The Leaders of the Group of Seven (G7) met in Hiroshima for 49th annual Summit. This year’s summit is hosted by Japan in its capacity as the President of the grouping. The choice of Hiroshima as host city of the G7 Summit underlines Prime Minister Kishida’s commitment to put nuclear disarmament and non-proliferation prominently on the agenda of the meeting.

G7 Hiroshima Leaders’ Communiqué —

On Ukraine —

ü  Condemned in the strongest possible terms the war of aggression by Russia against Ukraine.

ü  Separately issued G7 Leaders’ Statement on Ukraine.

ü  Decided to take concrete steps to support Ukraine for as long as it takes in the face of Russia’s illegal war of aggression.

On Disarmament and Non-proliferation —

ü  Decided to strengthen disarmament and non-proliferation efforts, towards the ultimate goal of a world without nuclear weapons.

ü  The summit also released the G7 Leaders’ Hiroshima Vision on Nuclear Disarmament.

Indo-Pacific —

ü  Reiterated the importance of a free and open Indo-Pacific, which is inclusive, prosperous, secure, based on the rule of law.

ü  Underscored commitment to strengthen coordination with regional partners, including the Association of Southeast Asian Nations (ASEAN) and its member states

Global Economy, Finance and Sustainable Development —

ü  The global economy has shown resilience against multiple shocks including the COVID-19 pandemic, Russia’s war of aggression against Ukraine, and associated inflationary pressures.

ü  It decided to coordinate the approach of members to economic resilience and economic security that is based on diversifying and deepening partnerships and de-risking, not decoupling.

ü  It decided to work on issues such as resilient supply chains, non-market policies and practices, and economic coercion.

On debt sustainability —

ü  Debt sustainability is a major concern undermining progress towards SDGs, with low- and middle-income countries disproportionately affected by Russia's aggression against Ukraine.

ü  Supported the G20’s effort to improve the implementation of the Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative (DSSI).

ü  DSSI means that bilateral official creditors are, during a limited period, suspending debt service payments from the poorest countries that request the suspension.

ü  It welcomed the development of Climate Resilient Debt Clauses (CRDC) to enhance the safety net for borrowers facing the impacts of climate change.

On infrastructure — It reaffirmed the shared commitment to the G7 Partnership for Global Infrastructure and Investment (PGII) and to working together and aiming to mobilise up to

$600 billion by 2027 for infrastructure funding.

Climate Change Environment — Decided to work together and with others to accelerate achievement of the Sustainable Development Goals (SDGs), recognising that reducing poverty and tackling the climate and nature crisis go hand in hand.

Clean energy economy — Decided to take concrete steps to drive the transition to clean energy economies of the future through cooperation within and beyond the G7.

Expressed its commitment to deepen cooperation through Just Energy Transition Partnerships (JETPs), the Climate Club and new Country Packages for Forest, Nature and Climate.

Also decided to preserve the planet by accelerating the decarbonisation of energy sector and the deployment of renewables, end plastic pollution and protect the oceans.

Food Security — Announced that member countries are taking concrete steps to launch the Hiroshima Action Statement for Resilient Global Food Security with partner countries to address needs of today and into the future.

Health — Decided to invest in global health through vaccine manufacturing capacity, worldwide, the Pandemic Fund, the future international agreement for pandemic prevention, preparedness and response, and efforts to achieve universal health coverage (UHC);

Digital — Expressed the commitment to work together and with others to advance international discussions on inclusive artificial intelligence (AI) governance and interoperability to achieve common vision and goal of trustworthy AI.

Other areas of cooperation —

ü  Decided to strengthen partnerships with African countries and support greater African representation in multilateral fora.

ü  Increased cooperation on international migration and strengthen the common effort to fight the trafficking and smuggling of human beings.

ü  Areas such as Gender, Human Rights, Science and Technology were also highlighted.

On China —

ü  Urged China to pressure its strategic partner Russia to end its war on Ukraine.

ü  The leaders expressed serious concern about the situation in the East and South China seas, where Beijing has been expanding its military presence and threatening to use force to exert its control over self-governed Taiwan.

ü  The statement said there was “no legal basis for China’s expansive maritime claims in the South China Sea.

