under the LAF stands adjusted to 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 6.25 per cent.
 
The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth. The main considerations underlying the decision are set out in the statement below.
 
Assessment
 
2. Since the June 2017 meeting of the MPC, impulses of growth have spread across the
global economy albeit still lacking the strength of a self-sustaining recovery. Among the
advanced economies (AEs), the US has expanded at a faster pace in Q2 after a weak Q1, supported by steadily improving labour market conditions, increasing consumer spending, upbeat consumer confidence helped by softer than expected inflation, and improving industrial production. Policy and political risks, however, continue to cloud the outlook. In the Euro area, the recovery has broadened across constituent economies on the back of falling unemployment and a pickup in private consumption; political uncertainty has receded substantially. In Japan, a modest but steady expansion has been taking hold, underpinned by strengthening exports, accelerating industrial production and wage reflation.
 
3. Among emerging market economies (EMEs), growth has regained some lost ground in China in Q2, with retail sales and industrial production rising at a steady pace. Nonetheless, tightening financial conditions on account of deleveraging financial institutions and slowdown in real estate could weigh negatively. The Russian economy has emerged out of two years of recession, aided by falling unemployment, rising retail sales and strong industrial production. In Brazil, a fragile recovery remains vulnerable to political uncertainty and a still depressed labour market. Economic activity in South Africa continues to be beset by structural and institutional bottlenecks and is in a technical recession.
 
4. The modest firming up of global demand and stable commodity prices have supported
global trade volumes, reflected in rising exports and imports in key economies. In the second half of July, crude prices have risen modestly out of bearish territory on account of inventory drawdown in the US, but the supply overhang persists. Chinese demand has fuelled a recent rally in metal prices, particularly copper. Bullion prices fell to multi-month lows on improved risk appetite but remain vulnerable to shifts in the geopolitical environment. Notwithstanding these developments, inflation is well below target in most AEs and is subdued across most EMEs.
 
5. International financial markets have been resilient to political uncertainties and
volatility has declined, except for sporadic reactions to hints of balance sheet adjustments by systemic central banks. Equity markets in most AEs have registered gains, with indices crossing previous highs in the US, but European markets were weighed down by Brexit talks and the strengthening euro. In EMEs, equities have gained on surging global risk appetite underpinned by improving macroeconomic fundamentals that have been pulling in capital inflows. Bond yields in major AEs have hardened on expectations of monetary policy normalisation, with German bunds reaching an intra-year high. In EMEs, the situation has remained diverse, driven by domestic factors, and fixed-income markets have been generally insulated from the bond sell-off in AEs. In the currency markets, the US dollar weakened further and fell to a multi-month low in July on weak inflation and uncertainty around the policies of the US administration. The euro, which has remained bullish, rallied further on upbeat economic data. The Japanese yen has generally eased, interspersed by bouts of appreciation on safe haven demand. EME currencies largely remained stable and have traded
with an appreciating bias.
 
6. On the domestic front, a normal and well-distributed south-west monsoon for the
second consecutive year has brightened the prospects of agricultural and allied activities and rural demand. By August 1, rainfall was 1 per cent above the long period average (LPA) and 84 per cent of the country’s geographical area received excess to normal precipitation. Kharif sowing has progressed at a pace higher than last year’s, with full-season sowing nearly complete for sugarcane, jute and soyabean. The initial uncertainty surrounding sowing of pulses barring tur and rice in some regions has also largely dissipated. Sowing of cotton and coarse cereals has exceeded last year’s levels but for oilseeds, it is lagging. Overall, these developments should help achieve the crop production targets for 2017-18 set by the Ministry of Agriculture at a higher level than the peak attained in the previous year. Meanwhile, procurement operations in respect of rice and wheat during the rabi marketing season have been stepped up to record levels – 36.1 million tonnes in April-June 2017 – and stocks have risen to 1.5 times the buffer norm for the quarter ending September.
 
7. Industrial performance has weakened in April-May 2017. This mainly reflected a
broad-based loss of speed in manufacturing. Excess inventories of coal and near stagnant output of crude oil and refinery products combined to slow down mining activity. For electricity generation, deficiency of demand seems to remain a binding constraint. In terms of uses, the output of consumer non-durables accelerated and underlined the resilience of rural demand. It was overwhelmed, however, by contraction in consumer durables – indicative of still sluggish urban demand – and in capital goods, which points to continuing retrenchment of capital formation in the economy. The weakness in the capex cycle was also evident in the number of new investment announcements falling to a 12-year low in Q1, the lack of traction in the implementation of stalled projects, deceleration in the output of infrastructure goods, and the ongoing deleveraging in the corporate sector. The output of core industries was also
dragged down by contraction in electricity, coal and fertiliser production in June, owing to
excess inventory and tepid demand. On the positive side, natural gas recorded an uptick in production after a prolonged decline and steel output remained strong. The 78th round of the Reserve Bank’s industrial outlook survey (IOS) revealed a waning of optimism in Q2 about demand conditions across parameters, and especially on capacity utilisation, profit margins and employment. The manufacturing purchasing managers’ index (PMI) moderated sequentially to a four-month low in June and the future output index also eased marginally. In July, the PMI declined into the contraction zone with a decrease in new orders and a deterioration in business conditions, reflecting inter alia the roll out of the GST; however, both new export orders and the future output index rose, reflecting optimism in the outlook. 
 
8. In contrast to manufacturing, high frequency real indicators of services sector activity
point to a mixed picture in Q1. In the transportation sub-sector, freight carriage by air
registered a strong performance sequentially and on an annual basis. Commercial vehicle sales rose after two successive months of contraction in response to the Bharat Standard (BS)-IV emission compliance switchover. Sales of passenger cars and two-wheelers suffered temporary dislocation in June even as motorcycle sales continued to grow for the third consecutive month, reflecting the firmness of rural demand. Activity in the communication sub-sector accelerated in May on strong and sustained growth in the subscriber base of voice and data services. The hospitality sub-sector was supported by vigorous growth of foreign tourist arrivals and air passenger traffic. The acceleration in steel consumption in April-May may be a precursor to a pickup in construction activity in Q1, but cement production remains in contraction mode. The PMI for the services sector continued to remain in expansion mode in May-June on expectations of improvement in market conditions.
 
9. In June, retail inflation measured by year-on-year changes in the CPI plunged to its
lowest reading in the series based to 2011-12. This was mainly the outcome of large
favourable base effects which are slated to dissipate and reverse from August. Although
month-on-month increases in the price level have been picking up since April, they were
weak in relation to the typical food-price driven summer uptick. The delay in indirect tax
revisions and anecdotal evidence of clearance sales across commodities could have dampened the momentum.
 
10. Prices of food and beverages, which went into deflation in May 2017 for the first time
in the new CPI series, sank further in June as prices of pulses, vegetables, spices and eggs recorded year-on-year declines and inflation moderated across most other sub-groups. There are now visible signs, however, of the usual seasonal price spikes, even if with a delay and especially in respect of tomatoes, onions and milk.
 
ADVERTISEMENT
11. Fuel inflation declined for the second month in succession as international prices of liquefied petroleum gas (LPG) fell and price increases moderated in the case of coke, and firewood and chips. Administered prices of LPG and kerosene are set to rise with the calibrated reduction in subsidy. Households appear to have discounted the recent low inflation prints; their three month ahead and one year ahead inflation expectations polled in the June 2017 round of the Reserve Bank’s survey have somewhat hardened.
 
12. Excluding food and fuel, CPI inflation moderated for the third month in succession in June, falling to 4 per cent as price momentum moderated inter alia in respect of education due to delay in fee revision cycles, and also in respect of health, clothing and footwear. Inflation in transport and communication services was depressed by the pricing war in the telecommunication space. Input costs relating to both industry and farms remain benign tracking international prices. Pricing power polled in the Reserve Bank’s industrial outlook survey and in manufacturing and services PMIs is still subdued.
 
13. Surplus liquidity conditions persisted in the system, exacerbated by front-loading of
budgetary spending by the Government. There was also some moderation in the pace of increase in currency in circulation (CiC) which is typical at this time of the year – as against the increase of Rs. 1.5 trillion in CiC during the first two months of 2017-18, it was Rs. 436 billion and Rs. 95 billon during June and July, respectively. Normally, currency returns to the banking system in these months and is reflected in a decline in CiC; consequently, the increase in CiC recorded this year reflects the sustained pace of remonetisation and the associated absorption of liquidity from the system. Surplus liquidity of Rs. 1 trillion was absorbed through issuance of treasury bills (TBs) under the market stabilisation scheme (MSS) and Rs. 1.3 trillion through cash management bills (CMBs) on a cumulative basis so far this financial year. Enduring surplus conditions warranted outright open market sales of Rs. 100 billion each on two occasions in June and July. Another auction of an equivalent amount has been announced and will be conducted on August 10, 2017. Apart from these operations, net average absorption of liquidity under the LAF was at Rs. 3.1 trillion in June and Rs. 3.0 trillion in July. Reflecting this active liquidity management, the weighted average call rate (WACR)
firmed up and traded about 17 bps below the repo rate on average during June and July – down from 29-32 basis points (bps) in March-April and 21 bps in May – within the LAF
corridor.
 
14. Turning to the external sector, merchandise export growth weakened in May and June from the April peak as the value of shipments across commodity groups either slowed or declined. By contrast, import growth remained in double digits, primarily due to a surge in oil imports and stockpiling of gold imports ahead of the implementation of the GST. Imports of coal, electronic goods, pearls and precious stones, vegetable oils and machinery also accelerated. As import growth continued to outpace export growth, the trade deficit at US$ 40.1 billion in Q1 was more than double its level a year ago. Net foreign direct investment doubled in April-May 2017 over its level a year ago, flowing mainly into manufacturing, retail and wholesale trade and business services. Foreign portfolio investors made net purchases of US$ 15.2 billion in domestic debt and equity markets so far (up to July 31), remaining bullish on the outlook for the Indian economy. The level of foreign exchange reserves was US$ 392.9 billion as on July 28, 2017.
 
Outlook
 
15. The second bi-monthly statement projected quarterly average headline inflation in the range of 2.0-3.5 per cent in the first half of the year and 3.5-4.5 per cent in the second half. The actual outcome for Q1 has tracked projections. Looking ahead, as base effects fade, the evolving momentum of inflation would be determined by (a) the impact on the CPI of the implementation of house rent allowances (HRA) under the 7th central pay commission (CPC); (b) the impact of the price revisions withheld ahead of the GST; and (c) the disentangling of the structural and transitory factors shaping food inflation. The inflation trajectory has been updated taking into account all these factors and incorporates the first round impact of the implementation of the HRA award by the Centre.
 
16. There are several factors contributing to uncertainty around this baseline inflation
trajectory. Implementation of farm loan waivers by States may result in possible fiscal
slippages and undermine the quality of public spending, entailing inflationary spillovers.
Moreover, the timing of the States’ implementation of the salary and allowances award is
critical – it is not factored into the baseline projection in view of lack of information on their plans. If States choose to implement salary and allowance increases similar to the Centre in the current financial year, headline inflation could rise by an additional estimated 100 basis points above the baseline over 18-24 months. Also, high frequency indicators suggest that price pressures are building up in vegetables and animal proteins in the near months. There are, however, some moderating forces at work. First, the second successive normal monsoon coupled with effective supply management measures may keep food inflation under check. Second, if the general moderation of price increases in CPI excluding food and fuel continues, it will contain upside pressures on headline inflation. Third, the international commodity price outlook is fairly stable at the current juncture.
 
17. Business sentiment polled in the manufacturing sector reflects expectations of
moderation of activity in Q2 of 2017-18 from the preceding quarter. Moreover, high levels of stress in twin balance sheets – banks and corporations – are likely to deter new investment. With the real estate sector coming under the regulatory umbrella, new project launches may involve extended gestations and, along with the anticipated consolidation in the sector, may restrain growth, with spillovers to construction and ancillary activities. Also, given the limits on raising market borrowings and taxes by States, farm loan waivers are likely to compel a cutback on capital expenditure, with adverse implications for the already damped capex cycle. At the same time, upsides to the baseline projections emanate from the rising probability of another good kharif harvest, the boost to rural demand from the higher budgetary allocation to
housing in rural areas, the significant step-up in the budgetary allocation for roads and 
bridges, and the growth-enhancing effects of the GST, viz., the shifting of trade from
unorganised to organised segments; the reduction of tax cascades; cost, efficiency and
competitiveness gains; and synergies in domestic supply chains. In turn, these virtuous forces may spur investment. External demand conditions are gradually improving and should support the domestic economy, although global political risks remain significant. Keeping in view these factors, the projection of real GVA growth for 2017-18 has been retained at the June 2017 projection of 7.3 per cent, with risks evenly balanced. 
 
18. The MPC observed that while inflation has fallen to a historic low, a conclusive
segregation of transitory and structural factors driving the disinflation is still elusive. In
respect of inflation-sensitive vegetables, prices are recording spikes. Excess supply conditions continue to push down prices of pulses and keep those of cereals in check. The MPC will continue monitoring movements in inflation to ascertain if recent soft readings are transient or if a more durable disinflation is underway. In its assessment of real activity, the MPC noted that while the outlook for agriculture appears robust, underlying growth impulses in industry and services are weakening, given corporate deleveraging and the retrenchment of investment demand.
 
19. The MPC noted that some of the upside risks to inflation have either reduced or not
materialised - (i) the baseline path of headline inflation excluding the HRA impact has fallen below the projection made in June to a little above 4 per cent by Q4; (ii) inflation excluding food and fuel has fallen significantly over the past three months; and, (iii) the roll-out of the GST has been smooth and the monsoon normal. Consequently, some space has opened up for monetary policy accommodation, given the dynamics of the output gap. Accordingly, the MPC decided to reduce the policy repo rate by 25 basis points. Noting, however, that the trajectory of inflation in the baseline projection is expected to rise from current lows, the MPC decided to keep the policy stance neutral and to watch incoming data. The MPC remains focused on its commitment to keeping headline inflation close to 4 per cent on a durable basis.
 
20. On the state of the economy, the MPC is of the view that there is an urgent need to
reinvigorate private investment, remove infrastructure bottlenecks and provide a major thrust to the Pradhan Mantri Awas Yojana for housing needs of all. This hinges on speedier clearance of projects by the States. On their part, the Government and the Reserve Bank are working in close coordination to resolve large stressed corporate borrowers and recapitalise public sector banks within the fiscal deficit target. These efforts should help restart credit flows to the productive sectors as demand revives. 
 
21. Dr. Chetan Ghate, Dr. Pami Dua, Dr. Viral V. Acharya and Dr. Urjit R. Patel were in
favour of the monetary policy decision, while Dr. Ravindra H. Dholakia voted for a policy
rate reduction of 50 basis points and Dr. Michael Debabrata Patra voted for status quo. The minutes of the MPC’s meeting will be published by August 16, 2017.
 
22. The next meeting of the MPC is scheduled on October 3 and 4, 2017.
 
NNN
ADVERTISEMENT
 

India-Israel Joint Statement

Prime Minister Narendra Modi meeting Israeli Prime Minister Benjamin Netanyahu, in Jerusalem, Israel on July 5, 2017.
Prime Minister Narendra Modi meeting Israeli Prime Minister Benjamin Netanyahu, in Jerusalem, Israel on July 5, 2017.
Following is the text of the Joint Statement issued by India and Israel here today during the visit of Prime Minister Narendra Modi to Israel:
 
Marking the 25th anniversary of the establishment of diplomatic relations between the two countries, Prime Minister Narendra Modi of India visited Israel from 4-6 July 2017 at the invitation of Prime Minister Benjamin Netanyahu of Israel. This historic first-ever visit by an Indian Prime Minister to Israel solidified the enduring friendship between their peoples and raised the bilateral relationship to that of a strategic partnership.
 
Noting that they represent two cradles of civilizations that have nurtured their respective heritages over the centuries, the two leaders affirmed their intention to build a broad-based relationship that will realise the full potential of their association. In doing so, they recognized that throughout history, the Jewish Communities have always had a home in India and have been treated with warmth and respect.
 
Reviewing the development of the relationship after a quarter century of diplomatic ties, the two leaders agreed on initiatives and policies that would reflect the goals and aspirations of both nations and widen their collaborative endeavours in a broad range of areas. They visualized that the two countries will become close partners in development, technology, innovation, entrepreneurship, defence and security.
 
Recognizing its centrality for development, India and Israel agreed to establish a "Strategic Partnership in Water and Agriculture”. This will focus on water conservation, waste-water treatment and its reuse for agriculture, desalination, water utility reforms, and the cleaning of the Ganges and other rivers using advanced water technologies. It will also include the reinforcement and expansion of the existing Centres of Excellence (COE) under the stewardship of the Israeli Ministry of Foreign Affairs (MASHAV) and the Ministry of Agriculture of India to promote commercially viable business models involving Farmer Producer Organizations (FPOs); the provision of quality planting material; and the transfer of post-harvest technical know-how and market linkages involving the private sector through PPP, B2B & other models. The two leaders also agreed on the establishment of a Joint Working Group to steer this Partnership.
 
The two Prime Ministers noted the importance of realizing the full potential of bilateral trade and investment. They tasked the India-Israel CEO Forum to come up with early recommendations in this regard. Both leaders underlined the need to boost bilateral cooperation in innovation and entrepreneurship and called for greater collaboration in the field of start-ups.
 
Recognizing the importance of facilitating movement of businessmen and women, India and Israel underlined their expectation that the granting of multiple entry visas to business people for up to five years will encourage greater economic and commercial exchanges.
 
The two Prime Ministers agreed that negotiations would be conducted on an agreement for the Protection of Investments in order to encourage bilateral investments from both sides.
 
The two Prime Ministers welcomed the conclusion of the Memorandum of Understanding for establishing the India-Israel Industrial R&D and Innovation Fund (I4F) by the Department of Science and Technology, India and the National Authority for Technological Innovation, Israel with a contribution of US$ 20 million from each side. This MoU will play a seminal role in enabling Indian and Israeli enterprises to undertake joint R&D projects leading to development of innovative technologies and products that have potential for commercial application.
 
Recognising the importance of fostering wide ranging knowledge-business partnership for industries, R&D institutions and government agencies from both countries, Israel warmly welcomed India’s offer to be the "Partner Country” for the annual Technology Summit to be held in India in 2018.
 
Both leaders welcomed the ongoing cooperation between the Israel Space Agency (ISA) and the Indian Space Research Organisation (ISRO). They expressed satisfaction over the signing of three MoUs and Plan of Cooperation in the areas of Cooperation in Atomic Clocks; GEO-LEO Optical Link; Academic collaboration and Electric propulsion for small satellites which would further enhance cooperation between the two countries. They also encouraged the two Space Agencies to further enhance the growing relationship for mutual benefit. The two leaders acknowledged that the recent launching by ISRO of an Israeli nano satellite is an important milestone in this arena.
 
ADVERTISEMENT
The Prime Ministers noted with satisfaction that both sides have agreed to upgrade their scientific and technological collaboration by supporting joint research and development projects in the cutting edge areas, including ‘Big Data Analytics in Health Care’. They directed the India-Israel Joint Committee on Science and Technology to explore the possibility of further advancement of scientific collaboration including setting up of Networked Centres of Research Excellence in the cutting edge areas of mutual strength and interest.
 
Reaffirming the importance of bilateral defence cooperation over the years, it was agreed that future developments in this sphere should focus on joint development of defence products, including transfer of technology from Israel, with a special emphasis on the 'Make in India' initiative.
 
India and Israel are committed to promote security and stability in cyberspace on both the governmental and private levels. The Prime Ministers emphasized the importance of enhanced dialogue between their national cyber authorities and expressed their commitment to expand and accelerate their cooperation in this sphere including laying a mutual roadmap for its implementation. Both sides also recognise the value of enhancing and further institutionalising their broad-based cooperation on cyber issues through a Framework for cooperation in the area of cyber security.
 
Recognizing that terrorism poses a grave threat to global peace and stability, the two Prime Ministers reiterated their strong commitment to combat it in all its forms and manifestations. They stressed that there can be no justification for acts of terror on any grounds whatsoever. The leaders asserted that strong measures should be taken against terrorists, terror organizations, their networks and all those who encourage, support and finance terrorism, or provide sanctuary to terrorists and terror groups. They also underscored the need to ensure that terrorist organizations do not get access to any WMD or technologies. Both leaders also committed to cooperate for the early adoption of the Comprehensive Convention on International Terrorism (CCIT).
 
Both leaders reaffirmed their commitments as envisaged in the agreement on cooperation on Homeland and Public Security and encouraged the various Working Groups to implement the agreement in an efficient and effective manner.
 
The two Prime Ministers underlined the importance of enhanced collaboration in the field of Higher Education and Research and agreed to promote this through relevant agreements and the Joint Research Grant Programme.
 
Noting the importance of growing people to people contacts between India and Israel, the two leaders agreed to facilitate the promotion of travel & tourism in both directions, including through the further enhancement of air links between India and Israel.
 
Appreciating the contribution of the Jewish community in India and Jews of Indian origin in Israel in bringing the two societies closer, Prime Minister Modi announced the opening of an Indian Cultural Centre in Israel. This was warmly welcomed by Prime Minister Netanyahu who expressed his deep respect for Indian culture and recalled Israel's strong support and sponsorship of PM Modi's initiative to promote the practice of Yoga by designating June 21 as International Yoga Day.
 
The two Prime Ministers recognized the contribution of Indian care-givers in Israel and expressed their intention to reach a mutually agreed-upon arrangement which will provide for their continued arrival in a regulated manner.
 
The two Prime Ministers discussed the developments pertaining to the Israeli-Palestinian Peace Process. They underlined the need for the establishment of a just and durable peace in the region. They reaffirmed their support for an early negotiated solution between the sides based on mutual recognition and security arrangements.
 
During the visit, the following Agreements were signed:
 
i. MoU between the Department of Science & Technology, India and National Technological Innovation Authority, Israel for setting up of India-Israel Industrial R&D and Technological Innovation Fund (I4F).
 
ii. MoU between the Ministry of Drinking Water and Sanitation of the Republic of India and the Ministry of National Infrastructure, Energy and Water Resources of the State of Israel on National Campaign for Water Conservation in India
 
iii MoU between U.P. Jal Nigam, Government of Uttar Pradesh, of the Republic of India and the Ministry of National Infrastructure, Energy and Water Resources of the State of Israel on State Water Utility Reform in India
 
iv India-Israel Development Cooperation - Three Year Work Program in Agriculture 2018-2020
 
v Plan of Cooperation Between the Indian Space Research Organisation (ISRO) and the Israel Space Agency (ISA) regarding cooperation in Atomic Clocks
 
vi MoU between the Indian Space Research Organisation (ISRO) and the Israel Space Agency (ISA)regarding cooperation in GEO-LEO Optical Link
 
vii MoU between the Indian Space Research Organisation (ISRO) and the Israel Space Agency (ISA) regarding cooperation in Electric Propulsion for Small Satellites
 
Prime Minister Modi thanked the people and Government of Israel for their gracious hospitality and extended a warm invitation to Prime Minister Netanyahu to visit India at a mutually convenient time. Prime Minister Netanyahu accepted the invitation.
 
NNN
ADVERTISEMENT
 
 

India-United States Joint Statement

Prime Minister Narendra Modi meeting US President Donald Trump, at White House, in Washington DC, on June 26, 2017.
Prime Minister Narendra Modi meeting US President Donald Trump, at White House, in Washington DC, on June 26, 2017.
Following is the text of the Joint Statement -- "United States and India: Prosperity Through Partnership" -- issued by the United States and India during Prime Minister Narendra Modi's visit to Washington on June 24-26:
 
President Donald J. Trump hosted Prime Minister Narendra Modi of India at the White House on June 26 for an official visit to Washington, D.C. 
 
In marking 70 years of diplomatic relations between India and the United States, the leaders resolved to expand and deepen the strategic partnership between the countries and advance common objectives. Above all, these objectives include combatting terrorist threats, promoting stability across the Indo-Pacific region, increasing free and fair trade, and strengthening energy linkages. President Trump and Prime Minister Modi expressed confidence that, together, the United States and India will provide strong leadership to address global challenges and build prosperity for their citizens in the decades to come. 
 
Democratic Stalwarts in the Indo-Pacific Region
 
As responsible stewards in the Indo-Pacific region, President Trump and Prime Minister Modi agreed that a close partnership between the United States and India is central to peace and stability in the region. Recognizing the significant progress achieved in these endeavors, the leaders agreed to take further measures to strengthen their partnership. In accordance with the tenets outlined in the U.N. Charter, they committed to a set of common principles for the region, according to which sovereignty and international law are respected and every country can prosper. To this end, the leaders: 
 
reiterate the importance of respecting freedom of navigation, overflight, and commerce throughout the region;
 
call upon all nations to resolve territorial and maritime disputes peacefully and in accordance with international law;
 
support bolstering regional economic connectivity through the transparent development of infrastructure and the use of responsible debt financing practices, while ensuring respect for sovereignty and territorial integrity, the rule of law, and the environment; and
 
call on other nations in the region to adhere to these principles. 
 
President Trump welcomed further Indian contributions to promote Afghanistan’s democracy, stability, prosperity, and security. Recognizing the importance of their respective strategic partnerships with Afghanistan, the leaders committed to continue close consultations and cooperation in support of Afghanistan’s future.
 
In accord with India’s Think West policy, President Trump and Prime Minister Modi resolved to increase cooperation, enhance diplomatic consultations, and increase tangible collaboration with partners in the Middle East. 
 
The leaders strongly condemned continued provocations by the Democratic People’s Republic of Korea (DPRK), emphasizing that its destabilizing pursuit of nuclear and ballistic missile programs poses a grave threat to regional security and global peace. The leaders called on DPRK to strictly abide by its international obligations and commitments. The leaders pledged to work together to counter the DPRK’s weapons of mass destruction programs, including by holding accountable all parties that support these programs. 
 
Shoulder-to-Shoulder Against Terrorism 
 
The Leaders stressed that terrorism is a global scourge that must be fought and terrorist safe havens rooted out in every part of the world. They resolved that India and the United States will fight together against this grave challenge to humanity. They committed to strengthen cooperation against terrorist threats from groups including Al-Qa’ida, ISIS, Jaish-e-Mohammad, Lashkar-e-Tayyiba, D-Company, and their affiliates. India appreciated the United States designation of the Hizb-ul-Mujahideen leader as a Specially Designated Global Terrorist as evidence of the commitment of the United States to end terror in all its forms. In this spirit, the leaders welcomed a new consultation mechanism on domestic and international terrorist designations listing proposals. 
 
The leaders called on Pakistan to ensure that its territory is not used to launch terrorist attacks on other countries. They further called on Pakistan to expeditiously bring to justice the perpetrators of the 26/11 Mumbai, Pathankot, and other cross-border terrorist attacks perpetrated by Pakistan-based groups. 
 
The leaders announced increased cooperation to prevent terrorist travel and to disrupt global recruitment efforts by expanding intelligence-sharing and operational-level counterterrorism cooperation. They welcomed commencement of the exchange of information on known and suspected terrorists for travel screening. They further resolved to strengthen information exchange on plans, movements and linkages of terrorist groups and their leaders, as well as on raising and moving of funds by terrorist groups. 
 
The leaders also affirmed their support for a U.N. Comprehensive Convention on International Terrorism that will advance and strengthen the framework for global cooperation and reinforce the message that no cause or grievance justifies terrorism. They also pledged to work together to prevent proliferation of weapons of mass destruction and their delivery systems and to deny access to such weapons by terrorists and non-state actors.
 
Growing Strategic Convergence
 
President Trump and Prime Minister Modi pledged to deepen defense and security cooperation, building on the United States’ recognition of India as a Major Defense Partner. The United States and India look forward to working together on advanced defense equipment and technology at a level commensurate with that of the closest allies and partners of the United States. Reflecting the partnership, the United States has offered for India’s consideration the sale of Sea Guardian Unmanned Aerial Systems, which would enhance India’s capabilities and promote shared security interests. 
 
ADVERTISEMENT
Resolving to expand their maritime security cooperation, the leaders announced their intention to build on the implementation of their "White Shipping” data sharing arrangement, which enhances collaboration on maritime domain awareness. President Trump welcomed Prime Minister Modi’s strong support for the United States to join as an Observer in the Indian Ocean Naval Symposium. Noting the importance of the upcoming MALABAR naval exercise, the leaders determined to expand their engagements on shared maritime objectives and to explore new exercises. 
 
As global nonproliferation partners, the United States expressed strong support for India’s early membership in the Nuclear Suppliers Group, the Wassenaar Arrangement, and the Australia Group. President Trump reaffirmed the support of the United States for India’s permanent membership on a reformed U.N. Security Council. 
 
Increasing Free and Fair Trade
 
The leaders committed that the United States and India -- leading engines of growth in the global economy -- should intensify their economic cooperation to make their nations stronger and their citizens more prosperous. Noting that extensive economic and tax reforms launched in their respective countries will unlock immense economic opportunities for both countries, the leaders committed to further expanding and balancing the trade relationship and to removing obstacles to growth and jobs creation. They also resolved to pursue increased commercial engagement in a manner that advances the principles of free and fair trade. To this end, the United States and India plan to undertake a comprehensive review of trade relations with the goal of expediting regulatory processes; ensuring that technology and innovation are appropriately fostered, valued, and protected; and increasing market access in areas such as agriculture, information technology, and manufactured goods and services. President Trump and Prime Minister Modi further committed to strengthening cooperation to address excess capacity in industrial sectors. They called on their teams to find creative ways to improve bilateral trade. 
 
ADVERTISEMENT
Surveying United States-India energy ties and the two countries’ respective energy strategies, the leaders affirmed the continued importance of their Strategic Energy Partnership and of leveraging new opportunities to elevate cooperation to enhance global energy security. The leaders called for a rational approach that balances environment and climate policy, global economic development, and energy security needs. 
 
President Trump affirmed that the United States continues to remove barriers to energy development and investment in the United States and to U.S. energy exports so that more natural gas, clean coal, and renewable resources and technologies are available to fuel India’s economic growth and inclusive development. Prime Minister Modi and President Trump looked forward to conclusion of contractual agreements between Westinghouse Electric Company and the Nuclear Power Corporation of India for six nuclear reactors in India and also related project financing. Both leaders welcomed upcoming visits between India and the United States that will expand energy and innovation linkages across the energy sector and deepen cooperation, including on more efficient fossil fuel technologies, smart grids, and energy storage. They supported financing of energy projects, including clean coal projects, by Multilateral Development Banks to promote universal access to affordable and reliable energy.
 
Recognizing that we are in an increasingly digital world, the leaders agreed to intensify the mutually beneficial partnership to fully harness their innovation capabilities to solve global developmental challenges. As global partners, the United States and India resolved to further strengthen their collaboration in health, space, oceans, and other areas of science and technology. The leaders also agreed to strengthen their cooperation to address the growing threats and challenges from malicious cyber activity and committed to work together to promote an open, interoperable, secure, and reliable cyberspace environment that supports innovation, economic growth, and commerce.
 
Applauding the entrepreneurship and innovation of Indians and Indian-Americans that have directly benefitted both nations, President Trump welcomed India’s formal entry into the International Expedited Traveler Initiative (Global Entry program) in order to facilitate closer business and educational ties between the citizens of India and the United States. 
 
President Trump gladly accepted Prime Minister Modi’s invitation to visit India. They look forward to working together in a spirit of friendship in the years to come.
 
NNN
ADVERTISEMENT
 
 

Full Text: RBI's Second Bi-monthly Monetary Policy Statement, 2017-18

RBI logo
 
Following is the text of the Second Bi-monthly Monetary Policy Statement, 2016-17 and Resolution of the Monetary Policy Committee (MPC) issued by the Reserve Bank of India (RBI) issued here today: 
 
Resolution of the Monetary Policy Committee (MPC), Reserve Bank of India
 
On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) decided to:
 
keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25 per cent.
 
Consequently, the reverse repo rate under the LAF remains at 6.0 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.50 per cent.
 
The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth. The main considerations underlying the decision are set out in the statement below.
 
Assessment
 
2. Since the April 2017 meeting of the MPC, global economic activity has expanded at a modest pace, supported by firming growth in major advanced economies (AEs) and in some emerging market economies (EMEs) as well. In the US, a tightening labour market is generating wage gains. Alongside, industrial production has steadily improved in recent months and retail sales remain robust, although home sales ebbed in April. Political risks remain high, however. In the Euro area, the recovery has been underpinned by consistently falling unemployment, rising retail sales and a brighter outlook for manufacturing reflected in purchasing managers’ and business surveys. In Japan, exports supported by a depreciated yen and industrial activity are driving an acceleration in growth. Wages and inflation, however, are depressed and holding back domestic demand. Among EMEs, the Chinese economy is stabilising, especially in manufacturing, but financial risks in the form of the credit-fuelled debt overhang could impinge on the outlook. Brazil appears to be emerging out of recession, although growth dynamics remain fragile due to worsening labour market conditions and political turmoil. In Russia, the strengthening global environment is supporting the recovery with improving macro fundamentals. South Africa is grappling with structural constraints which are depressing economic activity.
 
3. The pick-up in global merchandise trade volume since the start of the year has been sustained in Q2 of 2017, buoyed by strengthening global demand as reflected in rising international air freight and container throughput. Crude prices fell to a five-month low in early May on higher output from Canada and the US, and remain soft, undermining the OPEC’s recent efforts to tighten the market by trimming supply. Among non-fuel commodity prices, metal prices have been retreating on expectations of weak demand from China. Bullion prices remain range-bound, while food prices eased in April but rose in May. These developments suggest that the inflation outlook is still relatively benign for AEs and EMEs alike.
 
4. International financial markets have been lifted by improving global growth prospects, broadly accommodative monetary policy stances of systemic central banks and generally positive incoming data. Increasingly, financial markets have shown resilience to geo-political events and have swiftly priced them in. This has been reflected in the reinvigoration of the reach for returns. Country-specific factors have modulated investor sentiment. Equity markets in most AEs have gained in Q2, surpassing past peaks in the US; boosted by corporate profits in Japan; and supported by easing political tensions and upbeat data in the case of the Euro area. In EMEs, equities have turned in a mixed performance, with high valuations across Asia, but weaker in Latin America on softer commodity prices. Bond yields in major AEs have been largely range-bound. In EMEs, yields have hardened in the few countries facing inflation pressures and political uncertainties, but for commodity exporters, there has been some recent decline. In the currency markets, the US dollar has weakened in May after dovish guidance by the Fed and unexpected political events. Since mid-May, the yen has shed its depreciating bias and appears to have gained safe haven appeal. EME currencies, which had depreciated on the strength of the US dollar, have steadied more recently on renewal of capital flows and risk-on investor appetite.
 
5. On May 31, 2017 India’s Central Statistics Office (CSO) released quarterly estimates of national income accounts for Q4 of 2016-17, provisional estimates for 2016-17 and revisions for the preceding five years. The growth of real gross value added (GVA) for 2016-17 has been pegged at 6.6 per cent, 0.1 percentage point lower than the second advance estimates released in February 2017. Underlying the revision is a downward adjustment in services sector growth in Q4 for the constituents of construction, financial and professional services, and real estate. Estimates of agriculture and allied activities have been upgraded to incorporate the all-time high production of foodgrains and horticulture in the year. GVA in industry has also been placed higher in the provisional estimates relative to the earlier reading to reflect the impact of new indices of industrial production (IIP) and wholesale prices (WPI) rebased to 2011-12. The new data reveal that a slowdown in activity in both industry and services set in as early as Q1 of 2016-17 and became pronounced in Q4. Moreover, the deceleration of activity coursing through the year has had underlying drivers that have been in operation since Q2. Components of aggregate demand reflect a contraction in gross fixed investment in Q4, reversing the turnaround evident in the second half of the year in the advance estimates. This is also reflected in the contraction in the production of capital goods in the new IIP. However, private final consumption expenditure recorded robust year-on-year growth.
 
6. On May 9, the Ministry of Agriculture (MoA) released its third advance estimates of foodgrains production, which confirmed the record level of output achieved in 2016-17 and, in fact, revised it upwards to 273 million tonnes. The MoA also set out its second advance estimates of fruits and vegetables on May 30, which was also a historical record. Benefiting from the bumper harvest, rabi procurement during Q1 of 2017-18 so far has been significantly higher than a year ago, replenishing food stocks and taking them to 61.9 million tonnes in May 2017, three times the buffer norm. On June 6, the India Meteorological Department (IMD) re-affirmed its forecast of a normal and well-distributed south-west (June-September) monsoon, which augurs well for the agricultural outlook.
 
7. The new series on the IIP released by the CSO on May 12 improves the coverage of industrial activity, realigns weights and reclassifies sub-sectors to better capture the underlying structural dynamics of the sector, and smoothens the impact of lumpy items on the index. As a result, industrial production expanded by 5.0 per cent during 2016-17 based on the new series (as against 0.7 per cent in the old series). Turning to the current financial year, the output of eight core industries decelerated sharply in April on account of contraction in coal, crude oil and cement due to structural constraints and low demand. Furthermore, electricity generation decelerated due to depressed demand pricing out relatively expensive thermal output. By contrast, the production of steel and fertiliser picked up, the former driven up by exports and the latter by expectations of a normal monsoon.
 
8. The business expectations index generated by the Reserve Bank’s April round of the Industrial Outlook Survey reflects optimism in the manufacturing sector in Q2 of 2017-18, driven by expectations of rising rural demand, exports and profit margins. On the other hand, the manufacturing purchasing managers’ index (PMI) moderated sequentially in May as employment contracted and new orders, both domestic and exports, slowed down. The index, however, remained in the expansion zone and the future output index accelerated for the third month in succession.
 
9. High frequency real indicators of activity in the services sector point to a mixed performance in April. In the transportation sub-sector, freight carriage by air and rail gathered momentum, and passenger car sales accelerated on the back of sustained strength of urban demand. Sales of commercial vehicles and three-wheelers contracted, however, reflecting in part the effects of new emission norms and technology changes. Two-wheeler sales remained depressed, indicative of still subdued rural demand. In the communication sub-sector, there was a strong growth in the subscriber base of voice and data services. The sustained growth of foreign tourist arrivals and air passenger traffic, both domestic and international, supported activity in the hotels, restaurants and the hospitality sub-sector. Both steel consumption and cement production were, however, sluggish, pointing to continuing weakness in construction activity. The services PMI for May rose to its highest reading since November 2016, with an expansion in new business reflecting improving underlying demand conditions, alongside optimism on employment.
 
10. Retail inflation measured by year-on-year changes in the consumer price index (CPI) plunged to a historic low in April, pulled down by a large favourable base effect which overwhelmed a momentum that was feeble relative to the historical record for the month. Underlying this surprising softness was a sharp fall in food inflation brought about by a deflation in the prices of pulses and vegetables. In addition, moderation in the prices of cereals, eggs, oils and fats and spices contributed to the loss of momentum. In the case of pulses, the large-scale augmentation of supply on account of expansion in acreage, procurement, buffer stocking and imports caused a sharp decline in prices starting in August 2016. Propelled by significantly higher arrivals in mandis relative to the seasonal pattern, prices of vegetables also fell markedly from July and bottomed out in January 2017, with fire sales during the demonetisation period accentuating the fall. The seasonal uptick that typically occurs in the pre-monsoon months has been muted so far. In the fuel group by contrast, inflation surged across the board. Prices of liquefied petroleum gas (LPG) and kerosene rose in sympathy with international prices even as the subsidy was set on a path of calibrated reduction. Fuel used by rural households rose for the third month in succession, narrowing the wedge between fuel inflation facing rural and urban households. In response to these developments, inflation expectations three months ahead and a year ahead surveyed in the Reserve Bank’s inflation expectations survey of households have ticked down marginally.
 
ADVERTISEMENT
11. Excluding food and fuel, inflation dipped 60 basis points from a month ago to 4.4 per cent. The delayed and cumulative downward adjustment of domestic petrol and diesel prices in April to the softening of international crude prices in preceding months was among the factors at work. Inflation in respect of services embedded in transport and communication, education, recreation and health also moderated. The industrial outlook survey and the PMIs for manufacturing and services indicate that pricing power remains weak.
 
12. Even as surplus liquidity in the banking system post-demonetisation was drained by the ramping up of new currency in circulation by Rs. 1.5 trillion in April and May, massive spending by the Government re-injected liquidity into the system, raising the daily average overall surplus liquidity in the banking system to Rs. 4.2 trillion in April and Rs. 3.5 trillion in May. Unwinding of the excess reserves that banks used to dress up balance sheets for end-March also resulted in an accretion of Rs. 0.8 trillion to the surplus liquidity. Absorption operations undertaken by the Reserve Bank in the context of these developments and the consequent downward pressure on money market rates consisted of Rs. 1 trillion impounded through issuance of treasury bills (TBs) of tenors ranging from 312 days to 329 days under the market stabilisation scheme (MSS), auctions of cash management bills (CMBs) of Rs. 0.7 trillion triggered by the decline in cash balances of the Government, and variable rate reverse repo auctions of different tenors which took in the remaining surplus liquidity averaging Rs. 3.8 trillion in April and Rs. 3.4 trillion in May. With the narrowing of the the LAF corridor from +/- 50 bps to +/- 25 bps in April 2017, these operations ensured that the weighted average call money rate (WACR) – the operating target of monetary policy– broadly traded within the corridor. The spread between the WACR and the policy repo rate narrowed from 29-32 basis points (bps) in March-April to 21 bps in May.
 
