The Puzzling Ban of E-Cigarettes in India

The Indian government’s own disastrous experience with bans of various substances and services in the past should categorically advise it against such a move in the future. Yet, it is planning to go down the same route again with the case of “e-cigarettes” also known as Electronic Nicotine delivery systems (ENDS). A ban on ENDS, however well-intentioned, will put several former smokers at a greater risk of limiting their access to no-tar alternatives and will end up defeating the larger public health objectives.

In a landmark 200-page report titled “Nicotine without smoke: tobacco harm reduction”, the Royal College of Physicians in the UK concludes that e-cigarettes are not a gateway to smoking, nor do they result in the normalisation of smoking. They find that the available evidence indicates that “e-cigarettes are being used almost exclusively as safer alternatives to smoked tobacco, by confirmed smokers who are trying to reduce harm to themselves or others from smoking or to quit smoking completely”. Importantly, they further categorically find that the long-term harm caused by e-cigarettes is less than 5 percent compared to other tobacco products.

By allowing ENDS to operate in India legally, the government and regulatory bodies can have a lot more control over the product. This includes levying appropriate taxes, issuing public use guidelines, providing information about the product, enforcing a minimum age for sales, and individual product restrictions surrounding flavour choices and nicotine concentration in tobacco or e-cigarette products. In fact, regulators could go further to ensure product standardisation, labelling requirements to indicate the level of nicotine (something which is not in practice today for normal cigarettes), and technological developments in the field to further reduce the harm caused by the products.

Read the full article here

The Case Against Weakening India's No First Use Policy

Last month defence minister Rajnath Singh chose Pokhran – the site of India’s nuclear tests – to suggest that the future of the country’s nuclear no first use policy would depend on changing “circumstances”. Singh’s surprise statement was apparently aimed at Pakistan after tensions escalated following the Indian government’s decision to bifurcate the state of Jammu and Kashmir into two union territories.The statement also comes amid dissatisfaction with the no first use policy, with one critic calling it a “formula for disaster”. Opponents cite Pakistan’s battlefield nuclear weapons, which they believe offer a shield for Pakistan-based terrorism. The way out, according to this logic, would be for India to threaten pre-emptive nuclear strikes on Pakistan’s arsenal.Read More

Honey traps, deepfakes, AI: Why India’s RAW needs to prepare for threats beyond terrorism

In the context of India, honey-trappers usually try to extract information or spread fake news. There is still evidence of the adversary breaking into the top-level. That, however, is no reason for India’s intelligence community to not break out of the status quo. If anything is to be learnt from the 26/11 experience, intelligence agencies must stay ahead of the curve, adapt to these rapid shifts and not jeopardise the nation’s first line of defence.Read more

Howdy Modi and Trump showcase Indian lobby in US. But double loyalties can’t go far

Trump’s presence at Howdy Modi certainly highlights the strength and the comfort of the India-US relationship. The event’s organisers claim that it is the largest-ever turnout for a foreign elected leader on US soil. Apparently, only the Pope attracted a bigger crowd. In the amoral world of international relations, it is par for the course for states to influence the politics and policies of other countries.  A lot depends on how the prevalent nationalist “America First” political sentiment in the United States perceives the Howdy Modi rally.Read more