ü  It opposed China’s militarisation activities in the region."

About the G-7 -

Origin —

ü  The origin of G7 lies in the oil shocks of 1973 and the corresponding financial crisis.

ü  In order to address the situation after oil shock, the heads of the world's six leading industrial nations decided to hold a meeting in 1975.

ü  These six nations were — US, UK, France, Germany (West), Japan and Italy.

ü  These countries were joined by Canada in 1976 and G7 came into existence.

Current Members —

ü  US, UK, Canada, France, Germany, Italy and Japan are the current members of this group.

ü  It can be said that the members of this group are the most developed and the advanced economies of the world.

ü  The European Union is also represented within the G7.

Purpose of G7 —

ü  To determine the course of multilateral discourse.

ü  To shape political responses to global challenges.

ü  Basically, G7 provides a platform to discuss and coordinate solutions to major global issues, especially in the areas of trade, security, economics, and climate change.

The World Health Organization has launched a global network to help swiftly detect the threat from infectious diseases, like COVID-19, and share the information to prevent their spread.

About International Pathogen Surveillance Network (IPSN) -

ü  The International Pathogen Surveillance Network (IPSN) is a global network of pathogen genomic actors.

ü  It is hosted by the WHO Hub for Pandemic and Epidemic Intelligence.

ü  Its aim is to accelerate progress on the deployment of pathogen genomics and improve public health decision-making.

ü  By strengthening the pathogen genomic surveillance ecosystem, the IPSN enables faster detection of new pathogens and the enhanced tracking of the spread and evolution of diseases.

ü  This in turn can drive better public health responses.

ü  The IPSN supports ongoing disease surveillance and will help detect and fully characterise new disease threats before they become epidemics or pandemics.

Vision/Mission behind IPSN -

A world where every country has equitable access to sustained capacity for genomic sequencing and analytics as part of its public health surveillance system

Need for an International Surveillance Network for Pathogens -

ü  COVID-19 highlighted the critical role pathogen genomics plays when responding to pandemic threats.

ü  As pointed out by the WHO that without the rapid sequencing of the SARS CoV-2 virus, vaccines would not have been as effective and would not have become available as quickly.

ü  New and more transmissible variants of the virus would also not have been identified as quickly.

ü  WHO said that genomics lies at the heart of effective epidemic and pandemic preparedness and response.

ü  While the pandemic spurred countries to scale up their genomics capacity, the agency warned that many still lack effective systems for collecting and analysing samples.

The IPSN would help address such challenges.

Areas of Work for IPSN -

Communities of practice to solve common challenges –

ü  At the heart of the IPSN’s work is a set of communities of practice that enable exchange between partners working on pathogen genomics.

ü  The first of these is the IPSN Community of Practice on genomics data.

ü  Its projects and deliverables aim to harmonise data standards and protocols, ensure genomics data tools are fit for purpose, and that data and benefits sharing are enhanced.

Country scale-up accelerator to align efforts and enable South-South exchange –

ü  The IPSN has established a Country Scale-Up Accelerator (CSUA) to accelerate and amplify the efforts of IPSN members to rapidly increase country capacity for pathogen genomic surveillance.

ü  The CSUA’s projects and deliverables aim to create a set of capacity-building tools as global goods, and to empower increased South-South bilateral and subregional partnerships for capacity development.

Funding to improve equity and to power IPSN projects –

ü  To ensure improved coordination and harmonisation of donor efforts, the IPSN has established a funders forum.

ü  The forum which works with the Secretariat to support IPSN activities and members including a small grants fund.

ü  High-level advocacy/communications to keep genomic surveillance on the agenda – With active engagement of countries, partners, regional organisations and WHO, the IPSN keeps pathogen genomic surveillance on the global agenda and ensures strategic buy-in.

Global partners forum for pathogen genomics to bring partners together –

ü  The annual forum brings together key players from all IPSN entities involved in pathogen genomic surveillance.

ü  The forum will help in providing a high-profile stage to build partnerships, introduce innovations, socialise ideas and advocate for political and financial commitments.