13. Merchandise exports posted double digit growth in March and April 2017 in an environment of slowly improving global trade, with 80 per cent of this expansion contributed by engineering goods, petroleum products, gems and jewellery, readymade garments and chemicals. Merchandise imports also increased sharply, propelled by domestic demand, with the jump of 47.2 per cent in US dollar terms not recorded since 2011. Imports of petroleum and products rose strongly on price effects as international crude prices firmed up in the wake of OPEC’s productions cut. Gold imports also surged in volume terms, initially driven by seasonal and festival demand but subsequently by stockpiling in anticipation of the roll out of the goods and services tax (GST). Non-oil non-gold imports contributed about half of the total import growth in March and April, reflecting higher recourse to electronic goods, pearls and precious stones, coal, machinery and machine tools from overseas markets. With import growth significantly outpacing export growth, the trade deficit increased sizably. The current account deficit (CAD) for the year 2016-17 is likely to remain within 1 per cent of GDP. Unlike in the immediately preceding quarter, capital flows in April-May 2017 were dominated by foreign portfolio investment (FPI), pushed out by risk-on investor sentiment as global growth prospects improved. Also, clarity emerged on taxation issues in the Union Budget and the expectations of faster structural reforms were fuelled by the decisive outcome of State elections. The level of foreign exchange reserves as on June 2, 2017 was US$ 381.2 billion.
 
Outlook
 
14. The abrupt and significant retreat of inflation in April from the firming trajectory that was developing in February and March has raised several issues that have to be factored into the inflation projections. First, it needs to be assessed as to whether or not the unusually low momentum in the reading for April will endure. Second, the prices of pulses are clearly reeling under the impact of a supply glut caused by record output and imports. Policy interventions, including access to open trade, may be envisaged to arrest the slump in prices. Third, the accumulated downward adjustment in the prices of petrol and diesel effected in April has been largely reversed on June 1. Fourth, the easing of inflation excluding food and fuel may be transient in view of its underlying stickiness in a situation of rising rural wage growth and strong consumption demand. Thus, the April reading has imparted considerable uncertainty to the evolving inflation trajectory, especially for the near months. If the configurations evident in April are sustained, then absent policy interventions, headline inflation is projected in the range of 2.0-3.5 per cent in the first half of the year and 3.5-4.5 per cent in the second half (Chart 1). Risks are evenly balanced, although the spatial and temporal distribution of the monsoon and the government staying the course in effective food management will play a critical role in the evolution of risks. The risk of fiscal slippages, which, by and large, can entail inflationary spillovers, has risen with the announcements of large farm loan waivers. At the current juncture, global political and financial risks materialising into imported inflation and the disbursement of allowances under the 7th central pay commission’s award are upside risks. The date of implementation of the latter is still not announced and as such, it is not factored into the baseline projections. The implementation of the GST is not expected to have a material impact on overall inflation.
 
15. With the CSO’s provisional estimates for 2016-17, the projection of real GVA growth for 2017-18 has accordingly been revised 10 bps downwards from the April 2017 projection to 7.3 per cent, with risks evenly balanced (Chart 2). The continuing remonetisation should enable a pick-up in discretionary consumer spending, especially in cash-intensive segments of the economy. Furthermore, the reductions in banks’ lending rates post-demonetisation should support both consumption and investment demand of households and stress-free corporates. Moreover, Government spending continues to be robust, cushioning the impact of a slowdown in other constituents. The implementation of proposals in the Union Budget should crowd in private investment as the business environment improves with structural reforms, including the GST, the Insolvency and Bankruptcy Code, and the abolition of the Foreign Investment Promotion Board. Strengthening external demand will likely play a more decisive role in supporting the domestic economy. In addition, the new IIP broadens the recognition of industrial activity. On the downside, global political risks remain elevated and could materialise. Second, rising input costs and wage pressures may prove a drag on the profitability of firms, pulling down overall GVA growth. Third, the twin balance sheet problem - over-leveraged corporate sector and stressed banking sector - may delay the revival in private investment demand.
 
ADVERTISEMENT
16. The MPC noted that incoming data suggest that the transitory effects of demonetisation have lingered on in price formations relating to salient food items, entangled with excess supply conditions with respect to fruits and vegetables, pulses and cereals. At the same time, however, the CSO’s latest releases on national income accounts and industrial production attest to the effects of demonetisation on the broader economy being sector specific and transient, as well as to the noteworthy resilience of private consumption. At this stage, it is difficult to isolate these factors or to judge the strength of their persistence. As the year progresses, underlying inflation pressures, especially input costs, wages and imported inflation, will have to be closely and continuously monitored.
 
17. Noting that inflation has fallen below 4 per cent only since November 2016, the MPC remains focused on its commitment to keeping headline inflation close to 4 per cent on a durable basis keeping in mind the output gap. The current state of the economy underscores the need to revive private investment, restore banking sector health and remove infrastructural bottlenecks. Monetary policy can play a more effective role only when these factors are in place. Premature action at this stage risks disruptive policy reversals later and the loss of credibility. Accordingly, the MPC decided to keep the policy rate unchanged with a neutral stance and remain watchful of incoming data.
 
18. The Reserve Bank will continue to work in partnership with the government to address the stress in banks’ balance sheets. Better alignment of administered interest rates on small savings with market rates and stepped-up recapitalisation of banks to facilitate adequate flow of credit to productive sectors are important steps to follow through.
 
19. Five members were in favour of the monetary policy decision, while Dr. Ravindra H. Dholakia was not in favour. The minutes of the MPC’s meeting will be published by June 21, 2017.
 
20. The next meeting of the MPC is scheduled on August 1 and 2, 2017.
 
NNN
 
 
 
ADVERTISEMENT
 
 

Saint Petersburg Declaration by India and Russia

Prime Minister Narendra Modi and Russian President Vladimir Putin at the joint media briefing, at Konstantin Palace, in St. Petersburg, Russia on June 1, 2017.
Prime Minister Narendra Modi and Russian President Vladimir Putin at the joint media briefing, at Konstantin Palace, in St. Petersburg, Russia on June 1, 2017.
The following is the text of the "Saint Petersburg Declaration by the Russian Federation and the Republic of India: A vision for the 21st century" issued here today after talks between Prime Minister Narendra Modi and Russian President Vladimir Putin:
 
We, the leaders of India and Russia, in the year that marks the 70th anniversary of the establishment of diplomatic relations between our countries, note that the Indian-Russian special and privileged strategic partnership is a unique relationship of mutual trust between two great powers. Our relationship covers all areas of cooperation, including in the spheres of political relations, security, trade and economy, military and technical field, energy, scientific, cultural and humanitarian exchanges, and foreign policy, and helps promote national interests of both countries, and contributes to the establishment of a more peaceful and just world order.
 
Our bilateral relations are based on deep mutual understanding and respect, similar priorities in economic and social development, as well as in foreign policy. We favor the same approaches to ensuring peace and security and shaping a global architecture that reflects cultural and civilizational diversity and at the same time strengthens unity of humankind. India-Russia relations have stood the test of time and have been immune to external influences.
 
Russia unwaveringly supported India in its struggle for independence and helped it to achieve self-sufficiency. In August 1971, our countries signed the Treaty of Peace, Friendship and Cooperation, which outlined fundamental principles of mutual relations such as respect for each other's sovereignty and interests, good neighborliness and peaceful co-existence. Two decades later, in January 1993, India and Russia reaffirmed the inviolability of those provisions in the new Treaty of Friendship and Cooperation.The Declaration on Strategic Partnership between the Republic of India and the Russian Federation of October 3, 2000, took the bilateral relations to a new level characterized by coordinated approaches towards ensuring international peace and security, addressing major global and regional issues, as well as close cooperation in economic, cultural, educational and other areas. This partnership was further elevated to the level of a Special and Privileged Strategic Partnership on 21 December 2010.
 
Advancing the comprehensive development of the Indian-Russian relations is an absolute priority of the foreign policy of both States. We will continue to widen our scope of cooperation by launching large-scale initiatives in different spheres and enhance and enrich our bilateral agenda so as to make it more result-oriented.
 
The economies of India and Russia complement each other in the energy sector. We will strive to build an "Energy Bridge” between our States and expand bilateral relations in all areas of energy cooperation, including nuclear, hydrocarbon, hydel and renewable energy sources and in improving energy efficiency.
 
India and Russia note that wider use of natural gas, an economically efficient and environmentally friendly fuel, which has become an integral part of the global energy market, is highly significant for reducing greenhouse gas emissions and will assist in fulfilling the provisions of the Paris Agreement on Climate Change, as well as achieving sustainable economic growth.Cooperation in the peaceful uses of nuclear energy has emerged as one of the hallmarks of the strategic partnership between the two countries, contributing to India’s energy security and energizing broader scientific and technological cooperation. With concerted efforts on both sides, there has been a series of steady and demonstrable achievements in our civil nuclear partnership, including advancing nuclear power projects at the Kudankulam site and transforming it into one of India’s largest energy hubs. We welcome the conclusion of the General Framework Agreement and Credit Protocol for Units 5 and 6 of the Kudankulam Nuclear Power Plant. We will work towards the implementation of the Strategic Vision for Strengthening Cooperation in Peaceful Uses of Atomic Energy signed between the two countries on December 11, 2014. The future of Indian-Russian cooperation holds great promise across a wide spectrum covering nuclear power, nuclear fuel cycle and nuclear science and technology.
 
ADVERTISEMENT
The growing partnership in the nuclear power sector between India and Russia has opened opportunities for developing advanced nuclear manufacturing capabilities in India in line with Government of India’s "Make in India” initiative. India and Russia commit themselves to earnestly implement the "Programme of Action for Localization in India” signed on 24 December 2015, and to encourage their nuclear industries to engage closely and foster concrete collaborations.
 
We are interested in launching joint projects on exploration and exploitation of hydrocarbons in the Arctic shelf of the Russian Federation.
 
We will develop joint strategies to harness the potential for mutually beneficial cooperation in the field of deep sea exploration and development of hydrocarbon resources, polymetallic nodules, and other marine resources utilizing strengths in the field of maritime research and training to develop mutually beneficial cooperation.
 
We welcome cooperation among energy companies of both States in modernizing the existing power stations and building new ones in the territory of India. We will endeavour to develop joint projects in each other’s countries through sharing of technologies, experience of working in different terrains and climatic conditions, and use of energy efficient technologies for creation and propagation of cleaner, climate friendly and affordable energy resources.
 
Our major economic objectives include expanding trade and investment and diversification of trade in goods and services, in particular increasing the share of high-technology products in bilateral trade, fostering industrial cooperation, improving the environment for entrepreneurship and investments and developing cooperation in banking and financial matters between the two countries. As the next stage of our strategic partnership, we will extend our bilateral technical, economic and scientific cooperation to third countries by undertaking joint development projects in mutually agreed sectors.
 
We will coordinate our efforts to promote settlements of Indian-Russian trade in national currencies to reduce dependence of our bilateral trade on other currencies. We will jointly encourage our business communities to use the existing workable schemes and mechanisms for settlements in national currencies elaborated by the Reserve Bank of India and the Bank of Russia.
 
We will coordinate our positions in order to develop a credit rating industry that is transparent for the market participants and independent from political conjuncture. In this sense we support work aimed at exploring the opportunities of harmonization of our legislation in the area of credit ratings, as well as the recognition of ratings of our local credit rating agencies.
 
We acknowledge the importance of developing economic cooperation at the regional level. We will facilitate an early commencement of negotiations on a free trade agreement between the Eurasian Economic Union and the Republic of India.
 
We appreciate the compelling logic of regional connectivity for peace, progress and prosperity. We believe that connectivity must be strengthened It should be based on dialogue and consent of all parties concerned with due respect to sovereignty. The Russian and Indian Sides being guided by the principles of transparency, sustainability and responsibility, reiterate their commitment to build effective infrastructure for the International North South Transport Corridor and implementation of the Green Corridor.
 
We take note of the fact that both States are committed to building knowledge based economies, on the basis of latest scientific advances and innovation. We will broaden cooperation in designing, developing, manufacturing and bringing to foreign markets high-technology products and strengthen scientific collaboration in areas such as space technology, aviation, new materials, agriculture, information and communication technologies, medicine, pharmaceuticals, robotics, nanotechnology, supercomputing technologies, artificial intelligence and material sciences. We welcome the establishment of the High Level Committee on Cooperation in High Technologies between the two countries.
 
We will work together to step up joint efforts aimed at modernizing infrastructure, explore ways to jointly respond to urbanization challenges, address issues related to ensuring food security, preserving water and forest resources, and share experience in carrying out economic reforms and national programs for the development of small and medium enterprises and in skill development.
 
We will work together to further develop the potential for cooperation in the diamond industry with an objective to take full advantage of existing strengths and resources of both our countries in this area. We will also intensify our joint efforts to counter undisclosed synthetic stones entering diamond market and to support the development of generic marketing programmes for diamonds.
 
Recognizing the strength of Russia in shipbuilding, river navigation and desalination technologies, we will work together to develop joint projects through transfer of technology and experience sharing for developing inland waterways, river embankments, ports and cargo containers towards effective utilization of extensive river systems in India.
 
We will work together in development of high speed railways, dedicated freight corridors, and application of newer technologies for efficient rail transport through joint development and sharing of technologies, and training of personnel to benefit from each other’s competences in the railroad sector.
 
We will work together to improve market access for agriculture and food commodities in each other’s country and develop joint strategies through research & development for utilization of existing potential in the agriculture and food processing sector covering an entire spectrum of activities from farming, harvesting, production, processing to marketing strategies.We will work together to explore joint projects for effective use of natural resources in each other’s country through application of existing technologies and development and sharing of newer technologies for search in the field of mining & metallurgy for affordable and climate friendly utilization of natural resources.
 
ADVERTISEMENT
We note that India will become the third largest aviation market by 2020 and in this connection, recognize that the Regional Connectivity Scheme of the Government of India provides an opportunity for strengthening cooperation in joint production and setting up of joint ventures in India in the field of aviation manufacturing to serve the demand created and for export to third countries.
 
Our bilateral defense cooperation is built on strong mutual trust. Russia exports its modern military technologies to India. We will upgrade and intensify this cooperation, through joint manufacture, co-production and co-development of military hardware and military spares, with increasing reliance on the adoption and sharing of future technologies, in compliance with the obligations of the sides under the existing agreements on military-technical cooperation.
 
We will work towards a qualitatively higher level of military-to-military cooperation. We will continue holding regular joint land and sea military exercises, and training in each others’ military institutions. This year will see the first ever Tri-services exercise INDRA–2017.
 
We see ample opportunities for bilateral cooperation in space research, with a view to using relevant technologies for the benefit of society.
 
We will continue joint work to prevent and respond to natural disasters.
 
We intend to enhance and actively promote greater cooperation between our regions and states, with a particular emphasis on the Far East region of Russia.
 
India and Russia regard the establishment of the multi-polar global order in international relations as a reflection of natural and inevitable process of evolution of interstate relations in the 21st century. In this regard, we will enhance collaboration to democratize the system of international relations based on the principles of the rule of law and the central role of the United Nations coordination of world politics. We believe that there is a need to reform the United Nations and in particular, the United Nations Security Council to make it more representative of contemporary realities and to respond more effectively to emerging challenges and threats. Russia reaffirms its strong support to India’s candidature for a permanent seat in a reformed United Nations Security Council. We will support the advancement of a positive unifying global agenda, effectively engage in international efforts to strengthen peace and ensure global and regional stability and security, confront challenges and threats, and actively promote just and coordinated approaches to crisis resolution.
 
We will work to foster the democratization and reform of global political, economic, financial and social institutions, for them to better accommodate the interests of all members of the international community. We oppose any recourse to unilateralism or lack of respect to sovereignty, ignoring the core concerns and legitimate interests of the countries. In particular, we do not accept the unilateral use of political and economic sanctions as a means of exerting pressure.
 
We intend to further build up fruitful cooperation within BRICS, which, as a result of our joint efforts, enhances consistently its authoritative and influential role in global affairs.
 
We will continue to develop cooperation within other multilateral forums and organizations, including the WTO, G20 and the Shanghai Cooperation Organization, as well as Russia-India-China cooperation.
 
India's full membership in the Shanghai Cooperation Organization will considerably enhance the Organization's capabilities to ensure peace and stability, achieve economic development and prosperity in Eurasia and the Asia-Pacific region, as well as improve the Organization's international standing.
 
We will continue facilitating efforts to build an open, well-balanced and inclusive security architecture in the Asia-Pacific region based on shared principles and taking into account the legitimate interests of all States of the region, including through the development of relevant dialogue in the framework of the East Asia Summit.
 
We will further coordinate our positions on the challenging issues of restoration of peace and stability in the Middle East and North Africa, settlement of the Syrian crisis, achievement of national reconciliation in Afghanistan, including in the agreed framework of the Moscow dialogue, using the laid down principles of national sovereignty and non-interference in internal affairs, while encouraging the countries to lead the change from within.
 
India and Russia have a shared commitment to preventing the proliferation of weapons of mass destruction.Russia is convinced that India's participation in multilateral export control regimes will contribute to their enhancement. In this context, Russia welcomes India's applications for the membership in Nuclear Suppliers Group and the Wassenaar Arrangement and reiterates its strong support for India's earliest admission to these export control regimes.
 
We strongly condemn terrorism in all its forms and manifestations and stress that there can be no justification whatsoever for any acts of terrorism, whether based upon ideological, religious, political, racial, ethnic or any other reasons. Together, we will continue efforts to combat international terrorism, which poses a great threat to maintenance of peace and security. We are convinced that the unprecedented spread of this threat requires decisive collective response on part of the entire global community, without double standards and selectivity, in accordance with international law and the UN Charter. We urge all countries and entities to work sincerely to disrupt terrorist networks and their financing, and stop cross-border movement of terrorists. We call for early conclusion of negotiations on the Comprehensive Convention on International Terrorism to strengthen the global counter-terrorism normative and legal framework to combat this scourge.
 
Sharing common approaches to providing security in the use of information and communication technologies, we intend to keep working together for developing universal rules, standards and principles of responsible behaviour of the States in this context, on the basis of democratization and a model representing multi-stakeholderism with primacy of the State, in global internet governance.
 
We recognize the necessity to activate bilateral interaction in this sphere on the basis of the Indian-Russian Intergovernmental Agreement on Cooperation in the field of Security in the use of Information and Communication Technologies.Taking into account the profound mutual interest, sympathy and respect between the peoples of India and Russia, we will contribute to further developing bilateral contacts in the sphere of culture and sports, including by organizing annual festivals and exchanges. We welcome the organizing of events in different cities in both countries to commemorate the 70th anniversary of the establishment of diplomatic relations between India and Russia in 2017-18.
 
Bilateral cooperation in the sphere of education offers great opportunities. We will work to strengthen cooperation in the field of education through promoting direct contacts among universities and academic institutions and providing assistance to students from the two countries.
 
Our Bilateral cooperation in the sphere of Science & Technology offers great opportunities. We are committed to work together to address global challenges like Climate change, Environmental protection, Clean energy, Cyber security, Affordable health care, Marine biology etc through scientific discoveries and to explore priority areas of common interest. We are working together to create networks of knowledge centers, connectivity of minds and scientific corridors to augment innovation led technology development for societal development.
 
We intend to further foster development of tourism and people-to-people contacts, including by easing the visa regime.
 
We are confident that India and Russia will continue to remain a role model for harmonious and mutually beneficial partnership and strong friendship between two states. Building on the shared vision of development of bilateral relations, we will succeed in further realizing the immense potential of India-Russia special and privileged strategic partnership for the benefit of our States and international community as a whole.
 
St Petersburg, The Russian Federation 
01 June 2017
 
NNN
 
ADVERTISEMENT
 
 

India-Germany Joint Statement

Prime Minister Narendra Modi and German Chancellor Angela Merkel at Berlin’s Brandenburg Gate, Germany on May 30, 2017.
Prime Minister Narendra Modi and German Chancellor Angela Merkel at Berlin’s Brandenburg Gate, Germany on May 30, 2017.
Following is the text of the Joint Statement issued by India and Germany after talks between Prime Minister Narendra Modi and German Chancellor Angela Merkel here today:
 
Today, the fourth Inter-Governmental Consultations [IGC] between India and Germany were held in Berlin. The Prime Minister of India Shri Narendra Modi and the German Federal Chancellor Dr. Angela Merkel agreed to further strengthen the Strategic Partnership between India and Germany by deepening cooperation on foreign policy and security issues as well as on sustainable development and enhanced trade and investment ties.
 
Prime Minister Modi and Chancellor Merkel welcomed the successful implementation of the ambitious bilateral agenda that was agreed during the last round of Inter-governmental Consultations held in New Delhi in 2015. They reiterated that the Indo-German Strategic Partnership is based on common values of democracy, free trade and a rule-based international order and that it has strengthened the bilateral relations by further enhancing trust and mutual respect.
 
Promoting Security, Stability, and Sustainability contributing to a Rules Based Global Order
 
As strategic partners, India and Germany are committed to close coordination, bilaterally and with partners, in the G20, the United Nations and other multilateral fora, to address existing and emerging challenges to international security, global economic stability and growth. 
 
India and Germany emphasized their commitment to a stable, united, prosperous, pluralistic and peaceful Afghanistan. They supported a comprehensive and inclusive Afghan-led and Afghan-owned peace and reconciliation process that leads to the renunciation of violence and breaking of all ties to international terrorism and the respect for the Afghan Constitution including its human rights provisions. They underlined that the Heart of Asia-Istanbul process remains an important format for regional confidence building and regional political cooperation.
 
Both Leaders expressed their commitment to strengthen global non-proliferation efforts. Germany welcomed India's accession to the Missile Technology Control Regime. Germany also welcomed India’s intensified engagement with the other export control regimes - the Nuclear Suppliers Group (NSG), Australia Group and the Wassenaar Arrangement - and expressed its support for India's early accession to these regimes.
 
Both leaders reaffirmed the urgent need for a comprehensive reform of the UN Security Council, including its expansion in both permanent and non-permanent categories of membership, to make it more effective, efficient and responsive to the existing challenges to international peace and security and representative of the contemporary geo-political realities.
 
The two Leaders commended the steadfast efforts of the G-4 and other reform oriented countries and groups in moving forward the discussions towards initiation of text-based negotiations on the Security Council reform agenda at the ongoing Inter-governmental Negotiations (IGN) at the UN. 
 
Both countries reiterated their full support to each other’s candidatures for a permanent seat in a reformed and expanded UN Security Council.
 
Both sides underlined the importance of freedom of navigation in international waters, the right of passage and other maritime rights and obligations in accordance with the UN Convention on the Law of the Sea and other principles of international law. Both Leaders attached particular importance to security, stability, connectivity and sustainable development of the blue economy in the Indian Ocean Region.
 
They concurred on fostering security cooperation with the goal of promoting peace and strengthening stability and the capacity to meet the global and regional security challenges. Both countries agreed to pursue closer cooperation and strive to conclude negotiations in 2017 on a binding agreement concerning enhanced cooperation in the defence field including in defence industry cooperation.
 
Prime Minister Modi and Federal Chancellor Merkel underlined their common concern about the threat and global reach of terrorism and extremism. They condemned terrorist violence in all its forms and manifestations. They agreed on the need to take strong measures against all those who encourage, support and finance terrorism, provide sanctuary and safe havens that sustain and support terrorist groups and organizations. They welcomed closer collaboration between India and Germany to counter these challenges through regular meetings of the Joint Working Group on Counter Terrorism. They called for finalization and adoption of Comprehensive Convention on International Terrorism.
 
Both Leaders welcomed the cooperation in disaster management under the work plan agreed in the Joint Declaration of Intent signed between the two countries for cooperation on investing in creation of knowledge, expertise and information exchange.
 
They welcomed the regular holding of annual German-Indian Cyber consultations since 2015, geared towards cooperation to strengthen the bilateral cyber relationship as laid out in the Joint Declaration of Intent on German-Indian Cooperation on Cyber Policy. Both sides looked forward to a successful conclusion of the work of the UN Group of Governmental Experts in the Field of Information and Telecommunications in the Context of International Security.
 
Both leaders reiterated their commitment to promote shared values such as respect for human rights and fundamental freedoms, democratic governance, equality, the rule of law, and multilateral cooperation.
 
Both Leaders welcomed the intensified exchange of views on issues of common concern between their Foreign Ministries through various dialogue formats, particularly Foreign policy consultations, Asian policy consultations, African policy consultations, and Policy planning dialogue. They also welcomed the newly established collaboration between the Foreign Service Institute of India and the Foreign Service Academy of Germany, with a visit of young German diplomats to New Delhi in March 2017 and signing of a Declaration of Intent on further cooperation. 
 
The two sides expressed their interest in exploring the possibilities to cooperate in their assistance to African Countries. The Leaders called for a process by which concrete synergies in areas such as capacity building, vocational training, connectivity and renewable energy will be set up. They encouraged their respective businesses to explore collaborative activities to promote trade and development in Africa.
 
Prime Minister Modi and Federal Chancellor Merkel reiterated their commitment to the ambitious implementation of the Sustainable Development Goals laid out in the 2030 Agenda for Sustainable Development, both domestically and through international cooperation, as well as the implementation of the Paris Agreement with a timely transformation to low-carbon inclusive sustainable economies. Germany welcomed India’s early ratification of the Paris Agreement, allowing the agreement to enter into force in November 2016.
 
Both Leaders stressed the important role of the G20 in fostering strong, sustainable, balanced and inclusive growth, private investments, free and rules-based trade and financial markets regulation. In the context of the German G20 Presidency’s theme "Shaping an Interconnected World”, Prime Minister Modi welcomed the Presidency’s focus on building resilience, improving sustainability and assuming responsibility, as well as on enhancing the benefits of globalization and sharing them more widely at national and international levels. Both Leaders looked forward to the G20 Summit under the chairmanship of Federal Chancellor Merkel in Hamburg in July this year.
 
Economic Opportunities and Skills as Enabling Factor for Sustained Growth
 
Prime Minister Modi and Federal Chancellor Merkel underlined their determination to ease bilateral trade and investment. They pointed to the potential of open markets and the importance of investment protection for foreign investors for deepening trade relations and for attracting investments to the mutual benefit of both countries. In this context, both Leaders underlined their commitment to India’s strategic partnership with the EU and their interest in developing it further. They also reaffirmed their strong commitment to the EU-India Broad Based Trade and Investment Agreement and their commitment to bring about a resumption of the negotiations at the earliest possible date. This would, inter alia, allow to establish provisions for the mutual protection of new foreign investments.
 
ADVERTISEMENT
Recognizing Germany's key competencies in high technology and India's growing needs, both the Leaders welcomed the efforts of the High Technology Partnership Group (HTPG) to identify specific opportunities for high technology collaboration, including in priority areas of skills development in manufacturing under the "Make in India” program and to enhance cooperation in defence manufacturing and machine tools as well as enhancing cooperation in maritime technology and the development of blue economy. They also agreed to explore possibilities of cooperation in the field of industry 4.0 particularly between the Industry platforms on both sides, and they welcomed efforts to deepen relations between the Indian and German space agencies.
 
They agreed that policies such as the 'Make in India' initiative offer investment opportunities for German companies. Both the Leaders welcomed the full implementation of the Fast Track System for German companies, as agreed during the last consultations, in the Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce & Industry. The Fast Track System has been enabling both sides to identify and solve problems faced by German Companies and investors in their operations in India. Apart from this, the Fast Track System also serves as a platform for discussing general suggestions from the point of view of German companies and Investors with regard to ease of doing business in India.
 
Recognizing the importance of Vocational Education and Training (VET) towards making transformational impact in creating sustainable livelihood opportunities for the youth and building efficient pool of skilled human resource, both Leaders agreed to further strengthen collaboration between India and Germany in this area. Both leaders acknowledged the global need to bridge the gap between the demand and shortage of skilled work force.
 
Both Leaders expressed satisfaction at the close cooperation in the area of skill development and agreed to support the on-going activities within the agenda decided by the Joint Working Group on VET. They also agreed to hold the next meeting of Joint Working Group on VET in Germany before the end of 2017. 
 
Germany welcomes India’s massive effort to enhance its skill development landscape by engaging the industry into the provision and implementation of VET. Both countries acknowledged the well-established dual VET system in Germany, which includes the interests of the industry on all levels and creates skilled personnel that meets the demands of the labour market.
 
The Leaders agreed that cooperation should be jointly explored for the establishment of India’s National Institute of Skill Development (NISD), of an Indian Institute of Skills (IIS) e.g. through linking it with possible German partners as well as of India International Skill Centers to be established in the country for providing pre-departure orientation.
 
Both sides welcomed the signing of the Joint Declaration of Intent on cooperation in the field of Vocational Education and skill development for the Machine Tools Sector and of the Joint Declaration of Intent on the advancement of dual VET and collaboration on Training of VET Cluster Managers and Indian Skill Development Officers.
 
The Leaders also welcomed the "Alliance on Dual VET” (Vocational Education and Training) founded by Indian industrialists and leaders of major Indian companies, aspiring to ensure India’s industries’ proactive participation in strengthening skills and employability of young people. 
 
In the same way, both welcomed the envisaged technical cooperation programme for training and skill development for solar technologies.
 
ADVERTISEMENT
In the field of transport, both Leaders believe that India's railway modernization and expansion plans offer ample opportunities for the German rail industry. They appreciated the significant progress made on strengthening the cooperation in rail sector especially the initiatives in the area of railway safety. 
 
In pursuance of the emphasis on manufacturing and skill development by the Government of India, they encouraged their respective business enterprises to enter into arrangements for co-development and co-production of commercial aviation and defence equipment in India, including transfer of know-how and technologies.
 
Both sides welcomed the entering into force of the German-Indian social security agreement on 1 May 2017. This wide encompassing Agreement includes Totalisation and Exportability of benefits and ensures and coordinates the social protection of nationals of both countries in the area of social security and payment of pensions even in the case of residence in the other contracting state.
 
Hand in Hand for Sustainable Livelihoods and Clean Environment
 
India and Germany share a long standing, trustful and successful development cooperation. The Leaders agreed to continue cooperation towards the common aim of developing climate-friendly, efficient and sustainable solutions for India's expanding energy needs and other areas of sustainable development. Prime Minister Modi expressed appreciation for Germany's assistance in developmental projects over the years.
 
The two leaders welcomed the outcome of the Annual Negotiations on development cooperation held in October 2016, as well as the new envisaged commitments in bilateral development cooperation for 2017, each comprising an amount of 1 billion Euros.
 
Both leaders expressed great appreciation for the successful cooperation on fostering renewable energies in India. They highlighted the successful Indo-German Solar Partnership founded in 2015 and the cooperation on Green Energy Corridors established in 2013.
 
Building on existing formats of cooperation, the Leaders reiterated their support to the Indo-German Climate and Renewables Alliance as an overarching alliance between India and Germany with the objective to give recognition to ongoing collaboration of various stakeholders on energy and climate change as well as to enhance cooperation and synergies in these fields.
 
The Leaders underlined the importance of the Indo-German Energy Forum (IGEF) in contributing to the further development of the Indian energy sector. They envisaged to hold the next meeting of the Indo-German Energy Forum in the second half of 2017 in India. Prime Minister Modi and Chancellor Merkel reaffirmed the importance of the Indo-German Environment Forum (IGEnvF) in contributing to further cooperation on environmental issues, including biodiversity and climate change. They agreed to hold the next meeting of the Indo-German Environmental Forum in 2017 in New Delhi. 
 
Both sides expressed their commitment to work towards the goals expressed in the New Urban Agenda, agreed at the Habitat III conference in 2016. The Indo-German cooperation on urban development will help to facilitate their implementation. Sustainable urban development was agreed as a new priority area of bilateral cooperation between India and Germany in 2016. Until 2022 Germany intends to provide financial and technical assistance in the range of 1 billion Euros. The Joint Working Group on Sustainable Urban Development identified Kochi, Coimbatore and Bhubaneshwar for bilateral collaboration. Underpinning this cooperation, both sides encouraged to cooperate in the field of spatial and urban monitoring and evaluation systems. They underlined opportunities for German companies in the sector of sustainable urban development opened by India's initiative on 100 Smart Cities.
 
The two Leaders welcomed the meetings of the Working Groups for collaboration in Water Management, Waste Management / Circular Economy, and Climate Change held in 2016 and took note of the scheduled meetings for 2017 including the meeting of the proposed Working Group on Biodiversity. They welcomed the ongoing Indo-German cooperation on resource efficiency and called for continuation of joint initiatives in this field. Both Leaders noted the proposed establishment of the G20 Resource Efficiency Partnership. They highlighted the successfully operating Indian Resource Panel (InRP), making India one of the first emerging economies having in place a national advisory body on resource efficiency.
 
The Leaders acknowledged, in particular with regard to the G20, the ongoing important work and activities at different levels to fight marine litter and to counteract its impacts. They stressed the need for cooperation to follow-up on the work done so far within the G20.
 
Both sides highlighted the constructive role of the Bilateral Working Group on Agriculture, Food Processing and Consumer Protection with its last meeting in November 2016 in Hannover. Bilateral efforts focused on food safety and residues management, plant protection topics, development of the seed sector, agricultural training and skills enhancement, processing as well as veterinary issues.
 
Recognizing the need to promote an ecosystem that creates entrepreneurial economy, both Leaders agreed to promote cooperation in the field of Startups by facilitating interaction with various stakeholders in the Startups ecosystem.
 
Education and Research for Innovative Potential
 
Prime Minister Modi and Federal Chancellor Merkel welcomed the Indo-German Partnerships in Higher Education to facilitate collaborative research and academic and institutional exchanges between 10 Universities and Institutions of Higher Education of each country. The International Centre for Advanced Studies in Humanities and Social Sciences in India is forming a nucleus for ambitious interlinked research and acts as a forum for exchanges among outstanding scholars from both countries. Both leaders took note of the Conference "City Scapes” on sustainable urban development and migration, organized in October 2016 by the German House for Research and Innovation (DWIH) in New Delhi. The DWIH serves as a main point for German Indian science and technology networking.
 
Both Leaders welcomed the growing number of Indian students studying in German Universities. In this regard, the German side agreed to address visa issues being faced by Indian students. The German side is actively considering an Indian proposal for a Memorandum of Understanding concerning mutual recognition of qualifications to further encourage students to choose the respective partner country as their destination for academic studies.
 
Both Leaders expressed their appreciation and satisfaction over the high level of engagement between India and Germany in the fields of Science and Technology as exemplified by India’s participation in mega-science facilities at DESY and FAIR in Germany. Both countries have noted the additional financial projections made by the FAIR Council due to the time and cost overrun of the project and will take up necessary steps required to consider the same.They also acknowledged the flagship role of the bilateral Indo-German Science and Technology Centre (IGSTC) in promoting industrial R&D projects that have potential for application towards the development of new breakthrough technologies.
 
Both sides expressed their continued commitment to further develop the Indo German Centre for Sustainability (IGCS) by expanding the existing thematic research scope in order to include topical areas such as climate change impact on coastal infrastructure and adaptation strategies concerning water resources. Both leaders took note of the decision of the Max-Planck Society and the Indian Institute of Technology in New Delhi to continue their successful "Indo-German Collaboration in Computer Sciences”. The Helmholtz Centre for Infection Research and the Indian Council for Medical Research intend to focus their future cooperation on Chronic Viral Disease and Anti-Microbial Resistance.
 
Friendship through Exchange
 
Prime Minister Modi and Federal Chancellor Merkel welcomed the implementation of German language teaching in Kendriya Vidyalayas in conformity with the National Education Policy of India as well as the German side’s efforts to promote modern Indian languages in German educational institutions. Both sides would make all efforts to institutionalise the reciprocal arrangements as envisaged in the Joint Declaration of Intent.
 
The two Leaders looked forward to the National Council of Educational Research and Training (NCERT) and the German Educational Exchange Service (PAD)´s broadening cooperation in supporting India’s efforts to establish the teaching of Hindi in German schools. Both sides look forward to first Hindi classes under this cooperation in the course of the current year.
 
Both Leaders encouraged Indian States and German Laender as well as the municipalities to capitalize on the similarities in the federal structures of both countries and explore all opportunities for engagement at a local level, including through further sister-State and twinning-city arrangements, mutually agreed mechanisms and exchange of best practices in regular contacts.
 
Both countries agreed to further facilitate mutual assistance in criminal matters and underlined their commitment to bring to a successful conclusion their negotiations on a treaty as soon as possible.
 
Both leaders encouraged frequent and intense contact between parliamentarians and scholars. They recognized the role of the German political foundations in facilitating such contacts through educational and dialogue formats.
 
Prime Minister Modi and Chancellor Merkel furthermore urged all concerned to explore greater contacts between cultural, educational and academic institutions of both countries, with particular emphasis on young people, to foster closer understanding and friendship. Both leaders appreciated the activities of the Indo-German Young Leaders’ Forum in this regard.
 
Both leaders expressed deep satisfaction at the deliberations held at the 4th IGC. Prime Minister Modi thanked Chancellor Merkel for her warm hospitality and for hosting the 4th IGC.
 
 
NNN
ADVERTISEMENT
 
 

Full Text: RBI's First Bi-monthly Monetary Policy Statement, 2017-18

RBI logo
 
Following is the text of the First Bi-monthly Monetary Policy Statement, 2016-17 and Resolution of the Monetary Policy Committee (MPC) issued by the Reserve Bank of India (RBI) issued here today: 
 
Resolution of the Monetary Policy Committee (MPC) Reserve Bank of India
 
On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) decided to:
 
keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25 per cent.
 
Consequent upon the narrowing of the LAF corridor as elaborated in the accompanying Statement on Developmental and Regulatory Policies, the reverse repo rate under the LAF is at 6.0 per cent, and the marginal standing facility (MSF) rate and the Bank Rate are at 6.50 per cent.
 
The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth. The main considerations underlying the decision are set out in the statement below.
 
Assessment
 
2. Since the MPC met in February 2017, indicators of global growth suggest signs of stronger activity in most advanced economies (AEs) and easing of recessionary conditions in commodity exporting large emerging market economies (EMEs). In the US, high frequency data indicate that the labour market, industrial production and retail sales are catalysing a recovery in Q1 of 2017 from a relatively subdued performance in the preceding quarter. Nonetheless, risks to higher growth have arisen from non-realisation or under-achievement of macroeconomic policies. In the Euro area, the manufacturing purchasing managers’ index (PMI) rose to a six-year high in March amidst improving consumer confidence and steadily strengthening employment conditions. In the Japanese economy, nascent signs of revival are evident in the form of falling unemployment, improving business sentiment on fixed investment, and rising exports helped by the depreciation of the yen; however, deflation risks linger.
 
3. For EMEs, the outlook is gradually improving, with indications that the slowdown characterising 2016 could be bottoming out. In China, supportive macroeconomic policies, surging credit growth and a booming property market have held up the momentum of growth albeit amidst concerns about financial stability and capital outflows. In Brazil, hardening commodity prices are providing tailwinds to reforms undertaken by the authorities to pull the economy out of recession, although financial fragilities remain a risk. Russia is benefiting from the firming up of crude prices and it is widely expected that growth will return to positive territory in 2017.
 
4. Inflation is edging up in AEs to or above target levels on the back of slowly diminishing slack, tighter labour markets and rising commodity prices. Among EMEs, Turkey and South Africa remain outliers in an otherwise generalised softening of inflation pressures. Global trade volumes are finally showing signs of improvement amidst shifts in terms of trade, with exports rising strongly in several EMEs as well as in some AEs whose currencies have depreciated.
 
5. International financial markets have been impacted by policy announcements in major AEs, geo-political events and country-specific factors. Equity markets in AEs were driven up by reflation trade, stronger incoming data and currency movements. Equity markets in EMEs had a mixed performance, reflecting domestic factors amidst a cautious return of investor appetite and capital flows. In the second half of March, dovish guidance on US monetary policy lifted equities across jurisdictions, especially in Asia, as the reach for EME assets resumed strongly, although doubts about the realisation of US policies, Brexit and softer crude prices tempered sentiments. Bond markets have mirrored the uncertainty surrounding the commitment to fiscal stimulus in the US and yields traded sideways in AEs, while they generally eased across EMEs. In the currency markets, the US dollar’s bull run lost steam by mid-March. EME currencies initially rose on optimism on the global outlook, but some of them have weakened in recent days with the fall in commodity prices. Crude prices touched a three-month low in March on rising shale output and US inventories. Food prices have been firming up globally, driven by cereals.
 