Not Enough Reasons for Cryptocurrency Ban

An inter-ministerial committee led by Economic Affairs Secretary Subhash Chandra Garg has proposed that holding cryptocurrency in India be made illegal. Directly or indirectly investing, trading, or exchanging foreign cryptocurrencies could lead to a prison sentence of up to 10 years or a fine of up to ₹25 crores. The committee’s argument is that banning cryptocurrencies makes sense given the risks associated with them and volatility in their prices. RBI governor Shaktikanta Das has backed this decision, going as far as to call cryptocurrencies a ‘Ponzi scheme’. In an interview, Das stated that the issuance of currency is a sovereign function. Allowing private companies to issue currency will undermine and destroy macroeconomic and financial stability. He also aired that they would raise concerns about money laundering and terror financing-things. There is some substance to the argument. But a blanket ban on cryptocurrencies might be hard to implement and might do more harm than good. That’s not me saying it, the committee itself has previously argued this. They also argued that a blanket ban would drive operators underground and might prove to be a catalyst in cryptocurrencies being used for illegitimate purposes.So why does a committee go from being on the fence on cryptocurrency regulation to a blanket ban? Cryptocurrency has never been legal tender (it might be once Facebook-led Libra comes out). It has always been traded like more of an asset. So it's not like bitcoin was challenging the Rupee (or Dollar or Pound in the first place). The recommendation is still a draft law. But once it is imposed, there is no plan to facilitate an exit for current crypto holders, who will end up being criminalised. According to The Wire, there are 50 lakh crypto traders in India and trading volumes are in the range of 1500 Bitcoins a day, or around INR 1 Bn. It lags some way behind the global trading volume which is in excess of $21 Bn. So if you hold/continue to hold foreign cryptocurrency, there is a real chance that one fine day you might wake up a criminal.There are around 2,116 cryptocurrencies globally with a market capitalisation of $119.46Billion. All of them are banned unless they are Indian. The panel recommended that the RBI can consider having a digital banknote as India’s official digital currency. So there is hope yet for crypto in India, just none for the private sector. In addition, there is also plenty of hope for blockchain technologies.According to the report, blockchain can be used by banks and other financial firms for processes such as loan-issuance tracking, collateral management, fraud detection and claims management in insurance, and reconciliation systems in the securities market.Broadly there are two points of contention that this ban and encouragement of blockchain presents. Firstly, implementation. Crypto trading and investing do not require government or third-party approval. This means it is hard for the government to detect where, when, and by whom crypto transactions are being conducted. This is before we get into the state’s capacity to monitor all these transactions.Secondly, winners and losers. RBI emerges out of this a winner. Not having to regulate cryptocurrencies under its mandate means that the can has been kicked down the road at the moment. There will be arguments made that the Indian economy also won. The burden of proof here is to justify how the Indian economy was losing when the crypto ban wasn’t in place.As for losers, there are two big stakeholders that lost. Firstly, for India’s startup community involved in crypto, this is a major setback. Crypto exchange CoinRecoil’s CEO Kunal Barchha in an open letter to the PM said as much. One possible means of recourse for them might be the law. Article 19 gives citizens the fundamental right of freedom to business in any sector or trade. It is hard to predict how the judiciary might rule on this when asked in court, but a legal challenge will provide hope to businesses dealing with cryptocurrencies.The second loser here is Facebook. More specifically, Facebook-led Libra. The ban means that if the currency achieves mass adoption, it is not going to have a user base in India. This might mean that Indian’s lose out on innovations in fintech until the ban lasts or is circumvented at least. As the crypto business flourishes globally, India might be left to play catch up once the ban is lifted.Bottom line is that there are good arguments on the side calling for the curtailment of cryptocurrencies. However, they are not nearly enough to call for a blanket ban. Let alone one that punishes through ₹25 crore fines and 10-year imprisonments. Even the committee or earlier versions of it would agree. The crypto ecosystem could have done without regulation in order to grow. As with other areas of technology, the government’s approach protects us for the moment. However, bans such as these, even if implemented well, will have to come down someday. Let’s hope we are prepared for when that happens.The writer is a Policy Analyst – Technology, at the Takshashila Institution and the co-author of Data Localisation in a Globalised World: An Indian Perspective. Views are Personal.This article was first published in Deccan Chronicle. 