Outcomes of IPSN -

ü  To build towards a strong disease surveillance system, IPSN members and their work will result in —

ü  Stronger national and international surveillance systems better able to detect and characterise new threats and reduce endemic burdens;

ü  Increased harmonisation and innovation in pathogen genomics;

ü  Increased scale and efficiency of country capacity building efforts; and Increased political attention and financing efficiency

A committee, formed by the Union government, has recommended that the Indian Institutes of

Technology (IITs) be brought under the ambit of a proposed Accreditation agency. So far, IITs have never been accredited by the National Assessment and Accreditation Council (NAAC), which is the existing agency that grades India’s colleges and universities.

ü  In November 2022, Central government had constituted a High-Level Committee, under the Chairmanship of K. Radhakrishnan.

ü  The committee was formed for strengthening the Assessment & Accreditation processes and preparing a road map for the National Accreditation Council envisioned in the National  Education Policy, 2020.

ü  The committee recently submitted its report to the government.

About National Assessment and Accreditation Council (NAAC) -

ü  NAAC is an autonomous body established by the University Grants Commission (UGC).

ü  It was established in 1994 on the basis of recommendations made under the National Education Policy (1986).

ü  It is registered under the Karnataka Societies Registration Act of 1960.

ü  Vision — To make quality the defining element of higher education in India through a combination of self and external quality evaluation, promotion and sustenance initiatives.

ü  Headquarters — Bengaluru

Objectives of NAAC -

ü  To arrange for periodic assessment and accreditation of institutions of higher education or units thereof, or specific academic programmes or projects;

ü  To stimulate the academic environment for promotion of quality of teaching-learning and research in higher education institutions;

ü  To encourage self-evaluation, accountability, autonomy and innovations in higher education;

ü  To undertake quality-related research studies, consultancy and training programmes.

What is Assessment and Accreditation?

ü  Assessment is the performance evaluation of an institution or its units based on certain established criteria.

ü  Accreditation is the certification of quality for a fixed period, which in the case of NAAC is five years.

ü  The University Grants Commission (UGC) through a gazette notification in January 2013, has made it mandatory for Higher Educational Institutions (HEIs) to undergo accreditation.

How accreditation process is carried out?

The process of Assessment and Accreditation broadly consists of –

ü  Online submission of Institutional Information for Quality Assessment (IIQA) and Self-Study Report (SSR).

ü  Data Validation and Verification (DVV) by NAAC.

ü  Student Satisfaction Survey (SSS) by NAAC.

ü  Peer Team Visit.

ü  Institutional Grading.

What are the benefits of being NAAC-Accredited?

ü  Through a multi-layered process steered by the NAAC, a higher education institution gets to know whether it meets certain standards of quality set by the evaluator in terms of curriculum, faculty, infrastructure, research and financial well-being among others.

ü  Based on these parameters, the NAAC gives institutions grades ranging from A++ to C. If an institution is graded D, it means it is not accredited.

ü  Apart from recognition, being accredited also helps institutions attract capital as funding agencies look for objective data for performance funding.

ü  It helps an institution know its strengths, weaknesses, and opportunities through an informed review process.

ü  NAAC accreditation helps students going for higher education abroad as many global higher education authorities insist on recognition and accreditation of the institution where the student has studied.

Recommendations of the Dr. K. Radhakrishnan Committee -

The committee has recommended that the IITs should be brought under the ambit of NAAC. Currently, IITs follow their internal systems for periodic peer evaluation and assessment of programmes.

Binary Accreditation System –

ü  Currently, NAAC follows an eight-point grading system under which institutes are rated A++, A+, A, B++, B+, B, C and D based on data submitted by institutes and their verification by expert teams during campus visits.

ü  The committee has suggested that under the new system, institutes be certified as “Accredited” or “Not Accredited (for those who are far below the standards for accreditation)”.

ü  A separate category of “Awaiting Accreditation” will cover institutes which are “close to the threshold level” or accreditation.

ü  The committee has also proposed that the entire accreditation process be made less dependent on inspections by teams of experts by adopting the mechanism of “crowdsourcing”.

ü  The idea now is to get the inputs submitted by the institutes vetted by a “carefully chosen set of audience with diverse association with the concerned institutes”.