6. On the domestic front, the Central Statistics Office (CSO) released its second advance estimates for 2016-17 on February 28, placing India’s real GVA growth at 6.7 per cent for the year, down from 7 per cent in the first advance estimates released on January 6. Agriculture expanded robustly year-on-year after two consecutive years of sub-one per cent growth. In the industrial sector, there was a significant loss of momentum across all categories, barring electricity generation. The services sector also slowed, pulled down by trade, hotels, transport and communication as well as financial, real estate and professional services. Public administration, defence and other services cushioned this slowdown. To some extent, government expenditure made up for weakness in private consumption and capital formation.
 
7. Several indicators are pointing to a modest improvement in the macroeconomic outlook. Foodgrains production has touched an all-time high of 272 million tonnes, with record production of rice, wheat and pulses. The record production of wheat should boost procurement operations and economise on imports, which had recently surged. Rice stocks, which had depleted to close to the minimum buffer norm, have picked up with kharif procurement. The bumper production of pulses has helped in building up to the intended buffer stock (i.e., 20 lakh tonnes) and this will keep the price of pulses under check – the domestic price of pulses has already fallen below the minimum support price (MSP).
 
ADVERTISEMENT
8. Industrial output, measured by the index of industrial production (IIP), recovered in January from a contraction in the previous month, helped by a broad-based turnaround in manufacturing as well as mining and quarrying. Capital goods production improved appreciably, although this largely reflected the waning of unfavourable base effects. Consumer non-durables continued, however, to contract for the second successive month in spite of supportive base effects. Thus, investment and rural consumption demand remain muted. The output of core industries moderated in February due to slowdown in production of all the components except coal. The manufacturing purchasing managers’ index (PMI) remained in expansion mode in February and rose to a five month high in March on the back of growth of new orders and output. The future output index also rose strongly on forecasts of pick-up in demand and the launch of new product lines. The 77th round of the Reserve Bank’s industrial outlook survey indicates that overall business sentiment is expected to improve in Q1 of 2017-18 on the back of a sharp pick up in both domestic and external demand. Coincident indicators such as exports and non-oil non-gold imports are indicative of a brighter outlook for industry, although the sizable under-utilisation of capacity in several industries could operate as a drag on investment.
 
9. Activity in the services sector appears to be improving as the constraining effects of demonetisation wear off. On the one hand, rural demand remains depressed as reflected in lower sales of two- and three-wheelers and fertiliser. On the other hand, high frequency indicators relating to railway traffic, telephone subscribers, foreign tourist arrivals, passenger car and commercial vehicles are regaining pace, thereby positioning the services sector on a rising trajectory. After three consecutive months of contraction, the services PMI for February and March emerged into the expansion zone on improvement in new business.
 
10. After moderating continuously over the last six months to a historic low, retail inflation measured by year-on-year changes in the consumer price index (CPI) turned up in February to 3.7 per cent. While food prices bottomed out at the preceding month’s level, base effects pushed up inflation in this category. Prices of sugar, fruits, meat, fish, milk and processed foods increased, generating a sizable jump in the momentum in the food group. In the fuel group, inflation increased as the continuous hardening of international prices lifted domestic prices of liquefied petroleum gas during December 2016 – February 2017. Kerosene prices have also been increasing since July with the programmed reduction of the subsidy. Adapting to the movements in these salient prices, both three months ahead and a year ahead households’ inflation expectations, which had dipped in the December round of the Reserve Bank’s survey, reversed in the latest round. Moreover, the survey reveals hardening of price expectations across product groups. The 77th round of the Reserve Bank’s industrial outlook survey indicates that pricing power is returning to corporates as profit margins get squeezed by input costs.
 
11. Excluding food and fuel, inflation moderated in February by 20 basis points to 4.8 per cent, essentially on transient and item-specific factors. In February, favourable base effects were at work in the clothing and bedding sub-group as well as in personal care and effects, the latter also influenced by the disinflation in gold prices. The volatility in crude oil prices and its lagged pass-through are impacting the trajectory of CPI inflation excluding food and fuel. Much of the impact of the fall of US $4.5 per barrel in international prices of crude since early February would feed into the CPI print in April as its cumulative pass-through occurred with a lag in the first week of this month. Importantly, inflation excluding food and fuel has exhibited persistence and has been significantly above headline inflation since September 2016.
 
12. With progressive remonetisation, the surplus liquidity in the banking system declined from a peak of Rs. 7,956 billion on January 4, 2017 to an average of Rs. 6,014 billion in February and further down to Rs. 4,806 billion in March. Currency in circulation expanded steadily during this period. Its impact on the liquidity overhang was, however, partly offset by a significant decline in cash balances of the Government up to mid-March which released liquidity into the system. Thereafter, the build-up of Government cash balances on account of advance tax payments and balance sheet adjustment by banks reduced surplus liquidity to Rs. 3,141 billion by end-March. Issuances of cash management bills (CMBs) under the market stabilisation scheme (MSS) ceased in mid-January and existing issues matured, with the consequent release of liquidity being absorbed primarily through variable rate reverse repo auctions of varying tenors. Accordingly, the average net absorption by the Reserve Bank increased from Rs. 2,002 billion in January to Rs. 4,483 billion in March. The weighted average call money rate (WACR) remained within the LAF corridor. The maturing of CMBs and reduced issuance of Treasury bills leading up to end-March has also contributed to Treasury bill rates being substantially below the policy rate.
 
13. Merchandise exports rose strongly in February 2017 from a subdued profile in the preceding months. Growth impulses were broad-based, with major contributors being engineering goods, petroleum products, iron ore, rice and chemicals. The surge in imports in January and February 2017 largely reflected the effect of the hardening of commodity prices such as crude oil and coal. Non-oil non-gold imports continued to grow at a modest pace, though capital goods imports remained sluggish. With imports outpacing exports, the trade deficit widened in January and February from its level a year ago, though it was lower on a cumulative basis for the period April-February 2016-17.
 
14. Balance of payments data for Q3 indicate that the current account deficit for the first three quarters of the financial year narrowed to 0.7 per cent of GDP, half of its level a year ago. For the year as a whole, the current account deficit is likely to remain muted at less than 1 per cent of GDP. Foreign direct investment (FDI) has dominated net capital inflows during April-December, with manufacturing, communication and financial services being the preferred sectors. Turbulence in global financial markets set off a bout of global risk aversion and flight to safe haven that caused net outflows of foreign portfolio investment (FPI) during November 2016 to January 2017. The tide reversed with the pricing in of the Fed’s normalisation path and improvement in global growth prospects. FPI flows turned positive in February and welled up into a surge in March, especially in debt markets relative to equity markets (which had been the dominant recipient until February). This reversal appears to have been driven by stable domestic inflation, better than expected domestic growth, encouraging corporate earnings, clarity on FPI taxation, pro-reform budget proposals and state election results. The level of foreign exchange reserves was US$ 369.9 billion on March 31, 2017.
 
Outlook
 
ADVERTISEMENT
15. Since the February bi-monthly monetary policy statement, inflation has been quiescent. Headline CPI inflation is set to undershoot the target of 5.0 per cent for Q4 of 2016-17 in view of the sub-4 per cent readings for January and February. For 2017-18, inflation is projected to average 4.5 per cent in the first half of the year and 5 per cent in the second half.
 
16. Risks are evenly balanced around the inflation trajectory at the current juncture. There are upside risks to the baseline projection. The main one stems from the uncertainty surrounding the outcome of the south west monsoon in view of the rising probability of an El Niño event around July-August, and its implications for food inflation. Proactive supply management will play a critical role in staving off pressures on headline inflation. A prominent risk could emanate from managing the implementation of the allowances recommended by the 7th CPC. In case the increase in house rent allowance as recommended by the 7th CPC is awarded, it will push up the baseline trajectory by an estimated 100-150 basis points over a period of 12-18 months, with this initial statistical impact on the CPI followed up by second-order effects. Another upside risk arises from the one-off effects of the GST. The general government deficit, which is high by international comparison, poses yet another risk for the path of inflation, which is likely to be exacerbated by farm loan waivers. Recent global developments entail a reflation risk which may lift commodity prices further and pass through into domestic inflation. Moreover, geopolitical risks may induce global financial market volatility with attendant spillovers. On the downside, international crude prices have been easing recently and their pass-through to domestic prices of petroleum products should alleviate pressure on headline inflation. Also, stepped-up procurement operations in the wake of the record production of foodgrains will rebuild buffer stocks and mitigate food price stress, if it materialises.
 
17. GVA growth is projected to strengthen to 7.4 per cent in 2017-18 from 6.7 per cent in 2016-17, with risks evenly balanced.
 
18. Several favourable domestic factors are expected to drive this acceleration. First, the pace of remonetisation will continue to trigger a rebound in discretionary consumer spending. Activity in cash-intensive retail trade, hotels and restaurants, transportation and unorganised segments has largely been restored. Second, significant improvement in transmission of past policy rate reductions into banks’ lending rates post demonetisation should help encourage both consumption and investment demand of healthy corporations. Third, various proposals in the Union Budget should stimulate capital expenditure, rural demand, and social and physical infrastructure all of which would invigorate economic activity. Fourth, the imminent materialisation of structural reforms in the form of the roll-out of the GST, the institution of the Insolvency and Bankruptcy Code, and the abolition of the Foreign Investment Promotion Board will boost investor confidence and bring in efficiency gains. Fifth, the upsurge in initial public offerings in the primary capital market augurs well for investment and growth.
 
19. The global environment is improving, with global output and trade projected by multilateral agencies to gather momentum in 2017. Accordingly, external demand should support domestic growth. Downside risks to the projected growth path stem from the outturn of the south west monsoon; ebbing consumer optimism on the outlook for income, the general economic situation and employment as polled in the March 2017 round of the Reserve Bank’s consumer confidence survey; and, commodity prices, other than crude, hardening further.
 
20. Overall, the MPC’s considered judgement call to wait out the unravelling of the transitory effects of demonetisation has been broadly borne out. While these effects are still playing out, they are distinctly on the wane and should fade away by the Q4 of 2016-17. While inflation has ticked up in its latest reading, its path through 2017-18 appears uneven and challenged by upside risks and unfavourable base effects towards the second half of the year. Moreover, underlying inflation pressures persist, especially in prices of services. Input cost pressures are gradually bringing back pricing power to enterprises as demand conditions improve. The MPC remains committed to bringing headline inflation closer to 4.0 per cent on a durable basis and in a calibrated manner. Accordingly, inflation developments have to be closely and continuously monitored, with food price pressures kept in check so that inflation expectations can be re-anchored. At the same time, the output gap is gradually closing. Consequently, aggregate demand pressures could build up, with implications for the inflation trajectory.
 
21. Against this backdrop, the MPC decided to keep the policy rate unchanged in this review while persevering with a neutral stance. The future course of monetary policy will largely depend on incoming data on how macroeconomic conditions are evolving. Banks have reduced lending rates, although further scope for a more complete transmission of policy impulses remains, including for small savings/administered rates. It is in this context that greater clarity about liquidity management is being provided, even as surplus liquidity is being steadily drained out. Along with rebalancing liquidity conditions, it will be the Reserve Bank’s endeavour to put the resolution of banks’ stressed assets on a firm footing and create congenial conditions for bank credit to revive and flow to productive sectors of the economy.
 
22. Six members voted in favour of the monetary policy decision. The minutes of the MPC’s meeting will be published by April 20, 2017.
 
23. The next meeting of the MPC is scheduled on June 5 and 6, 2017.
 
NNN
ADVERTISEMENT
 
 

Full Text: RBI's Sixth Bi-monthly Monetary Policy Statement, 2016-17

RBI logo
 
Following is the text of the Sixth Bi-monthly Monetary Policy Statement, 2016-17 and Resolution of the Monetary Policy Committee (MPC) issued by the Reserve Bank of India (RBI) issued here today:
 
On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) decided to:
 
keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25 per cent.
 
Consequently, the reverse repo rate under the LAF remains unchanged at 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent.
 
The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving consumer price index (CPI) inflation at 5 per cent by Q4 of 2016-17 and the medium-term target of 4 per cent within a band of +/- 2 per cent, while supporting growth. The main considerations underlying the decision are set out in the statement below.
 
Assessment
 
2. Global growth is projected to pick up modestly in 2017, after slowing down in the year gone by. Advanced economies (AEs) are expected to build upon the slow gathering of momentum that started in the second half of 2016, led by the US and Japan. However, uncertainty surrounds the direction of US macroeconomic policies with potential global spillovers. Growth prospects for emerging market economies (EMEs) are also expected to improve moderately, with recessionary conditions ebbing in Russia and Brazil, and China stabilising on policy stimulus. Inflation is edging up on the back of rising energy prices and a mild firming up of demand. However, global trade remains subdued due to an increasing tendency towards protectionist policies and heightened political tensions. Furthermore, financial conditions are likely to tighten as central banks in AEs normalise exceptional accommodation in monetary policy.
 
3. International financial markets turned volatile from mid-January on concerns regarding the ‘Brexit’ roadmap and materialisation of expectations about economic policies of the new US administration. Within the rising profile of international commodity prices, crude oil prices firmed up with the OPEC’s agreement to curtail production. Prices of base metals have also increased on expectations of fiscal stimulus in the US, strong infrastructure spending in China, and supply reductions. Geopolitical concerns have also hardened commodity prices. More recently, the appetite for risk has returned in AEs, buoying equity markets and hardening bond yields as a response to the growing likelihood of further increases in the Federal Funds rate during the year. Coupled with expectations of fiscal expansion in the US, this has propelled the US dollar to a multi-year high.
 
ADVERTISEMENT
4. The Central Statistics Office (CSO) released its advance estimates for 2016-17 on January 6, placing India’s real GVA growth at 7.0 per cent for the year, down from 7.8 per cent (first revised estimates released on January 31) a year ago. Agriculture and allied activities posted a strong pick-up, benefiting from the normal south-west monsoon, robust expansion in rabi acreage (higher by 5.7 per cent over the preceding year) and favourable base effects as well as the continuing resilience of allied activities. In contrast, the industrial sector experienced a sharp deceleration, mainly due to a slowdown in manufacturing and in mining and quarrying. Service sector activity also lost pace, concentrated in trade, hotels, transport and communication services, and construction, cushioned to some extent by public administration and defence.
 
5. Industrial output measured by the index of industrial production (IIP) finally shrugged off the debilitating drag from insulated rubber cables from November and was also pushed up by a favourable base effect. In December, the output of core industries accelerated on a year-on-year as well as on a sequentially seasonally adjusted basis. The drivers of the upturn were steel production and petroleum refinery throughput, the former, inter alia, supported by import tariff safeguards and the latter buoyed by external demand. The acceleration in coal production and thermal electricity generation since November after three consecutive months of contraction augur well for the outlook for power. Reflecting these developments, the manufacturing purchasing managers’ index (PMI) returned to expansion mode in January on the back of growth of new orders and output, and the future output index has risen strongly. On the other hand, the 76th round of the Reserve Bank’s industrial outlook survey suggests that financing conditions facing the manufacturing sector have worsened in Q3 of 2016-17 and are expected to remain tight in Q4. This is corroborated by the sharp slowdown in bank credit to industry and continuing sluggishness in the investment climate in some sectors.
 
6. High frequency indicators point to subdued activity in the services sector, particularly automobile sales across all segments, domestic air cargo, railway freight traffic, and cement production. Nevertheless, some areas stand out as bright spots, having weathered the transient effects of demonetisation – steel consumption; port traffic; international air freight; foreign tourist arrivals; tractor sales; and, cellular telephone subscribers. The services PMI for January 2017 remained in retrenchment, but the fall in output was the least in the current phase of three consecutive months of contraction.
 
7. Marking the fifth consecutive month of softening, retail inflation measured by the headline consumer price index (CPI) turned down sharper than expected in December and reached its lowest reading since November 2014. This outcome was driven by deflation in the prices of vegetables and pulses. Some moderation in the rate of increase in prices of protein-rich items – eggs, meat and fish – also aided the downturn in food inflation.
 
8. Excluding food and fuel, inflation has been unyielding at 4.9 per cent since September. While some part of this inertial behaviour is attributable to the turnaround in international crude prices since October – which fed into prices of petrol and diesel embedded in transport and communication – a broad-based stickiness is discernible in inflation, particularly in housing, health, education, personal care and effects (excluding gold and silver) as well as miscellaneous goods and services consumed by households.
 
9. The large overhang of liquidity consequent upon demonetisation weighed on money markets in December, but from mid-January rebalancing has been underway with expansion of currency in circulation and new bank notes being injected into the system at an accelerated pace. Throughout this period, the Reserve Bank’s market operations have been in liquidity absorption mode. With the abolition of the incremental cash reserve ratio from December 10, liquidity management operations have consisted of variable rate reverse repos under the LAF of tenors ranging from overnight to 91 days and auctions of cash management bills under the market stabilisation scheme (MSS) of tenors ranging from 14 to 63 days. The average daily net absorption under the LAF was Rs. 1.6 trillion in December, Rs. 2.0 trillion in January and Rs. 3.7 trillion in February (up to February 7) while under the MSS, it was Rs. 3.8 trillion, Rs. 5.0 trillion and Rs.  2.9 trillion, respectively. Money market rates remained aligned with the policy repo rate albeit with a soft bias, with the weighted average call money rate (WACR) averaging 18 basis points below the policy rate during December and January.
 
10. Turning to the external sector, export growth remained in the positive zone for the fourth month in succession in December. Imports other than petroleum oil and lubricants (POL) came out of the spike in November and moderated in December. In contrast, there was an increase of over 10 per cent in POL imports, in part reflecting the rise in international crude oil prices. Overall, the trade deficit shrank both sequentially and on a year-on-year basis, being lower for the period April-December by US$ 23.5 billion than its level a year ago. On the whole, the current account deficit is likely to remain muted and below 1 per cent of GDP in 2016-17. While the buoyancy in net foreign direct investment was sustained, there have been portfolio outflows beginning October on uncertainty relating to the direction of US macroeconomic policies and expectations of faster normalisation of US monetary policy in the year ahead. Foreign exchange reserves were at US$ 363.1 billion on February 3, 2017.
 
ADVERTISEMENT
Outlook
 
11. In the fifth bi-monthly statement of December, headline inflation was projected at 5 per cent in Q4 of 2016-17 with risks lower than before but still tilted to the upside. The decline in headline CPI inflation in November and December has been larger than expected, but almost exclusively on the back of deflation in vegetables and pulses. While the seasonal ebb in the prices of vegetables that usually occurs with the onset of winter as well as some demand compression may have contributed to this outcome, anecdotal evidence points to some distress sales of perishables having accentuated the decline in vegetable prices, with spillovers into January as well. Looking beyond, prices of pulses are likely to remain soft with comfortable supply conditions, while vegetable prices may potentially rebound as the effects of demonetisation wear off.
 
12. The Committee is of the view that the persistence of inflation excluding food and fuel could set a floor on further downward movements in headline inflation and trigger second-order effects. Nevertheless, headline CPI inflation in Q4 of 2016-17 is likely to be below 5 per cent. Favourable base effects and lagged effects of demand compression may mute headline inflation in Q1 of 2017-18. Thereafter, it is expected to pick up momentum, especially as growth picks up and the output gap narrows. Moreover, base effects will reverse and turn adverse during Q3 and Q4 of 2017-18. Accordingly, inflation is projected in the range of 4.0 to 4.5 per cent in the first half of the financial year and in the range of 4.5 to 5.0 per cent in the second half with risks evenly balanced around this projected path. In this context, it is important to note three significant upside risks that impart some uncertainty to the baseline inflation path – the hardening profile of international crude prices; volatility in the exchange rate on account of global financial market developments, which could impart upside pressures to domestic inflation; and the fuller effects of the house rent allowances under the 7th Central Pay Commission (CPC) award which have not been factored in the baseline inflation path. The focus of the Union budget on growth revival without compromising on fiscal prudence should bode well for limiting upside risks to inflation.
 
13. GVA growth for 2016-17 is projected at 6.9 per cent with risks evenly balanced around it. Growth is expected to recover sharply in 2017-18 on account of several factors. First, discretionary consumer demand held back by demonetisation is expected to bounce back beginning in the closing months of 2016-17. Second, economic activity in cash-intensive sectors such as retail trade, hotels and restaurants, and transportation, as well as in the unorganised sector, is expected to be rapidly restored. Third, demonetisation-induced ease in bank funding conditions has led to a sharp improvement in transmission of past policy rate reductions into marginal cost-based lending rates (MCLRs), and in turn, to lending rates for healthy borrowers, which should spur a pick-up in both consumption and investment demand. Fourth, the emphasis in the Union Budget for 2017-18 on stepping up capital expenditure, and boosting the rural economy and affordable housing should contribute to growth. Accordingly, GVA growth for 2017-18 is projected at 7.4 per cent, with risks evenly balanced.
 
14. The Committee remains committed to bringing headline inflation closer to 4.0 per cent on a durable basis and in a calibrated manner. This requires further significant decline in inflation expectations, especially since the services component of inflation that is sensitive to wage movements has been sticky. The committee decided to change the stance from accommodative to neutral while keeping the policy rate on hold to assess how the transitory effects of demonetisation on inflation and the output gap play out.
 
15. The Reserve Bank has conducted market liquidity operations consistent with the liquidity management framework put in place in April 2016, progressively moving the system level ex ante liquidity conditions to close to neutrality. This stance will continue. Surplus liquidity should decline with progressive remonetisation. Nonetheless, the currently abundant liquidity with banks is likely to persist into the early months of 2017-18. The Reserve Bank is committed to ensuring efficient and appropriate liquidity management with all the instruments at its command to ensure close alignment of the WACR with the policy rate, improved transmission of policy impulses to lending rates, and adequate flow of credit to productive sectors of the economy.
 
16. The Committee believes that the environment for timely transmission of policy rates to banks lending rates will be considerably improved if (i) the banking sector’s non-performing assets (NPAs) are resolved more quickly and efficiently; (ii) recapitalisation of the banking sector is hastened; and, (iii) the formula for adjustments in the interest rates on small savings schemes to changes in yields on government securities of corresponding maturity is fully implemented.
 
17. Six members voted in favour of the monetary policy decision. The minutes of the MPC’s meeting will be published by February 22, 2017.
 
18. The next meeting of the MPC is scheduled on April 5 and 6, 2017.
 
NNN
ADVERTISEMENT
 
 

India-Japan Joint Statement

ADVERTISEMENT
Following is the text of the Joint Statement issued by India and Japan during the visit to Prime Minister Narendra Modi to Japan here today:
 
H.E. Mr. Narendra Modi, Prime Minister of the Republic of India, is currently on an official visit to Japan at the invitation of H.E. Mr. Shinzo Abe, Prime Minister of Japan. Earlier today, the two Prime Ministers held wide-ranging consultations on 11 November 2016, in Tokyo, during which they undertook a comprehensive review of the Special Strategic and Global Partnership as outlined in the "India and Japan Vision 2025" set forth on 12 December 2015. They acknowledged the significant progress in bilateral relations over the past two years since Prime Minister Modi's visit to Japan in August-September 2014. 
 
Synergising the Partnership
 
The two Prime Ministers appreciated the deep civilisational links between the people of the two countries, including the common heritage of Buddhist thought, and underscored their shared commitment to democracy, openness, and the rule of law as key values to achieve peaceful co-existence. They welcomed the high degree of convergence in the political, economic and strategic interests of the two countries that provides an enduring basis for a long-term partnership.
 
The two Prime Ministers underscored the rising importance of the Indo-Pacific region as the key driver for the prosperity of the world. They stressed the core values of democracy, peace, the rule of law, tolerance, and respect for the environment in realising pluralistic and inclusive growth of the region. In this context, Prime Minister Abe appreciated Prime Minister Modi’s active engagement in the region under the "Act East Policy,” and briefed Prime Minister Modi on the "Free and Open Indo-Pacific Strategy.” Prime Minister Modi appreciated Japan’s greater engagement in the region under this strategy. They recognised the potential for deeper bilateral cooperation and synergy between the said policy and strategy.
 
They further stressed that improving connectivity between Asia and Africa, through realising a free and open Indo-Pacific region, is vital to achieving prosperity of the entire region. They decided to seek synergy between India's "Act East" Policy and Japan's "Expanded Partnership for Quality Infrastructure,” by closely coordinating, bilaterally and with other partners, for better regional integration and improved connectivity as well as industrial networks based on the principles of mutual consultation and trust.
 
Reviewing the deepening interdependence and complexity of the global agenda, the two Prime Ministers also decided to expand common space and their cooperation on global challenges such as climate change, countering terrorism and violent extremism, reform of the United Nations (UN) including the United Nations Security Council (UNSC), as well as maintaining rules-based international order.
 
Keeping in mind the immense potential for combining Japan's capital, innovation and technologies with the rich human resources and economic opportunities available in India's high-growth economy, the two Prime Ministers underlined the need to intensify cooperation in high technology, space, clean energy and energy sector development, infrastructure and smart cities, bio-technology, pharmaceuticals, ICT, as well as education and skills development to strengthen and deepen their Special Strategic and Global Partnership. 
 
Building a Stronger Partnership for Safer and Stable World 
 
Stressing the role of India and Japan for stability and prosperity in the Indo-Pacific region, the two Prime Ministers reiterated the need to further consolidate their security and defence cooperation. They welcomed the entry into force of the two Defence Framework Agreements concerning the Transfer of Defence Equipment and Technology and concerning Security Measures for the Protection of Classified Military Information. They underscored the need to further expand defence engagement through greater two-way collaboration and technology cooperation, co-development and co-production, by expediting discussions for determining specific items including through the Joint Working Group on Defence Equipment and Technology Cooperation.
 
The two Prime Ministers appreciated the successful Annual Defence Ministerial Dialogue held in New Delhi, Japan's regular participation in the Malabar Exercise and the International Fleet Review off the coast of Vishakapatnam. They reaffirmed their desire to further deepen bilateral security and defence dialogues, through the "2+2” Dialogue, Defence Policy Dialogue, Military-to-Military Talks and Coast Guard-to-Coast Guard co-operation. They also welcomed that, with the inaugural air force staff talks held earlier this year, the two sides now have institutional wide ranging dialogue mechanism in place covering all three services. The two Prime Ministers shared their intention to expand dialogue and cooperation in the defence sector to cover exchange of observers in humanitarian assistance and disaster relief (HA/DR) exercises, and exchange and training of personnel in other fields.
 
Prime Minister Modi conveyed his appreciation for Japan's readiness to provide its state of the art defence platforms such as US-2 amphibian aircraft. It symbolises the high degree of trust between the two countries and the distance that Japan and India have covered in advancing their bilateral defence exchanges. 
 
Partnership for Prosperity 
 
Prime Minister Modi briefed Prime Minister Abe about his Government’s efforts to accelerate economic development through innovative initiatives such as "Make in India," "Digital India," "Skill India," "Smart City," "Swachh Bharat” and "Start-Up India." Prime Minister Abe expressed Japan's firm support for these initiatives by sharing its advanced skills and technologies, through active mobilisation of Japanese public and private sector investments, including through ODA. The two Prime Ministers underscored that these initiatives provide significant opportunities for further collaboration between private sectors of India and Japan.
 
The two Prime Ministers welcomed the steady progress made in the Mumbai-Ahmedabad High Speed Rail (MAHSR) Project, a flagship project between the two countries, through the discussion in the Joint Committee meetings held thrice in 2016.
The two Prime Ministers noted the target schedule of the MAHSR Project that the General Consultant will start its work in December 2016, that the construction work will commence by the end of 2018, and that the operation will start in 2023.
 
The two Prime Ministers also welcomed that a task force will be set up comprising representatives of both countries to develop a concrete roadmap for phased transfer of technology and "Make in India.” Both sides will explore further strengthening of partnership in high speed railways. The two Prime Ministers emphasised the critical importance of human resource development in high speed rail technology, operation and maintenance in a planned manner, including the commencement of preliminary work on establishment of HSR Institute and development of its training programme. The two Prime Ministers recognised the importance of accelerating the MAHSR Project by holding the Ground Breaking Ceremony in 2017. The two Prime Ministers noted with satisfaction, the growing collaboration between India and Japan in the modernisation and expansion of conventional railway system in India.
 
The two Prime Ministers decided to cooperate on the human resource development in the manufacturing sector in India through "Manufacturing Skill Transfer Promotion Programme.” This programme will enhance the manufacturing base of India and contribute to "Make in India” and "Skill India,” through training 30,000 persons over next 10 years with Japanese style manufacturing skills and practices through the establishment of the Japan-India Institutes for Manufacturing (JIM) and the Japanese Endowed Courses (JEC) in engineering colleges designated by Japanese companies in India in cooperation between the public and private sectors. The first three JIMs under the Programme would start in summer 2017 in the States of Gujarat, Karnataka and Rajasthan.
 
The two Prime Ministers welcomed the steady progress to realise 3.5 trillion yen of public and private financing to India in five years under the "Japan-India Investment Promotion Partnership." They also welcomed the progress in the projects at the Western Dedicated Freight Corridor (DFC), the Delhi-Mumbai Industrial Corridor (DMIC) and the Chennai Bengaluru Industrial Corridor (CBIC). The two Prime Ministers also confirmed the importance of securing appropriate implementation of ODA projects.
 
Prime Minister Modi appreciated the significant contribution of Japan's ODA in the development and modernisation of infrastructure in India. In this regard, the two Prime Ministers welcomed progress in the ODA projects in urban transportation sector such as the Chennai and Ahmedabad Metro, the Mumbai Trans Harbor Link project, and the introduction of the Intelligence Transport System along the Eastern Peripheral Highway in Delhi. Prime Minister Abe expressed Japan’s intention to support the upgrading of the ship-recycling yards of Alang, Bhavnagar District of Gujarat.
 
The two Prime Ministers expressed their strong commitment to work together to enhance connectivity, and welcomed the progress of the projects to enhance road connectivity in North Eastern India. They decided to build upon their cooperation in the field of smart cities to develop smart islands by initiating consultations to identify technologies, infrastructure, development strategies and management processes that would facilitate development of smart islands in an efficient and effective manner.
Prime Minister Modi appreciated the provision of ODA loan to the irrigation project in Jharkhand, and the preparatory survey for forest resource management in Odisha and irrigation improvement in Rajasthan and Andhra Pradesh.
 
Prime Minister Modi appreciated Japan’s efforts to support the construction of a Convention Centre in Varanasi and recognised its symbolic importance as a sign of strengthening bilateral ties.
 
Prime Minister Abe commended Prime Minister Modi’s strong commitment to improve business environment in India, and welcomed reforms undertaken for liberalising investment policies, simplifying and rationalising taxation system through the passage of historic Goods and Services Tax Bill, Insolvency and Bankruptcy Code and other measures.
 
Prime Minister Abe appreciated the actions taken by Prime Minister Modi on improving the business environment in India and creating enabling environment for Japanese investments .Prime Minister Modi appreciated the initiatives by Prime Minister Abe towards establishment of Japan Industrial Townships (JITs). He expressed confidence that establishment of these townships will enhance technology infusion, innovation and best practices in manufacturing sector in India. The two Prime Ministers welcomed the progress related to JITs including the focused planning by selecting a few areas out of the twelve JITs for pilot implementation and special investment incentives. They also agreed to continue to engage in consultation and cooperation in development of JITs.
 
Prime Minister Abe also expressed appreciation for the facilitation provided by the "Japan Plus” for the Japanese companies in India and the coordination by the "Core Group” chaired by Cabinet Secretary for the facilitation of Japan-India Investment Promotion Partnership. The two Prime Ministers noted with satisfaction that the bilateral Strategic Economic Dialogue, Financial Dialogue and meetings on Comprehensive Economic Partnership Agreement (CEPA) were held successfully this year and underlined the importance of these dialogues and their subcommittees to deepen bilateral cooperation. They also welcomed the entry into force of the Agreement on Social Security in October 2016, which would reduce costs of business and further facilitate human and economic exchanges between India and Japan.
 
The two Prime Ministers confirmed the importance of implementing the "Japan-India Make-in-India Special Finance Facility" of up to 1.5 trillion yen by Nippon Export and Investment Insurance (NEXI) and Japan Bank for International Cooperation (JBIC) to promote direct investment of Japanese companies in India. They welcomed the Memorandum Of Understanding (MoU) between the National Investment and Infrastructure Fund (NIIF) and Japan Overseas Infrastructure Investment Corporation for Transport and Urban Development (JOIN) to explore funding for infrastructure projects in India. 
 
Working together for a cleaner and greener future 
 
The two Prime Ministers recognised that access to reliable, clean and affordable energy is critical for economic growth of both countries, and in this regard, they welcomed the Japan-India Energy Partnership Initiative laid by the Japan-India 8th Energy Dialogue held in January 2016. They further desired to strengthen bilateral energy cooperation as it will contribute not only to the energy development of both countries, but also to worldwide energy security, energy access and climate change issue. They also reaffirmed their intention to promote transparent and diversified Liquified Natural Gas (LNG) market including elimination of destination clause.
 
The two Prime Ministers welcomed the early entry into force of the Paris Agreement on climate change, and reaffirmed their commitment to work together in developing the rules for successful implementation of the Agreement. They also shared the intention to hold as early as possible further consultations on the Joint Crediting Mechanism (JCM).
ADVERTISEMENT
Prime Minister Abe welcomed Prime Minister Modi’s efforts, particularly in the area of renewable energy, including the establishment of the International Solar Alliance.
 
The two Prime Ministers welcomed the signing of the Agreement between the Government of Japan and the Government of the Republic of India for Cooperation in the Peaceful Uses of Nuclear Energy which reflects a new level of mutual confidence and strategic partnership in the cause of clean energy, economic development and a peaceful and secure world.
 
Welcoming the growing collaboration between their private and public sector entities in environmentally friendly energy efficient technologies, the two Prime Ministers underlined the importance of promoting further cooperation in such areas as clean coal technologies and popularisation of eco-friendly vehicles including hybrid vehicles, electric vehicles etc.
 
The two Prime Ministers expressed their intention to achieve an early conclusion of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009. 
 
Laying the Foundation of a Future-oriented Partnership 
 
The two Prime Ministers recognised the vast potential for deeper bilateral collaboration of science and technology to fundamentally transform societies. They also stressed the importance of enhancing space cooperation, and welcomed the signing of the MOU between JAXA and ISRO. They also appreciated extending cooperation in the area of marine, earth and atmospheric sciences, including through the Memorundum of Cooperation (MOC) between the Ministry of Earth Science and JAMSTEC. They noted the progress made in bilateral IT and IoT cooperation through the bilateral Joint Working Group on IT and Electronics, the Japan-India IoT Investment Initiative in cooperation with JETRO, and Joint Committee on Science and Technology.
 
The two Prime Ministers welcomed the successful holding of the "Asian Ministerial Conference on Disaster Risk Reduction 2016” in New Delhi, following the Third UN World Conference on Disaster Risk Reduction. They recognised the potential for cooperation in the area of disaster management and disaster risk reduction. They also acknowledged the importance of the World Tsunami Awareness Day to raise awareness, promote better understanding of risks and develop tools to address it.
 
The two Prime Ministers also welcomed progress of cooperation in the field of healthcare including antimicrobial resistance, stem cell research, pharmaceuticals and medical devices. They also noted the opportunities for collaboration between Indian and Japanese pharmaceutical companies in light of the target regarding the quantitative share of generic medicines in Japan. 
 
Investing in People for a Durable Partnership
 
The two Prime Ministers stressed the need to further strengthen the opportunities for tourism, youth exchange and educational collaboration, and decided to mark the year 2017 as a year of India-Japan friendly exchanges in the field of culture and tourism. They welcomed the MOC in the field of Cultural Exchange. They expressed their strong desire to promote tourism flows between the two countries and noted with satisfaction the inaugural meeting of India-Japan Tourism Council and look forward to the second meeting in Japan in 2017. They also welcomed the planned opening of the Japan National Tourism Organisation (JNTO) office in Delhi in FY 2016.
 
ADVERTISEMENT
Prime Minister Abe announced a relaxation of visa requirement for Indian students and expressed his intention to expand the number of visa application sites for Indian nationals to twenty. Prime Minister Abe thanked Prime Minister Modi for extending the Visa on Arrival facility as well as long-term ten-year visas to Japanese tourists and investors.
 
Prime Minister Abe briefed about Japan’s new initiative "Innovative Asia” to enhance exchange of skilled human resources in Asia. The two Prime Ministers hoped that this initiative would provide Indian students new avenues to avail of scholarship and internship opportunities and would further foster innovation.
 
The two Prime Ministers noted with satisfaction the successful realisation of the first bilateral High-Level Policy Dialogue on Education, and stressed the need to further strengthen collaboration in education including through expanded university-to-university institutionalised links. The two Prime Ministers also underscored the importance of sharing the best practices regarding the education models, and initiatives such as SAKURA Science Plan (Japan-Asia Youth Exchange Programme in Science) under which young Indian students and researchers visit Japan.
 
The two Prime Ministers welcomed the signing of the MOC on Sports between the Ministry of Youth Affairs and Sports of India and the Ministry of Education, Culture, Sports, Science and Technology of Japan to promote sharing of experiences, skills, techniques, information and knowledge, with a special focus on Tokyo 2020 Olympics and Paralympics. Prime Minister Abe welcomed that Prime Minister Modi offered to support Japan's efforts towards the successful organisation of Tokyo 2020 Olympics and Paralympics.
 
The two Prime Ministers stressed the importance of increased interaction between all levels of the government, between parliament members, and between Prefectures and States. They welcomed the signing of the MOU between the State of Gujarat and Hyogo Prefecture on mutual cooperation. They also expressed satisfaction at the strengthened ties between the City of Kyoto and Varanasi, two ancient cities integral to their respective cultural heritage.
 
Prime Minister Modi welcomed the growing interest in Japan in celebrating the International Day of Yoga. Prime Minister Modi also encouraged the Japanese Yoga enthusiasts to avail of Indian scholarships for training in the most reputed yoga institutes in India.
 
The two Prime Ministers recognised the importance of the empowerment of women and the need to strengthen cooperation in this area, including efforts through conferences such as the World Assembly for Women (WAW!).
 
Sharing the view that the future of Asia needs to build on the positive influence of traditions of non-violence, tolerance, and democracy in Asia, the two Prime Ministers welcomed the symposium on "Shared Values and Democracy in Asia" held in Tokyo in January 2016 and looked forward to the next conference in 2017. 
 
Working Jointly for Strengthening Rules-based International Order in the Indo-Pacific Region and Beyond
 
The two Prime Ministers stressed the potential that the collaboration of India and Japan have in realising prosperous Indo-Pacific region in the 21st century. They decided to draw on the strength of shared values, convergent interests and complementary skills and resources, to promote economic and social development, capacity building, connectivity and infrastructure development in the region. In this regard, Prime Minister Abe proposed a new initiative combining the human, financial and technological resources of the two countries to advance these objectives including through Japanese ODA projects. Prime Minister Modi acknowledged the importance of bilateral cooperation in this regard.
 
The two Prime Ministers underscored the importance of India-Japan dialogue to promote cooperation and collaboration in Africa, with the objective to synergise their efforts and explore specific joint projects including in the areas of training and capacity building, health, infrastructure and connectivity. In this regard, they also expressed their intention to work jointly and cooperatively with the international community to promote the development of industrial corridors and industrial network in Asia and Africa.
 
The two Prime Ministers welcomed the prospects of cooperation between the two countries for promoting peace and prosperity in South Asia and neighboring region, such as Iran and Afghanistan, through both bilateral and trilateral cooperation, inter-alia, in the development of infrastructure and connectivity for Chabahar. They directed their officials to expeditiously work out details for such cooperation.
 
The two Prime Ministers welcomed the holding of trilateral dialogue among Japan, India and the United States, and strengthened coordination and cooperation in such areas as HA/DR, regional connectivity as well as maritime security and safety. The two Prime Ministers also welcomed continued and deepened trilateral dialogue among Japan, India and Australia.
 
Welcoming the progress in strengthening the East Asia Summit (EAS) process as the premier leaders-led forum to discuss regional political, economic and security issues, the two Prime Ministers decided to work together towards making the Summit a more dynamic proactive process. They welcomed the convening of the EAS Ambassadors’ Meeting in Jakarta and the establishment of the EAS Unit within the ASEAN Secretariat. They stressed the importance of enhancing maritime cooperation and regional connectivity within the EAS framework.
 
The two Prime Ministers expressed their willingness to shaping and strengthening the evolving regional architecture through enhanced cooperation in ASEAN-led fora such as ASEAN Regional Forum, ASEAN Defence Ministers' Meeting Plus, Expanded ASEAN Maritime Forum and coordination of their actions to tackle global and regional challenges including maritime security, terrorism and violent extremism, and climate change.
 
They expressed their strong hope that these regional and trilateral dialogue mechanisms will be further developed and contribute to a balanced, open, inclusive, stable, transparent and rules-based economic, political and security architecture in the Indo-Pacific region.
 