An Ecosystem of Smart Payments for Mobility

The Nandan Nilekani-led committee on digital payments made its recommendations to the government recently. The report talks about a multitude of issues, including the international expansion of RuPay cards, increasing digital payment acceptance at scale, and a revised outlook towards KYC. One of the most fundamental things the report talks about is the need for an NCMC (National Common Mobility Card) wallet.The idea of unifying cards for mobility has been recurring in the policy sphere for the better part of a decade now. For instance, launched in 2011, the ‘More’ card aimed to be a single point of transactions for transportations, including metro, buses, as well as parking. The initiative failed to take off but Nilekani committee seems to have revitalised the debate. The committee mentioned NCMC in no less than 3 of its recommendations to the government. It suggested using the platform as a common technical standard to promote interoperable standards for transit payments. It also asked to Enable wider use of NCMC by extending use cases beyond mobility to point of sale devices. They also recommended creation of an NCMC wallet.The idea behind the NCMC originally was to create a seamless experience for citizens by allowing them to use a single card for transport. One nation, one card. Starting with metros and buses, the applications of the card could at a later stage transcend into paying for fuel, tolls, and maybe even canteens at railway station.Widespread adoption of such an initiative is envisioned to have multiple positive effects. Firstly, and perhaps most importantly, the card could have a positive impact on the growth of digital payments. Secondly, this could help in ease of use for existing methods of transport (buses and metro) and provide a good template to introduce new methods of commute (smart bikes). Thirdly, the one nation one card approach could serve as a driver for more people to take up public transport, helping lower emissions.The introduction and adoption of such a card would fit into the larger narrative of a developing India under Smart Cities and Digital India. The ingredients for the strategy for smarter mobility are all present, the question remains whether a smart NCMC card is the best possible solution to the opportunity that India has today.

Solving for a Smarter Strategy

The failed implementation of the More card and the subsequent proposal for the NCMC card implores us to ask a few questions about where we are and where we plan to go from here. This is not to say that the smart card is not the solution, but to imply that it should be part of a broader vision that is not limited to the introduction of new cards and instead also utilises existing and emerging technologies.Smart cards for public transport are not a new invention. London has been using the Oyster card for years now, covering metro, buses, ferries, as well as cable cars. In 2007, Mumbai experimented with the same with a card called GO Mumbai (a pilot project) which was applicable for BEST buses and later in Central and Western Railway Services. The rates of adoption were meager. Out of the 37 lakh people who used the Central Railway only 12,000 used the card. In the Western Railway as out of the 33 lakh commuters, only 39 used the card. So before we go about implementing a new NCMC card, it would be a good idea to learn from the pilot initiatives like GO Mumbai and develop a strategy that incorporates these new learnings.GO Mumbai failed because of the infrastructure that supports smart cards. The company responsible for supplying gadgets that would validate the smart cards, Kaizen Limited, failed to deliver a sufficient number of products. Furthermore, the machines available to validate the cards for travel were riddled with technical problems. This directly contributed to low rates of adoption.So we need to learn from the pilots that did not fare well, as well as from initiatives that did. One idea might be to develop multiple points of entry and recharges for public transport in India. This would include introducing bank cards, public and private, with NFC that work on public transport systems. RuPay, recently adopted the same by launching contactless cards. Contactless cards would eliminate the need to have a metro card for users who own debit cards. The introduction of NFC technology in the metro, as well as buses, would facilitate payments by Apple Pay and Android Pay in smartphones and smartwatches. In such a scenario, an NCMC card could serve as an alternative to individuals who do not own a bank card or would prefer to top up using cash. An added advantage of having just one card (VISA, Mastercard, or RuPay) would be eliminating the need for continual top-ups. Such an ecosystem would make it a seamless experience for consumers to use public transport while multiplying the number of digital transactions. Besides, debit/credit cards are used at other points such as petrol pumps nationwide, so they wouldn’t need a strategy to push NCMC cards for fuel payments. This also supplements the committee’s current recommendation on increasing NCMC acceptance and maybe the future regardless of whether or not the government accepts this suggestion.So instead of tackling a problem as complex as payments for mobility using a new card, let us take this as an opportunity to introduce an ecosystem of smart payments, where consumers can easily access public transport with or without cards. Something we are progressing towards through the recommendations of the Nilekani committee.The writer is a Policy Analyst – Technology, at the Takshashila Institution and the co-author of Data Localisation in a Globalised World: An Indian Perspective. Views are Personal.This article was first published in Deccan Herald.  