ü  This set of audience may include students (including PhD and postdoctoral scholars), faculty, staff, alumni, official visitors such as selection committee members, employers of the students, etc.

National Accreditation Council (NAAC) –

ü  Lastly, the Radhakrishnan committee has proposed that instead of having separate bodies for accrediting institutes and courses, one overarching agency be set up.

ü  The proposed National Accreditation Council (NAAC), envisaged by the NEP, should also subsume the National Institutional Ranking Framework (NIRF), which ranks higher education institutes.

The government recently announced that foreign payments through credit cards will be brought within the purview of Liberalised Remittance Scheme (LRS). This invited criticism from the industry and individual taxpayers and the announcement was termed as “Tax Perversion", "Tax Terrorism", “A Broken-Down Tax Assessment System", etc.

Existing mechanism -

ü  The usage of an international credit card to make payments towards meeting expenses during a trip abroad was not covered under the LRS.

ü  These spendings were excluded by way of Rule 7 of the Foreign Exchange Management (Current Account Transaction) Rules, 2000.

ü  Rule 7 exempts the use of international credit cards from the LRS for payments by a person towards meeting expenses while such a person is on a visit outside India.

Recent announcement by the Government -

ü  Rule 7 has now been omitted, paving the way for the inclusion of such spending under LRS.

ü  It removes the exemption given to the use of international credit cards for meeting expenses by a person when he is abroad.

ü  The notification does not affect any changes in the use of international credit cards by residents while in India.

ü  Not only foreign tour packages but 20 per cent TCS rule also will apply to credit cards on international transactions.

ü  This means even direct booking would come under the ambit of 20 per cent TCS.

Government's subsequent clarification -

ü  Payments made by an individual using international debit or credit cards up to Rs 7 lakh per financial year will be excluded from the LRS limits and will not attract TCS.

ü  It is reiterated that the rate of TCS of 5 per cent and the Rs. 7 lakh threshold still applies for education and medical expenses (including incidental expenses).

ü  Further, remittance out of educational loans would be subject to TCS of 0.5 per cent only.

ü  The higher rate of TCS is only for investments, gifts, donations, and overseas travel.

Government's perspective on bringing TCS on LRS -

Multi-fold Increase in Remittances Under LRS —

ü  As per data published by the RBI, LRS remittances which were Rs 0.9 trillion in FY 2019, crossed Rs 2 trillion in FY2023.

ü  During FY2023, an interesting trend was noticed in the remittances for deposits, purchase of immovable property, investment in equity/debt, gifts/donations, and travel.

ü  Remittances under these heads constituted almost 70 per cent of the total, representing a year-on-year growth of 74 percent.

ü  Foreign travel alone was almost Rs 1.1 trillion in FY2023, a three-fold increase from the pre-Covid period.

ü  In all of these, payments made through credit cards are not reflected, as such payments were not subject to the LRS limit. This is an anomaly that needed to be fixed.

The Differential Treatment Between Debit Cards and Credit Cards —

ü  It needed to be removed in the interest of uniformity and equity and for capturing total expenditures under LRS for prudent foreign exchange management and to prevent bypassing of LRS limits.

ü  Payments by debit cards have been treated as LRS even earlier.

ü  Due to the exemption under erstwhile Rule 7, expenditures through credit cards were not accounted for under the specified LRS limit, which has led to some individuals exceeding the LRS limits.

Circumvention of System (Tax Evasion) —

ü  The system was circumvented in multiple ways, primarily by splitting payments in the name of multiple individuals–minors, household staff, etc.

ü  Also, in many cases, the 5 per cent tax was absorbed as a cost and not claimed by filing a return.

What could be the possible impact?

Complex Task for Banks —

Transactions for purposes like education and medical expenses remain outside the purview of new amendment.

It will be a difficult task for banks to keep track of each transaction and maintain records of every card user.

More Expensive Foreign Travel —

The current move will make foreign travel 20% more expensive as this amount will be blocked till it is refunded in the income tax.

Taxpayers will be able to claim the “20% TCS” back at the time of Income Tax Return (ITR filing).

Effect on Domestic Travel Agents —

ü  When TCS at 5 per cent on LRS remittances was first introduced in October 2020, it led to a significant loss of business for domestic travel and tour agents (DTAs).