The two Prime Ministers condemned terrorism in strongest terms in all its forms and manifestations in the spirit of "zero tolerance.” They noted with great concern the growing menace of terrorism and violent extremism and its universal reach. They expressed their condolences to the bereaved families of the victims of both countries in the recent terrorist attacks including in Dhaka and Uri. They called upon all countries to implement the UNSC Resolution 1267 and other relevant resolutions designating terrorist entities. They called upon all countries to work towards eliminating terrorist safe havens and infrastructure, in disrupting terrorist networks and financing channels, and stopping cross-border movement of terrorists. They underlined the need for all countries to effectively deal with trans-national terrorism emanating from their territory. They emphasised that the evolving character of terrorism called for stronger international partnership in countering terrorism and violent extremism, including through increased sharing of information and intelligence. The two Prime Ministers noted the ongoing bilateral dialogue on counter-terrorism and called for enhanced cooperation including through greater exchange of information and intelligence between the two sides. They also called for Pakistan to bring the perpetrators of terrorist attacks including those of November 2008 terrorist attack in Mumbai and 2016 terrorist attack in Pathankot to justice.
 
The two Prime Ministers affirmed closer cooperation in safeguarding the global commons and domains such as maritime, space as well as cyber.
 
The two Prime Ministers reiterated their commitment to respecting freedom of navigation and over flight, and unimpeded lawful commerce, based on the principles of international law, as reflected notably in the United Nations Convention on the Law of the Sea (UNCLOS). In this context, they urged all parties to resolve disputes through peaceful means without resorting to threat or use of force and exercise self-restraint in the conduct of activities, and avoid unilateral actions that raise tensions. As the leaders of the State Parties to the UNCLOS, the two Prime Ministers reiterated their view that all parties should show utmost respect to the UNCLOS, which establishes the international legal order of the seas and oceans. Regarding the South China Sea, the two Prime Ministers stressed the importance of resolving the disputes by peaceful means, in accordance with universally recognised principles of international law including the UNCLOS.
 
The two Prime Ministers condemned in the strongest terms North Korea's continued development of its nuclear weapons and ballistic missile programmes, including its uranium enrichment activities and strongly urged North Korea to refrain from any further provocation, to fully comply with its international obligations and commitments, including under relevant UNSC resolutions and to take actions towards the denuclearisation of the Korean Peninsula. The two Prime Ministers reaffirmed their determination to cooperate against proliferation activities posing a threat to the region. They also urged North Korea to address at the earliest the abductions issue.
 
Prime Minister Abe briefed Prime Minister Modi on Japan’s efforts to further contribute to peace, stability and prosperity of the region including through initiatives such as "Proactive Contribution to Peace.” Prime Minister Modi acknowledged Japan’s positive contribution to regional and global stability and prosperity.
 
The two Prime Ministers called for expeditious reforms of the UN including the UNSC to make it more legitimate, effective and representative, taking into account the contemporary realities of the 21st century and reiterated their resolve to work closely with likeminded partners to realise this goal. They welcomed the creation of the "Group of Friends” on UNSC reform which would provide impetus to the ongoing Inter Governmental Negotiations including significant movement towards the launch of text-based negotiations. The two Prime Ministers reiterated their support for each other's candidature, based on the firmly shared recognition that India and Japan are legitimate candidates for permanent membership in an expanded UNSC.
 
Recognising India as the largest democracy and a fast growing large economy in the Asia-Pacific region, Japan firmly supports India’s membership in the APEC. The two Prime Ministers decided to work towards liberalisation and facilitation of trade and investment in the Asia-Pacific region. They reaffirmed to cooperate towards conclusion of modern, comprehensive, high quality and mutually beneficial Regional Comprehensive Economic Partnership (RCEP) Agreement. The two Prime Ministers decided to work towards liberalisation and facilitation of trade, including through WTO’s Trade Facilitation Agreement and through enhanced trade in goods and services, and investment in the Asia-Pacific region. The two Prime Ministers reaffirmed the importance of enhancing communication and cooperation on excess capacity in steel industries including through the formation of the Global Forum on steel excess capacity as called for by the G20 leaders this year.
 
The two Prime Ministers reaffirmed their shared commitment to the total elimination of nuclear weapons. Prime Minister Abe stressed the importance of early entry into force of the Comprehensive Nuclear-Test-Ban Treaty (CTBT). They called for an immediate commencement and early conclusion of negotiations on a non-discriminatory, multilateral and internationally and effectively verifiable Fissile Material Cut-off Treaty (FMCT) on the basis of Shannon Mandate. They also expressed their resolve towards strengthening international cooperation to address the challenges of nuclear proliferation and nuclear terrorism.
 
The two Prime Ministers recognised the importance of effective national export control systems. Japan welcomed India's recent accession to the Missile Technology Control Regime (MTCR) and the Hague Code of Conduct against Ballistic Missile Proliferation (HCOC) and its intensified engagement with the export control regimes. The two Prime Ministers reaffirmed their commitment to work together for India to become a full member in the remaining three international export control regimes: Nuclear Suppliers Group, Wassenaar Arrangement and Australia Group, with the aim of strengthening the international non-proliferation efforts. 
 
Conclusion
 
Prime Minister Modi thanked the Government and people of Japan for their warm hospitality and extended a cordial invitation to Prime Minister Abe to visit India at a mutually convenient time for the next summit meeting. Prime Minister Abe accepted the invitation with appreciation.
 
NNN
 
           
 
ADVERTISEMENT
 

Text of Prime Minister Modi's address to the nation

Prime Minister Narendra Modi addressing the nation, in New Delhi, on November 8, 2016.
Prime Minister Narendra Modi addressing the nation, in New Delhi, on November 8, 2016.
Following is the text of Prime Minister Narendra Modi's address to the nation today:
 
My dear citizens,
 
I hope you ended the festive season of Diwali with joy and new hope. Today, I will be speaking to you about some critical issues and important decisions. Today I want to make a special request to all of you. You may recall the economic situation in May 2014 when you entrusted us with an onerous responsibility. In the context of BRICS, it was being said that the “I” in BRICS was shaky. Since then, we had two years of severe drought. Yet, in the last two and a half years with the support of 125 crore Indians, India has become the “bright spot” in the global economy. It is not just we who are saying this; it is being stated by the International Monetary Fund and the World Bank. 
 
In this effort for development, our motto has been ‘Sab Ka Saath Sab Ka Vikas’: We are with all citizens and for development of all citizens. This Government is dedicated to the poor. It will remain dedicated to them. In our fight against poverty, our main thrust has been to empower the poor, and make them active participants in the benefits of economic progress. 
 
The Pradhan Mantri Jan Dhan Yojana, the Jan Suraksha Yojana, the Pradhan Mantri Mudra Yojana for small enterprises, the Stand-up India programme for Dalits, Adivasis and Women, the Pradhan Mantri Ujjwala Scheme for gas connections in the homes of the poor, the Pradhan Mantri Fasal Beema Yojana and Pradhan Mantri Krishi Sinchai Yojana to protect the income of farmers, the Soil Health Card Scheme to ensure the best possible yield from farmers’ fields, and the e-NAM National Market Place scheme to ensure farmers get the right price for their produce — these are  all reflections of this approach. 
 
In the past decades, the spectre of corruption and black money has grown. It has weakened the effort to remove poverty. On the one hand, we are now No. 1 in the rate of economic growth. But on the other hand, we were ranked close to one hundred in the global corruption perceptions ranking two years back. In spite of many steps taken, we have only been able to reach a ranking of seventy-six now. Of course, there is improvement. This shows the extent to which corruption and black money have spread their tentacles. 
 
The evil of corruption has been spread by certain sections of society for their selfish interest. They have ignored the poor and cornered benefits. Some people have misused their office for personal gain. On the other hand, honest people have fought against this evil. Crores of common men and women have lived lives of integrity. We hear about poor auto-rickshaw drivers returning gold ornaments left in the vehicles to their rightful owners. We hear about taxi drivers who take pains to locate the owners of cell phones left behind. We hear of vegetable vendors who return excess money given by customers. 
 
There comes a time in the history of a country’s development when a need is felt for a strong and decisive step. For years, this country has felt that corruption, black money and terrorism are festering sores, holding us back in the race towards development. 
 
Terrorism is a frightening threat. So many have lost their lives because of it. But have you ever thought about how these terrorists get their money? Enemies from across the border run their operations using fake currency notes. This has been going on for years. Many times, those using fake five hundred and thousand rupee notes have been caught and many such notes have been seized. 
 
Brothers and sisters, 
ADVERTISEMENT
 
On the one hand is the problem of terrorism; on the other is the challenge posed by corruption and black money. We began our battle against corruption by setting up an SIT headed by a retired Supreme Court judge, immediately upon taking office. Since then
 
a law was passed in 2015 for disclosure of foreign black money; 
agreements with many countries, including the USA, have been made to add provisions for sharing banking information; 
a strict law has come into force from August 2016 to curb benami transactions, which are used to deploy black money earned through corruption; 
a scheme was introduced for declaring black money after paying a stiff penalty; 
 
My dear countrymen, 
 
Through all these efforts, in the last two and a half years, we have brought into the open nearly 1 lakh 25 thousand crore rupees of black money belonging to the corrupt. Honest citizens want this fight against corruption, black money, benami property, terrorism and counterfeiting to continue. Which honest citizen would not be pained by reports of crores worth of currency notes stashed under the beds of government officers? Or by reports of cash found in gunny bags? 
 
The magnitude of cash in circulation is directly linked to the level of corruption. Inflation becomes worse through the deployment of cash earned in corrupt ways. The poor have to bear the brunt of this. It has a direct effect on the purchasing power of the poor and the middle class. You may yourself have experienced when buying land or a house, that apart from the amount paid by cheque, a large amount is demanded in cash. This creates problems for an honest person in buying property. The misuse of cash has led to artificial increase in the cost of goods and services like houses, land, higher education, health care and so on. 
 
High circulation of cash also strengthens the hawala trade which is directly connected to black money and illegal trade in weapons. Debate on the role of black money in elections has been going on for years. 
 
Brothers and sisters, 
 
ADVERTISEMENT
To break the grip of corruption and black money, we have decided that the five hundred rupee and thousand rupee currency notes presently in use will no longer be legal tender from midnight tonight, that is 8th November 2016. This means that these notes will not be acceptable for transactions from midnight onwards. The five hundred and thousand rupee notes hoarded by anti-national and anti-social elements will become just worthless pieces of paper. The rights and the interests of honest, hard-working people will be fully protected. Let me assure you that notes of one hundred, fifty, twenty, ten, five, two and one rupee and all coins will remain legal tender and will not be affected. 
 
This step will strengthen the hands of the common man in the fight against corruption, black money and fake currency. To minimise the difficulties of citizens in the coming days, several steps are being taken. 
 
1. Persons holding old notes of five hundred or one thousand rupees can deposit these notes in their bank or post office accounts from 10th November till close of banking hours on 30th December 2016 without any limit. 
2. Thus you will have 50 days to deposit your notes and there is no need for panic. 
3. Your money will remain yours. You need have no worry on this point. 
4. After depositing your money in your account, you can draw it when you need it. 
5. Keeping in mind the supply of new notes, in the first few days, there will be a limit of ten thousand rupees per day and twenty thousand rupees per week. This limit will be increased in the coming days. 
6. Apart from depositing your notes in your bank account, another facility will also be there. 
ADVERTISEMENT
7. For your immediate needs, you can go to any bank, head post office or sub post office, show your identity proof like Aadhaar card, voter card, ration card, passport, PAN card or other approved proofs, and exchange your old five hundred or thousand rupee notes for new notes. 
8. From 10th November till 24th November the limit for such exchange will be four thousand rupees. From 25th November till 30th December, the limit will be increased. 
9. There may be some who, for some reason, are not able to deposit their old five hundred or thousand rupee notes by 30th December 2016. 
10. They can go to specified offices of the Reserve Bank of India up to 31st March 2017 and deposit the notes after submitting a declaration form. 
11. On 9th November and in some places on 10th November also, ATMs will not work. In the first few days, there will be a limit of two thousand rupees per day per card. 
12. This will be raised to four thousand rupees later. 
13. Five hundred and thousand rupee notes will not be legal tender from midnight. However for humanitarian reasons, to reduce hardship to citizens, some special arrangements have been made for the first 72 hours, that is till midnight on 11th November. 
14. During this period, government hospitals will continue to accept five hundred and thousand rupee notes for payment. 
15. This is for the benefit of those families whose members may be unwell. 
16. Pharmacies in government hospitals will also accept these notes for buying medicines with doctors’ prescription. 
17. For 72 hours, till midnight on 11th November, railway ticket booking counters, ticket counters of government buses and airline ticket counters at airports will accept the old notes for purchase of tickets. This is for the benefit of those who may be travelling at this time. 
18. For 72 hours, five hundred and thousand rupee notes will be accepted also at
Petrol, diesel and CNG gas stations authorised by public sector oil companies
Consumer co-operative stores authorised by State or Central Government
Milk booths authorised by State governments
Crematoria and burial grounds. 
These outlets will have to keep proper records of stock and collections. 
 
19. Arrangements will be made at international airports for arriving and departing passengers who have five hundred or thousand rupee notes of not more than five thousand rupees, to exchange them for new notes or other legal tender. 
20. Foreign tourists will be able to exchange foreign currency or old notes of not more than Rs 5000 into legal tender. 
21. One more thing I would like to mention, I want to stress that in this entire exercise, there is no restriction of any kind on non-cash payments by cheques, demand drafts, debit or credit cards and electronic fund transfer. 
Brothers and sisters, 
ADVERTISEMENT
In spite of all these efforts there may be temporary hardships to be faced by honest citizens. Experience tells us that ordinary citizens are always ready to make sacrifices and face difficulties for the benefit of the nation. I see that spirit when a poor widow gives up her LPG subsidy, when a retired school teacher contributes his pension to the Swacch Bharat mission, when a poor Adivasi mother sells her goats to build a toilet, when a soldier contributes 57 thousand rupees to make his village clean. I have seen that the ordinary citizen has the determination to do anything, if it will lead to the country’s progress. 
 
So, in this fight against corruption, black money, fake notes and terrorism, in this movement for purifying our country, will our people not put up with difficulties for some days? I have full confidence that every citizen will stand up and participate in this ‘mahayagna’. My dear countrymen, after the festivity of Diwali, now join the nation and extend your hand in this Imandaari ka Utsav, this Pramanikta ka Parv, this celebration of integrity, this festival of credibility. 
 
I am sure that all political parties, all governments, social services organizations, the media and indeed all sections of the society will take part in this with enthusiasm and make it a success. 
 
My dear countrymen, 
 
Secrecy was essential for this action. It is only now, as I speak to you, that various agencies like banks, post offices, railways, hospitals and others are being informed. The Reserve Bank, banks and post offices have to make many arrangements at very short notice. Obviously, time will be needed. Therefore all banks will be closed to the public on 9th November. This may cause some hardship to you. I have full faith that banks and post offices will successfully carry out this great task of national importance. However, I appeal to all of you to help the banks and post offices to meet this challenge with poise and determination. 
 
ADVERTISEMENT
My dear citizens, 
 
From time to time, based on currency needs, the Reserve Bank with the approval of the Central Government brings out new notes of higher value. In 2014, the Reserve Bank sent a recommendation for issue of five thousand and ten thousand rupee notes. After careful consideration, this was not accepted. Now as part of this exercise, RBI’s recommendation to issue two thousand rupee notes has been accepted. New notes of five hundred rupees and two thousand rupees, with completely new design will be introduced. Based on past experience, the Reserve Bank will hereafter make arrangements to limit the share of high denomination notes in the total currency in circulation. 
 
In a country’s history, there come moments when every person feels he too should be part of that moment, that he too should make his contribution to the country’s progress. Such moments come but rarely. Now, we again have an opportunity where every citizen can join this mahayajna against the ills of corruption, black money and fake notes. The more help you give in this campaign, the more successful it will be. 
 
It has been a matter of concern for all of us that corruption and black money tend to be accepted as part of life. This type of thinking has afflicted our politics, our administration and our society like an infestation of termites. None of our public institutions is free from these termites. 
 
Time and again, I have seen that when the average citizen has to choose between accepting dishonesty and bearing inconvenience, they always choose to put up with inconvenience. They will not support dishonesty. 
 
Once again, let me invite you to make your contribution to this grand sacrifice for cleansing our country, just as you cleaned up your surroundings during Diwali. 
 
Let us ignore the temporary hardship.
Let us join this festival of integrity and credibility.
Let us enable coming generations to live their lives with dignity.
Let us fight corruption and black money.
Let us ensure that the nation’s wealth benefits the poor.
Let us enable law-abiding citizens to get their due share. 
 
I am confident in the 125 crore people of India and I am sure country will get success. 
 
Thank you very much. Thanks a lot. 
 
Namaskar. 
 
Bharat Mata Ki Jai. 
 
NNN
ADVERTISEMENT
 

India-UK Joint Statement

ADVERTISEMENT
Following is the text of the India-UK Joint Statement during the visit of Prime Minister of the United Kingdom to India (India-UK Strategic Partnership looking forward to a renewed engagement: Vision for the decade ahead):
 
Prime Minister Theresa May visited India during 6-8 November 2016 at the invitation of Prime Minister Narendra Modi. This was her first bilateral visit outside Europe after taking over as the Prime Minister of the UK. The visit was designed to further strengthen the India–UK Strategic Partnership, guided by a shared vision for the future and supported by a concrete and comprehensive roadmap of bilateral and global engagement.
 
Prime Minister Modi welcomed Prime Minister May and discussed all aspects of India-UK relations. The two leaders recalled the strong bonds of friendship that exist between the two countries characterised by extensive political engagement, deep economic cooperation, and ever expanding scientific and technological collaboration. The two states enjoy vibrant people to people relations supported by the 1.5 million strong Indian diaspora in the UK and an increasing convergence on the way forward on key global challenges of the 21st century. Our shared history, our shared connections and our shared values make this a natural partnership. They form the foundation of a unique friendship.
 
The two Prime Ministers emphasized working together on a contemporary and forward-looking global partnership to promote peace, security and prosperity of the two countries and act as a force for good in the world.
 
During Prime Minister Modi’s visit to the UK last year, the two countries set out a bold vision for the UK-India Strategic Partnership. Both countries today commit to turn this vision into reality through closer, practical cooperation that delivers real benefits to both the countries. 
 
We are taking a shared stake in each other’s prosperity, generating jobs, developing skills, and enhancing the competitiveness of our two economies and opening up new markets for both of us. UK finance and expertise from its world leading services sectors will help deliver key Indian priorities like infrastructure development, future smart cities, sustainable energy, research and skills. Likewise, Indian investments and business capacities and niche competencies are making valuable contributions to the UK growth and economy. And we are determined to deepen our trade and investment relationship even further, reinforcing the dynamic and effective collaboration between our governments and business communities, and seizing the opportunities for closer cooperation as the UK leaves the EU. 
 
The UK was the first P5 advocate of India’s permanent membership of the UN Security Council, recognising the common values we hold and our shared vision of a stable, rules-based international system. We continue to build upon our 2015 Defence and International Security Partnership to deepen cooperation, including on countering terrorism, radicalisation, violent extremism and cyber security. We will jointly set out areas on defence and security which make clear our future ambitions to design, make, exercise, train and co-operate together. And we will continue to consult and co-ordinate across a range of global policy security challenges, in pursuit of our shared goal of a more secure world.
 
Stimulating growth, trade and business together
 
The two Prime Ministers noted the importance of the UK-India trade relationship and welcomed that business to business ties between India and the UK are flourishing.
 
They noted that India was the third largest investor in the UK and the second largest international job creator with Indian companies having created over 110,000 jobs in the UK. The UK is the largest G-20 investor in India. The two Prime Ministers expressed their pleasure at the level of bilateral financial cooperation and called for greater participation of the investment community from both sides in stimulating Indian and UK economic growth.
 
The two Prime Ministers welcomed the large number of commercial deals finalised in connection with the visit across a range of sectors - ICT companies, critical engineering and healthcare products.
 
The two Prime Ministers noted the importance of Government and business working together. They welcomed the suggestions made by the India-UK CEO Forum which met in the margins of the visit. They agreed that the two Governments, together with the CEO Forum, would review how the Forum can better support an enhanced economic and commercial relationship, alongside Government dialogues.
 
They agreed they will make it a priority for both countries, when the UK leaves the European Union, to build the closest possible commercial and economic relationship. To this end, the newly established Joint Working Group, reporting to JETCO, will discuss the detail of our trading relationship, and help drive progress. 
 
Financing India’s infrastructure growth
 
The two Prime Ministers agreed to accelerate the deepening partnership between the UK and India in financing investment in Indian infrastructure. Prime Minister Modi highlighted to Prime Minister May the immense opportunities India’s national programmes including Make in India, Digital India, Skill India and Smart Cities provided for UK companies to invest and partner India’s growth story.
 
Over $1.1 billion (INR 7,500 crore or £900 million) of rupee-denominated bonds have been issued in London since July 2016 establishing London as the leading global centre for offshore rupee finance. The two Prime Ministers commended the pioneering and highly successful bond issuances by HDFC (INR 3,000 crore or £366 million) and NTPC (INR 2,000 crore or £244 million), which will pave the way for Indian corporates to raise significant quantities of finance in London. They noted the recent issuance in London by the Canadian province of British Columbia, the first foreign sub-national entity to issue rupee-denominated bonds. They welcomed the intention of National Highways Authority of India [NHAI] and Indian Railway Finance Corporation [IRFC] to issue rupee-denominated bonds in the next few months. They also looked forward to other Indian entities, including Energy Efficiency Services Limited and the Indian Renewable Energy Development Agency preparing to issue green bonds including rupee-denominated bonds in London in the coming weeks. 
 
The two Prime Ministers also welcomed the agreement to create the FTSE-SBI India Bonds Index Series, which will support the development of India’s growing corporate bond market. This follows a successful collaboration between State Bank of India (SBI) and London Stock Exchange Group’s index business FTSE Russell. 
 
The two Prime Ministers were pleased with the progress being made to establish an India-UK Sub-Fund under the National Investment and Infrastructure Fund (NIIF). The fund will seek to leverage private sector investment from the City of London to finance Indian infrastructure projects under the umbrella of the NIIF. It is hoped that this will initially raise around £500 million and has the potential to unlock much greater investment flows in the future.
 
Both governments will be prepared to make an anchor investment of up to £120 million each in the India-UK Sub-Fund subject to agreeing a structure that maximises investor interest.
 
The two Prime Ministers welcomed that the economic and financial agenda will be taken forward by Finance Ministers when they convene the Economic and Financial Dialogue in early 2017. They welcomed successful collaboration between the two financial services sectors through the industry-led India-UK Financial Partnership. The IUKFP will meet again alongside the Economic and Financial Dialogue.
 
The two Prime Ministers commended CDC Group, the UK’s Development Finance Institution, for its initiatives in India. They noted CDC’s expanding investment portfolio in India. India will continue to be a key focus of CDC’s investment strategy.
 
Smart Cities and Urban Development 
 
The two Prime Ministers recalled the three city partnerships agreed in London in November 2015 and noted progress. They agreed to build on these through a more strategic and ambitious urban partnership that brings together Governments, businesses, investors and urban experts to build smarter, more inclusive cities that drive shared prosperity, jobs and growth in India and the UK. Both sides would drive the partnership to raise investment, identify opportunities and accelerate progress. UK seed investment financing through mechanisms like CDC, NIIF, and UK Export Finance could leverage higher financing from financial markets - including through Rupee Bonds floated on the London Stock Exchange. As part of the partnership, the two Prime Ministers welcomed new technical assistance for the redevelopment of Varanasi City Railway Station under the Varanasi Smart City Development Plan.
 
Start-up India 
 
Prime Minister May announced that the UK is investing over £160m across 75 start-up enterprises which would create jobs and deliver critical services across several States in India. She announced an additional £20 million for a Start-Up India Venture Capital Fund. The Fund will support 30 enterprises and leverage additional £40m capital from other investors including UK venture capital funds.
 
Ease of Doing Business
 
Prime Minister May commended the progress made by India on Ease of Doing Business and the passing of the Goods and Services tax Bill in the Indian Parliament. The two Prime Ministers welcomed the signing of an MoU between the UK and India on Ease of Doing Business, which will harness UK expertise to support India’s efforts to climb the World Bank Ease of Doing Business ratings.
 
Intellectual Property
 
The two Prime Ministers welcomed the signing of an MOU on Intellectual Property, which will promote innovation, creativity and economic growth in both countries.
 
Energy and Climate Change
 
To drive forward the next phase of bilateral collaboration on the shared strategic priority of secure, affordable and sustainable energy, the two Prime Ministers noted an enhanced UK-India energy for growth partnership and welcomed the decision to hold the first India-UK Energy Summit in early 2017. 
 
They also welcomed a fourth phase of our joint UK-India Civil Nuclear Research Programme which will look at new technologies that contribute to enhancing nuclear safety, advanced materials for nuclear systems, waste management, and future civil nuclear energy systems. 
 
The two Prime Ministers underlined that addressing Climate Change was a shared objective. They welcomed the ratification of the Paris Agreement by a number of countries including India, leading to entry into force of the Agreement on 4 November 2016 and pledged to work together towards its implementation. 
 
Prime Minister May appreciated Indian leadership on the International Solar Alliance to harness solar energy for meeting energy demands globally and to address climate change concerns. She signalled the UK’s intention to join the Alliance and the UK will continue to engage in discussions as the Framework Agreement is finalised. The two leaders called upon prospective member countries to signal their support for the International Solar Alliance on the sidelines of COP 22 in Marrakesh on 15 November 2016.
 
A Global Partnership
 
The United Kingdom and India share a commitment to democratic values, international peace and security, and national and international prosperity. The two Prime Ministers reiterated the need for the rules-based international system to adapt and renew itself in light of the transformational changes that have taken place over the last 70 years. Prime Minister May reaffirmed the UK’s commitment to a reformed United Nations Security Council with India as a permanent member, as well as to an enhanced role for India within the United Nations system. The United Kingdom continues to actively support India’s membership of the Security Council given India’s increasing role as a leading power, and contributions to international peace and security. In this regard, the leaders directed their relevant officials to have close and regular consultations on all matters related to the United Nations, including UN terrorist designations. The two Prime Ministers underlined the priority they attach to international peace keeping, where India is the second largest troop contributor and the UK is the 6th largest budget contributor in the world.
 
They committed to co-ordinating ever more closely within the G20, and welcomed the positive role played by the Commonwealth in championing democracy and fundamental freedoms. India and the United Kingdom expressed their strong and shared interest in advancing nuclear disarmament and non-proliferation. The UK welcomed India’s joining of the Missile Technology Control Regime (MTCR) which would strengthen global non-proliferation objectives and continues to be a strong advocate of early Indian membership of the Nuclear Suppliers Group (NSG) as well as membership of other key Export Control Regimes.
 
Following the Statement of Intent on Partnership for Cooperation in Third Countries signed in November 2015, the two Prime Ministers agreed to continue to pursue this partnership with a specific focus on Africa. Both sides agreed to share their experiences and best practices in providing developmental cooperation. 
 
Fighting terrorism and responding to global security challenges
 
Prime Minister May strongly condemned the September terrorist attack on the Indian Army Brigade headquarters in Uri, and offered condolences to the victims and their families. The two leaders strongly affirmed that terrorism is a serious threat to humanity. They reiterated their strong commitment to combat terrorism in all its forms and manifestations, and stressed that there can be no justification for acts of terror on any grounds whatsoever – agreeing that there should be zero-tolerance on terrorism.
 
ADVERTISEMENT
India and the United Kingdom have both suffered the human cost of terrorism, and now work in partnership to tackle the threat terrorism and violent extremism poses. Our two countries understand the increasingly transnational challenge of terrorism which demands multilateral as well as bilateral cooperation. International cooperation to combat terrorism is at the core of successfully denying terrorists the space to radicalise, recruit and conduct attacks. The two leaders welcomed the ongoing bilateral counter terrorism cooperation and called for greater sharing of information between the two sides. Both countries agreed to collaborate with each other to reduce the threat from violent extremist use of the internet, including the sharing of best practices to reduce radicalisation and recruitment attempts online. 
 
The two Prime Ministers affirmed that the fight against terrorism should not only seek to disrupt and bring to justice terrorists, terror organisations and networks, but should also identify, hold accountable and take strong measures against all those who encourage, support and finance terrorism, provide sanctuary to terrorists and terror groups, and falsely extol their virtues. There should be no glorification of terrorists or efforts to make a distinction between good and bad terrorists. They agreed that South Asia should be stable, prosperous and free from terror and called on all countries to work towards that goal.
 
Both Prime Ministers acknowledged that terrorism and violent extremism poses one of the most serious threats to international peace and security and in this regard, called for concerted global action without selectivity. The two leaders called for urgent measures to counter and prevent the spread of terrorism, violent extremism and radicalisation.
 
The leaders welcomed the recent UK-initiated joint statement on Preventing Violent Extremism launched at the Global Countering Terrorism Forum in New York. . The two leaders also called for strengthening the existing international counter terrorism legal framework including through the adoption of the Comprehensive Convention on International Terrorism. The two leaders reiterated their call for Pakistan to bring the perpetrators of the November 2008 terrorist attacks in Mumbai and 2016 Pathankot attack to justice.
 
Enhancing defence partnership
 
Building on the Defence and International Security Partnership (DISP) agreed in November 2015, the UK and India are committed to further strengthening their strategic partnership in defence.
 
The two Prime Ministers recognized the potential for cooperation in defence manufacturing between UK and Indian companies in the ‘Make in India’ framework and agreed to encourage and facilitate such cooperation. The UK will continue their engagement with the Indian MOD and Indian defence companies to simplify and expedite export controls and to support the transfer of technology to enable projects in areas of mutual interest.
 
The two Prime Ministers tasked the Defence Consultative Group (DCG) on 15-16 November 2016 to advance the bilateral defence cooperation agenda, including the UK's proposals for capability partnerships, through a range of activities including military to military cooperation, training, exchange of subject matter experts, research and technology linkages as well as defence manufacturing.
 
Noting that ongoing cooperation between HAL and BAE Systems in manufacturing Hawk Advanced Jet Trainers in India as an example of partnership in defence manufacturing, the Prime Ministers agreed to apply innovative approaches to jointly promote products and services into international markets. 
 
Cyber cooperation
 
The UK and India also remain committed to promoting a free, open, peaceful and secure cyberspace. The UK and India will work together to support the multi-stakeholder model of internet governance. The UK fully supports PM Modi’s vision of a digital India. The growing India-UK cyber relationship is a success story of the Defence and International Security Partnership (DISP). The two Prime Ministers announced their desire to enter into a Framework for the UK-India Cyber Relationship. The Prime Ministers also noted with satisfaction progress made on cyber security, including regular cooperation to tackle the shared threat of cyber crime, and the signing of an MOU between respective Computer Security Incident Response Teams in March 2016.
 
Freedom of the Seas
 
The two sides underlined the importance of maintaining the legal order for the seas and oceans based on the 1982 UN Convention on the Law of the Sea (UNCLOS). They reaffirmed their respect for and commitment to the freedom of navigation and overflight based on the universally recognised principles of international law, as reflected in the UNCLOS. They stated that all related territorial and jurisdictional disputes should be resolved by peaceful means, without resorting to the threat or use of force. They urged States to respect UNCLOS and refrain from activities which prejudice the peace, good order and security of the oceans.
 
International Affairs
 
The two Prime Ministers recognised the increasing role of India as a global player. In this context, they recognised the constructive contribution of India in building peace and stability in the South Asia region, including through its expansive development cooperation in Afghanistan. In this context, they expressed support for the efforts of Afghan security forces against the continuing threat of terrorism in Afghanistan and strongly endorsed their efforts to ensure Afghanistan’s security. Noting that a secure and stable Afghanistan would contribute to peace and prosperity of the region, they agreed that a political settlement in Afghanistan has to be Afghan-owned and Afghan-led and will succeed only if the Taliban insurgency abandons violence and abides by democratic norms. They also welcomed the pledges of support to Afghanistan by the UK, India and the international community at the Brussels Conference, and agreed to work together to help the Government of Afghanistan deliver its ambitious reform programme. The UK side extended its support to India for the Sixth Ministerial Meeting of the Heart of Asia Istanbul Process on Afghanistan in Amritsar on 4 December 2016.
 
Both nations agreed to continue their engagement with Maldives to strengthen its democratic institutions.
 
The Prime Ministers noted the progress made by Sri Lanka in line with UN Human Rights Council Resolution 30/1 and agreed that more needed to be done. They committed to continue working closely with the Sri Lankan Government to achieve this.
 
The two Prime Ministers reaffirmed their support to the people and the Government of Iraq in their war against terrorism and welcomed the Iraqi-led operation to liberate Mosul and other cities from the control of terrorist organization ISIS. The two leaders emphasized the importance of national reconciliation and unity in Iraq and expressed belief that with international support, Iraq will be able to defeat terrorism and would successfully overcome the challenges it faces.
 
Extradition, Returns and Mobility
 
The two Prime Ministers affirmed their strong commitment to enhance cooperation under the Mutual Legal Assistance Treaty. The two leaders agreed that fugitives and criminals should not be allowed to escape the law. They expressed their strong commitment to facilitate outstanding extradition requests from both sides. In this context, they directed that the officials dealing with extradition matters from both sides should meet at the earliest to develop better understanding of each countries’ legal processes and requirements; share best practices, and identify the causes of delays and expedite pending requests. They also agreed that regular interactions between the relevant India-UK authorities would be useful to resolve all outstanding cases expeditiously.
 
Prime Minister Modi welcomed Prime Minister May's announcement that the UK is to offer new services to improve business travel for Indian visitors to the UK. India will become the first visa country to be offered the Registered Traveller Scheme, offering business travellers expedited clearance at the UK border. The Indian Government will become the first government in the world to be invited to nominate business executives to the Great Club, a bespoke visa and immigration service. The two Prime Ministers welcomed these changes, which will mean that India will have one of the best UK visa services of any country in the world, with more application points than anywhere else and the only place where you can get a same day visa, reflecting the UK Government's commitment to continuing to attract inward investment and business from India. 
 
The two Prime Ministers acknowledged the valuable contributions of the 1.5 million strong Indian diaspora to British society and their role in furthering bilateral relations. They recognised that mobility can strengthen people-to-people relations between the two countries. To this end, both parties agreed that visa regimes need to be as simple and efficient as possible for students, businesses, professionals, diplomats and officials and other travellers, including facilitating short-term mobility of skilled personnel between the two countries. The two leaders noted that the UK remained a popular destination for Indian students and that these students add to deepening India-UK partnership across all sectors of bilateral engagement. Prime Minister May noted that there remained no cap on overall numbers of international students studying at recognised educational institutions in the UK, that Indian students would continue to be welcome and that the UK Home Secretary had recently announced her intention to consult on changes to the UK student visa regime. 
 
The two Prime Ministers agreed that ensuring simple and effective visa systems depended critically on cooperation to protect the integrity of border and immigration systems. This included ensuring the timely and efficient return of individuals to their country of origin, as required by their respective national laws. Both countries agreed to strengthen co-operation in this area by implementing an expedited process for verifying the nationality and issuing travel documents. The two Prime Ministers announced the launch of a senior UK-India dialogue on Home Affairs issues which will take place bi-annually and be chaired at Permanent Secretary/Secretary level. The Prime Ministers expect this dialogue to make progress on key issues of mutual concern, including opportunities to make the visa system simpler and more efficient, and steps to improve the integrity of border and immigration systems.
 
Celebrating Culture and Education and promoting skills
 
The two Prime Ministers noted that 2016 is the India-UK Year of Education, Research and Innovation and welcomed the further investment (£20m) in the UK-India Education Research Initiative (UKIERI) to 2021, creating 50 new partnerships in 2017.
 
Both Prime Ministers welcomed first 35 UK faculties visiting India under the Ministry of Human Resource Development funded GIAN programme and 198 new GREAT scholarships for Indian students to study at 40 UK universities. Both leaders welcomed the first batch of TCS sponsored UK interns, under the Generation UK-India programme. Both Prime Ministers look forward to the celebration of 2017 as the India-UK Year of Culture and support the activities and programmes being planned, for example an exhibition of Indian Science in the Science Museum in London, and highlighting 400 years of Shakespeare. Both Prime Ministers welcomed new teaching materials to the Indian SWAYAM MOOC platform, developed in partnership by UK and Indian Universities.
 
The UK is supporting the Skill India Mission through a Centre for Excellence for the automobile sector in Pune. Prime Minister May announced a new commitment of up to £12m to support India’s Skill India mission. Technology transfer from the UK will facilitate international training standards in up to 5 sectors including apprenticeships and certification.
 
Harnessing Science and Technology for a better future
 
The two Prime Ministers noted that the exponential growth in science and technology programmes in India provide immense possibilities for further expanding bilateral collaboration. India-UK joint funding now stands at over £200 million and its leveraged impact on the economies and societies is several times higher. They announced new research partnerships worth £80 million including a new Joint Strategic Group on Anti-Microbial Resistance (AMR) with a joint investment of up to £13 million. The Prime Ministers recognised that Anti-Microbial Resistance (AMR) is a global challenge, and further recognized the commitments made at the G20 and UNGA earlier this year. Building upon the Thames-Ganga Partnership, the two Prime Ministers welcomed new initiatives on joint hydrological research programme and re-using waste water as well as innovative biotechnologies for cleaning and processing industrial waste, adding value to the Swachh Bharat programme.
 
Noting the growing partnership in the area of renewable energy and combating climate change, the two Prime Ministers welcomed the launch of India-UK Clean Energy R&D Centre with focus on solar energy storage and integration with joint investment of £10 million and a collaborative R&D programme on energy efficient building materials. Both these green initiatives would help to reduce carbon footprint and contribute to the Smart Cities programme.
 
Building on the recent successful collaborations in agriculture, the two sides announced projects to address post-harvest losses benefiting farmers. Building on the recent successful collaborations in healthcare, the two sides announced the launch of the second phase of joint research in women’s and children’s health in low-income settings.
 
The two leaders commended ongoing collaboration in biotechnology. The two sides looked forward to engaging on India’s efforts to develop a Bio-bank that will draw on UK Bio-Bank’s scientific expertise.
 
Conclusion
 
Prime Minister May thanked Prime Minister Modi for the warm hospitality extended to her and her delegation.
 
NNN
ADVERTISEMENT
 

Goa Declaration at 8th BRICS Summit

Prime Minister Narendra Modi with Presidents Michel Temer of Brazil, Vladimir Putin of Russia, Xi Jinping of China and Jacob Zuma of South Africa in the BRICS Leaders’ family photograph at the BRICS Summit, in Goa on October 16, 2016.
Prime Minister Narendra Modi with Presidents Michel Temer of Brazil, Vladimir Putin of Russia, Xi Jinping of China and Jacob Zuma of South Africa in the BRICS Leaders’ family photograph at the BRICS Summit, in Goa on October 16, 2016.
Following is the Goa Declaration issued by the Leaders of Brazil, Russia, India, China and South Africa at the end of the 8th BRICS Summit here today:
 
We, the Leaders of the Federative Republic of Brazil, the Russian Federation, the Republic of India, the People's Republic of China and the Republic of South Africa, met on 15-16 October 2016 in Goa, India, at the Eighth BRICS Summit, which was held under the theme "Building Responsive, Inclusive and Collective Solutions.”
 
Recalling all our previous declarations, we emphasise the importance of further strengthening BRICS solidarity and cooperation based on our common interests and key priorities to further strengthen our strategic partnership in the spirit ofopenness, solidarity,equality, mutual understanding, inclusiveness and mutually beneficial cooperation. We agree that emerging challenges to global peace and security and to sustainable development require further enhancing of our collective efforts. 
 
We agree that BRICS countries represent an influential voice on the global stage through our tangible cooperation, which delivers direct benefits to our people. In this context, we note with satisfaction the operationalisation of the New Development Bank (NDB) and of the Contingent Reserve Arrangement (CRA), which contributes greatly to the global economy and the strengthening of the international financial architecture. We welcome the report presented by NDB President on the work of the Bank during the first year of its operations. We are pleased to note the progress in operationalising the Africa Regional Centre (ARC) of the NDB and pledge our full support in this regard. We look forward to developing new BRICS initiatives in a wider range of areas in the years to come. 
 
We note with appreciation the approval of the first set of loans by the New Development Bank (NDB), particularly in the renewable energy projects in BRICS countries. We express satisfaction with NDB's issuance of the first set of green bonds in RMB. We are pleased to note that the operationalisation of BRICS Contingent Reserve Arrangements (CRA) has strengthened the global financial safety net. 
 
In order to reach out and enrich our understanding and engagement with fellow developingand emerging economies, we will hold an OutreachSummit of BRICS Leaders with the Leaders of BIMSTEC member countries - Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation comprising of Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand. The meeting will be an opportunity to renew our friendship with BIMSTEC countries as well as to jointly explore possibilities of expanding trade and commercial ties,and investment cooperation between BRICS and BIMSTEC countries,while advancing our common goals of peace, development, democracy and prosperity. 
 