Modi govt’s blanket ban on plastics at this moment of economic slowdown is a bad idea

Modi’s de-plasticisation campaign seeks to end the use of single-use plastics by 2022. It is unclear if anyone in the government has done economic and environmental cost-benefit analyses of a nationwide ban on single-use plastics. If India’s proposed ban on single-use plastics is successful, the benefit is that we will reduce plastic pollution, but at the cost of worsening the cumulative environmental impact.Read more

China’s headache: Taiwan and not Tibet or Xinjiang

China’s defence white paper 2019 reiterates the importance of Xinjiang, Tibet, and Taiwan for China. The white paper highlights China’s concerns about Taiwan. But it implies a certain lessening of its worries on Xinjiang and Tibet compared to the past.Read more...

Slow economic growth is both immoral and anti-national. Don’t ignore falling GDP rate

Having convinced ourselves that the Narendra Modi government’s policies cannot be at fault, we are now debating whether the economic slowdown that began in 2017 is cyclical or structural. More than three million people emerge out of poverty for every percentage rise in GDP. The Indian economy will have to grow at over 10 per cent per annum every year to become a five-trillion-dollar economy by 2024. The RBI now projects a growth rate of 6.9 per cent for the next year.Read more

Wider debate needed on major changes in data protection law

With the developments in Kashmir and the economy dominating so much of the national discussion, it can be hard to keep track of what is happening with tech policy. One thing that might slip through the cracks is the changes in the Data Protection Bill. According to a recent report by Medianama, the ministry of electronics and information technology, or MEITY, is privately seeking responses to new questions from select stakeholders.The Data Protection Bill is going to be profoundly important in India’s tech policy landscape, going forward. It will tackle issues around data privacy, data protection, and data processing, all of which have never been discussed at length in Indian law. Based on inputs received from the Srikrishna Committee report, it will also focus on data localisation. So when MEITY initially asked for feedback on the draft data protection bill, it received over 600 comments from individuals and organisations. For this round of comments, the ministry has reached out to only 10-15 stakeholders.This raises a host of questions and concerns about the process. First, as Medianama puts it, why the secrecy? With over 600 comments being submitted, the bill is clearly an issue with a significant amount of public interest. MEITY and its bureaucracy could argue that 600 submissions are a lot to process, and not all the comments are relevant to the process. But for a piece of legislation this important, it is surely better to have too many inputs instead of picking and choosing which voices you would like to elevate. There is also not a lot of transparency in the process. How does one figure out the basis on which these 10-15 stakeholders were selected? This is not to imply that the participants asked for feedback are not a decent sample of stakeholders. But this could have been done better had a rationale/basis behind the selection been provided.Not knowing why some people have been selected and the others ruled out matters more when the bill has sweeping changes. The new version of the bill is reportedly going to address issues in e-commerce and community data. Both these topics were not a part of the Srikrishna Committee or the October consultation process. It is unclear what the bill’s stance might be on both these matters. To make an educated guess on e-commerce, the bill might condense and borrow aspects from the draft e-commerce policy from earlier this year. It is anyone’s guess what those aspects might be, but it does narrow down the list. As for community data, there does not exist such a precedent. It is frankly shocking that the consultation has been labelled as “clarifications” in the bill. If entire new industries are being addressed under the document, then surely it should be classified as additions/revisions, and thus call for comments from all stakeholders. It might not have been acceptable to have a selection of stakeholders for a round of clarifications on data protection. And that is even more so when it comes to picking and choosing stakeholders regarding legislation that has such substantial changes.This lack of transparency also makes one question the importance given to the comments submitted earlier. There is clearly value in having documents that present the perspectives of stakeholders across the industry, academia, and civil society. But given the recent turn of events, who can say whether these perspectives have been reflected in the new version that is being circulated for feedback. The idea here is not to give credit to organisations/individuals who may have caused tangible changes in policy. Instead, it is to ensure that the process that goes into finalising the document is truly multilateral.The final version of the policy will still have winners and losers. No legislation is objectively perfect. This is especially true in technology, where most laws find it hard to keep up with rapid advances in the industry. If the industry wins through lax laws on data privacy, civil society arguing for stronger privacy laws will de facto lose. What the consultations should then aim for is to reflect that different views on subjects were considered before making trade-offs in favour of one over the other.What makes this situation even more bizarre is that up until this point, the process has been fairly transparent. The Srikrishna Committee’s recommendations were comprehensive and publicly available. As was the first round of comments in October 2018, even though the comments submitted were not made available to the public. Why then has the second round of inputs been restricted to just a few people without any explanation? Not allowing public comments while adding e-commerce and community data to the mandate is going to have negative implications when the bill finally comes out. A large share of stakeholders in academia, industry, and civil society are going to have fundamental disagreements on the way this was carried out, as well as its contents.Indian policy towards all things technology is slowly catching up with advancements. As new legislation comes out regarding other emerging technologies such as artificial intelligence, fintech, and the Internet of Things, it would make sense to involve multiple perspectives while designing it. Failure to do so is likely to have an adverse impact on the adoption of these technologies and, by extension, India’s development.This article was first published in Deccan Chronicle. Views expressed are personal.