ü  Customers preferred overseas travel services with Global Travel Agents (GTAs).

ü  GTAs have been escaping TCS compliance and hence can offer better pricing on their platforms.

ü  Now that tax rate has been increased four-fold, travellers will prefer GTAs, as the upfront cost for travellers will increase while availing the services of DTAs.

Conclusion -

It is important to acknowledge the government’s genuine efforts in that direction in providing justice and ease of life for honest taxpayers. It is also equally important for honest taxpayers to join in and support the government in promoting a fair, easy, and compliant taxation system in the country

Recently, the 1st Ministerial meeting of the India-European Union Trade and Technology Council (TTC) took place, in Brussels, Belgium. 

Key Highlights of the Meeting:

Working Groups:

ü  The meeting involved discussions on roadmaps for future cooperation under three working groups:

ü  Strategic Technologies, Digital Governance, and Digital Connectivity

ü  Green and Clean Energy Technologies

ü  Trade, Investment, and Resilient Value Chains

Objectives:

ü  The meeting aimed to provide direction and lay the roadmap for cooperation between India and the EU in various areas of mutual interest.

ü  This included addressing mutual market access, WTO reforms, ongoing Free Trade Agreement (FTA) negotiations, and cooperation in different sectors.

Carbon Border Adjustment Mechanism (CBAM):

ü  India and the EU were also working towards resolving a trade-related issue concerning the EU’s Carbon Border Adjustment Mechanism (CBAM).

ü  The CBAM is described as a tool that places a price on carbon emissions during the production of goods entering the EU, encouraging cleaner production practices outside the EU.

About India-EU Trade and Technology Council:

ü  India-EU Trade and Technology Council (TTC) is a high-level coordination platform established in 2022 by the Indian Prime Minister and the President of the European Commission.

ü  It aims to address strategic challenges related to trade, trusted technology, and security.

ü  The TTC operates through ministerial meetings held annually, alternating between India and the EU for balanced participation and stronger bilateral cooperation.

Working Groups of TTC:

WG on Strategic Technologies, Digital Governance, and Digital Connectivity:

Ø  Focuses on areas of mutual interest such as digital connectivity, Artificial Intelligence, 5G/6G, Quantum Computing, Semiconductors, Cybersecurity, and digital skills.

Ø  Aims to foster cooperation in digital platforms and systems.

WG on Green and Clean Energy Technologies:

Ø  Emphasizes green technologies, research, and innovation.

Ø  Covers areas like clean energy, Circular Economy, waste management, plastic pollution, waste-to-hydrogen, and battery recycling for e-vehicles.

Ø  Promotes collaboration between EU and Indian incubators, SMEs, and start-ups.

WG on Trade, Investment, and Resilient Value Chains:

Ø  Focuses on enhancing supply chain resilience, critical component access, energy, and raw materials.

Ø  Aims to resolve trade barriers and address global trade challenges.

Ø  Promotes cooperation in multilateral fora, international standards, and addresses geopolitical challenges.

Significance of the India-EU Trade and Technology Council (TTC):

Addressing Geopolitical Challenges:

Ø  The establishment of the TTC reflects the recognition by both India and the EU of the evolving geopolitical landscape.

Ø  It signifies their commitment to building a strong collaborative framework to tackle strategic challenges together.

Political Guidance and Implementation:

Ø  The TTC serves as a platform for political guidance and coordination.

Ø  It provides a structured framework to effectively implement political decisions, coordinate technical endeavors, and ensure accountability at the political level.

Boosting Bilateral Trade:

Ø  The TTC aims to enhance EU-India bilateral trade, which has reached historical highs. In 2022, the trade volume between the two reached Euro 120 billion, including Euro 17 billion worth of digital products and services.

Ø  The TTC will contribute to further increasing trade and expanding economic cooperation between the two parties.

Strengthening Technical Collaboration:

Ø  Through the working groups of the TTC, collaboration in strategic technologies, digital governance, clean energy, trade, and investment will be strengthened.

Ø  The TTC provides a platform for sharing expertise, exchanging knowledge, and fostering innovation in these key areas.