We reiterate our common vision of ongoing profound shifts in the world as it transitions to a more just, democratic, and multi-polar international order based on the central role of the United Nations, and respect for international law. We reaffirm the need for strengthening coordination of efforts on global issues and practical cooperation in the spirit of solidarity, mutual understanding and trust. We underline the importance of collective efforts in solving international problems, and for peaceful settlement of disputes through political and diplomatic means, and in this regard, we reiterate our commitment to the principles of the Charter of the United Nations. 
 
We note the global character of current security challenges and threats confronting the international community. We reiterate our view that international efforts to address these challenges, the establishment ofsustainable peace as well as the transition to a more just, equitable and democratic multi-polar international order requires a comprehensive, concerted and determined approach, based on spirit of solidarity, mutual trust and benefit, equity and cooperation, strong commitment to international law and the central role of the United Nations as the universal multilateral organisation entrusted with the mandate for maintaining international peace and security, advance global development and to promote and protect human rights. We underline the importance of further strengthening coordination of our efforts in this context. 
 
We reaffirm our commitment to contribute to safeguarding a fair and equitable international order based on the purposes and principles of the Charter of the United Nations including through consistent and universal respect and adherence to the principles and rules of international law in their inter-relation and integrity, compliance by all states with their international legal obligations.We express our commitment to resolutely reject the continued attempts to misrepresent the results of World War II. We recall further that development and security are closely interlinked, mutually reinforcing and key to attaining sustainable peace. 
 
We remain confident that resolving international problems require collective efforts for peaceful settlement of disputes through political and diplomatic means. Implementation of principles of good-faith, sovereign equality of States, non-intervention in the internal affairs of States and cooperation excludes imposition of unilateral coercive measures not based on international law. We condemn unilateral military interventions and economic sanctions in violation of international law and universally recognised norms of international relations. Bearing this in mind, we emphasise the unique importance of the indivisible nature of security, and that no State should strengthen its security at the expense of the security of others. 
 
We recall the 2005 World Summit Outcome document. We reaffirm the need for a comprehensive reform of the UN, including its Security Council, with a view to making it more representative, effective and efficient, and to increase the representation of the developing countriesso that it can adequately respond to global challenges. China and Russia reiterate the importance they attach to the status and role of Brazil, India and South Africa in international affairs and support their aspiration to play a greater role in the UN. 
 
We welcome the substantive measures undertaken by the UN membership to make the process of selecting and appointing the UN Secretary-General more transparent and inclusive. 
 
We expressour gratitude to UN Secretary-General Mr. Ban Ki-moon for his contributions to the United Nations in the past ten years. We congratulate Mr. AntónioGuterres, on his appointment as the Secretary-General of the United Nations andexpress oursupport and to work closely with him. 
 
Cognizant of BRICS countries’ significant contributions to UN Peacekeeping operations, and recognising the important role of UN Peacekeeping operations in safeguarding international peace and security, we realise the challenges faced by UN Peacekeeping and emphasise the need to further strengthen its role, capacity, effectiveness, accountability and efficiency, while adhering to the basic principles of peacekeeping. We emphasise that UN Peacekeeping operations should perform the duty of protection of civilians in strict accordance with their respective mandates and in respect of the primary responsibility of the host countries in this regard. 
 
We are deeply concerned about the situation in the Middle East and North Africa. We support all effortsfor finding ways to the settlement of the crises in accordance with international law and in conformity with the principles of independence, territorial integrity and sovereignty of the countries of the region. On Syria, we call upon all parties involved to work for a comprehensive and peaceful resolution of the conflict taking into account the legitimate aspirations of the people of Syria,through inclusive national dialogue and a Syrian-led political process based on Geneva Communiqué of 30 June 2012 and in pursuance of the UN Security Council Resolution 2254 and 2268 for their full implementation.While continuing the relentless pursuit against terrorist groups so designated by the UN Security Councilincluding ISIL, Jabhat al-Nusra and other terrorist organisations designated by the UN Security Council. 
 
We reiterate also the necessity to implement the two-state solution of the Palestinian-Israeli conflict on the basis of the relevant UNSC resolutions, the Madrid Principles and Arab Peace Initiative, and previous agreements between the two sides,through negotiations aimed at creating an independent, viable, territorially contiguous Palestinian State livingside-by-side in peace with Israel, withinsecure, mutually agreed and internationally recognised borders on the basis of 1967 lines, with East Jerusalem as its capital, as envisaged in the relevant UN Resolutions. 
 
We express deep concern at the persisting security challenges in Afghanistan and significant increase in terrorist activities in Afghanistan. We affirm support to the efforts of the Afghan Government to achieve Afghan-led and Afghan-owned national reconciliation and combat terrorism, and readiness for constructive cooperation in order to facilitate security in Afghanistan, promote its independent political and economic course, becoming free from terrorism and drug trafficking. The Leaders expressed the view that capable and effective Afghan National Security Forces (ANSF) should be the key to the stabilisation of Afghanistan. In this regard, the Leaders emphasised the need for continued commitment of regional countries and wider international community, including the NATO-led Resolute Support Mission, which as the ISAF’s heir has a key role in the ANSF capacity-building. The Leaders stressed the importance of multilateral region-led interaction on Afghan issues, primarily by those organisations, which consist of Afghanistan’s neighbouring countries and other regional states, such as the Shanghai Cooperation Organisation, Collective Security Treaty Organization, and the Heart of Asia Conference. 
 
We welcome the African Union’s (AU) vision, aspirations, goals and priorities for Africa’s development enshrined in Agenda 2063, which is complementary with the 2030 Agenda for Sustainable Development. We reaffirm our support for Africa’s implementation of its variousprogrammesin pursuit of its continental agenda for peace and socio economic development. We will continue to engage in joint endeavours to advance Africa's solidarity, unity and strength through support measures for regional integration and sustainable development.We further welcome recent elections that have been held in the continent and the peaceful manner in which they were conducted. 
 
We support the AU’s efforts to resolving conflictsthrough its peace and security architecture, in collaboration with the United Nations and the continent’s regional organisations, and to contribute towards lasting and sustainable peace and security in Africa. 
We welcome the decision of the African Union’s Assembly to operationalise its Peace Fund, in order to contribute to financing of its peace and security operations. We support efforts aimed at full operationalisation of the African Standby Force (ASF) and note the progress being made in this regard, including the contributions by the African Capacity for Immediate Responses to Crises (ACIRC). 
 
We express our concern that political and security instability continues to loom in a number of countriesthat is exacerbated by terrorism and extremism.We call upon the international community through the United Nations, African Union and regional and international partners to continue their support in addressing these challenges, including post-conflict reconstruction and development efforts. 
 
We welcome the adoption of landmark 2030 Agenda for Sustainable Development and its Sustainable Development Goals during the UN Summit on Sustainable Development on 25 September 2015 and the Addis Ababa Action Agenda at the Third International Conference on Financing for Development. We welcome the people-centred and holistic approach to sustainable development enshrined in the 2030 Agenda and its emphasis on equality, equity and quality-life to all. We welcome the reaffirmation of the guiding principles of the implementation of the 2030 Agenda, including the principle of Common But Differentiated Responsibilities (CBDR). 
 
The 2030 Agenda, with its overarching focus on povertyeradication, lays an equal and balanced emphasis on the economic, social and environmental dimensions of sustainable development. We call upon developed countries to honour their Official Development Assistancecommitments to achieve 0.7% of Gross National Income commitment for Official Development Assistance to developing countries. Those commitments play a crucial role in the implementation of the SDGs. We further welcome the establishment of a Technology Facilitation Mechanism within the UN with a mandate to facilitate technology for the implementation of the SDGs. 
 
We commit to lead by example in the implementation of the 2030 Agenda for Sustainable Development inline with national circumstances and development context respecting the national policy space. We welcome the G20 Action Plan on the 2030 Agenda for Sustainable Developmentadopted during G20 Hangzhou Summit and commit to its implementation by taking bold transformative steps through both collective and individual concreteactions. 
 
We meet at a time when the global economic recovery is progressing, with improved resilience and emergence of new sources of growth.The growth, though is weaker than expected with downside risks to the global economy continuing to persist.This gets reflected in a variety of challenges including commodity price volatility, weak trade, high private and public indebtedness, inequality and lack of inclusiveness of economic growth. Meanwhile, the benefits from growth need to be sharedbroadly in an inclusive manner.Geopolitical conflicts, terrorism, refugee flows, illicit financial flows and the outcome of UK referendum have further added to the uncertainty in the global economy.
 
We reiterate our determination to use all policy tools – monetary, fiscal, and structural, individually and collectively, to achieve the goal of strong, sustainable, balanced and inclusive growth. Monetary policy will continue to support economic activity and ensure price stability, consistent with central bank’s mandates. Monetary policy alone, though, cannot lead to balanced and sustainablegrowth. We, in this regard, underscore the essential role of structural reforms.We emphasise that our fiscal policies are equally important to support our common growth objectives. We also take note that the spill-over effects ofcertain policy measures in some systemically important advanced economies can have adverse impact on growth prospects of emerging economies. 
 
We recognise that innovation is a key driver for mid and long term growth and sustainable development. We stress the importance of industrialisation and measures that promote industrial development as a core pillar of structural transformation. 
We highlight the need to use tax policy and public expenditure in a more growth-friendly way taking into account fiscal space available, that promotesinclusiveness, maintains resilience and ensuressustainability of debt as a share of GDP. 
 
We note the dynamic integration processes across the regions of the world, particularly in Asia, Africa and South America.We affirm our belief to promote growth in the context of regional integration on the basis of principles of equality, openness and inclusiveness. We further believe that this will promote economic expansion through enhanced trade,commercial and investmentlinkages. 
 
We highlight the importance of public and private investments in infrastructure, including connectivity,to ensure sustained long-term growth. We, in this regard, call for approaches to bridge the financing gap in infrastructure including through enhanced involvement of Multilateral Development Banks. 
 
We reaffirm our commitment to a strong, quota based and adequately resourced IMF. Borrowed resources by the IMF should be on a temporary basis. We remain strongly committed to support the coordinated effort by the emerging economies to ensure that the Fifteenth General Review of Quotas, including the new quota formula, will be finalised within the agreed timelines so as to ensure that the increased voice of the dynamic emerging and developing economies reflects their relative contributions to the world economy, while protecting the voices of least developed countries (LDCs), poor countries and regions. 
 
We welcome the inclusion of the RMB into the Special Drawing Rights (SDR) currency basket on 1October, 2016. 
 
We call for the advanced European economies to meet their commitment to cede two chairs on the Executive Board of the IMF. The reform of the IMF should strengthen the voice and representation of the poorest members of the IMF, including Sub-Saharan Africa. 
 
We share concerns regarding the challenges of sovereign debt restructurings, and note that timely and successful debt restructuring is key for ensuring access to international capital markets, and hence economic growth, for countries with high debt levels. We welcome the current discussions to improve the debt restructuring process,and on the revised collective action clauses (CACs). 
 
We reiterate our support for the multilateral trading system and the centrality of the WTO as the cornerstone of a rule based, open, transparent, non-discriminatory and inclusive multilateral trading system with development at the core ofits agenda. We note the increasing number ofbilateral, regional, and plurilateral trade agreements, and reiterate that these should be complementary to the multilateral trading system and encourage the parties thereon to align their work in consolidating the multilateral trading system under the WTO in accordance with the principles of transparency, inclusiveness, and compatibility with the WTO rules. 
 
We emphasise the importance of implementing the decisions taken at the Bali and Nairobi Ministerial Conferences. We stress the need to advance negotiations on the remaining Doha Development Agenda (DDA) issues as a matter of priority. We call on all WTO members to work together to ensure a strong development oriented outcome for MC11 and beyond. 
 
We appreciate the progress in the implementation of the Strategy for BRICS Economic Partnership and emphasise the importance of the BRICS Roadmap for Trade, Economic and Investment Cooperation until 2020. We believe that close cooperation between the sectoral cooperation mechanisms, BRICS Contact Group on Economic and Trade Issues, the BRICS Business Council, New Development Bank and the BRICS Interbank cooperation mechanism is crucial in strengthening the BRICS economic partnership. We welcome, in this context, the continued realisation of the major BRICS economic initiatives such as enhanced cooperation in e-commerce, "single window”, IPR cooperation, trade promotionand micro, small and medium enterprises (MSMEs).We recognise non-tariff measures (NTMs),services sector, and standardisation and conformity assessments as possible areas of future cooperation.We note in this context the meeting of BRICS Trade Ministers in New Delhi on 13 October 2016 and welcome its substantive outcomes. 
 
In operationalising the Strategy for BRICS Economic Partnership, we encourage measures that support greater participation, value addition and upward mobility in Global Value Chains of our firms including through the preservation of policy space to promote industrial development. 
 
We welcome India's initiative to host the first BRICS Trade Fair in New Delhi. This is an important step towards the implementation of Strategy for BRICS Economic Partnership. We believethis will further consolidate trade and commercial partnership among BRICS countries. We welcome the deliberations and outcome of the meeting of BRICS Trade Ministers held on 13October 2016 in New Delhi. 
 
We noted the Annual Report by the BRICS Business Council, including the various initiatives undertaken by its Working Groups. We further direct the Council to accelerate the development and realisation of joint projects which, on a mutually beneficial basis, contribute to the economic objectives of BRICS. 
 
We agreed that MSMEs provide major employment opportunities, at comparatively lower capital cost, and create self-employment opportunities in rural and underdeveloped areas. MSMEs thus help assure equitable wealth distribution nationally and globally. We commend organisation of BRICSsecond round-table on MSMEs by India with a focus on technical and business alliances in MSMEs Sector. We agree to work for greater integration of MSMEs in Regional and Global Value Chains. 
 
We commend China for the successful hosting of the 11th G20 Leaders’ Summit in Hangzhou and its focus on innovation, structural reform and development as drivers of medium and long term economic growth. We recognise the role of G20 as the premier forum for international and financial cooperation and emphasise the importance of the implementationof the outcomes of G20 Hangzhou Summit, that we believe will foster strong, sustainable, balanced and inclusive growth and will contribute to improved global economic governance and enhance the role of developing countries. 
 
We stress the importance to foster an innovative, invigorated, interconnected and inclusive world economy.We will enhance our consultations and coordinationon the G20 agenda, especially on issues of mutual interest to the BRICS countries, and promote issues of importance for the Emerging Market and Developing Economies (EMDEs). We will continue to work closely with all G20 membersto strengthen macroeconomic cooperation, promote innovation, as well as robust and sustainable trade and investment to propel global growth,improve global economic governance,enhance the role of developing countries,strengthen international financial architecture,support for industrialisation in Africa and least developed countries and enhance cooperation on energy access and efficiency. We stress the need for enhanced international cooperation to address illicit cross-border financial flows, tax evasion and trade mis-invoicing. 
 
The role of BRICS and its collaborative efforts in the field of economic and financial co-operation are yielding positive results. We emphasise the importance of our cooperation in order to help stabilise the global economy and to resume growth. 
 
We welcome experts exploring the possibility of setting up an independent BRICS Rating Agency based on market-oriented principles, in order to further strengthen the global governance architecture. 
 
We welcome the reports of BRICS Think Tanks Council and BRICS Academic Forum that have emerged as valuable platforms for our experts to exchange views. They have submitted their valuable suggestions with regard to promoting market research and analysis in BRICS and developing countries and exploring possibilities of carrying this process forward.We believe that BRICS institution-building is critical to our shared vision of transforming the global financial architecture to one based on the principles of fairness and equity. 
 
We emphasise the importance of enhancing intra-BRICS cooperation in the industrial sector, including through the BRICS Industry Ministers Meetings, in order to contribute to the accelerated and sustainable economic growth, the strengthening of comprehensive industrial ties, the promotion of innovation as well as job creation, and improvement of the quality of life of people in BRICS countries. 
 
We congratulate the United Nations Industrial Development Organization (UNIDO) for the 50th anniversary of its foundation and recall its unique mandate to promote and accelerate inclusive and sustainable industrial development and its contribution in promoting industrialisation in Africa. We note, in this context, the progress achieved so far in the establishment of the UNIDO-BRICS Technology Platform. 
 
We commend our Customs administrations on the establishment of the Customs Cooperation Committee of BRICS,and on exploring means of further enhancing collaboration in the future, including those aimed at creating legal basis for customs cooperation and facilitating procedures of customs control. We note the signing of the Regulations on Customs Cooperation Committee of the BRICS in line with the undertaking in the Strategy for BRICS Economic Partnership to strengthen interaction among Customs Administrations. 
 
We recall the Fortaleza Declaration wherein we recognised the potential for BRICS insurance and reinsurance markets to pool capacities and had directed our relevant authorities to explore avenues for cooperation in this regard. We would like this work to be expedited. 
 
We reaffirm our commitment towards a globally fair and modern tax systemand welcome the progress made on effective and widespread implementation of the internationally agreed standards. We support the implementation of the Base Erosion andProfit Shifting Project (BEPS) with due regard to the national realities of the countries.We encourage countries and International Organisations to assist developing economies in building their tax capacity. 
 
We note that aggressive tax planning and tax practices hurt equitable development and economic growth. Base Erosion and Profit Shiftingmust be effectively tackled. We affirm that profit should be taxed in the jurisdiction where the economic activity is performedand the value is created. We reaffirm our commitment to support international cooperation in this regard, including in the Common Reporting Standard for Automatic Exchange of Tax Information (AEOI). 
 
We note the ongoing discussions on international taxation matters. In this regard, we recall the Addis Ababa Action Agenda on Financing for Development including its emphasis on inclusive cooperation and dialogue among national tax authorities on international tax matters with increased participation of developing countries and reflecting adequate, equitable, geographical distribution, representing different tax systems. 
 
We support the strengthening of international cooperation against corruption, including through the BRICS Anti-Corruption Working Group, as well as on matters related to asset recovery and persons sought for corruption. We acknowledge that corruption includingillicit money and financial flows, and ill-gotten wealth stashed in foreign jurisdictions is a global challenge which mayimpact negatively on economic growth and sustainable development. We will strive to coordinate our approach in this regard and encourage a stronger global commitment to prevent and combat corruptionon the basis of the United Nations Convention against Corruption and other relevant international legal instruments. 
 
We recognise that nuclear energy will play a significant role for some of the BRICS countries in meeting their 2015 Paris Climate Change Agreement commitments and for reducing global greenhouse gas emissions in the long term. In this regard, we underline the importance of predictability in accessing technology and finance for expansion of civil nuclear energy capacity which would contribute to the sustainable development of BRICS countries. 
 
We reiterate that outer space shall be free for peaceful exploration and use by all States on the basis of equality in accordance with international law.Reaffirming that outer space shall remain free from any kind of weapons or any use of force, we stress that negotiations for the conclusion of an international agreement or agreements to prevent an arms race in outer space are a priority task of the United Nations Conference on Disarmament, and support the efforts to start substantive work, inter alia, based on the updated draft treaty on the prevention of the placement of weapons in outer space and of the threat or use of force against outer space objects submitted by China and Russian Federation.We also note an international initiative for a political obligation onthe no first placement of weapons in outer space. 
 
Priority should be accorded to ensuring the long-term sustainability of outer space activities, as well as ways and means of preserving outer space for future generations. We note that this is an important objective on the current agenda of the UN Committee on the Peaceful Uses of Outer Space (UNCOPUOS). In this respect, we welcome the recentdecision by the UNCOPUOS Scientific and Technical Sub-Committee Working Group on Long-term Sustainability of Outer Space Activities to conclude negotiations and achieve consensus on the full set of guidelines for the long term sustainability of outer space activities by 2018to coincide with the commemoration of the 50th Anniversary of the first United Nations Conference on the Exploration and Peaceful Uses of Outer Space (UNISPACE + 50). 
 
We strongly condemn the recent several attacks, against some BRICS countries, including that in India.We strongly condemn terrorism in all its forms and manifestations and stressed that there can be no justification whatsoever for any acts of terrorism, whether based upon ideological, religious, political, racial, ethnic or any other reasons. We agreed to strengthen cooperation in combating international terrorism both at the bilateral level and at international fora. 
 
To address the threat of chemical and biological terrorism, we support and emphasise the need for launching multilateral negotiations on an international convention for the suppression of acts of chemical and biological terrorism, including at the Conference on Disarmament.In this context, we welcome India’s offer to host a Conference in 2018 aimed at strengthening international resolve in facing the challenge of the WMD-Terrorism nexus. 
 
We call upon all nations to adopt a comprehensive approach in combating terrorism, which should include countering violent extremism as and when conducive to terrorism, radicalisation, recruitment, movement of terrorists including Foreign Terrorist Fighters, blocking sources of financing terrorism, including through organised crime by means of money-laundering, drug trafficking, criminal activities, dismantling terrorist bases, and countering misuse of the Internet including social media by terror entities through misuse of the latest Information and Communication Technologies (ICTs).Successfully combating terrorism requires a holistic approach. All counter-terrorism measures should uphold international law and respect human rights. 
 
We acknowledge the recent meeting of the BRICS High Representatives on National Securityand, in this context, welcome the setting up and the first meeting of the BRICS Joint Working Group on Counter-Terrorism on 14September 2016 in New Delhi. We believe it will further promote dialogue and understanding among BRICS nations on issues of counter terrorism, as well ascoordinate efforts to address the scourge of terrorism. 
 
We acknowledge that international terrorism, especially the Islamic State in Iraq and the Levant (ISIL, also known as Daesh) and affiliated terrorist groups and individuals, constitute a global and unprecedented threat to international peace and security. Stressing UN’s central role in coordinating multilateral approaches against terrorism, we urge all nations to undertake effective implementation of relevant UN Security Council Resolutions, and reaffirm our commitment on increasing the effectiveness of the UN counter terrorism framework.We call upon all nations to work together to expedite the adoption of the Comprehensive Convention on International Terrorism (CCIT) in the UN General Assembly without any further delay. We recall the responsibility of all States to prevent terrorist actions from their territories. 
 
We reaffirm our commitment to the FATF International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation and call for swift, effective and universal implementation of FATF Consolidated Strategy on Combating Terrorist Financing, including effective implementation of its operational plan. We seek to intensify our cooperation in FATF and FATF-style regional bodies (FSRBs). 
 
We welcome the outcome document of the Special session of the General Assembly on the world drug problem, held in New York from 19-21 April 2016. We call for strengthening of international and regional cooperation and coordination to counter the global threat caused by the illicit production and trafficking of drugs, especiallyopiates. We note with deep concern the increasing links between drug trafficking and terrorism, money laundering and organised crime. We commend the cooperation between BRICS drug control agencies and welcome the deliberations in second Anti-Drug Working Group Meeting held in New Delhi on 8 July 2016. 
 
We reaffirm that ICT expansion is a key enabler for sustainable development, for international peace and security and for human rights. We agree to strengthen joint efforts to enhance security in the use of ICTs, combating the use of ICTs for criminal and terrorist purposes and improving cooperation between our technical, law enforcement, R&D and innovation in the field of ICTs and capacity building institutions. We affirm our commitment to bridging digital and technological divides, in particular between developed and developing countries. We recognise that our approach must be multidimensional and inclusive and contains an evolving understanding of what constitutes access, emphasising the quality of that access. 
 
We reiterate that the use and development of ICTs through international and regional cooperation and on the basis of universally accepted norms and principles of international law, including the Charter of the UN; in particular political independence, territorial integrity and sovereign equality of States, the settlement of disputes by peaceful means, non-interference in internal affairs of other States as well as respect for human rights and fundamental freedoms, including the right to privacy; are of paramount importance in order to ensure a peaceful, secure and openand cooperative use of ICTs. 
The increasing misuse of ICTs for terrorist purposes poses a threat to international peace and security. We emphasise the need to enhance international cooperation against terrorist and criminal misuse of ICTs and reaffirm the general approach laid in the eThekwini, Fortaleza and Ufa declarations in this regard. We reaffirm the key role of the UN in addressing the issues related to the security in the use of ICTs. We will continue to work together for the adoption of the rules, norms and principles of responsible behaviour of Statesincludingthrough the process of UNGGE. We recognise that the states have the leading role to ensure stability and security in the use of ICTs. 
 
We advocate also for an open, non-fragmented and secure Internet, and reaffirm that the Internet is a global resource and that States should participate on an equal footing in its evolution and functioning,taking into account the need to involve relevant stakeholders in their respective roles and responsibilities. 
 
We recognise the importance of energy-saving and energy-efficiency for ensuring sustainable economic development and welcome the Memorandum of Understanding which was signed in this regard. 
 
We recognise the challenge of scaling-up power generation and its efficient distribution, as well as the need to scale up low carbon fuels and other clean energy solutions. We further recognise the level of investments needed in renewable energy in this regard. We therefore believe that international cooperation in this field be focused on access to clean energy technology and finance. We further note the significance of clean energy in achieving Sustainable Development Goals. We recognise that sustainable development, energy access, and energy security are critical to the shared prosperity and future of the planet. We acknowledge that clean and renewable energy needs to be affordable to all. 
We support a wider use of natural gas as an economically efficient and clean fuel to promote sustainable development as well as to reduce the greenhouse emissions in accordance with the Paris Agreement on climate change. 
 
We note that BRICS countries face challenges of communicable diseases including HIV and Tuberculosis. We, in this regard, note the efforts made by BRICS Health Ministers to achieve the 90–90–90 HIV treatment target by 2020. We underline the imperative to advance cooperation and action on HIV and TB in the BRICS countries, including in the production of quality-assured drugs and diagnostics. 
 
We take note of United Nations High Level Meeting on Ending AIDS in June 2016 and forthcoming Global Conference on TB under WHO auspices in Moscow in 2017. 
Recognising global health challenges we emphasise the importance of cooperation among BRICS countries in promoting research and development of medicines and diagnostic tools to end epidemics and to facilitate access to safe, effective, quality and affordable essential medicines. 
 
We welcome the High Level meeting on Anti-Microbial Resistance (AMR) during UNGA-71, which addresses the serious threat that AMR poses to public health, growth and global economic stability. We will seek to identify possibilities for cooperation among our health and/or regulatory authorities, with a view to share best practices and discuss challenges, as well as identifying potential areas for convergence. 
 
We reaffirm our commitment to promote a long-term and balanced demographic development and continue cooperation on population related matters in accordance with the Agenda for BRICS Cooperation on Population Matters for 2015-2020. 
 
We welcome the outcomes of the meetings of BRICS Labour & Employment Ministers held on 9 June 2016 in Geneva and on 27-28 September 2016 in New Delhi. We take note of the possibility of bilateral Social Security Agreements between BRICS countries, and of the commitment to take steps to establish a network of lead labour research and training institutes, so as to encourage capacity building, information exchange and sharing of best practices amongst BRICS countries. We recognise quality employment, including a Decent Work Agenda, sustaining social protection and enhancing rights at work, are core to inclusive and sustainable development. 
 
We welcome the outcomes of the fourth BRICS Education Ministers’ meeting held on 30 September 2016 in New Delhi, including the New Delhi Declaration on Education. We stress the importance of education and skills for economic development, and reaffirm the need for universal access to high-quality education. We are satisfied with the progress of the BRICS Network University (BRICSNU) as well as the BRICS University League (BRICSUL), which will commence their programmes in 2017. These two initiatives will facilitate higher education collaboration and partnerships across the BRICS countries. 
 
We appreciate the organisation of Young Diplomats’ Forum held on 3-6 September 2016 in Kolkata. We also welcome the signing of the Memorandum of Understanding between BRICS Diplomatic Academies to encourage exchange of knowledge and experiences. 
We welcome the outcomes of the fourth BRICS STI Ministerial Meeting held on 8 October 2016, wherein they adopted theJaipur Declaration and endorsed the updated Work Plan (2015-2018) aimed at strengthening cooperation in science, technology and innovation, especially leveraging young scientific talent for addressing societal challenges; creating a networking platform for BRICS young scientists; co-generating new knowledge and innovative products, services and processes; and addressing common global and regional socio-economic challenges utilising shared experiences and complementarities. 
 
We stress the importance of implementation of the BRICS Research and Innovation Initiative. We welcome the hosting of the first BRICS Young Scientists Conclave in India, instituting of BRICS Innovative Idea Prize for Young Scientists.We note the progress of the first Call for Proposals under the BRICS STI Framework Programme, in ten thematic areas, with funding commitment from the five BRICS STI Ministries and associated funding bodies. We welcome the establishment of the BRICS Working Group on Research Infrastructure, and Mega-Science to reinforce the BRICS Global Research Advanced Infrastructure Network (BRICS-GRAIN). 
 
We welcome the outcomes of the Agriculture Ministers’ Meeting, held on 23 September 2016, including the Joint Declaration. We emphasise the importance of ensuring food security, and addressingmalnutrition, eliminating hunger,inequality and poverty through increased agricultural production, productivity, sustainable management of natural resources and trade in agriculture among the BRICS countries. As the world's leading producers of agriculture products and home to large populations, we emphasise the importance of BRICS cooperation in agriculture.We recognize the importance of science-based agriculture and of deploying information and communication technology (ICT). 
 
To further intensify cooperation among BRICScountries in agricultural research policy, science and technology, innovation and capacity building, including technologies for small-holder farming in the BRICS countries, we welcome the signing of the MoU for Establishment of the BRICS Agricultural Research Platform. 
 
Considering the dependence of agriculture on water, we call upon the development of infrastructure for irrigation to assist farmers in building resilience during times of drought and welcome sharing of experiences and expertise in these areas. 
 
We affirm that the value of sharing expertise and experiences among BRICS countries with regard to usage of Information and Communication Technology (ICT) in e-governance, financial inclusion, and targeted delivery of benefits, e-commerce, open government, digital content and services and bridging the digital divide. We support efforts aimed at capacity building for effective participation in e-commerce trade to ensure shared benefits. 
 
We welcome the forthcoming BRICS Telecommunication Ministerial Meeting that will further strengthen our cooperation, including on technology trends, standards developments, skill developments, and policy frameworks. 
 
We believe it is necessary to ensure joint efforts towards diversification of the world market of software and IT equipment. We call for developing and strengthening the ICT cooperation in the framework of the BRICS Working Group on ICT Cooperation. 
 
We welcome the outcomes of the meetings of BRICS Ministers responsible for Disaster Management held on 19-20 April 2016 in St. Petersburg and on 22 August 2016 in Udaipur. We also welcome the Udaipur Declaration adopted at the second meeting and applaud the formation of BRICS Joint Task Force on Disaster Risk Management. 
We extend our deepest condolences to the people of Haiti and the Caribbean on the tragic loss of lives following hurricane Matthew. We support the efforts of the UN and humanitarian partners in their response to this tragedy. 
 
We welcome the outcomes of the BRICS Ministerial Meeting on Environment held on 15-16 September 2016, in Goa, including the Goa Statement on Environment. We welcome the decision to share technical expertise in the areas of abatement and control of air and water pollution, efficient management of waste and sustainable management of bio-diversity. We recognise the importance of participation by BRICS countries in environmental cooperation initiatives, including developing a platform for sharing environmentally sound technologies. 
 
We welcome the outcome of the 17th Conference of Parties to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), held in Johannesburg, South Africa, as a landmark advancement of the regulation of international trade in endangered species from 24 September - 4 October 2016. 
We welcome the adoption of the Paris Agreement anchored in the United Nations Framework Convention on Climate Change (UNFCCC), and its signing by a large number of countries on 22 April 2016. We emphasise that the comprehensive, balanced and ambitious nature of the Paris Agreement reaffirms the principles of UNFCCC includingthe principle of equity and common but differentiated responsibilities and respective capabilities, in light of different national circumstances (CBDR & RC). 
We welcome the Paris Agreement and its imminent entry into force on 4 November 2016.We call on the developed countries to fulfil their responsibility towards providing the necessary financial resources, technology and capacity building assistance to support the developing countries with respect to both mitigation and adaptation for the implementation of the Paris Agreement. 
 
We reiterate the commitments to gender equality and empowerment of all women and girls as contained in the 2030 Agenda. We recognise that women play a vital roleas agents of developmentand acknowledge that their equal and inclusive participation and contribution is crucial to making progress across all Sustainable Development Goals and targets. We emphasise the importance of enhancing accountability for the implementation of these commitments. 
 
Cognizant of the potential and diversity of youth population in our countries, their needs and aspirations, we welcome the outcomes of the BRICS Youth Summit in Guwahati including, "Guwahati BRICS Youth Summit 2016 Call to Action” that recognise the importance of education, employment, entrepreneurship, and skills training for them to be socially and economically empowered. 
 
We welcome the BRICS Convention on Tourism, that was organised in Khajuraho, Madhya Pradesh on 1-2 September 2016 as an effective means to promote tourism cooperation among BRICS countries. 
 
As home to 43% of the world population and among the fastest urbanising societies, we recognise the multi-dimensional challenges and opportunities of urbanisation. We affirm our engagement in the process that will lead to adoption of a New Urban Agenda by the Conference of the United Nations on Housing and Sustainable Urban Development – Habitat III(Quito, 17-20 October, 2016).We welcome the BRICS Urbanisation Forum, BRICS Friendship Cities Conclave, held in Visakhapatnam on 14-16 September 2016, and in Mumbai on 14-16 April 2016, respectively, which contributed to fostering increased engagements between our cities and stakeholders. We call for enhanced cooperation with regard to strengthening urban governance, making our cities safe and inclusive, improving urban transport, financing of urban infrastructure and building sustainable cities. 
 
We note India’s initiative on the upcoming BRICS Local Bodies Conference to exchange expertise and best-practices, including in local budgeting. 
 
Noting the importance of orderly, safe, regular and responsible migration and mobility of people, we welcome the outcomes of first BRICS Migration Ministers Meeting in Sochi, Russian Federation, on 8 October 2015. 
 
We recognise the important role of culture in sustainable development and in fostering mutual understanding and closer cooperation among our peoples. We encourage expansion of cultural exchanges between people of BRICS countries. In this context we commend the hosting of the first BRICS Film Festival in New Delhi on 2-6 September 2016. 
 
We welcome the forthcoming meeting of the Second BRICS Parliamentary Forum in Geneva on 23 October 2016under the theme of ‘BRICS Parliamentary Cooperation on the implementation of the SDGs’. 
 
We appreciate the deliberations of the BRICS Women Parliamentarians’ Forum in Jaipur on 20-21 August, 2016 and the adoption of Jaipur Declaration, centred on SDGs, that inter alia emphasises the commitment to strengthen parliamentary strategic partnerships on all the three dimensions of sustainable development,fostering gender equality and women empowerment. 
 
We note the deliberations on a BRICS Railways Research Network aimed at promoting research and development in this field to further growth in our economies in a cost effective and sustainable manner. 
 
We congratulate India on organising the first BRICS Under-17 Football Tournament in Goa on 5-15 October 2016. We,in this regard, note the initiative towards a BRICS Sports Council to foster exchanges among BRICS countries. 
 
Recognising the increasing trade, business and investment between BRICS countries and the important role of BRICS Interbank Cooperation Mechanism, we welcome the signing of the Memorandum of Understanding between the BRICS countries National Development Banks and the New Development Bank (NDB). We welcome the initiative of the Export-Import Bank of India of instituting Annual BRICS Economic Research Award to promote advanced research in economics of relevance to BRICS countries. 
We reiterate our commitment to strengthening our partnerships for common development. To this end, we endorse the Goa Action Plan. 
 
China, South Africa, Brazil and Russia appreciate India’s BRICS Chairpersonship and the good pace of BRICS cooperation agenda. 
 
We emphasise the importance of review and follow up of implementation of outcome documents and decisions of the BRICS Summits. We task our Sherpas to carry this process forward. 
 
China, South Africa, Brazil and Russia express their sincere gratitude to the Government and people of India for hosting the Eighth BRICS Summit in Goa. 
India, South Africa, Brazil and Russia convey their appreciation to China for its offer to host the Ninth BRICS Summit in 2017 and extend full support to that end.
                                                                                           
NNN
 
ADVERTISEMENT
 

British Prime Minister Theresa May to visit India from November 6-8

ADVERTISEMENT
British Prime Minister Theresa May will pay an official visit to India from November 6 to 8, accompanied by a business delegation, on what will be her first bilateral trip outside Europe.
 
Ms. May will hold talks with Prime Minister Narendra Modi and review all aspects of India-United Kingdom Strategic Partnership, a press release from the Ministry of External Affairs said.
 
The Joint Economic and Trade Committee meeting will be held on the sidelines of the visit, it said.
 
During the visit, Ms. May, alongside Mr. Modi, will inaugurate the India-UK Tech Summit in New Delhi jointly hosted by the Confederation of Indian Industry (CII) and the Department of Science and Technology, Government of India. 
 
The summit will be an opportunity for the two sides to strengthen business-to-business engagement in the areas of technology, entrepreneurship and innovation, design, IPRs and higher education. 
 
The two sides had agreed to hold the summit during Mr. Modi's  visit to the UK in November 2015, the release added.
 
NNN
 
ADVERTISEMENT
 

India-Russia Joint Statement

Prime Minister Narendra Modi meeting Russian President Vladimir Putin, in Goa on October 15, 2016.
Prime Minister Narendra Modi meeting Russian President Vladimir Putin, in Goa on October 15, 2016.
Following is the text of the Joint Statement issued by India and Russia -- Partnership for Global Peace and Stability -- during the visit of Russian President Vladimir Putin to Goa today:
 
 
President of the Russian Federation, H.E. Mr. Vladimir V. Putin and Prime Minister of the Republic of India, H.E. Mr. Narendra Modi met today in Goa, during an official visit of the Russian President to India for the 17th India-Russia Annual Summit. The Leaders reviewed the Special and Privileged Strategic Partnership between India and Russia that is rooted in longstanding mutual trust, characterized by unmatched reciprocal support to each other's core interests and unique people-to-people affinities. They pledged to pursue new opportunities to take the economic ties to unprecedented heights, achieve sustainable development, promote peace and security at home and around the world, strengthen inclusive and transparent global governance, and provide global leadership on issues of shared interest. 
 
Acknowledging Russia's crucial contributions to India's industrial development and technological advancement and defence needs since the second half of the last century, Prime Minister Modi reiterated that Russia will remain India's major defence and strategic partner, and the enduring partnership between them is an anchor of peace and stability in a changing world order. President Putin reaffirmed Russia’s continued commitment to the Special and Privileged Strategic Partnership with India and noted the commonality of positions of both the countries on such issues as war on terrorism. Indian Side expressed its appreciation for Russia’s unequivocal condemnation of the terrorist attack on army base in Uri.
 
Follow-Up on the previous Summits
 
The Leaders welcomed the significant progress made in bilateral relations since 2014, pursuant to the roadmaps set out in the Joint Statements issued during President Putin's visit to India in December 2014 and Prime Minister Modi's visit to Russia in December 2015. They expressed satisfaction at continued bilateral exchanges including high-level visits, institutional exchanges and other contacts over the past year that had further strengthened the India-Russia strategic partnership.
 
Economic Cooperation
 
The Leaders recognized the need to constantly reinvent methodologies to realize the target set at the Annual Summit in December 2014, to increase annual bilateral trade and investment and committed to working towards the objective. They re-emphasized the need for continued facilitation by both governments based on regular consultations within the framework of institutional mechanisms as well as speedy implementation of decisions. Acknowledging that liberalization of the travel regime for the businessmen of both States, strengthening of new Transport Corridors, etc. are important steps in this direction, the Sides called for their timely and effective implementation.
 
The Sides welcomed the outcomes of the 22nd meeting of the Indian-Russian Inter-Governmental Commission (IGC) on Trade, Economic, Scientific, Technological and Cultural Cooperation held in New Delhi on 13 September 2016 and called for early finalization of new proposals identified during the IGC. Both Sides reiterated their commitment to further easing of business. They further noted the creation of bilateral investment fund by National Infrastructure Investment Fund (NIIF) of India with Russian Direct Investment Fund (RDIF) to facilitate high-technology investments in Russia and India. The Sides particularly welcomed the recent investment by India in the Russian oil sector and called on companies in both countries to finalize new and ambitious investment proposals in similar promising sectors such as pharmaceuticals, chemical industry, mining, machine building, implementation of infrastructure projects, cooperation in railway sector, fertilizer production, automobiles and aircraft construction as well as collaborative ventures in modernizing each other's industrial facilities. The Sides favourably assessed the ongoing cooperation between the railway organizations of the two countries and urged them to intensify it further.
 