The Evolution of Synthetic Thought

Download the Essay in PDFThe world has never been enough. At least for us, humans. The endeavour to become more than what we are lies at the heart of human civilisation. We have overcome challenges of nature, obstacles of time, physical and mental impediments. Perhaps nothing reflects the culmination of this collective zeal to surpass our capabilities as much as Transhumanism.Transhumanism is a belief that human beings can transcend the limits of physical and mental limitations through technology. For some, a Transhumanist is an ideal to strive towards, and for others, it is both a source and an answer to all of humanity’s problems.Borne out of a belief system that humankind should reach the pinnacle of its capabilities and beyond, Transhumanism comprises augmentations to overcome limitations. While technological augmentations may be a recent endeavour, primitive humans have utilised tools to augment their capabilities. From the wooden spears, they used to hunt, the prosthetic wooden and iron legs to augment walking, all the way to lances in warfare, humans have employed augmentations throughout history. Eyeglasses, clothing, and ploughs signalled a rise in using tools to augment our capabilities.The rise in medical technology, genetic science, and electronics from the 1990s, has opened new frontiers in human capabilities. We don’t merely use technology as enablers but have started adopting it from within in the form of cybernetics. Armbands, deep-brain stimulators, physical and neural augmentations, mechanical and cybernetic implants, and potentially gene editing are technologies that humans can use to enhance themselves and achieve capabilities previously unheard of.On one hand, science is driving innovation in augmentation, and on the other, Transhumanism has given rise to a significant amount of philosophical thought. Notions of challenging what it means to be human, virtues and vices of post-humanism, and the dangers of uncontrolled immortality provoke deep questions that do not have answers but encourage much debate and discourse. There is also an entire section of humanity that believes that the very notion of Transhumanism is irrelevant, for any such technological advancements are several decades away.Transhumanism has generated fear and enthusiasm in equal measures. While proponents extol the virtues of embracing technology to enhance our lives, detractors fear what this will mean to be human at all. The widespread availability of Transhumanist technologies could result in radical life extension, overall well-being and improper perpetuation could create class divides, encourage oppression and even alter geopolitical landscapes.For the first time in human history, we can radically alter our minds and bodies and take shortcuts to the various destinations of natural evolution. This essay looks at Transhumanism from an emerging technological paradigm and attempts to provide an objective view of where Transhumanism is headed and what it means to the rest of the world.[pdf-embedder url="https://takshashila.org.in/wp-content/uploads/2019/08/TE-Evolution-of-Synthetic-Thought-CRG-2019-01.pdf"]Download the Essay in PDF