They welcomed enhanced interactions between representatives of the business community of India and Russia including the CEOs level interaction particularly during large trade and business events in 2016 such as the Saint Petersburg International Economic Forum (June 16-18), attended by Mr. Dharmendra Pradhan, Minister for Petroleum and Natural Gas, International Industrial Exhibition INNOPROM (July 11-14), attended by Mrs. Nirmala Sitharaman, Minister of State (Independent Charge) for Commerce and Industry, as well as Chief Ministers of the Indian states of Rajasthan, Maharashtra and Andhra Pradesh and the Eastern Economic Forum (September 2-3). They called for continuation of such interactions and noted that India's participation as a partner country in INNOPROM-2016 highlighted the INNOPROM as one of the most representative among international events in the field of industry, scientific and technological innovations. Both Sides noted with satisfaction successful visit of the Minister of Industry and Trade of the Russian Federation Denis Manturov leading a business delegation to the states of Andhra Pradesh, Rajasthan, Maharashtra and New Delhi from October 11-14, 2016 and noted huge potential for intensification of the Indian-Russian industrial collaboration. The Indian Side welcomed Russia's scheduled participation as partner country in International Engineering Sourcing Show 2017 in India underlining it would impart added momentum to bilateral economic links. Russia welcomed intentions of the Government of India to focus on the opportunities in the Far East of the Russian Federation, participate enthusiastically in the Eastern Economic Forum in 2017, organize a roundtable between the Governors of the Far East Regions of the Russian Federation and the Chief Ministers of different States of India, explore trade and investment opportunities in the agriculture, mining, shipping etc.
 
Both Sides welcomed initiatives to promote direct trade in diamonds between India and Russia and gave positive evaluation of the work of the Special Notified Zone (SNZ) at the Bharat Diamond Bourse, noting active support of this project from PJSC ALROSA, i.e. through holding regular rough diamond viewing. The Sides noted the latest increase in the number of Indian resident companies signing long-term rough diamonds supply contracts with PJSC ALROSA, and emphasized the importance of further development of mechanisms and terms of work in the SNZ with the aim of strengthening bilateral diamond trade.
 
Positively evaluating the initiatives like agreement of phytosanitary and veterinary authorities of both countries on mutual market access for agricultural and processed food products, including dairy products and bovine meat, the Sides agreed to continue ongoing consultations between their regulatory authorities and introduce measures to widen the range of such products for bilateral trade.
 
Both Sides welcomed progress in the implementation of Green Corridor project in accordance with the Protocol between the Central Board of Excise & Customs of India and the Federal Customs Service of Russia on Cooperation in Exchange of Pre-arrival information for Facilitation of Trade and Customs Control on Goods and Vehicles moved between the two countries. Since the signing of the Protocol on 6th April, 2015, the Customs administrations on both sides have resolved complex technical issues and have successfully given effect to a real-time pre-arrival exchange of information based on customs export declarations, paving the way to boost bilateral trade.
 
The Sides noted the progress in the work of the Joint Study Group to consider the feasibility of a free trade agreement between the Republic of India and the Eurasian Economic Union.
 
Taking into account the important role of banks in settlement of trade, the Sides expressed hope for the enhancement by commercial banks of the two countries of their partnership, including through the development of correspondent relations and increase in lending limits. The Sides welcomed the elevation of the Sub-Group on Banking and Financial Matters into the Working Group on Banking and Financial Matters and its broadened scope including additional issues of Indian-Russian cooperation in the insurance sphere.
 
Recognizing the vital role played by connectivity in increasing trade between the two countries, the Leaders welcomed the increased emphasis on implementation of the International North-South Transport Corridor (INSTC), which can play a key role in promoting economic integration in the region through reduction of time taken for the transit of goods. They also welcomed increased interaction between Indian and Russian customs authorities under the framework of INSTC.
 
India-Russia "Energy Bridge” 
 
Both Sides noted with satisfaction that robust civil nuclear cooperation, collaboration in hydrocarbon sphere, long term LNG sourcing interest, work on the hydrocarbon energy pipeline and cooperation in renewable energy sector constitute a promising "Energy Bridge” between the two countries. 
 
The Sides affirmed that their successful nuclear energy cooperation, which has already started generating electricity at the Kudankulam nuclear power plant, is one of the most tangible and substantive aspects of their strategic partnership. The Sides reaffirm their intention to further expand cooperation under the "Strategic Vision to Strengthen Cooperation in the Peaceful Uses of Atomic Energy between the Russian Federation and the Republic of India" signed on December 11, 2014. In this context they noted with satisfaction a series of positive developments marked in their civil nuclear cooperation this year, including attainment of full power capacity of Kudankulam Unit 1, integration with electricity grid of Kudankulam Unit 2, commencement of the site work for Kudankulam Units 3 and 4, and the progress in discussions on the General Framework Agreement and the Credit Protocol for Kudankulam Units 5 and 6 with a view to conclude these documents before the end of 2016. Following the dedication of Kudankulam Unit-1 by Prime Minister Modi and President Putin on August 10, 2016, both leaders jointly dedicated Unit 2 of the Kudankulam Nuclear Power Plant to "India-Russia Friendship and Cooperation” and witnessed the laying of foundation concrete for Kudankulam Units 3 and 4 through video-links at a ceremony in Goa. 
 
The Indian Side stated it is working towards early allocation of the second site for the construction of the Russian-designed NPP. Both Sides appreciated the progress being made in the implementation of the Programme of Action for Localization between Russia’s Rosatom and India’s Department of Atomic Energy with active engagement of Indian nuclear manufacturing industry for local manufacturing in India of equipment and components for upcoming and future Russian-designed nuclear power projects in the context of the serial construction in India of Russian-designed Units. They noted with satisfaction continued senior official level interactions between their atomic energy establishments, including under the framework of the three Joint Working Groups on Nuclear Fuel, Science and Technology and Nuclear Power, and the Central Working Group on Localization set up during the last two Summits. The Indian Side also congratulated the Russian Side for successfully hosting the ATOMEXPO in May 2016, which was attended by senior Indian officials and nuclear industry representatives from both public and private sectors of India.
 
ADVERTISEMENT
The Leaders of both countries highly appreciated the progress made by Indian and Russian oil companies since the last Summit with the Indian companies acquiring equity in "Tass-Yuryakh Neftegazodobycha” and "Vankorneft” making it the largest equity oil acquisition hitherto by India. With the aim of further strengthening oil and gas cooperation the Russian Side expressed its interest in attracting Indian oil companies to participate in joint projects in the offshore-Arctic fields of the Russian Federation. The two Sides supported a wider use of natural gas as an economically efficient and ecologically clean fuel to promote sustainable development as well as to reduce the greenhouse gas emissions in accordance with the Paris Agreement on climate change.
 
Both Sides reaffirmed their continued commitment to work together towards development of energy efficiency and renewable energy sources. In this context, they expressed readiness to strengthen and expand bilateral cooperation in the field of solar energy under the MoU signed on 24 December, 2015 between the Russian Energy Agency of the Ministry of Energy of the Russian Federation and the Solar Energy Corporation of the Republic of India on building solar power-stations in India.
 
The Sides emphasized the need to provide assistance to the power sector companies of both countries in the development of cooperation in the sphere of modernization of existing power plants and construction of new power plants in India.
 
Cooperation among States of India and Regions of Russia
 
Given the immense potential for inter-regional cooperation which will bolster bilateral relationship, the Sides agreed to promote further strengthening and increasing the effectiveness of our bilateral inter-regional cooperation. Recalling the Joint Statement of December 11, 2014, the Sides welcomed the signing of the MoI between Maharashtra and Khanty-Mansiysk Autonomous Okrug - Ugra and between Maharashtra and Sverdlovsk Region. They also encouraged their other regions and states to similarly enter into cooperative arrangements to mutual benefit. The Sides further committed themselves to mark the 50th anniversary of establishment of Sister-City relationship between Mumbai and Saint Petersburg, through yearlong celebrations in 2017.
 
Enhancing Science, Health, Technology and Education Links
 
The Leaders noted with satisfaction strengthening of bilateral scientific cooperation programme, in both basic and applied sciences, in such fields as Material Science, Information & Communication Technologies, Biotechnologies, Mathematics, Physics, Chemistry, etc. The Sides observed the positive dynamics in the development of scientific and technical ties between the states and regions of India and Russia. The Sides welcomed Memorandum of Understanding between the Department of Science and Technology of the Government of India and the FAS? of Russia on further development of bilateral interaction in scientific and technical sphere and in the field of innovations.
 
The Sides noted the expansion of cooperation in the field of education. The Russian Academia has been getting more and more actively involved in the programme of academic mobility launched by the Government of India and called the Global Initiative for Academics Network, the large number of applications from Russian professors being its proof. The Sides agreed to carry forward cooperation under this initiative. Educational cooperation between India and Russia received institutional support with the creation of the Network of Russian and Indian Universities (RIN) established under the Declaration signed in Moscow on May 8, 2015 by representatives of 9 Indian and 21 Russian institutions of higher education in the presence of the President of the Republic of India H.E. Mr. Pranab Mukherjee and Minister of Science and Technology of the Russian Federation Mr. Dmitry V.Livanov. The Sides noted the RIN’s intensive activity in promoting exchanges of students and faculty, development of curriculum, creation of joint laboratories, organization of scientific conferences and seminars as well as conducting joint scientific research and collaboration in commercialization of technologies developed in research institutions. The Sides called for sustained efforts for the expansion of the list of universities participating from both countries in the RIN. 
 
The Sides expressed satisfaction with the progress achieved in the MoU signed in December 2015 between Centre for Development of Advance Computing (CDAC), Indian Institute of Science (IISc) and Lomonosov Moscow State University (MSU) for cooperation in high performance computing (HPC). The Indian Side conveyed its interest in expanding this cooperation with the Russian Side in a number of activities in supercomputing beyond envisaged in the MoU.
 
ADVERTISEMENT
The Sides took note of the interaction in the field of mathematics and successful hosting of the 2nd Indian-Russian Joint Conference in Statistics and Probability in Saint Petersburg in May-June 2016, and pointed out the necessity to further enhance cooperation in this area. 
 
Recognizing the importance of the Arctic and given that Russia is a member of the Arctic Council and India is an observer since May 2013, the Sides agreed to facilitate scientific cooperation to study the challenges (like melting ice, climate change, marine life and biodiversity), facing the rapidly changing Arctic region. 
 
The Sides welcomed interaction between India and Russia in the field of modern phytogenetics, which serves as the most important source of knowledge and constructive solutions for the provision of food security, and success of the First International Scientific Symposium "Genetics and genomics of plants for food security” in Novosibirsk in August 2016, as well as underlined the necessity of further enhancement of cooperation in this field.
 
Welcoming the declaration of June 21 as International Day of Yoga and noting successful organization of Yoga events in the year 2016, the Sides agreed to cooperate for promoting health and fitness through traditional Indian forms of Yoga and Ayurveda. The Sides will explore possibility of mutual cooperation in formulation of curriculum for Ayurvedic studies and development of regulations for quality control of Ayurvedic practices and medicines in Russia.
 
Space Cooperation
 
The Leaders reaffirmed their commitment to pursue the immense potential to cooperate in outer space with a view to advance socially useful applications and scientific knowledge. They welcomed signing of a MoU for setting up and utilizing ground stations in each other's territories to enhance the usefulness of their respective navigation satellite constellations of GLONASS and NavIC. The Sides emphasized that the space agencies of India and Russia will engage more actively on space technology applications, launch vehicle, satellite navigation, space science and planetary exploration. The Sides also confirmed their commitment to elaborate within the Scientific and Technical Subcommittee of the UN Committee on Space a consolidated approach to the preparation of the set of guidelines for the long-term sustainability of outer space activities and regulatory provisions on safety of space operations, as the most important component of the said document.
 
Defence Cooperation
 
Recognizing the contribution of military-technical cooperation in the Special and Privileged Strategic Partnership between the two countries, the Leaders reaffirmed their strong commitment to continue their cooperation in this field. In this context, they commended the activities of the Indian-Russian Inter-Governmental Commission on Military-Technical Cooperation.
 
The Sides expressed satisfaction at joint Indian-Russian exercises INDRA involving ground forces in Russia’s Far East in 2016. They welcomed the visit of the Indian Minister of State for Defence in April 2016 and delegation of the National Defence College in May-June 2016 to Moscow. They underlined the need to expand training, joint exercises and institutionalized interactions between the Armed Forces of both countries.
 
The Sides noted with satisfaction achievements in the field of joint design, development and production of high-technology military equipment and in this context, positively evaluated the establishment of the Joint Venture for production of Ka-226T helicopters in India. 
 
Both Sides welcomed plans to hold Indo-Russian military industrial conference later in 2016 and create bilateral Science & Technology Committee. The Indo-Russian Military industrial Conference will address military equipment related issues including spares, repair and maintenance of Russian supplied equipment and co-production. Private players too would be invited to participate under Make in India initiative. The Bilateral Science & Technology Committee would focus on matters relating to R&D collaboration in such high-tech areas as IT, communication, cyber security, medical engineering, outer space cooperation, remote sensing, etc.
 
Security and Disaster Management
 
Recognizing the need for sustained and institutionalized interactions to foster greater security-related and disaster management cooperation, the Sides noted the successful visit of Russian Minister for Civil Defence, Emergencies and Elimination of Consequences of Natural Disasters Vladimir Puchkov to India in March 2016, during which they held the first meeting of the Joint Commission on cooperation in the field of prevention and elimination of emergencies and signing of the Joint Implementation Plan for the years 2016-2017. 
 
ADVERTISEMENT
Recalling the visit of Russian Interior Minister Vladimir Kolokoltsev to India in September 2015, the Sides reaffirmed their intention to finalize an Agreement on Cooperation between the Ministry of Interior of the Republic of India and the Ministry of Internal Affairs of the Russian Federation and a Joint Action Plan between the Narcotics Control Bureau of the Republic of India and the Ministry of the Internal Affairs of the Russian Federation, which would provide an enabling framework to further develop ongoing inter-ministerial interactions for exchange of best practices and expertise, conducting training courses in countering extremism and drug-trafficking.
 
Culture, Tourism and People-to-People Ties
 
The Sides reaffirmed their interest in the early signing of a Cultural Exchange Programme for the years 2016-2018 between the Ministry of Culture of the Republic of India and the Ministry of Culture of the Russian Federation and confirmed their interest in intensifying cultural cooperation, including between academic and research organizations of the two countries acting in the field of culture and arts. Noting the success of the Festival of Russian Culture in 2016, it was decided to have the Festival of Indian Culture in Russia in 2017. 
 
The Sides appreciated the agreement reached by the Joint Working Group on culture and tourism in New Delhi in September 2016 on developing direct contacts between state institutions of the two countries in the field of culture and tourism.
 
The Sides welcomed steps aimed at concluding the Agreement to implement the decision to facilitate visa free entry, stay and exit of crew of aircraft of the designated aircraft companies as well as other aircraft companies performing charter and special flights in the respective territories of their countries on reciprocal basis. 
 
The Sides agreed to work towards further simplification and liberalization of visa arrangements, and promote group tourist travel to enhance people-to-people contacts.
 
The Sides noted the importance of interaction on issues related to migration and agreed to work towards improving the legal framework of cooperation in that sphere, in particular on the issuance of work permits and temporary residency permits for Indian nationals working in Russia through continued dialogue on these issues. 
 
The two Sides expressed satisfaction with the pace of the implementation of the Treaty on Transfer of Sentenced Persons between the Republic of India and the Russian Federation which came into force in March 2015 and expressed hope that further results would be achieved in the coming times with the implementation of the bilateral Treaty on Transfer of Sentenced Persons.
 
The Sides expressed intention to exert efforts in order to strengthen cooperation in the consular sphere, including an exchange of experience in defending its citizens’ and juridical entities’ rights and interests in the territory of the state of residence, and to provide possible assistance to the consular missions of the state represented.
 
Recognizing the role of cinema in promoting understanding and good will at people-to-people level, the two Sides expressed satisfaction on organization of Indian Film Festival in Moscow and Russian Film Festival in Mumbai in 2016. They agreed to deepen and expand the scope of India-Russia cooperation in the field of cinema by supporting interaction between film organizations and exploring possibilities of concluding audio-video coproduction agreement between the two countries.
 
Realizing the immense potential for collaboration in tourism sector and with an aim to encourage closer cooperation between tourism agencies of the two countries, the Sides agreed to celebrate 2018 as 'Year of Tourism between India and Russia'. They encouraged further collaboration between Ministry of Tourism of the Republic of India and Federal Agency for Tourism of the Russian Federation in enhancing bilateral cooperation, including establishment of direct links and contacts between Indian and Russian tourist associations, organizations, enterprises and companies. 
 
70th Anniversary Celebrations of the Establishment of Diplomatic Relations
 
The leaders called for grand celebrations in 2017 to mark the 70th anniversary of the establishment of diplomatic relations between India and Russia. They asked the concerned ministries and agencies to organize celebrations depicting width and depth of multi-faceted relations that the countries have spanning diverse fields including political, defence, energy, trade, economy, finance, investment, culture, education, think-tanks, science and technology, sports, youth, tourism, people-to-people etc. They welcomed elaboration of an Action plan towards this goal. 
 
Global Order and World Peace
 
Recognizing the importance of cooperation between India and Russia for global peace and stability, both Sides reaffirmed their desire to work together to promote a multi-polar international system based on the central role of the United Nations and international law, common interests, equality, mutual respect and non-interference in the internal affairs of countries.
 
India and Russia called for comprehensive reform of the UN Security Council to make it more effective and representative of the contemporary geo-political realities. Russia reaffirmed its support for India's candidature for a permanent membership of a reformed and expanded UN Security Council. 
 
The Indian Side highly appreciated the role played by Russia in India's accession to the Shanghai Cooperation Organization (SCO). The Leaders welcomed the signing of the Memorandum of Obligations at the SCO Summit in Tashkent on 24 June 2016 and reaffirmed the intention of both countries to work together closely in order to enhance the SCO's efficiency and performance in various spheres.
 
The Leaders expressed satisfaction over the development of cooperation in the BRICS grouping and underlined the importance of further strengthening BRICS strategic partnership guided by principles of openness, solidarity, equality, mutual understanding, inclusiveness and mutually beneficial cooperation. They appreciated India’s BRICS Chairmanship and good pace of implementation and expansion of BRICS cooperation agenda. They noted the intensification and diversification of cooperation between BRICS countries and lauded the outcomes of the meetings of BRICS NSAs, Ministers of Agriculture; Disaster Management; Education; Finance; Labour & Employment; Science, Technology and Innovation; and Trade in 2016 and looked forward to positive outcomes of meetings of Ministers of Health and Telecommunications. The Leaders expressed satisfaction at the momentum generated by the BRICS Business Council Meetings in 2016. They welcomed the progress in the functioning of the New Development Bank and its decision to disburse the first set of loans for projects in the area of green and renewable energy. Russia applauded the focus on enhancing people-to-people contacts during India’s BRICS Chairmanship and organisation of events like BRICS Film Festival, BRICS Under-17 Football Tournament, BRICS Convention on Tourism, etc. and promised full support to India’s efforts in ensuring the continuity and further development of BRICS activities during its Chairmanship in 2016. The Sides also highly praised customs cooperation within BRICS, including efforts to establish its Customs Cooperation Committee and to create a legal basis for interaction and mutual assistance on customs matters.
 
The Leaders expressed satisfaction over the development of BRICS economic cooperation. They appreciated the progress in the implementation of the Strategy for BRICS Economic Partnership adopted at the Ufa Summit in July 2015. The Russian Side commended the Indian Side for continuity in the realization of the main initiatives launched under Russian Presidency in BRICS such as e-commerce, "single window”, intellectual property rights cooperation, trade promotion and micro-small and medium-sized enterprises (MSMEs) cooperation. The Sides also agreed to broaden cooperation through joint promotion of the Indian initiatives on eliminating non-tariff barriers in trade, increasing trade in services and structuring support and development of MSMEs in the BRICS format. The Russian side also appreciated the organisation of the 1st BRICS Trade Fair in New Delhi to further consolidate trade ties among BRICS countries. They also underlined the importance of the implementation of the BRICS Roadmap for Trade, Economic and Investment Cooperation until 2020 submitted by the Russian Side in 2015. It was agreed that close cooperation among the BRICS Contact Group on Economic and Trade Issues, the BRICS Business Council and the New Development Bank is crucial to enhance the BRICS economic partnership. 
 
Having stressed the importance of cooperation between Russia, India and China (RIC) the Leaders welcomed the outcomes of the RIC Ministerial Meeting in Moscow on 18 April, 2016 as a tangible contribution to deepening mutual trust and coordination on international and regional issues. Both Sides reaffirmed their desire to further strengthen interaction in the trilateral format in order to jointly counter new challenges and threats.
 
The Leaders expressed concern over the deteriorating security situation in Afghanistan and recognized the need for resolute action against the menace of terrorism and threats of illicit drug-production and drug-trafficking, including the elimination of terror sanctuaries, safe havens, and other forms of support to terrorists. Both Sides called for constructive international, regional and bilateral cooperation in order to help Afghanistan in addressing the domestic security situation, improving the capabilities of Afghan National Security Forces, strengthening counter-narcotics capabilities, ensuring socio-economic development, and enhancing connectivity. India and Russia reiterated their support for Afghan government's efforts towards the realization of an Afghan-led and Afghan-owned national reconciliation process based upon the principles of international law.
 
The Leaders strongly condemned terrorism in all its forms and manifestations, and emphasized the necessity of comprehensive international collaboration in order to ensure its eradication. India and Russia recognize the threat posed by terrorism, and believe that the full implementation of the relevant UNSC resolutions, the UN Global Counter-Terrorism Strategy without application of any double standards or selectivity will be instrumental in countering this challenge. They stressed the need to deny safe havens to terrorists and the importance of countering the spread of terrorist ideology as well as radicalization leading to terrorism, stopping recruitment, preventing travel of terrorists and foreign terrorist fighters, strengthening border management and having effective legal assistance and extradition arrangements. Furthermore, stressing the need to have a strong international legal regime built on the principle of ‘zero tolerance for direct or indirect support of terrorism’, both Sides called upon the international community to make sincere efforts towards the earliest conclusion of the Comprehensive Convention on International Terrorism (CCIT).
 
Both Sides recognized that the rapidly expanding role of Information and Communication Technologies (ICTs) has led to the development of certain security vulnerabilities which need to be addressed through the development of universally applicable rules for responsible behaviour of states which should ensure the safe and sustainable use of ICTs. The Leaders reaffirmed the need to deepen bilateral cooperation in this field and welcomed the conclusion of the Indian-Russian Inter-Governmental Agreement for Cooperation in this regard. 
 
Both Sides expressed concern over the continuing instability in South-Eastern Ukraine and supported a political and negotiated settlement of the issue through the complete implementation of the Package of Measures for the Implementation of Minsk Agreements of February 12, 2015. 
 
The two Sides are convinced that the conflict in Syria should be peacefully resolved through comprehensive and inclusive intra-Syrian dialogue based on the Geneva Communique of June 30, 2012, and relevant UN Security Council resolutions. Both Sides underlined the necessity of strengthening the cessation of hostilities, delivery of humanitarian aid to besieged areas, and the continuation of intra-Syrian dialogue under UN supervision. India recognized Russian Side's effort towards achieving a political and negotiated settlement of the situation in Syria. 
 
The Sides reaffirmed that they have a common interest in preventing the proliferation of Weapons of Mass Destruction and in strengthening the multilateral export control regimes. A responsible approach to disarmament and non-proliferation is demonstrated by India and Russia's constructive participation in relevant international fora such as the Conference on Disarmament, the Organization for the Prohibition of Chemical Weapons, etc. Both Sides reiterated their desire to strengthen interaction and coordination of views on these issues. Russia welcomed India's accession to the Hague Code of Conduct against Ballistic Missile Proliferation and the Missile Technology Control Regime. Russia is convinced that India's participation will strengthen the international export control regimes and in this regard welcomed India’s application for membership in the Nuclear Suppliers Group (NSG), reiterating its strong support for India's early entry into the NSG. Russia also supported India’s interest in full membership in the Wasseanaar Arrangement. 
 
The Leaders stressed upon the need for preventing the weaponization of space. They noted the convergence of their interests in ensuring peaceful and sustainable uses of outer space and reaffirmed their commitment towards working together in relevant international fora such as the UN Committee on Peaceful Uses of Outer Space in Vienna, the Conference on Disarmament in Geneva and the UN General Assembly First Committee in New York to promote these common interests. The Sides also called for conclusion of a legally binding international agreement for the prevention of weaponization of outer space at the Conference on Disarmament in Geneva.
 
The Sides reiterated their desire to further strengthen their consultations and coordination in various international organizations such as the Group of Twenty (G-20), East Asia Summits, Asia-Europe Meeting, ASEAN Regional Forum, ASEAN Defence Ministers' Meeting Plus, the Conference on Interaction and Confidence Building Measures in Asia, and the Asia Cooperation Dialogue. India and Russia expressed satisfaction over the outcomes of the G-20 Summit held in Hangzhou in September 2016 and highlighted the significance of joint efforts in the G-20 for encouraging global economic growth, ensuring a stable international financial system, improving global economic governance and accelerating structural reforms. Russia reiterated its support for India's application to join APEC and committed to work closely with India. The Sides reiterated their commitment to further jointly promote coordination and cooperation aimed at maintaining lasting peace and stability in the Asia Pacific region. They supported the development of an open, inclusive and transparent security and cooperation architecture in the region on the basis of universally recognized principles of international law. In this regard they confirmed their commitment towards continued discussion on regional security architecture in the Asia Pacific under the framework of the East Asia Summit. 
 
Bilateral Perspectives 
 
Acknowledging the unique nature of strategic partnership between the Republic of India and the Russian Federation, the Leaders agreed to diversify stakeholders and further strengthen the existing mechanisms of cooperation to propel India-Russia partnership to a level that meets the aspirations of their people.
 
NNN
ADVERTISEMENT
 

Full Text: RBI's Fourth Bi-monthly Monetary Policy Statement, 2016-17

RBI logo
Following is the text of the Resolution of the Monetary Policy Committee (MPC), Reserve Bank of India (RBI) issued here today:
 
On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) decided to:
 
• reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 6.5 per cent to 6.25 per cent with immediate effect.
 
Consequently, the reverse repo rate under the LAF stands adjusted to 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 6.75 per cent.
 
The decision of the MPC is consistent with an accommodative stance of monetary policy in consonance with the objective of achieving consumer price index (CPI) inflation at 5 per cent by Q4 of 2016-17 and the medium-term target of 4 per cent within a band of +/- 2 per cent, while supporting growth. The main considerations underlying the decision are set out in the statement below.
 
Assessment
 
2. Global growth has been slowing more than anticipated through 2016 so far, with weak investment and trade damping aggregate demand. Meanwhile, risks in the form of Brexit,
banking stress in Europe, rebalancing of debt-fuelled growth in China, rising protectionism
and diminishing confidence in monetary policy have slanted the outlook to the downside.
World trade volume has contracted sharper than expected in the first half of 2016, and the
outlook has worsened with the recent falling off of imports by advanced economies (AEs)
from emerging market economies (EMEs). Inflation remains subdued in AEs and has started to edge down in EMEs.
 
3. International financial markets were overwhelmed by the Brexit vote in Q2, with equity
markets losing valuations worldwide, currencies plunging and turning volatile, and investors
rushing for safe havens. Markets, however, recovered quickly and reclaimed lost ground in
Q3, with a return of risk appetite propelling capital flows back into EMEs. Nonetheless, an
uneasy calm prevails on uncertainty about the stance of monetary policy of systemic central
banks. Commodity prices have firmed up slightly, easing stress for commodity exporters and shaving off some of the terms of trade gains accruing to commodity importers. Crude prices rose to a recent peak in Q2 of 2016, mostly on supply disruption in various parts of the world, and again in late September as the OPEC announced intentions of cutting back on supply; but, the upturn has been curbed by higher inventories.
 
4. On the domestic front, the outlook for agricultural activity has brightened
considerably. The south west monsoon ended the season with a cumulative deficit of only 3
per cent below the long period average, with 85 per cent of the country’s geographical area
having received normal to excess precipitation. Kharif sowing has surpassed last year’s
acreage, barring cotton, sugarcane and jute and mesta. Accordingly, the first advance 
estimates of kharif foodgrains production for 2016-17 by the Ministry of Agriculture have
been placed at a record level, and higher than the target set for the year. The industrial
sector, by contrast, suffered a manufacturing-driven contraction in early fiscal year Q2, after
a sequential deceleration in gross value added in Q1. Even after trimming the statistical
effects of the lumpy and order-driven contraction of insulated rubber cables, industrial
production as measured by the index of industrial production (IIP) turned out to be slower
than a year ago. In August, steel production rose to a 37-month high and cement production
maintained momentum - auguring well for construction activity - even though the output of
core industries as a whole was weighed down by a decline in the production of coal, crude oil and natural gas and deceleration in refinery products and electricity generation. Nonetheless, business expectations polled in the Reserve Bank’s industrial outlook survey and by other agencies remain expansionary in Q2 and Q3. The strong public investment in roads, railways and inland waterways, the recent efforts to unclog cash flows in large projects under arbitration, and the boost to spending from the 7th Pay Commission’s award, should improve the industrial outlook. In the services sector, the acceleration in the pace of activity in Q1 appears to have been sustained. An increasing number of high frequency indicators are moving into positive territory, construction is boosted by policy initiatives, and public administration, defence and other services will be supported by the pay commission award.
 
ADVERTISEMENT
5. Retail inflation measured by the headline CPI had been elevated by a sharp pick-up
in the momentum of food inflation overwhelming favourable base effects during April-July. In
August, however, the momentum of food inflation turned negative and surprised
expectations; consequently, base effects in that month came into full play and pulled down
headline inflation to an intra-year low. Fuel inflation has moderated steadily through the year
so far. Inflation excluding food and fuel (including petrol and diesel embedded in
transportation) has been sticky around 5 per cent, mainly in respect to education, medical
and personal care services. Households reacted to the recent hardening of food inflation
adaptively and raised their inflation expectations in the September 2016 round of the
Reserve Bank’s inflation expectations survey of households. Input costs in the manufacturing sector, including staff costs, have firmed up slightly as evident in various surveys, but the presence of considerable slack has restrained their transmission into corporate pricing power.
 
6. Liquidity conditions have remained comfortable in Q3, with the Reserve Bank
absorbing liquidity on a net basis through variable rate reverse repo auctions of varying
tenors. Liquidity was injected through open market purchases of `200 billion in line with the
system’s requirements. As a result, the weighted average call money rate (WACR) remained tightly aligned with the policy repo rate and, in fact, traded with a soft bias. Interest rates on commercial paper (CPs) and certificates of deposit (CD) also eased.
 
7. In the external sector, merchandise exports contracted in the first two months of Q2.
Subdued domestic demand was, however, reflected in a faster contraction in imports.
Moreoever, the still soft crude prices pared off a fifth of the oil import bill and gold import
volume slumped to a fifth of its volume a year ago. Consequently, the merchandise trade
deficit narrowed by US$ 10 billion in April-August on a year-on-year basis. These
developments are likely to have contained the current account deficit in Q2 at its level in Q1,
although the decline in remittances and the flattening of software earnings warrants
monitoring. While the pace of foreign direct investment slowed compared to a year ago,
portfolio flows were stronger after the Brexit vote, galvanised by a search for returns in an
expanding universe of negative yields. The level of foreign exchange reserves rose to
US$ 372 billion by September 30, 2016 – an all-time high.
 
Outlook
 
ADVERTISEMENT
8. The Committee expects that the strong improvement in sowing, along with supply
management measures, will improve the food inflation outlook. It notes that the sharp drop in inflation reflects a downward shift in the momentum of food inflation – which holds the key to future inflation outcomes – rather than merely the statistical effects of a favourable base
effect. The Government has announced several measures to cool food inflation pressures,
especially with regard to pulses. These measures should help in moderating the momentum
of food inflation in the months ahead. This has opened up space for policy action, as
indicated in the third bi-monthly monetary policy statement. The easy liquidity conditions
engendered by the Reserve Bank’s operations should also enable the smooth transmission
of the policy action through various market segments. Furthermore, banks should find added impetus for better transmission by the recent downward adjustment in small savings rates.
 
The Committee took note of potential cost push pressures that may emerge, including the 7th pay commission award on house rent allowances, and the increase in minimum wages with possible spillovers through minimum support prices. The fuller play of these factors will need vigilance to prevent a generalised cost spiral from taking root. On balance, the Committee envisages a trajectory taking headline CPI inflation towards a central tendency of 5 per cent by March 2017, with risks tilted to the upside albeit lower than in the second and third bimonthly monetary policy statements of June and August respectively.
 
9. The momentum of growth is expected to quicken with a normal monsoon raising
agricultural growth and rural demand, as well as by the stimulus to the urban consumption
spending from the pay commission’s award. The accommodative stance of monetary policy and comfortable liquidity conditions should support a revival of credit to the productive sectors. The continuing sluggishness in world trade and smaller terms of trade gains than in the past point, however, to further slackening of external demand going forward. Accordingly, the projection of growth of real gross value added (GVA) for 2016-17 is retained at 7.6 per cent, with risks evenly balanced around it.
 
10. Six members voted in favour of the monetary policy decision. The minutes of the
MPC’s meeting will be published on October 18, 2016. The next meeting of the MPC is
scheduled on December 6 and 7, 2016 and its resolution will be announced on December 7,
 
NNN
ADVERTISEMENT
 
 

Union Council of Ministers

President Pranab Mukherjee, Vice-President M. Hamid Ansari and Prime Minister Narendra Modi with the newly inducted Ministers after they were sworn in at a ceremony, at Rashtrapati Bhavan, in New Delhi on July 5, 2016.
President Pranab Mukherjee, Vice-President M. Hamid Ansari and Prime Minister Narendra Modi with the newly inducted Ministers after they were sworn in at a ceremony, at Rashtrapati Bhavan, in New Delhi on July 5, 2016.
Following is the Union Council of Ministers after the expansion and reshuffle carried out by Prime Minister Narendra Modi today:
 
PRIME MINISTER
Narendra Modi: Personnel, Public Grievances and Pensions
Department of Atomic Energy Department of Space
All important policy issues, and all other portfolios not allocated to any Minister
 
CABINET MINISTERS
1.   Raj Nath Singh: Home Affairs
2.   Sushma Swaraj: External Affairs
3.   Arun Jaitley: Finance, Corporate Affairs
4.   M. Venkaiah Naidu: Urban Development, Housing and Urban Poverty Alleviation, Information  & Broadcasting
5.   Nitin Jairam Gadkari: Road Transport and Highways, Shipping
6.   Manohar Parrikar: Defence
7.   Suresh Prabhu: Railways
8.   D.V. Sadananda Gowda: Statistics & Programme Implementation
9.   Uma Bharati: Water Resources, River Development and Ganga Rejuvenation
10.  Najma A. Heptulla: Minority Affairs
11.  Ramvilas Paswan: Consumer Affairs, Food and Public Distribution
12.  Kalraj Mishra: Micro, Small and Medium Enterprises
13.  Maneka Sanjay Gandhi: Women and Child Development
14.  Ananth Kumar: Chemicals and Fertilizers, Parliamentary Affairs
15.  Ravi Shankar Prasad: Law & Justice, Electronics & Information Technology
16.  Jagat Prakash Nadda: Health & Family Welfare
17.  Ashok Gajapathi Raju Pusapati: Civil Aviation
18.  Anant Geete: Heavy Industries and Public Enterprises
19.  Harsimrat Kaur Badal: Food Processing Industries
20.  Narendra Singh Tomar: Rural Development, Panchayati Raj, Drinking Water and Sanitation
21.  Chaudhary Birender Singh: Steel
22.  Jual Oram: Tribal Affairs
23.  Radha Mohan Singh: Agriculture & Farmers Welfare
24.  Thaawar Chand Gehlot: Social Justice and Empowerment
25.  Smriti Zubin Irani: Textiles
26.  Harsh Vardhan: Science and Technology, Earth Sciences
27.  Prakash Javadekar: Human Resource Development
 
ADVERTISEMENT
MINISTERS OF STATE
1.   Rao Inderjit Singh: Planning (Independent Charge)
Urban Development, Housing & Urban Poverty Alleviation
2.   Bandaru Dattatreya: Labour and Employment (Independent Charge)
3.   Rajiv Pratap Rudy: Skill Development & Entrepreneurship (Independent Charge)
4.   Vijay Goel: Youth Affairs and Sports (Independent Charge),
Water Resources, River Development & Ganga Rejuvenation
5.   Shripad Yesso Naik: AAYUSH (Independent Charge)
6.   Dharmendra Pradhan: Petroleum and Natural Gas (Independent Charge)
7.   Piyush Goyal: Power (Independent Charge), Coal (Independent Charge), New and Renewable Energy (Independent Charge), Mines (Independent Charge)
8.   Jitendra Singh: Development of North Eastern Region (Independent Charge), Prime Minister’s Office, Personnel, Public Grievances & Pensions, Department of Atomic Energy, Department of Space
9.   Nirmala Sitharaman: Commerce and Industry (Independent Charge)
10.  Mahesh Sharma: Culture (Independent Charge), Tourism (Independent Charge)
11.  Manoj Sinha: Communications (Independent Charge), 
Railways
12.  Anil Madhav Dave: Environment, Forest and Climate Change (Independent Charge)
13.  V.K. Singh: External Affairs
14.  Santosh Kumar Gangwar: Finance
15.  Faggan Singh Kulaste: Health & Family Welfare
16.  Mukhtar Abbas Naqvi: Minority Affairs, Parliamentary Affairs
17.  S.S. Ahluwalia: Agriculture & Farmers Welfare, Parliamentary Affairs
18.  Ramdas Athawale: Social Justice & Empowerment
19.  Ram Kripal Yadav: Rural Development
20.  Haribhai Parthbhai Chaudhary: Micro, Small & Medium Enterprises
21.  Giriraj Singh: Micro, Small & Medium Enterprises
22.  Hansraj Gangaram Ahir: Home Affairs
23.  G.M. Siddeshwara: Heavy Industries & Public Enterprises
24.  Ramesh Chandappa Jigajinagi: Drinking Water & Sanitation
25.  Rajen Gohain: Railways
26.  Parshottam Rupala: Agriculture & Farmers Welfare, Panchayati Raj
27.  M.J. Akbar: External Affairs 
28.  Upendra Kushwaha: Human Resources Development
29.  Radhakrishnan P., Road Transport & Highways, Shipping
30.  Kiren Rijiju: Home Affairs
31.  Krishan Pal: Social Justice & Empowerment
32.  Jasvantsinh Sumanbhai Bhabhor: Tribal Affairs
33.  Sanjeev Kumar Balyan: Water Resources, River Development & Ganga Rejuvenation
34.  Vishnu Deo Sai: Steel
35.  Sudarshan Bhagat: Agriculture and Farmers Welfare
36.  Y.S. Chowdary: Science and Technology, Earth Science
37.  Jayant Sinha: Civil Aviation
38.  Rajyavardhan Singh Rathore: Information & Broadcasting
39.  Babul Supriyo: Urban Development, Housing and Urban Poverty Alleviation
40.  Sadhvi Niranjan Jyoti: Food Processing Industries
41.  Vijay Sampla: Social Justice & Empowerment
42.  Arjun Ram Meghwal: Finance, Corporate Affairs
43.  Mahendra Nath Pandey: Human Resource Development
44.  Ajay Tamta: Textiles       
45.  Krishna Raj: Women & Child Development
46.  Mansukh L. Mandaviya: Road Transport & Highways, Shipping, Chemicals & Fertilizers
47.  Anupriya Patel: Health & Family Welfare
48.  C.R. Chaudhary: Consumer Affairs, Food & Public Distribution
49.  P.P. Chaudhary: Law & Justice, Electronics & Information Technology
50.  Subhash Ramrao Bhamre: Defence
 
NNN
 
ADVERTISEMENT
 

India-Mexico Joint Statement

ADVERTISEMENT
Following is the text of the Joint Statement issued by India and Mexico in Mexico City on Wednesday during Prime Minister Narendra Modi's visit to Mexico:
 
1.At the invitation of His Excellency Mr. Enrique Peña Nieto, President of the United Mexican States, His Excellency Mr. Narendra Modi, Prime Minister of India paid a working visit to Mexico on 8th June 2016, with the objective to continue the dialogue held by the two leaders on the margins of the 70thregular session of the United Nations General Assembly on 28th September 2015.
 
2.The leaders recognized the opportunities to define the path of the India-Mexico Privileged Partnership for the 21st Century that allows the growth of bilateral relations in economic field, in science and technology and in the most important issues of the global agenda reflecting a broad convergence of long-term political, economic and strategic goals.
 
3.President Enrique Peña Nieto elaborated on the structural reforms undertaken in Mexico to promote economic growth and development. On his part, Prime Minister Mr. Narendra Modi highlighted the initiatives undertaken by his Government for the economic growth and the improvement of standard of living of the people.
 
In this context, both leaders:
 
Political Dialogue
 
4.Instructed the Foreign Ministers of both countries to develop the roadmap of the Privileged Partnership suitable for the 21stCentury, in the framework of the Seventh Mexico-India Joint Commission Meeting to be held in Mexico in 2016.
 
5.Look forward to the results of the Sixth Meeting of the Joint Committee on Science and Technology, and the Fourth Meeting of the High Level Group on Trade, Investment and Cooperation, which will be held in Mexico during the second half of 2016.
 