Facebook can’t be taken down, but Zuckerberg can be taken down a notch

It is hard to associate Facebook and most of Big Tech with anything positive right now. Privacy breaches and the Cambridge Analytica scandal led the American Federal Trade Commission (FTC) to fine Facebook $5bn. The fine was a joke. FTC’s decision was seen to be so weak that Facebook’s stock actually rose in the wake of the levy. You know a corporation is a fairly big when a multi-billion dollar fine barely qualifies as pocket change for it. The question most of the world seems to be asking is whether Facebook is perhaps too big?You will hear arguments that bigness is not a crime, that no company should be punished for being successful. But that is not remotely the point. The only reason the world now thinks that Facebook needs to be curbed is because of its horrendous conduct with the privacy of user data. Earlier this year, we found out that Facebook stored millions of passwords in plain text, visible to thousands of employees. When users signed up for two-factor authentication, Facebook used those numbers for targetted ads. What’s worse is that the $5bn fine is for privacy violations that Facebook has been fined for before by the FTC in 2011. Not only did Facebook’s conduct failed to improve, it actually got worse (read: Cambridge Analytica).

There have been privacy-focused initiatives from within Facebook that help users take more control of their privacy. Facebook recently announced an upcoming feature called ‘Off-Facebook Activity’. The idea is that since Facebook tracks what you do on the Internet even when you are not on Facebook, Off-Facebook Activity will give you an overview of websites and apps that share your information with Facebook. You still can’t delete the information that Facebook collects. However, you can choose to delink that information from your digital profile. It’s not perfect in concept, hasn’t been released yet, and does not do nearly enough to calm concerns around Facebook’s conduct towards user privacy.This would not have been such a huge problem if Facebook did not have a stronghold on free speech. Facebook (with its acquisition of Instagram and WhatsApp) has a monopoly on social media. Its closest competitors are Snapchat or LinkedIn. So even if people want to quit Facebook, they don’t have anywhere else to go. Zuckerberg has in fact admitted to Facebook’s power on free speech itself, stating, “Lawmakers often tell me we have too much power over speech, and frankly, I agree.”

Facebook’s monopoly means that no matter how horrible their conduct is with user data, they tend to get away with it. This brings us to the question of whether Facebook can be broken up. The idea here is that if Facebook could be unmerged with Instagram and WhatsApp, it would spark competition in privacy practices. Competition in privacy laws would be better for everyone.There have been calls to do exactly that. The idea of dismantling Big Tech is a key message of United States Senator Elizabeth Warren’s presidential campaign. Facebook’s own co-founder, Chris Huges, argued for breaking up Facebook too, calling Zuckerberg’s power “unAmerican”. The problem here is that it is a grey area for antitrust laws. It's unclear whether existing antitrust law is equipped to engender a splitting of Facebook, Instagram, and WhatsApp. It's up to the Justice Department and FTC to determine if a case can be made out for it. Even so, you can rest assured that if the U.S. government wanted to break up Facebook, it would be a lengthy process that might ultimately be unsuccessful. The government tried to break up Microsoft in 1990s, and failed.The other option here is to have stricter regulations when it comes to privacy. It is certainly the one Facebook prefers. In an Op-ed article for the New York Times published earlier this year, Nick Clegg, a vice president–level staffer at Facebook, called for better accountability through regulation. He emphasised the need for “significant resources and strong new rules” and added that breaking the company up would not resolve the problems of election interference or user privacy.Of course, Nick Clegg would say that. The problem here is that even if better privacy laws did exist they might not mean much given Facebook’s size and dominion. It could just choose to ignore them as it has in the past and assuage hurt feelings by paying a fine on occasion. Besides, U.S. privacy laws would not apply overseas. People in India would still suffer from privacy violations at the hands of Facebook.Facebook’s size is not a reason to punish it. However, its conduct toward user privacy is. It might be impossible to break up Facebook, but it is reasonable to demand accountability of it.If Facebook is to be truly made accountable, Mark Zuckerberg needs to be reined in. You will hear people say that Facebook’s current situation is a failure of capitalism. They will probably say that Big Tech needs big structural changes. They wouldn’t be wrong. Capitalism — and the attention economy, in particular — is not perfect. But, as of now, these are broad sweeping arguments, and not solutions. If Facebook is to be made more accountable, we need to begin with making Zuckerberg more accountable. Zuckerberg currently holds ~60% share on the Facebook board. This means Facebook’s board has no power to keep him accountable. It is advisory at best.The fix here is that Zuckerberg's power needs to be regulated. Creating a privacy czar will achieve little if s/he has no power to check Zuckerberg and his decisions. There are ways to accomplish this, none of them are easy.The most straightforward solution here would be to loosen Zuckerberg’s hold on the board by divesting him of a significant part of his shares. The legal precedent for this may not exist. However, it is only fair as Zuckerberg’s power, as a single man controlling the speech of 2 billion individuals, is unprecedented. It would help the board hold him accountable rather than simply advise. It would also steer clear of setting a precedent of companies being punished for being too successful.This article was first published in The Hindu.