6.The two countries will update the bases of cooperation according to a convergent and comprehensive plan, will evaluate the progress made in diverse fields and will set new objectives and themes to strengthen the agenda of bilateral relations.
 
7.Had a detailed exchange of views on the regional issues of mutual interest, including the political and economic developments in Latin America, the CELAC and the Pacific Alliance, as well as the current situation in the Asia-Pacific region.
 
Economic Partnership
 
8.Underscored the increasing importance of diversifying the economic exchanges to promote trade and investment to a level corresponding to their true potential.
 
9.Stressed the necessity of developing a greater connectivity between the two countries and encouraging cooperation in the infrastructure sector, among small and medium enterprises, in pharmaceutical products, in energy, in the automobile sector, in Information and Communication Technology, in agriculture, in food processing and in other related sectors.
 
10.Noted with satisfaction the growing interest for investment of the Indian companies in the energy sector - attracted by the structural reforms carried out in Mexico, as well as the opportunities for Mexican companies in the Indian market.
 
11.Agreed that cooperation is key to promote the investment and the use of solar energy. The two sides agreed to explore ways and means to boost the objectives of the International Solar Alliance.
 
ADVERTISEMENT
12.Stressed the importance of promoting increased exchanges between the peoples of the two countries for better understanding and strengthening of bilateral links in the areas of culture, education and tourism.
 
Bilateral Cooperation
 
13.Exchanged points of views and welcomed the opportunities offered by the convergence between the National Digital Strategy of Mexico and the Digital India Initiative, which share common objectives.
 
14.Welcomed collaboration in space science, earth observation, climate and environmental studies, and the efficient use of space-related resources available in India as well as in Mexico for remote sensing, advance warning for disaster prevention and launch of satellites between the Mexican Space Agency (AEM) and the Indian Space Research Organization (ISRO).
 
15.Considering that both countries have huge diaspora communities abroad, the Leaders agreed on exchanging views, information and share best practices with respect to the participation of networks, organizations and individuals in their diasporas in the development of communities of their origin and their residence, as well as for the welfare and protection of their respective nationals in foreign countries.
 
Dialogue on Global Affairs
 
16.Pledged to continue promoting the shared goals of nuclear disarmament and non-proliferation as solutions with multilateral perspective, as well as to continue promoting cooperation on international security issues.
 
17.Reiterated their strong condemnation of terrorism in all its forms and manifestations.
 
18.Reaffirmed the importance to have an effectivemultilateral system, with the United Nations at its core, and agreed on the importance of continuing supporting the progress in the process of comprehensive reforms of the United Nations Security Council.
 
19.Noted productive and substantive cooperation in the context of their participation in G-20.
 
20.Welcomed with satisfaction the successful conclusion of the Climate Change Conference held in Paris in December 2015 and applauded the signing by both countries of the Paris Agreement on April 22, 2016. They committed to ratify the Paris Agreement as soon as possible, as well as to develop new and renewable sources of energy to meet the developmental challenges of their respective countries.
 
21.President Enrique Peña Nieto cordially invited the Indian Prime Minister to visit Mexico again on a State visit in the near future. Similarly, Prime Minister Modi invited President Peña Nieto to pay a State visit to India. They agreed that suitable dates would be worked out through diplomatic channels.
 
NNN
ADVERTISEMENT
 

India-US Joint Statement

Prime Minister Narendra Modi meeting US President Barack Obama in the Oval Office at White House, in Washington DC, on June 7, 2016.
Prime Minister Narendra Modi meeting US President Barack Obama in the Oval Office at White House, in Washington DC, on June 7, 2016.
The following is the text of the Joint Statement, titled "The United States and India: Enduring Global Partners in the 21st Century", issued by India and the United States during Prime Minister Narendra Modi's visit here today:
 
1) The Prime Minister of India Narendra Modi and the President of the United States of America Barack Obama met today in the White House during an official working visit of Prime Minister Modi to the United States.  Marking their third major bilateral summit, the leaders reviewed the deepening strategic partnership between the United States and India that is rooted in shared values of freedom, democracy, universal human rights, tolerance and pluralism, equal opportunities for all citizens, and rule of law. They pledged to pursue new opportunities to bolster economic growth and sustainable development, promote peace and security at home and around the world, strengthen inclusive, democratic governance and respect for universal human rights, and provide global leadership on issues of shared interest.  
 
2) The leaders welcomed the significant progress made in bilateral relations between India and the United States during their tenure, in accordance with the roadmaps set out in the Joint Statements issued during Prime Minister Modi’s visit to the United States in September 2014 and President Obama’s visit to India in January 2015. The leaders affirmed the increasing convergence in their strategic perspectives and emphasized the need to remain closely invested in each other’s security and prosperity.  
 
Advancing U.S.-India Global Leadership on Climate and Clean Energy
 
3) The steps that the two Governments have taken in the last two years through the U.S.-India Contact Group, including by addressing the nuclear liability issue, inter alia, through India’s ratification of the Convention on Supplementary Compensation for Nuclear Damage, have laid a strong foundation for a long-term partnership between U.S. and Indian companies for building nuclear power plants in India. Culminating a decade of partnership on civil nuclear issues, the leaders welcomed the start of preparatory work on site in India for six AP 1000 reactors to be built by Westinghouse and noted the intention of India and the U.S. Export-Import Bank to work together toward a competitive financing package for the project. Once completed, the project would be among the largest of its kind, fulfilling the promise of the U.S.-India civil nuclear agreement and demonstrating a shared commitment to meet India’s growing energy needs while reducing reliance on fossil fuels.  Both sides welcomed the announcement by the Nuclear Power Corporation of India Ltd, and Westinghouse that engineering and site design work will begin immediately and the two sides will work toward finalizing the contractual arrangements by June 2017.  
 
4) The United States and India share common climate and clean energy interests and are close partners in the fight against climate change. Leadership from both countries helped galvanize global action to combat climate change and culminated in the historic Paris Agreement reached last December. Both countries are committed to working together and with others to promote full implementation of the Paris Agreement to address the urgent threats posed by climate change. India and the United States recognize the urgency of climate change and share the goal of enabling entry into force of the Paris Agreement as early as possible. The United States reaffirms its commitment to join the Agreement as soon as possible this year. India similarly has begun its processes to work toward this shared objective. The leaders reiterated their commitment to pursue low greenhouse gas emission development strategies in the pre-2020 period and to develop long-term low greenhouse gas emission development strategies. In addition, the two countries resolved to work to adopt an HFC amendment in 2016 with increased financial support from donor countries to the Multilateral Fund to help developing countries with implementation, and an ambitious phasedown schedule, under the Montreal Protocol pursuant to the Dubai Pathway. The leaders resolved to work together at the upcoming International Civil Aviation Organization Assembly to reach a successful outcome to address greenhouse gas emissions from international aviation. Further, the two countries will pursue under the leadership of the G20 strong outcomes to promote improved heavy-duty vehicle standards and efficiency in accordance with their national priorities and capabilities.  
 
5) The leaders welcomed the signing of an MOU to Enhance Cooperation on Energy Security, Clean Energy and Climate Change, and an MOU on Cooperation in Gas Hydrates.  
 
6) Reflecting Prime Minister Modi’s call to embrace wildlife conservation as a development imperative, the leaders welcomed the signing of an MOU to enhance cooperation on Wildlife Conservation and Combating Wildlife Trafficking.  
 
Clean Energy Finance
 
ADVERTISEMENT
7) The United States supports the Government of India’s ambitious national goals to install 175 GW of renewable power which includes 100 GW from solar power.   
 
8) The United States welcomes the launch of the International Solar Alliance (ISA), recognizes the critical role it can play in the development and deployment of solar power, and intends pursuing membership in the ISA. To this end, and to strengthen ISA together, the United States and India will jointly launch the third Initiative of the ISA which will focus on off-grid solar for energy access at the Founding Conference of ISA in September, 2016 in India. The United States also remains committed, with other developed countries, to the goal of jointly mobilizing $100 billion per year by 2020 to address the needs of developing countries in the context of meaningful mitigation and adaptation action.  
 
9) The United States is committed to bring to bear its technical capacity, resources and private sector, and is jointly launching with India new efforts, to spur greater investment in India’s renewable energy sector, including efforts that can serve as a model for other ISA Member Countries. In particular, the United States and India today are announcing: the creation of a $20 million U.S.-India Clean Energy Finance (USICEF) initiative, equally supported by the United States and India, which is expected to mobilize up to $400 million to provide clean and renewable electricity to up to 1 million households by 2020; a commitment to establish the U.S.-India Clean Energy Hub as the coordinating mechanism to focus United States Government efforts that, in partnership with leading Indian financial institutions, will increase renewable energy investment in India; a $40 million U.S.- India Catalytic Solar Finance Program, equally supported by the United States and India, that, by providing needed liquidity to smaller-scale renewable energy investments, particularly in poorer, rural villages that are not connected to the grid, could mobilize up to $1 billion of projects; the expansion of handholding support to Indian utilities that are scaling up rooftop solar and continuation of successful cooperation with USAID on “Greening the Grid”. 
 
10) The United States and India also remain committed to the goals of Mission Innovation, which they jointly launched during COP-21 in Paris to double their respective clean energy research and development (R&D) investment in five years. Toward this end, the two leaders reaffirmed their commitment to cooperate on research and development, including through the announcement of an upcoming $30 million public-private research effort in smart grid and grid storage.   
 
Strengthening Global Nonproliferation
 
11)  The President thanked the Prime Minister for his substantive contribution to and active participation in 2016 Nuclear Security Summit in Washington, D.C., and welcomed his offer to host a Summit on Countering Weapons of Mass Destruction Terrorism in 2018.   The United States and India will work together to combat the threat of terrorists accessing and using chemical, biological, nuclear and radiological materials.  
 
12) Recalling their shared commitment to preventing proliferation of weapons of mass destruction and their means of delivery, the leaders looked forward to India’s imminent entry into the Missile Technology Control Regime. President Obama welcomed India’s application to join the Nuclear Suppliers Group (NSG), and re-affirmed that India is ready for membership. The United States called on NSG Participating Governments to support India’s application when it comes up at the NSG Plenary later this month.  The United States also re-affirmed its support for India’s early membership of the Australia Group and Wassenaar Arrangement.  
 
Securing the Domains: Land, Maritime, Air, Space, and Cyber
 
13) The leaders applauded the completion of a roadmap for cooperation under the 2015 U.S.-India Joint Strategic Vision for the Asia-Pacific and Indian Ocean Region, which will serve as a guide for collaboration in the years to come. They resolved that the United States and India should look to each other as priority partners in the Asia-Pacific and the Indian Ocean region.   
 
14) They welcomed the inaugural meeting of the Maritime Security Dialogue. Owing to mutual interest in maritime security and maritime domain awareness, the leaders welcomed the conclusion of a technical arrangement for sharing of maritime “White Shipping” information.  
 
15) The leaders affirmed their support for U.S.-India cooperation in promoting maritime security. They reiterated the importance they attach to ensuring freedom of navigation and overflight and exploitation of resources as per international law, including the United Nations Convention on the Law of the Sea, and settlement of territorial disputes by peaceful means.  
 
16) The leaders applauded the enhanced military to military cooperation between the two countries especially in joint exercises, training and Humanitarian Assistance and Disaster Relief (HA/DR). They expressed their desire to explore agreements which would facilitate further expansion of bilateral defense cooperation in practical ways. In this regard, they welcomed the finalization of the text of the Logistics Exchange Memorandum of Agreement (LEMOA).
 
17) Noting that the U.S.-India defense relationship can be an anchor of stability, and given the increasingly strengthened cooperation in defense, the United States hereby recognizes India as a Major Defense Partner.  As such:
 
The United States will continue to work toward facilitating technology sharing with India to a level commensurate with that of its closest allies and partners. The leaders reached an understanding under which India would receive license-free access to a wide range of dual-use technologies in conjunction with steps that India has committed to take to advance its export control objectives.
In support of India’s Make In India initiative, and to support the development of robust defense industries and their integration into the global supply chain, the United States will continue to facilitate the export of goods and technologies, consistent with U.S. law, for projects, programs and joint ventures in support of official U.S.-India defense cooperation.   
18) The leaders also committed to enhance cooperation in support of the Government of India’s Make In India Initiative and expand the co-production and co-development of technologies under the Defense Technology and Trade Initiative (DTTI).  They welcomed the establishment of new DTTI working groups to include agreed items covering  Naval Systems, Air Systems, and other Weapons Systems. The leaders announced the finalization of the text of an Information Exchange Annex under the Joint Working Group on Aircraft Carrier Technology Cooperation.  
 
19) President Obama thanked Prime Minister Modi for his government’s support for the Defense POW/MIA Accounting Agency (DPAA) missions in India, including a recovery mission that resulted in the recent repatriation of remains of the United States Service Members missing since the Second World War. The leaders announced their commitment to future DPAA? missions.  
 
20) As space faring nations, India and the United States acknowledge that outer space should be an ever expanding frontier of human endeavour, and look forward to deepening their cooperation on earth observation, Mars exploration, space education and manned space flight. The leaders welcomed the progress toward establishment of an ISRO-NASA  Heliophysics Working Group as well as toward finalization of a Memorandum of Understanding for exchange of earth observation satellite data.  
 
21) The leaders emphasized that cyberspace enables economic growth and development, and reaffirmed their commitment to an open, interoperable, secure, and reliable Internet, underpinned by the multistakeholder model of Internet governance.  They committed to deepen cooperation on cybersecurity and welcomed the understanding reached to finalize the Framework for the U.S.-India Cyber Relationship in the near term.  They committed to enhance cyber collaboration on critical infrastructure, cybercrime, and malicious cyber activity by state and non-state actors, capacity building, and cybersecurity research and development, and to continue discussions on all aspects of trade in technology and related services, including market access.  They have committed to continue dialogue and engagement in Internet governance fora, including in ICANN, IGF and other venues, and to support active participation by all stakeholders of the two countries in these fora. The leaders committed to promote stability in cyberspace based on the applicability of international law including the United Nations Charter, the promotion of voluntary norms of responsible state behavior during peacetime, and the development and implementation of practical confidence building measures between states.  
 
22) In this context, they affirmed their commitment to the voluntary norms that no country should conduct or knowingly support online activity that intentionally damages critical infrastructure or otherwise impairs the use of it to provide services to the public; that no country should conduct or knowingly support activity intended to prevent national computer security incident response teams from responding to cyber incidents, or use its own teams to enable online activity that is intended to do harm; that every country should cooperate, consistent with its domestic law and international obligations, with requests for assistance from other states in mitigating malicious cyber activity emanating from its territory; and that no country should conduct or knowingly support ICT-enabled theft of intellectual property, including trade secrets or other confidential business information, with the intent of providing competitive advantages to its companies or commercial sectors.  
 
Standing Together Against Terrorism and Violent Extremism
 
23) The leaders acknowledged the continued threat posed to human civilization by terrorism and condemn the recent terrorist incidents from Paris to Pathankot, from Brussels to Kabul. They resolved to redouble their efforts, bilaterally and with other like-minded countries, to bring to justice the perpetrators of terrorism anywhere in the world and the infrastructure that supports them.  
 
24) Building on the January 2015 U.S.-India Joint Statement commitment to make the U.S.-India partnership a defining counterterrorism relationship for the 21st Century, as well as the September 2015 U.S.-India Joint Declaration on Combatting Terrorism,  the leaders announced further steps to deepen collaboration against the full spectrum of terrorist threats.  
 
25) The leaders committed to strengthen cooperation against terrorist threats from extremist groups, such as Al-Qa’ida, Da’esh/ISIL, Jaish-e Mohammad, Lashkar-e-Tayyiba, D Company and their affiliates, including through deepened collaboration on UN terrorist designations. In this context, they directed their officials to identify specific new areas of collaboration at the next meeting of U.S.–India Counterterrorism Joint Working Group.  
 
26) Recognizing an important milestone in the U.S.-India counterterrorism partnership, the leaders applauded the finalization of an arrangement to facilitate the sharing of terrorist screening information. They also called for Pakistan to bring the perpetrators of the 2008 Mumbai and 2016 Pathankot terrorist attacks to justice.  
 
27) The leaders affirmed their support for a UN Comprehensive Convention on International Terrorism that advances and strengthens the framework for global cooperation and reinforces that no cause or grievance justifies terrorism.  
 
Bolstering Economic and Trade Ties
 
28) The leaders highlighted the strong and expanding economic relationship between the United States and India and committed to support sustainable, inclusive, and robust economic growth, and common efforts to stimulate consumer demand, job creation, skill development and innovation in their respective countries.  
 
29) In order to substantially increase bilateral trade, they pledged to explore new opportunities to break down barriers to the movement of goods and services, and support deeper integration into global supply chains, thereby creating jobs and generating prosperity in both economies. They look forward to the second annual Strategic and Commercial Dialogue in India later this year to identify concrete steps in this regard. They also commended the increased engagement on trade and investment issues under the Trade Policy Forum (TPF) and encouraged substantive results for the next TPF later this year. They welcomed the engagement of U.S. private sector companies in India’s Smart City program.  
 
ADVERTISEMENT
30) The leaders applauded the strong bonds of friendship between the 1.5 billion peoples of India and the United States that have provided a solid foundation for a flourishing bilateral partnership, noting that two-way travel for tourism, business, and education has seen unprecedented growth, including more than one million travelers from India to the United States in 2015, and similar number from the United States to India.The leaders resolved to facilitate greater movement of professionals, investors and business travelers, students, and exchange visitors between their countries to enhance people-to-people contact as well as their economic and technological partnership.  To this end, they welcomed the signing of an MOU for Development of an International Expedited Traveler Initiative (also known as the Global Entry Program) and resolved to complete within the next three months the procedures for India’s entry into the Global Entry Program. 
 
31) The leaders recognized the fruitful exchanges in August 2015 and June 2016 on the elements required in both countries to pursue a U.S.-India Totalization Agreement and resolved to continue discussions later this year.  
 
32) Recognizing the importance of fostering an enabling environment for innovation and empowering entrepreneurs, the United States welcomes India’s hosting of the 2017 Global Entrepreneurship Summit.  
 
33) The leaders welcomed the enhanced engagement on intellectual property rights under the High Level Working Group on Intellectual Property and reaffirmed their commitment to use this dialogue to continue to make concrete progress on IPR issues by working to enhance bilateral cooperation among the drivers of innovation and creativity in both countries. 
 
34) The United States welcomes India’s interest in joining the Asia Pacific Economic Cooperation forum, as India is a dynamic part of the Asian economy.  
 
Expanding Cooperation: Science & Technology and Health
 
35) The leaders affirmed their nations’ mutual support in exploring the most fundamental principles of science as embodied in the arrangement reached to cooperate on building a Laser Interferometer Gravitational Wave Observatory (LIGO) in India in the near future and welcomed the formation of the India-U.S. Joint Oversight Group to facilitate agency coordination of funding and oversight of the project. 
 
36) The leaders look forward to India’s participation at the September 2016 Our Ocean Conference in Washington, D.C. as well as holding of the first India-U.S. Oceans Dialogue later this year, to strengthen cooperation in marine science, ocean energy, managing and protecting ocean biodiversity, marine pollution, and sustainable use of ocean resources.  
 
37) The leaders reaffirmed their commitment to the Global Health Security Agenda and the timely implementation of its objectives.  The Prime Minister noted India's role on the Steering Group and its leadership in the areas of anti-microbial resistance and immunization. The President noted the United States’ commitment to support, undergo, and share a Joint External Evaluation in collaboration with the World Health Organization. 
 
38) The leaders recognized the global threat posed by multi-drug-resistant tuberculosis (MDR-TB) and committed to continue collaboration in the area of tuberculosis and to share respective best practices.   
 
39) The leaders noted the growing threat of non-communicable diseases and the urgent need to address the risk factors by, inter alia, promoting healthy lifestyles, controlling sugar and salt intake, promoting physical activity especially among children and youth and strengthening efforts to curb tobacco use. The leaders also reiterated the importance of holistic approaches to health and wellness, and of promoting the potential benefits of holistic approaches by synergizing modern and traditional systems of medicine, including Yoga. 
 
40) The leaders strongly endorsed expansion of the Indo-U.S. Vaccine Action Program, which is fostering public-private research partnerships focused on the development and evaluation of vaccines to prevent tuberculosis, dengue, chikungunya and other globally important infectious diseases.  
 
Global Leadership
 
41) The leaders reaffirmed their resolve to continue working together as well as with the wider international community to augment the capacity of the United Nations to more effectively address the global development and security challenges. With the historic adoption of the 2030 Agenda for Sustainable Development in September 2015, and recognizing its universality, the leaders reaffirmed their commitment to implement this ambitious agenda domestically and internationally and work in a collaborative partnership for the effective achievement of Sustainable Development Goals.  
 
42) The leaders reaffirmed their support for a reformed UN Security Council with India as a permanent member. Both sides committed to ensuring that the Security Council continues to play an effective role in maintaining international peace and security as envisioned in the UN Charter. The leaders are committed to continued engagement on Security Council reform in the UN Intergovernmental Negotiations (IGN) on Security Council Reform.  
 
43) The leaders welcomed the successful convening of the Leaders’ Summit on UN Peacekeeping and committed to deepening engagement on UN peacekeeping capacity-building efforts in third countries, through co-organizing the first UN Peacekeeping Course for African Partners in New Delhi later this year for participants from ten countries in Africa. The leaders also reiterated their support for ongoing reform efforts to strengthen UN peacekeeping operations.  
 
44) Building on their respective bilateral engagements with Africa, such as the U.S.-Africa Leaders Summit and India-Africa Forum Summit, the leaders reflected that the United States and India share a common interest in working with partners in Africa to promote prosperity and security across the continent.  The leaders welcomed trilateral cooperation with African partners, including in areas such as agriculture, health, energy, women's empowerment and sanitation under the Statement of Guiding Principles on Triangular Cooperation for Global Development. They looked forward to opportunities to deepen the U.S.-India global development cooperation in Africa, as well as in Asia and beyond.  
 
Building People-to-People Ties
 
45) Both sides committed to open additional consulates in each other’s country. India will be opening a new consulate in Seattle and the United States will open a new consulate at a mutually agreed location in India.  
 
46) The leaders announced that the United States and India will be Travel and Tourism Partner Countries for 2017, and committed to facilitate visas for each other’s nationals. 
 
47) Reflecting on the strong educational and cultural bonds between the two countries, the leaders welcomed the growing number of Indian students studying in the United States, which increased by 29 percent to nearly 133,000 students in 2014-2015, and looked forward to increased opportunities for American students to study in India. The leaders also appreciated their governments’ joint efforts through the Fulbright-Kalam Climate Fellowship to develop a cohort of climate scientists to confront the shared challenge of global climate change.  
 
48) Recognizing its mutual goal of strengthening greater people-to-people ties, the leaders intend to renew efforts to intensify dialogue to address issues affecting the citizens of both countries that arise due to differences in the approaches of legal systems, including issues relating to cross-country marriage, divorce and child custody.  
 
49) Prime Minister Modi welcomed the United States repatriation of antiquities to India. The leaders also committed to redouble their efforts to combat the theft and trafficking of cultural objects.  
 
50) Prime Minister Modi thanked President Obama for his gracious invitation and warmth of hospitality.  He extended an invitation for President Obama to visit India at his convenience.  
 
NNN
ADVERTISEMENT
 

India-Qatar Joint Statement

Prime Minister Narendra Modi and the Emir of Qatar, Sheikh Tamim Bin Hamad Al Thani, at the delegation level talks, at Emiri Diwan, in Doha, Qatar on June 5, 2016.
Prime Minister Narendra Modi and the Emir of Qatar, Sheikh Tamim Bin Hamad Al Thani, at the delegation level talks, at Emiri Diwan, in Doha, Qatar on June 5, 2016.
Following is the text of the joint statement issued by India and Qatar during the visit of Prime Minister Narendra Modi to Qatar in Doha today:
 
At the invitation of His Highness Sheikh Tamim Bin Hamad Al-Thani, Emir of the State of Qatar, Hon'ble Prime Minister of the Republic of India, Shri Narendra Modi paid a two-day official visit to the State of Qatar from 4-5 June, 2016.
 
His Highness the Emir received Prime Minister Modi on 5 June at the Amiri Diwan and exchanged views on bilateral, regional and multilateral issues of common interest. The wide-ranging discussions were held in a cordial and friendly atmosphere.
During the visit, Prime Minister Modi also met His Excellency Sheikh Abdullah Bin Nasser Bin Khalifa Al-Thani, Prime Minister and Minister of the Interior of the State of Qatar.
 
During the official meetings, the two sides recalled the historical ties between India and Qatar and noted that the mutually beneficial and traditionally close interaction, which has existed between the peoples of the two countries over several generations, had stood the test of time.
 
The leaders of the two sides expressed satisfaction with the current state of bilateral relations underpinned by the regular exchange of high-level visits. They welcomed the conclusion of various agreements/MoUs during the visit of Prime Minister Modi to Qatar. They acknowledged that these agreements and those already existing would strengthen the framework for the consolidation of friendship and cooperation between India and Qatar.
 
Both leaders appreciated the well-functioning bilateral institutional mechanisms in the fields of trade and investment, energy, defence and manpower and emphasized that the sectoral Joint Working Groups should continue to meet regularly to further strengthen cooperation between the two countries. The two sides agreed to constitute an inter-ministerial High Level Joint Committee to regularly review all bilateral matters, as well as regional and global issues of mutual interest.
 
Recognizing the existing goodwill, the two leaders agreed to further broaden and deepen bilateral engagement in diverse fields of mutual interest. They agreed to further enhance high-level political exchanges, defence and security cooperation, trade and economic relations and people-to-people linkages. They stressed upon the need for building a strong partnership for the 21st century between the two countries in keeping with their responsibility for promoting peace, stability and security in the region and the world.
 
Acknowledging that the agreement on Defence Cooperation signed in November 2008 provided the required framework to strengthen bilateral defence ties, the two leaders agreed to provide further impetus to these relations, including through joint exercises and enhanced training of naval, air and land forces, as also in the area of coastal defence. The Qatari side evinced interest in the opportunities offered under the 'Make in India' initiative for joint production of defence equipment in India.
 
The Indian side appreciated Qatar's participation in the International Fleet Review and DEFEXPO in India in February and March 2016, respectively, and the increasing visits of Qatari delegations to India's Naval and Coast Guard establishments. The Qatari side thanked India for its high-level participation, along with an indigenously designed and built guided missile frigate of the Indian Navy during DIMDEX in March 2016, and the regular goodwill visits of the ships of Indian Navy and Coast Guard. The Qatari side expressed appreciation for India's offer to conduct special training programmes for the personnel of Qatar Armed Forces and Coast Guard in India and in Qatar.
 
ADVERTISEMENT
The two leaders agreed to enhance cooperation to strengthen maritime security in the Gulf and the Indian Ocean regions, vital for the security and prosperity of both countries.
 
The two leaders expressed strong condemnation of the phenomenon of international terrorism, reiterating their firm resolve to cooperate together to root out this global menace which threatened all nations and societies. They noted that the spread of terrorist organisations at the global and regional level, and the significant rise in acts of terrorism directly undermined the international peace and security environment and endangered efforts to ensure sustainable growth and development.
 
Both leaders condemned all acts of violence, terrorism and extremism, which cannot be justified under any circumstances, regardless of their motivation, in all their forms and manifestations. They reaffirmed that terrorism could not and should not be associated with any religion, civilisation or ethnic group.
 
The two leaders highlighted the need to isolate the sponsors and supporters of terrorism and agreed that urgent action against all such entities, which support terrorism and use it as an instrument of policy, must be taken.
 
Both sides noted that addressing the menace of global terrorism should be based on a comprehensive approach which should include, but not limited to, countering violent extremism, combating radicalisation and recruitment, disrupting terrorist movements, stopping all sources for financing of terrorism, stopping flow of Foreign Terrorist Fighters, dismantling terrorist infrastructure, and countering terrorist propaganda through the internet.
 
The two sides discussed ways and means to further promote cooperation in cyber security, including prevention of use of cyber space for terrorism, radicalization and for disturbing social harmony. They welcomed exchanges and dialogue between religious scholars and intellectuals of both countries and the organization of conferences and seminars to promote values of peace, tolerance, inclusiveness and welfare, inherent in all religions.
 
Expressing appreciation of their ongoing bilateral cooperation in the area of security, the two leaders agreed to enhance cooperation in counter-terrorism operations, intelligence-sharing, developing best practices and technologies, capacity-building and to strengthen cooperation in law enforcement, anti-money laundering, drug-trafficking and other transnational crimes. The two sides further agreed to take action against illegal transfer of money. Both leaders welcomed the signing of an MOU on cooperation in exchange of intelligence related to money laundering, related crimes and terrorism financing.
 
Both leaders highlighted that countering terrorism required a strong collective action by the global community. They further agreed to strengthen their cooperation in combating terrorism within the relevant multilateral institutions.
 
The two sides described bilateral trade ties as an abiding link between the two countries. Taking note of the excellent trade engagement, with the two countries being among the top trading partners for each other, both sides agreed upon the need to further strengthen these ties, particularly through diversifying the trade basket. They agreed to encourage regular participation in each other’s trade fairs and exhibitions and to facilitate trade promotion measures. The two sides expressed satisfaction at the growing presence of Indian and Qatari companies in each other's market and agreed to further encourage such participation. To promote business to business and tourism linkages, they also agreed to put in place appropriate mechanism for expeditious grant of visas to businessmen and tourists of the two countries.
 
The Qatari side welcomed the participation of Indian companies in the infrastructure development projects in Qatar in preparation for the FIFA 2022 World Cup and the development plans under "Vision 2030 for Qatar”.
 
Prime Minister Modi highlighted the major initiatives taken by the Government of India for ‘Ease of Doing Business’ through simplification and rationalization of existing rules and relaxing of foreign direct investment caps in key areas, including interalia, railways, defence and insurance. Informing about the plans to create world class infrastructure in India through 100 smart cities; metro projects for 50 cities; modern waste management system for 500 cities; affordable healthcare within everyone's reach; sanitation for all by 2019; and a roof over every head by 2022, Prime Minister Modi invited Qatar to be a partner in India’s growth story.
 
Expressing his appreciation for Prime Minister Modi's vision to further accelerate India’s growth and development, His Highness the Emir expressed his confidence in India’s growth narrative. Noting their strong potential to provide Indian economy a positive thrust for growth, His Highness the Emir lauded the new initiatives of Prime Minister Modi including, "Start Up India", "Make in India", "Smart City”, and "Clean India” etc.
 
Recognizing the high growth rate and the existing potential of the Indian economy, the importance of partnering in India’s growth and acknowledging Qatar's significant investment capacity, the two sides discussed various avenues/instruments for Qatari investments in India, particularly in different asset classes and various infrastructure sectors as well as the disinvestments of Indian Public Sector Undertakings.
 
The two sides agreed to increase the level of participation in infrastructure projects in both countries. They further deliberated upon the importance of cooperation between Qatar Investment Authority and National Infrastructure and Investment Fund set up by the Government of India. The two leaders welcomed the signing of the framework agreement for participation of the Qatari institutional investors in the National Infrastructure and Investment Fund.
 
The two sides agreed for regular and timely exchange of information on available investment opportunities. Both sides also recognized the need for arranging regular meetings between Qatar Investment Authority and relevant Indian authorities and public and private sector companies.
 
The two sides expressed satisfaction at the growing bilateral trade in the energy sector, with Qatar being the largest supplier of LNG and LPG to India. The Indian side appreciated Qatar's contribution to India's energy security.
 
The two sides agreed to focus on enhancing cooperation in energy, covering the areas of training and human resources development and cooperation in research and development and through promotion of joint ventures in petrochemical complexes and cooperation in joint exploration in India and other countries.
 
ADVERTISEMENT
The Indian side highlighted the interest of its energy companies to pursue opportunities of mutual interest in Qatar, with Qatar Petroleum and other companies, in order to jointly explore new fields as well development of discovered oil and gas assets and exploit the existing resources of natural gas and crude oil in Qatar. The Indian side invited Qatar to invest in India’s exploration & production sector by bidding for the exploration blocks in India under the new "Hydrocarbon Exploration and Licensing” Policy and "Discovered Small Fields” Policy. The Indian side invited Qatar to participate in the second phase of the strategic reserves storage facility being created in India.
 
The two leaders deliberated upon the need for strengthening bilateral cooperation in the financial services sector, including banking, insurance and capital markets. They decided to expand cooperation between the financial institutions of the two countries like Securities and Exchange Board of India and the respective Central Banks.
 
Recognising that India offers world class medical treatment facilities at competitive cost, the two sides agreed to work towards enhancing cooperation in the health sector, including in the areas of health services, exchange of health personnel, health education and pharmaceuticals. Both leaders welcomed the signing of an MoU on bilateral Cooperation in the Field of Health between the Government of the State of Qatar and the Government of the Republic of India.
 
The Qatari side appreciated the initiative taken by Prime Minister Modi leading to the formation of International Solar Alliance. They acknowledged the importance of this Alliance in advancing new solar technologies worldwide.
 
The two leaders emphasized that the overwhelming response to the International Day of Yoga was a reflection of the global community's desire to come together to seek a balanced, healthier and sustainable future for the world. Prime Minister Modi thanked Qatar for its support to the First International Day of Yoga on 21 June 2015, including through the issue of commemorative stamps by the Qatar Post to mark the occasion.
 
The two leaders noted the role cultural exchanges played in bringing the peoples of India and Qatar together. The two sides agreed to expand bilateral cultural and sports cooperation, including frequent exchange of cultural groups and sports teams, and by collaborating in the field of cinema. Prime Minister Modi expressed appreciation to the Qatar Museums for its decision to celebrate Qatar-India Year of Culture in 2019. Both leaders welcomed the signing of the Agreement of Cooperation and Mutual Assistance in Custom Matters; the MoU on Tourism Cooperation; and the First Executive Programme for the MoU in the field of Youth and Sports between the Government of the State of Qatar and the Government of the Republic of India.
 
The two leaders noted that people-to-people contacts were at the heart of India-Qatar relations and both sides would continue to nurture these relations. HH the Emir appreciated the role and contribution of the Indian community for the development and progress of the State of Qatar. The Qatari side briefed the Indian side on the reform in labour laws which would protect the interest of skilled and unskilled labour in Qatar. Prime Minister Modi conveyed sincere thanks to the Qatari leadership for hosting the Indian community and for ensuring their continued welfare and safety. Both leaders welcomed the signing of the MoU for Cooperation in Skill Development and Recognition of Qualifications.
 
The two leaders exchanged views on regional and international issues of mutual interest, including the security situation in West Asia, Middle East and South Asia. They also expressed grave concern regarding security situation in Syria, Iraq, Libya and Yemen and reiterated the importance of peaceful resolution of these issues through dialogue and political negotiations.
 
In the context of the UN reforms, both leaders emphasized the importance of an effective multilateral system, centred on a UN reflective of contemporary realities, as a key factor in tackling global challenges. They stressed upon the urgent need to pursue UN reforms, including of the Security Council through an expansion in both categories of its membership, to make it more representative, credible and effective.
 
Prime Minister Modi expressed his sincere gratitude to His Highness the Emir for the warm welcome and gracious hospitality. He invited His Highness the Emir to pay an official visit to India at mutually convenient time, which was gladly accepted.
 
NNN
 
ADVERTISEMENT
 

India-Saudi Arabia Joint Statement

Prime Minister Narendra Modi meeting King Salman bin Abdulaziz Al Saud of Saudi Arabia, at the Royal Court, in Riyadh, on April 3, 2016
Prime Minister Narendra Modi meeting King Salman bin Abdulaziz Al Saud of Saudi Arabia, at the Royal Court, in Riyadh, on April 3, 2016
The following is the text of the Joint Statement issued by India and Saudi Arabia on April 3 during Prime Minister Narendra Modi's visit to Riyadh:
 
1.      At the invitation of the Custodian of the Two Holy Mosques His Majesty King Salman bin Abdulaziz Al Saud, Hon'ble Prime Minister of the Republic of India, Shri Narendra Modi paid a two-day official visit to the Kingdom of Saudi Arabia from 2-3 April 2016.
 
2.      The Custodian of the Two Holy Mosques received Prime Minister Shri Narendra Modi on 3 April at the Royal Court. The two leaders held discussions in the spirit of the strong friendship that binds the two countries and their peoples. During the visit, Prime Minister Modi also met with His Royal Highness Prince Mohammed bin Naif bin Abdulaziz Al-Saud, Crown Prince, Deputy Premier & Minister of Interior and His Royal Highness Prince Mohammed bin Salman bin Abdulaziz Al Saud, Deputy Crown Prince, Second Deputy Premier & Minister of Defence. Prime Minister Modi also received Minister of Foreign Affairs and Minister of Health & Chairman of the Executive Board of Saudi Aramco.
 
3.      The Custodian of the Two Holy Mosques King Salman bin Abdulaziz and Prime Minister Modi exchanged views on bilateral, regional and multilateral issues of mutual interest. The two leaders underlined the close and friendly bilateral ties, deep-rooted in shared history and sustained and nourished through growing economic partnership, multi-faceted cooperation and vibrant people to people contacts. The wide-ranging and constructive discussions were held in a cordial atmosphere and enabled better understanding and appreciation of each other’s concerns and perspectives, recognizing the close interlinkage of the stability and security of the Gulf region and the Indian subcontinent and the need for maintaining a secure and peaceful environment for the development of the countries of the region.
 
4.      Both leaders expressed appreciation for the successful transformation of bilateral relationship in political, economic, security, defence, manpower and people to people exchanges, in recent years, which have enriched bilateral ties. They expressed satisfaction at the regular exchange of high-level visits between the two countries, underlining that the Delhi Declaration (2006) and the Riyadh Declaration (2010) elevated the mutually beneficial bilateral relations to the level of 'Strategic Partnership'.
 
5.      Cognizant of their responsibility for promoting peace, stability and security in the region and the world, the two leaders emphasized the importance of further cementing bilateral strategic engagement, including in the areas of security and defence cooperation, to serve the common interests of the two countries and their peoples.
 
6.      Prime Minister Modi acknowledged that the MoU on Defence Cooperation signed during the visit of His Majesty King Salman bin Abdulaziz Al Saud to India in February 2014 as the then Crown Prince, Deputy Premier and Defence Minister of the Kingdom of Saudi Arabia was an important milestone in strengthening the strategic partnership between the two countries. The two leaders agreed upon the need to intensify bilateral defence cooperation, through exchange of visits by military personnel and experts, conduct of joint military exercises, exchange of visits of ships and aircrafts and supply of arms and ammunition and their joint development. They also welcomed the decision for convening of the second meeting of Joint Committee on Defence Cooperation in Riyadh to follow up on the visit of Prime Minister Modi.
 
7.      The two leaders agreed to enhance cooperation to strengthen maritime security in the Gulf and the Indian Ocean regions, vital for the security and prosperity of both countries. They further agreed to promote bilateral collaboration for humanitarian assistance and evacuation in natural disasters and conflict situations.
 
8.      The two leaders expressed strong condemnation of the phenomenon of terrorism in all its forms and manifestations, irrespective of who the perpetrators were and of their motivations.
 
9.      Affirming that the menace of extremism and terrorism threatens all nations and societies, the two leaders rejected totally any attempt to link this universal phenomenon to any particular race, religion or culture. They called on all states to reject the use of terrorism against other countries; dismantle terrorism infrastructures where they happen to exist and to cut off any kind of support and financing to the terrorists operating and perpetrating terrorism from their territories against other states; and bring perpetrators of acts of terrorism to justice.
 
10.  The two leaders agreed to further strengthen cooperation in combating terrorism, both at the bilateral level and within the multilateral system of the UN. The two leaders called upon the international community to strengthen multilateral regimes to effectively address the challenges posed by terrorism. The two sides agreed to work together towards the adoption of India’s proposed Comprehensive Convention on International Terrorism in the United Nations. The Prime Minister lauded Kingdom’s efforts at fighting terrorism in all its aspects and its active participation in international efforts towards this end. The Indian side was briefed on the Kingdom’s initiative in bringing together Islamic Alliance against terrorism.
 
11.  Acknowledging and commending their strong bilateral security cooperation, the two leaders agreed to enhance cooperation in counter-terrorism operations, intelligence sharing and capacity-building and to strengthen cooperation in law enforcement, anti-money laundering, drug-trafficking and other transnational crimes. They welcomed the signing of an MOU on cooperation in exchange of intelligence related to money laundering, related crimes and terrorism financing. The two sides further agreed to take action against illegal transfer of money.
 
12.  Both leaders agreed to promote cooperation in cyber security, including prevention of use of cyber space for terrorism, radicalization and for disturbing social harmony. The two leaders directed their relevant agencies to coordinate efforts to counter radicalization and misuse of religion by groups and countries for inciting hatred, perpetrating and justifying terrorism for pursuing political aims. The two leaders welcomed exchanges and dialogue between religious scholars and intellectuals of both countries and the organization of conferences and seminars to promote values of peace, tolerance, inclusiveness and welfare, inherent in all religions.
 
13.  Reiterating the significance of regular bilateral interactions in reinforcing the momentum for bilateral cooperation, the leaders noted with satisfaction the increase in high-level exchanges between the two countries in recent years. They underlined the importance of regular exchange of visits, including at the levels of ministers and senior officials.
 
14.  Both leaders appreciated the well-functioning bilateral institutional mechanisms in the field of trade & investment, energy, defence and manpower. They noted that new and potential areas of cooperation identified during the meetings held under these mechanisms had a constructive effect on the expanding bilateral ties and further called for effective implementation of the decisions made under the framework of these mechanisms.
 
15.  The two leaders welcomed the positive outcomes of the 11th session of the Joint Commission Meeting held in New Delhi in May 2015 and its Review Meeting held in Riyadh in December 2015. The two leaders mandated the Saudi-India Joint Commission to continue follow up of the decisions taken at the highest levels for cementing the bilateral strategic partnership.
 
ADVERTISEMENT
16.  Acknowledging the on-going positive transformation of the economies of India and Saudi Arabia, the two leaders emphasized the importance of expanding trade and investment ties to drive the strategic engagement forward. They directed their Finance and Trade Ministers to work together to find ways and means to substantially increase the flow of bilateral investments and growth of trade ties.
 
17.  Acknowledging the steady increase in bilateral trade over the last few years, the two leaders expressed satisfaction at the USD 39 billion trade in 2014-15. Taking note of the excellent trade and economic engagement, with the two countries being among the top trading partners for each other, the two leaders agreed upon the need to further strengthen these ties, particularly through diversifying non-oil trade.
 
18.  Both leaders expressed satisfaction at the growing presence of Indian and Saudi companies in each other's market and agreed to further encourage trade promotion measures and participation in fairs and exhibitions. They welcomed the meeting of Saudi India Business Council in New Delhi in December 2015 and agreed that Council was a useful platform for furthering trade and economic cooperation.
 
19.  The two sides conveyed satisfaction at the holding of the 4th India GCC Industrial Forum at King Abdullah Economic City, Jeddah in November 2015. The Saudi side thanked India for active participation of a large number of Indian companies in the International Fairs and Exhibitions held in Riyadh and Jeddah.
 
20.  The Custodian of the Two Holy Mosques King Salman Bin Abdulaziz lauded the strong growth shown by Indian economy and expressed appreciation for Prime Minister Modi's remarkable vision for the future of the country. He commended Prime Minister Modi’s worthy initiatives of "Start Up India", "Make in India", "Smart City”, and "Clean India”, noting their strong potential to provide Indian economy a positive thrust for growth.
 
21.  The Indian side highlighted the key initiatives taken by the Government of India to improve the ease of doing business in the country and India's key efforts to simplify and rationalize existing rules and relax the foreign direct investment norms in key areas, including railways, defence and insurance. Inviting Saudi Arabia to be a partner in India's growth story, Prime Minister Modi encouraged Saudi Aramco, SABIC and other Saudi companies to invest in the infrastructure sector in India and to participate in projects creating mega industrial manufacturing corridors, smart cities as well as the Digital India and Start up India programmes.
 
22.  The Saudi side expressed its interest in investing in infrastructure development in India, especially in priority areas such as railways, roads, ports, and shipping. The Saudi side welcomed interest of Indian side in investing in the Kingdom, especially taking advantage of the competitive investment opportunities offered by the Saudi economic and Industrial cities.
 
23.  Both leaders also welcomed the signing of the framework agreement between the General Investment Authority in Saudi Arabia and Invest India aimed at facilitating investments by the private sectors in the two countries.
 
24.  Keeping in view the importance of energy security as a key pillar of the strategic partnership, the two leaders expressed satisfaction at their growing bilateral trade in the energy sector, acknowledging Saudi Arabia as the largest supplier of crude oil to India.
 
25.  The two leaders agreed to transform the buyer-seller relationship in the energy-sector to one of deeper partnership focusing on investment and joint ventures in petrochemical complexes, and cooperation in joint exploration in India, Saudi Arabia and in third countries. The two sides also agreed to focus on areas of training and human resources development and cooperation in research and development in the energy sector. In this regard, the two leaders expressed the need for regular meetings under the umbrella of India-Saudi Arabia Ministerial Energy Dialogue.
 
26.  The two leaders agreed to strengthen cooperation between educational institutions, universities and higher research institutions of the two countries.
 
27.  Both leaders emphasized the importance of continued promotion of scientific and technological collaboration, including in the areas of renewable energy including solar, Information and Communication technology, space technology, sustainable development, arid agriculture, desert ecology, urban development, healthcare and bio-technology. The two sides further agreed to collaborate on areas of food security.
 
28.  The Saudi side appreciated the initiative taken by the Prime Minister of India leading to the formation of International Solar Alliance. They acknowledged the importance of this Alliance in advancing new solar technologies worldwide.
 
29.  Recognizing the vibrant people to people contacts that provided strong bonds between the two countries, the two leaders lauded the valuable role of the Indian community in Saudi Arabia and its contribution to the progress and development of both India and Saudi Arabia. They welcomed the signing of an agreement on labour cooperation for recruitment of General Category Workers. Both sides also welcomed the establishment of a Joint Working Group on Consular issues under the umbrella of the India-Saudi Arabia Joint Commission to discuss consular issues on a regular basis.
 
30.  Prime Minister Modi conveyed his sincere appreciation for the excellent arrangements made by the Saudi authorities for the comfort of the Haj and Umrah pilgrims from India.
 
31.  The two leaders noted that India and Saudi Arabia have shared civilizational ties over history that are enriched by the movement of goods, peoples and ideas. They believed that this common heritage can be drawn upon to strengthen their convergence on approaching contemporary challenges. A broad approach of humanism and tolerance and a conviction that faith should unite rather than divide can be a positive factor in international relations.
 
32.  The two leaders discussed regional and international issues of mutual interest, including the security situation in West Asia, Middle East and South Asia, in the light of their common interest in the regional and global peace, security and stability. Referring to the earlier declarations with regard to the situations in Yemen and Syria, they called for the implementation of relevant UN Security Council resolutions (2216, 2254 and 2268). They also expressed grave concern regarding security situation in Libya and Iraq. In this regard, they reiterated the importance of peaceful resolution of these issues through dialogue and political negotiations.
 
33.  During their discussions on regional issues, the two sides emphasized the importance of the principle of good neighbourliness, non-interference in internal affairs, respect of independence, sovereignty and territorial integrity and resolution of dispute through peaceful means.
 
34.  The two sides expressed their hope for achieving a just, comprehensive and lasting peace in accordance with the Arab Peace Initiative and the resolutions of international legitimacy, in a way that guarantees the legitimate rights of the Palestinian people, including the establishment of their independent, united and viable state, with East Jerusalem as its capital.
 
35.  Both leaders emphasized the importance of an effective multilateral system, centred on a UN reflective of contemporary realities, as a key factor in tackling global challenges. They stressed upon the urgent need to pursue UN reforms, including of the Security Council through an expansion in both categories of its membership, to make it more representative, credible and effective.
 
36.  The leaders agreed that the visit of Prime Minister Modi to Saudi Arabia helped in further consolidating and deepening the strategic partnership framework and further development of excellent bilateral relations in all spheres, to serve the common interests of the two countries and their peoples.
 
37.  Prime Minister Modi expressed his sincere gratitude to His Majesty the King for the warm welcome and gracious hospitality. He invited His Majesty the King to pay an official visit to India at mutually convenient time, which was gladly accepted.
 
NNN
 
 
 
ADVERTISEMENT
 

India-Russia Joint Statement

Prime Minister Narendra Modi and Russian President Vladimir Putin at the 16th Annual India-Russia Summit at the Kremlin in Moscow, on December 24, 2015.
Prime Minister Narendra Modi and Russian President Vladimir Putin at the 16th Annual India-Russia Summit at the Kremlin in Moscow, on December 24, 2015.
The following is the text of the Joint Statement between India and Russia, "Shared Trust, New Horizons", issued here today during Prime Minister Narendra Modi's visit to Russia:
 
At the invitation of the President of the Russian Federation H.E. Mr. Vladimir Putin, the Prime Minister of the Republic of India H.E. Mr. Narendra Modi paid an official visit to the Russian Federation on 23-24 December 2015 for the bilateral Annual Summit. The two Leaders held extensive and substantive discussions to review progress in bilateral relations since the last Annual Summit and their meeting on the margins of the BRICS Summit in Ufa in July 2015. The interactions between the two Leaders were marked by deep warmth and mutual trust that characterize the special and privileged strategic partnership between Russia and India.
 
Reflecting their continued emphasis on further enhancing bilateral economic and commercial relations, President Putin and Prime Minister Modi jointly addressed CEOs of leading Russian and Indian companies. A number of important agreements in diverse fields of bilateral cooperation, including several commercial agreements between Russian and Indian companies, were signed during the visit. Prime Minister Modi also addressed a gathering of Friends of India including members of the Indian community in Russia.
 
The Leaders expressed satisfaction at continued bilateral exchanges including high-level visits, institutional exchanges and other contacts over the past year that had further strengthened the Russia-India strategic partnership. In particular, the participation of the President of India H.E. Mr. Pranab Mukherjee in the celebrations to mark the 70th Anniversary of Russia’s Victory in the Great Patriotic War exemplified the mutual solidarity, empathy and goodwill between the two countries. A contingent of the Indian Armed Forces also attended the commemoration. The Leaders welcomed continued parliamentary exchanges, especially the visit of the Speaker of the State Duma of the Federal Assembly of the Russian Federation, Mr. Sergey Naryshkin to India in February 2015 for the Russia-India Inter-Parliamentary Commission.
 
The Leaders noted the intensive and effective dialogue between their Ministries, Security Councils and other specialized agencies and specifically mentioned visits to India by Deputy Chairman of the Government of the Russian Federation Dmitry Rogozin (December 2015), Defense Minister of the Russian Federation Sergey Shoigu (January 2015), Head of the Federal Customs Service Andrey Beliyaninov (April 2015), Interior Minister of the Russian Federation Vladimir Kolokoltsev (September 2015) as well as visits to Russia by National Security Adviser of the Republic of India Ajit Doval (May 2015), Minister for External Affairs of the Republic of India Sushma Swaraj for the Inter Governmental Commission on Trade and Economic Cooperation (October 2015) and Defence Minister of the Republic of India Manohar Parrikar for the Inter Governmental Commission on Military and Technical Cooperation (November 2015). They also noted with satisfaction bilateral Ministerial discussions on the margins of major international events, including those between the Russian Minister of Industry and Trade Denis Manturov and Minister of State for Commerce and Industry of the Republic of India Nirmala Sitharaman on the margins of the Saint Petersburg International Economic Forum (June 2015), the Minister of the Russian Federation for Civil Defence, Emergencies and Elimination of Consequences of Natural Disasters Vladimir Puchkov and the Home Minister of the Republic of India Rajnath Singh on the margins of the UN World Conference on Disaster Risk Reduction in Sendai, Japan (March 2015), Minister of Justice of the Russian Federation Alexander Konovalov and Minister for Law and Justice of the Republic of India D.V.Sadananda Gowda on the sidelines of the Fifth Saint Petersburg International Legal Forum (May 2015), and Minister of Energy of the Russian Federation Alexander Novak and Minister of State for Petroleum and Natural Gas of the Republic of India Dharmendra Pradhan on the sidelines of the Sixth OPEC International Seminar in Vienna (June 2015). They further noted with satisfaction the participation of Minister for Science and Technology of the Republic of India, Minister of State for Home Affairs of the Republic of India, Minister of State for Agriculture of the Republic of India and the Chairman of the Standing Committee on External Affairs of the Lok Sabha of the Republic of India at various BRICS meetings organized by Russia as the Chair of BRICS to strengthen mutually beneficial cooperation in diverse fields. 
 
Trade and Investment Cooperation
 
The Sides reconfirmed their commitment to realize the target set at the last Annual Summit, to increase annual bilateral trade and investment and emphasized the need for continued facilitation by both the governments based on regular consultations within the framework of institutional mechanisms as well as speedy implementation of decisions and liberalization of relevant rules and regulations. In this context, the Sides welcomed the agreement reached on liberalization of the travel regime for the businessmen of both States and called for its effective implementation. They also instructed relevant agencies to continue the process of modernization of their bilateral investment agreement.
 
The Sides welcomed the outcomes of the twenty first meeting of the Russian-Indian Intergovernmental Commission (IGC) on Trade, Economic, Scientific, Technological and Cultural Cooperation held in Moscow on October 20, 2015, as well as the decisions of various working groups of the Commission, particularly on trade and economic cooperation, modernization and industrial cooperation. They noted that the joint working group on priority investment projects, which held its third meeting in Moscow in October 2015, had identified several projects and called for early finalization of relevant proposals.
 
Both Sides reiterated their assessment that the "Make in India” initiative provides a new and durable framework for engagement by Russian corporate entities in the fast growing Indian economy as well as noted the efforts made by the Indian Government to improve ease of doing business. In this context the Sides also noted the efforts of the Russian Government in improving business climate in Russia. They welcomed the efforts by companies of both countries to cooperate in this framework in diverse sectors. In this context, the Sides emphasized the role of investment funds to facilitate high-technology investments in Russia and India.
 
The Sides welcomed recent announcement of several major bilateral investment proposals and called on companies in both countries to finalize new and ambitious investment proposals in promising sectors such as oil and gas, pharmaceuticals, chemical industry, mining, machine building, implementation of infrastructure projects, cooperation in railway sector, fertilizer production, automobiles and aircraft construction as well as collaborative ventures in modernizing each other's industrial facilities.
 
They welcomed enhanced interactions between representatives of the business community of Russia and India including the CEOs level interaction during the summit as well as during large trade and business events such as the Saint Petersburg International Economic Forum and the Eastern Economic Forum. They called for continuation of such interactions and noted that India's participation as a partner country in the International Industrial Exhibition INNOPROM 2016 would emphasize the recognized authority of the event as one of the most representative among international events in the field of industry, scientific and technological innovations. Russia’s participation as partner country in India Engineering Sourcing Show 2017 could impart added momentum to bilateral economic relations.
 
The Sides welcomed the successful launch of the Joint Study Group to consider the feasibility of a free trade agreement between the Republic of India and the Member States of the Eurasian Economic Union and the first meeting of the Study Group in Moscow on 31 July 2015. The Sides supported early finalization of a draft Joint Study Group report.
 
The Sides attach great importance to exploring new multi-modal connectivity between their economies to facilitate the movement of bulk goods and commodities as well as trade between the two countries. In this context, they welcomed increased emphasis on implementation of the International North-South Transport Corridor (INSTC), and noted that several meetings including the Stakeholders Meeting, INSTC Council, Expert Level meetings and a meeting of customs agencies had been held over the past few months. They stressed that the INSTC can play a key role in promoting economic integration in the region stretching from the Indian Ocean to the Baltic Sea by creating new centers of growth as well as joint industrial and infrastructure facilities.
The Sides noted that Customs authorities of the two countries had created legal mechanisms for implementing the Green Corridor arrangement and plan to soon launch it in a test mode.
 
The Sides welcomed initiatives to promote direct trade in diamonds between Russia and India, including the increased number of Indian resident companies signing long-term rough diamonds supply contracts with PJSC ALROSA from 9 in 2014 to 12 in 2015. Both Sides also welcomed the creation of a Special Notified Zone (SNZ) at the Bharat Diamond Bourse and the start of diamond viewing by ALROSA Group on its premises. They agreed to further promote the development of SNZ and its rough diamond auctions mechanism.
 
The Sides welcomed the positive outcome of engagements between the phytosanitary and veterinary authorities of both the countries to finalize mutual market access for agricultural and processed food products, including dairy products, which were a new and promising area for development and diversification of bilateral trade. They agreed to continue ongoing consultations between their regulatory authorities and introduce measures to widen the range of such products for bilateral trade.
 
The Sides noted developing cooperation between Russian and Indian commercial banks and an existing scope for its further expansion. Taking into account the important role of banks in settlement of bilateral trade and investment contracts, the Sides express hope for the enhancement by commercial banks of the two countries of their partnership, including establishment of correspondent relations and increasing lending limits. The Sides welcomed the ongoing work, coordinated by the two central banks to promote the use of national currencies in mutual trade and called for continued concerted engagement by relevant regulatory institutions and commercial entities to further facilitate and enhance such trade settlements. 
 
Energy Cooperation
 
The Sides reaffirmed that their cooperation in the peaceful uses of nuclear energy is a cornerstone of the Russia-India strategic partnership. They reiterated their commitment to bilateral agreements on developing cooperation in nuclear energy, including the Strategic Vision for Strengthening Cooperation in Peaceful Uses of Atomic Energy between the Russian Federation and the Republic of India signed in New Delhi on December 11, 2014. They noted with satisfaction continued senior official level interactions between their atomic energy establishments, including under the framework of the three new Joint Working Groups on Nuclear Fuel, Science and Technology and Nuclear Power set up during the last Summit. They appreciated the progress made in the Kudankulam Nuclear Power Project and agreed to expedite the implementation of ongoing and upcoming projects at Kudankulam. The Sides welcomed progress in identifying the second site in India for additional six nuclear reactor units to be set up in cooperation with Russia. They agreed to actively work towards localization of manufacturing in India under the aegis of Make in India and in tandem with the serial construction of nuclear power plants. In this context, they welcomed the finalization of Programme of Action for localization between RosAtom of Russia and the Department of Atomic Energy of India.
 
The Sides welcomed the first meeting of the Joint Study Group for studying the possibility of hydrocarbon pipeline system connecting Russia and India held in Moscow on November 6, 2015 as part of the Programme on Enhanced Cooperation in the Oil and Gas sphere signed in New Delhi in December 2014.
 
The Sides noted the interest of JSC Zarubezhneft in cooperating with Indian partners in upstream oil and gas projects in Russia, India and third countries, including implementation of enhanced and improved oil recovery technologies and provision of oil field services for onshore and offshore Indian oilfields. The Sides supported intensification of activity under the Memorandum of Understanding signed by JSC Zarubezhneft and Oil India Limited in December 2014, aiming at signing and joint realization of particular contracts.
 
Both Sides acknowledge the significance of supply of liquefied natural gas (LNG) supplies from Russia to India. In this regard, the Sides expressed satisfaction at the development of cooperation between Gazprom Group and its Indian partners in LNG trade. The Russian Side welcomes the interest and involvement of Indian partners with regard to cooperation in joint projects stipulating the possibility of LNG supply to India from JSC NOVATEK project Arctic LNG on the resource base of the fields located on the Gydan Peninsula and partly in the Gulf of Ob.
 
The Sides welcomed the signing of Agreement between Rosneft and ONGC Videsh Limited for acquiring 15% stakes by OVL in Rosneft’s Vankorneft Oil fields and discussions for further stakes in future. They noted the continued interest of Indian companies in investing in the hydrocarbon sector in Russia, in particular discussions between Rosneft and Oil India limited on promising investment projects, and called for early finalization of new investment proposals. The Sides welcomed the Key Terms of Oil and Oil Products Supplies signed by Rosneft and Essar group in December 2014 as well as the Contract for oil supplies for the Vadinar refinery (India), which also provides stakes for Rosneft in the refinery, concluded between these businesses on the margins of the BRICS Summit in Ufa on 8 July 2015. Both sides noted with appreciation the offer made by Rosneft of scholarships to Indian students interested in pursuing courses in the field of Oil and Petroleum in Russia.
 
The Sides noted mutual interest in developing cooperation in joint implementation of electric power projects, including hydro, thermal and solar power plants, as well as supply of Russia's electric power equipment to India. The Sides welcomed the signing of the Memorandum of Understanding between the Russian Energy Agency and the Solar Energy Corporation of India (SECI) regarding the construction of solar power plants in the Republic of India. 
 
Cooperation in Education and Science and Technology
 
The Sides noted positive developments in scientific and technological cooperation. They emphasized the importance of full implementation of the Agreement between the Government of the Russian Federation and the Government of the Republic of India on Scientific and Technological Cooperation of 30 June 1994, and the Comprehensive long term programme of cooperation in science, technology and innovations between Russia and India until 2020.
 
Welcoming the outcomes of the 8th session of the bilateral Working Group on Science and Technology held on 3 September 2015 in Moscow, the Sides expressed confidence that they would facilitate further development of ties in the scientific and technological cooperation. The Sides welcomed the decision to establish a Russian-Indian council for organizations to finance cooperation in science, technology and innovation.
 
The Sides noted with satisfaction joint research under the programmes of Russian Ministry of Education and Science and the Indian Department of Science and Technology and the Indian Department of Biotechnology as well as the Russian Foundation for Basic Research and the Indian Department of Science and Technology. The Sides welcomed the launching of new calls for scientific research projects in 2016. They also noted the signing of an Agreement in May 2015 between the Russian Science Foundation and the Department of Science and Technology of the Republic of India and the decisions made in September 2015 to provide grants for fundamental and exploratory research in natural and technical sciences. The agreement being finalized between the Federal Association of Scientific Organizations and Department of the Science and Technology of the Republic of India for joint collaborations in international research teams, will impart a further fillip to S&T collaboration.
 
ADVERTISEMENT
The Sides pointed out the necessity to further enhance cooperation under the auspices of Russian-Indian research centers and welcomed the Declaration on Association of Russian and Indian Universities signed in Moscow in May 2015, which would promote exchange of students and faculty, development of curriculum, creation of joint laboratories, organization of scientific conferences and seminars as well as conducting of joint scientific research and collaboration in commercialization of technologies developed in research institutions. As an important measure to boost the effectiveness of cooperation among Russian-Indian research centers, the Sides called for the creation of an Russian-Indian data base of scientific and educational institutions and joint projects proposed by those institutions, as well as the development and maintenance of a catalogue of initiatives through which the Russian-Indian cooperation in science and technology is implemented. The Sides nominated Tomsk State University and the Indian Institute of Technology in Mumbai as coordinators of these initiatives as a "Russia-India Resource Centre”.
 
The Sides welcomed the agreements between Moscow State University and Indian Institute of Science, Bangalore along with the Centre for Development of Advanced Computing, Pune to launch a Russia-Indian High Performance Computing Initiative, which would promote cooperation in Education Systems and Research Methodologies.
Considering Russia's status as a member of the Arctic Council (AC) and India's observer status at this organization since 2013, the Sides emphasized the importance of joint activities in the framework of the Arctic Council. They acknowledged the potential for the development of joint scientific research in the Arctic region, particularly the Russian Scientific Center on Spitsbergen (Svalbard) archipelago.
 
The Sides welcomed the decision to establish a joint working group on education and noted the immense potential for expanding student exchanges, cooperation in vocational training and training of engineers, teachers and other specialists. The Indian Side highlighted the programme of Global Initiative for Academics Network (GIAN) in this regard and encouraged faculty from various universities in Russia to avail of the opportunities available. Both sides welcomed progress towards the establishment of an Ayurveda Chair in the People Friendship University in Moscow. They further agreed to work towards early finalization of intergovernmental agreements on the recognition of educational and academic degrees.
 
The Sides welcomed the successful Round Table on Cooperation in development of e-Government Services and Information and Communication Technologies at the level of Deputy Minister/Secretary of relevant departments held in Moscow on 7 October 2015. Both sides discussed ways and mechanisms for strengthening cooperation in areas such as e-Governance, IT-ITeS trade promotion, joint development of software, High Performance Computing, Telecommunication and information security. The Sides will make efforts in order to reach a mutually acceptable settlement of the situation around the Russian-Indian joint venture Sistema Shyam TeleServices Ltd. 
 
Culture, Tourism and People to People contacts
 
The Sides called for early conclusion of a Cultural Exchange Programme for the years 2016–2018 between the Ministry of Culture of the Russian Federation and the Ministry of Culture of the Republic of India and confirmed their interest in intensifying cultural cooperation, including between academic and research organizations of the two countries acting in the field of culture and arts. Noting the success of the Festival of Indian Culture in Russia in 2015, it was decided to have the Festival of Russian Culture in India in 2016.
 
The two Sides noted ongoing interactions between mass media organizations of the two countries and affirmed the need for enhancing cooperation in the information sphere. In this context, they welcomed the MoU between VGTRK and Prasar Bharti for exchange of news and current affairs as well as other content. The two Sides also endorsed the increased interaction between the media companies of the two countries within the multilateral formats under the SCO and BRICS auspices.
 
The Sides appreciated the agreement reached by the Joint Working Group on culture and tourism in Moscow (August 2015) on developing direct contacts between state institutions of the two countries in tourism promotion.
 
Reaffirming the enormous goodwill and strong ties between the people of Russia and India, the Sides welcomed the finalized agreement to issue six-month multiple entry tourist visas, based on reciprocity, which would further enhance tourism and people-to-people contacts. The Sides noted that the introduction of e-Tourist visas by the Indian Side had further simplified visa procedures for Russian nationals, which was reflected in the fact that nearly 20000 Russian tourists had already availed of this facility. Russia and India agreed to work towards further simplification and liberalization of visa arrangements, and consider measures such as group visa-free travel, to increase tourist flows between them.
 
The Sides welcomed the signing of the Protocol for amendment of the Agreement between the Government of the Russian Federation and Government of the Republic of India of 3 December 2004 on mutual travel regime for holders of diplomatic and official passports and the Protocol for amendment of the Agreement between the Government of the Russian Federation and the Government of the Republic of India of 21 December 2010 on simplification of requirements for mutual travels of certain categories of citizens of the two countries. The Sides will facilitate movement of crew of scheduled commercial airlines and charter flights of both Sides through appropriate use of General Declaration and issuance of long-term multiple entry gratis visas.
The Sides noted the importance of interaction on issues related to migration and agreed to work towards improving the legal framework of cooperation in the sphere of migration, work permits and temporary residency permit for Indian nationals working in Russia through continued dialogue on these issues.
 
The Sides welcomed the coming into force of the bilateral Treaty on Transfer of Sentenced Persons in March 2015 and agreed to further facilitate mutual assistance in criminal matters. The Indian Side welcomed the proposed visits of an expert level delegation and the Minister of Justice of the Russian Federation to India next year at the invitation of his Indian counterpart on practical aspects of implementation of this Treaty as well as the Treaty on Mutual Assistance in civil and commercial matters signed in the year 2000.
 
ADVERTISEMENT
The Sides expressed support for further intensifying cooperation between the states and union territories of the Republic of India and the regions of the Russian Federation in the field of economy and culture. They noted the importance of establishing close contacts between the business representatives at the regional level. 
 
Space cooperation 
 
The Sides expressed mutual commitment to the further development of cooperation in the field of outer space exploration for mutual benefit in such fields as rocket and engine engineering, as well as development of spacecraft, including microsatellites, Earth remote sensing and space meteorology, satellite navigation and related technologies and services, as well as space science. In this regard they commended the MOU between the Indian Space Research Organization and the Federal Space Agency on expanding cooperation in the field of the exploration and use of outer space for peaceful purposes signed in June 2015. The MOU was memorable also as it was timed to coincide with the 40th anniversary of the launch of the first Indian satellite using a Soviet carrier launch vehicle.
 
Both Sides welcomed the tripartite Memorandum of Understanding signed between OJSC "GLONASS”, Glonass Union and the Centre for Development of Advance Computing (C-DAC) for cooperation in commercial applications through integration of Russian and Indian satellite navigation systems. 
 
Defence and Military-Technical Cooperation
 
Both Sides reaffirmed that military-technical cooperation remains one of the key elements of the Special and Privileged Strategic Partnership between the two countries. In this context, they commended the outcomes of the fourteenth and fifteenth meetings of the Russian-Indian Inter-Governmental Commission on Military-Technical Cooperation held in New Delhi in January 2015 and in Moscow in November 2015 respectively.
 
The Sides expressed satisfaction at joint Russian-Indian naval exercises in December 2015 in the Bay of Bengal, as well as INDRA-2015 joint exercises involving ground forces conducted in Rajasthan (India) in November 2015. They welcomed the visit of the Chief of the Army Staff of India to Russia in September 2015 during which useful discussions were held to expand training, joint exercises and institutionalized interactions between the Armed Forces of both countries.
 
The Sides took note of achievements in the field of joint design, development and production of high-technology military equipment. Both sides reaffirmed their intention to expand the scope of such cooperation and to avail of the opportunities provided by the Make in India initiative in the defence sector and directed the concerned agencies to finalize such projects between relevant entities and enterprises of the two countries at the earliest. 
 
Security and Disaster Management
 
The Sides emphasized the need for sustained and institutionalized interactions to foster greater security-related cooperation. They noted the successful visit of the Russian Interior Minister to India in September 2015, during which discussions on a new Agreement on Cooperation security matters were initiated. They called for early finalization of the Agreement which would provide an enabling framework to further develop ongoing interactions between their security establishments for exchange of best practices, training and expertise, especially in countering extremism and terrorism. In this context, the Sides welcomed recent intensification of operational level exchanges between the Federal Security Service of Russia and the National Security Guards of India.
 
The Sides agreed to strengthen linkages between their anti-narcotics agencies. They agreed to work towards early finalization of a Joint Action Plan between the Federal Service for Narcotics Control of Russia and Narcotics Control Bureau of India.
The two Sides reaffirmed their mutual support on disaster risk reduction, rescue and humanitarian relief, as reflected in their cooperation in evacuation of their citizens during the crisis in Yemen in April 2015. They agreed to finalize a Joint Action Plan between the Ministry of the Russian Federation for Civil Defence, Emergencies and Elimination of Consequences of Natural Disasters and the Ministry of Home Affairs of India to guide cooperation in this regard.
 
International and Regional Issues
 
Both Sides expressed concern at increasing instability and continuing conflict across the world, including in their shared neighbourhood. They underlined the need to work towards an equitable international order based on the principles of equality, mutual respect and non-interference in internal affairs of States.
 
On the 70th anniversary of the United Nations, the Sides highlighted the Organisation’s key role in maintaining international peace and security, promoting sustainable economic and social development and protecting human rights. The Leaders of Russia and India emphasized the need to reform the UN Security Council and make it more representative of contemporary realities and to respond more effectively to emerging challenges and threats. Russia regards India as a deserving and strong candidate that can bring an independent and responsible approach within the UN Security Council and reaffirms its strong support to India’s candidature for a permanent seat in a reformed UNSC.
 
The Sides call for creation of a common space for international economic cooperation, building on market mechanisms and jointly developed rules based on the WTO principles that imply freedom of trade, investment and open competition. Both Sides stressed the need to preserve the integrity and balance of the multilateral trading system, based on universally recognized WTO rules and norms.
 
The Sides expressed their commitment to the progressive development of cooperation within BRICS and the strengthening of its global role. The Leaders commended the outcomes of the 7th BRICS summit in Ufa (July 8-9, 2015) and stressed the importance of the documents adopted: the Ufa Declaration, the Ufa Action Plan, and the Strategy for BRICS Economic Partnership. The Sides agreed to ensure, throughout the upcoming Indian presidency, continuity in the implementation of the agreements reached, further coordination of activities in the international arena, and to strengthen the strategic partnership between BRICS countries. The Sides emphasized their mutual commitment to expand intra BRICS cooperation in various fields including industry. In this context, they noted, inter alia, the successful meetings of BRICS Ministers of Industry (October 20, 2015) and Energy Ministers (November 19-20, 2015) in Moscow and welcomed the relevant memoranda of understanding adopted during these meetings. They noted the strong role played by Russia and India in the New Development Bank which will give a new impetus to the financing of major development projects.
 
The Sides emphasized the intention to deepen their interaction aimed at strengthening the role and authority of the Shanghai Cooperation Organization (SCO). They agreed to work together to increase the effectiveness of joint efforts in the SCO framework to counter threats and challenges to security, including those emanating from the territory of Afghanistan, and to enhance economic, cultural and humanitarian cooperation in the region. The Sides welcomed the decision to commence the procedure for India’s membership of the SCO adopted at the Ufa meeting of the Council of Heads of State of the SCO Member States on 10 July 2015. The Indian Side expressed its deep appreciation at the role played by Russia as Chair of the SCO in this regard. The Sides agreed to work together to finalize legal, financial and administrative aspects of India's accession to the Organization.
 
The Sides expressed satisfaction at the results of the Group of Twenty Summit held in Antalya on 15–16 November, 2015, and emphasized the importance of joint efforts aimed at increasing the role of the G-20 in stimulating global economic growth, ensuring the stability of international finance, improving global economic governance and accelerating structural reforms. The Sides called for measures to create of a more representative and legitimate international financial architecture.
 
The Sides agreed to work together to promote an open, inclusive and evolutionary regional architecture for security and stability in the Asia Pacific, emphasizing the peaceful settlement of disputes through dialogue, while respecting the diversity of political systems and development choices. They agreed to increase cooperation within the framework of the ASEAN Regional Forum and the ASEAN Defence Ministers' Meeting Plus and contribute to strengthening the leading mechanisms of practical interaction on identifying ways and means to maintain peace and stability in the Asia Pacific.
 
The Sides expressed satisfaction at the significant progress and achievements of the East Asia Summit (EAS) over the past ten years, and concurred that the EAS should continue to be a Leaders-led forum for dialogue on broad strategic, political and economic issues with the aim of promoting peace, stability and economic prosperity in East Asia. They noted that the inclusion of maritime cooperation as a priority area for cooperation in the EAS merits further consideration. They also agreed to continue joint efforts aimed at developing Nalanda University as an international center of excellence.
 
They took note of the progress made in the development of the Eurasian Economic Union and negotiations on the Regional Comprehensive Economic Partnership and expressed their willingness to work towards strengthening regional and global economic integration, further economic cooperation and equitable economic development in the region.
 
Russia and India expressed their willingness to closely interact in other multilateral formats, such as the Asia-Europe Meeting, the Conference on Interaction and Confidence Building Measures in Asia and the Asia Cooperation Dialogue. Russia reiterated its support for India’s application to join APEC and committed to work closely with India on this issue.
 
The Sides reiterated the importance of interaction in the Russia-India-China (RIC) format, noting that this mechanism contributes to enhancing mutual trust and to extending coordination on international and regional issues. The Sides also stressed the role of the RIC countries' high representatives in charge of security issues in developing common approaches to countering challenges and threats to regional stability.
 
Strongly condemning terrorism in all its forms and manifestations, the Sides noted that it is only possible to effectively fight this global menace through joint efforts of the entire world community without selectivity and double standards, in strict compliance with the relevant resolutions of the UN Security Council and the UN Global Counter-Terrorism Strategy. Russia and India are convinced that an important aspect of countering terrorism is its prevention, inter alia, through effective suppression of the spread of terrorist propaganda and extremist ideas. The Sides called for the elimination, once and for all, of all "safe havens" of terrorists. The Sides also called for the early completion of negotiations on the Comprehensive Convention on International Terrorism.
 
Noting the growing challenges and threats in the use of information and communication technologies (ICTs), the Sides emphasized the need to develop bilateral cooperation in the field of ICTs. Reaffirming the key role of the UN in addressing the issues related to the security in the use of ICTs, they also agreed to work together for developing universal rules of responsible behaviour of the States in the use of ICTs to address threats to international peace and security. The Sides are particularly concerned with the use of ICTs in violation of the UN Charter as well as for criminal and terrorist purposes, and agreed to cooperate in addressing these issues.
The Sides agreed to hold regular consultations at the level of experts to enable exchange of views on mutual basis on all aspects of security in the use of ICTs which includes practical cooperation between relevant agencies. In this regard, they agreed to work towards concluding a Russian-Indian intergovernmental agreement on cooperation in the field of international information security.
 
The Sides highlighted the importance of respecting the universally recognized principles of international law in the use of ICTs, in particular, the UN Charter, the principle of political independence, territorial integrity and sovereign equality of States, non-interference in internal affairs of other States and respect for human rights and fundamental freedoms, including right to privacy.
 
ADVERTISEMENT
Stressing that the exploration and use of outer space should be for peaceful purposes, Russia and India reiterated that they were against the weaponization of outer space. In this connection they called for a speedy launch of negotiations to conclude a relevant legally binding international agreement at the Conference on Disarmament in Geneva. Noting the urgency of preventing the arms race in outer space and ensuring the safety of space operations and long-term sustainability of outer space activities, the Sides affirmed the need to discuss and interact on practical measures conducive to this end in the First Committee, the UN Disarmament Commission, the UN Committee on the Peaceful Uses of Outer Space and at other relevant platforms.
 
Russia and India are united by common interests in preventing the proliferation of weapons of mass destruction (WMD) and their delivery systems and its falling into the hands of terrorists, as well as in strengthening multilateral export control regimes. In this context, Russia welcomes India's early accession to the Missile Technology Control Regime that would increase the effectiveness of this mechanism. Stressing once again that India should fully participate in the development of the norms of international export control regulation, Russia expressed its readiness to support India's aspiration for full membership in the Nuclear Suppliers' Group. Russia also supported India’s interest in full membership in the Wassenaar Arrangement.
 
The Sides emphasized that the approval of the Joint Comprehensive Plan of Action on Iran's nuclear programme is an important milestone that strengthens international and regional security as well as restores normal economic and political interaction between Iran and the international community.
 
Both Sides expressed serious concern at developments in Syria and Iraq where terrorist groups including Islamic State of Iraq and the Levant (ISIL), the al Nusra Front and other similar groups are operating causing violence. Both sides share the view that presence of terrorist groups in much of Iraq and Syria directly threatens regional and global security. Both sides expressed their support to global efforts to fight terrorism and to enhancing international efforts to counter activities of terrorist groups including "foreign terrorist fighters" pursuant to the relevant UNSC resolutions.
Russia and India voiced their strong support to sovereignty, unity and territorial integrity of Syria. Both sides expressed a common understanding that the internal armed conflict in Syria cannot be solved by the use of force, but rather through political and diplomatic means – through a substantive intra-Syrian dialogue without preconditions or external interference and based on the Geneva Communiqué of June 30, 2012, the Joint Statement on the outcome of the multilateral talks on Syria in Vienna of October 30, 2015 and the Statement of the International Syria Support Group (ISSG) of November 14, 2015.
 
Both sides expressed their strong support for the people and the Government of Iraq in their efforts to overcome the existing crisis and to uphold national sovereignty and territorial integrity. They emphasized the importance of national reconciliation and unity in Iraq by creation of an inclusive state system and strengthening of national democratic institutions through capacity building.
 
Russia and India welcome the progress achieved in the area of security, including the maintenance of the ceasefire regime in south-eastern Ukraine, as well as the signing of the agreement on the withdrawal of military equipment and artillery of the less than 100 millimeter calibre from the line of contact, which creates favourable conditions for moving forward the political settlement that has no alternative. Reconciliation of the sides is only possible through a direct inclusive dialogue, for which it is necessary to fully comply with all the provisions of the Package of Measures for the Implementation of the Minsk Agreements adopted on 12 February 2015 by the Contact Group on Ukraine with support of the Leaders of Russia, Germany, France and Ukraine, and approved by the UN Security Council resolution 2202.
 
The Sides expressed concern about the aggravation of the security situation in Afghanistan, including along its borders. The Sides recognized that terrorism and extremism pose the main threat to security and stability of Afghanistan, the region and beyond. In this regard, they emphasized the need for joint and concerted efforts and cooperation among countries in the region to address the challenge of terrorism in all its forms and manifestations, including the dismantling of terrorist sanctuaries and safe havens and disrupting all financial and other support for terrorism.
 
The Sides supported further promotion of a national reconciliation process led and guided by the Afghans themselves in compliance with established international principles. Russia and India reaffirmed their willingness to continue to provide multi-vector assistance to the Islamic Republic of Afghanistan in the interest of maintaining stability and independence of Afghanistan, and assisting socio-economic development and connectivity of the country. The Sides agreed to continue their close consultation and cooperation on Afghanistan.
 
The continuing growth of drug production and drug smuggling from Afghanistan is of particular concern. In this context, the importance of cooperation within the frameworks of the SCO, BRICS and the Paris Pact Initiative to counter the spread of narcotic substances was emphasized. The Sides expressed mutual interest in coordinating Russian and Indian positions during the preparation for and the work of the Special Session of the UN General Assembly on the World Drug Problem in 2016.
 
Looking Ahead
 
The Sides reaffirmed the unique character of Russia-India relations, based on time-tested and deep mutual trust and friendship between the two nations. They noted with satisfaction the continued support among the people of both countries to further strengthen and expand the bilateral relationship. They emphasized the remarkable convergence in their foreign policy priorities and underlined the significance of their special and privileged strategic partnership for their respective countries both bilaterally and in addressing regional and global issues in the days ahead.
 
Moscow
December 24, 2015
 
NNN
ADVERTISEMENT
 
Syndicate content
© Copyright 2012 NetIndian. All rights reserved. Republication or redistribution of NetIndian content, including by framing or similar means, is expressly prohibited without the prior written consent of NetIndian Media Corporation. Write to info[AT]netindian[DOT]in for permission to use content. Read detailed Terms of Use.