If India is in crisis, it is because good guys like ex-IAS Kannan Gopinathan rather quit

Ex-IAS Kannan Gopinathan’s resignation would have captured public attention even if it had not been in protest against the Narendra Modi-Amit Shah government’s clampdown in Jammu & Kashmir. In his ethical calculus, the benefit of fighting from the inside was lower than the costs of suppressing the voice of his conscience. So, he rightly quit. Yet, a different person in his shoes could have done the right thing by staying in service. Consider.Read more

Neither is Russia a reliable friend nor is US a fickle one. Nation-states have semi-permanent interests.

The Print’s daily roundtable TalkPoint posed a question connected to the Indian PM's France visit: Modi-Macron embrace: Does India have permanent friends or is every alliance strategic?My response:There are no friends, let alone permanent friends when it comes to international relations. Anthropomorphism in international conduct can lead us to incorrect assumptions and solutions. So, Russia is neither a reliable friend of India nor is the United States a fickle one. However, what can be said is that nation-states do have semi-permanent interests.It is in India’s interest to have a better relationship with France for two reasons. First, it ensures that the European Union’s policy towards India remains favourable. It is far more advantageous to deal with individual European states than with the European Union. Second, strategic engagement with France — inclusive of defence purchases — is a way to secure its support for Indian positions at the United Nations Security Council.Going ahead, diversification of the trade relationship with a key defence supplier like France is critical for India. A diverse partnership provides levers to hedge against changing geopolitical equations. Maritime co-operation, the International Solar Alliance, and nuclear energy trade illustrate this overlap of French and Indian interests.Read the entire discussion here.

India's Upcoming Digital Tax: How Will Big Tech Cope?

Taxation and regulation is slowly catching up with technology: India is now preparing a framework to tax Big Tech companies. India’s desire to do so is part of a global pattern. Earlier this year, France came up with a proposition to tax Google, Facebook, and Amazon. India following suit will lead to broader international consequences with a combination of factors determining how Big Tech is taxed.Digital taxation has been on the government’s mind for some time. June 2016 saw India come up with a “Google Tax,” an equalization levy that taxed digital advertising. In 2018, the revenue from the tax surpassed 10 billion rupees ($139 million). Prime Minister Narendra Modi’s government is also keeping an eye on the tech ecosystem. Modi himself has pushed for Digital India, Startup India, and called for digital payments post demonetization. As India grows as a market for digital technologies, the scope for the government to tax big tech firms such as Facebook and Google grows.India is a huge market for companies. As of April 2019, Facebook had 300 million users in India. You can expect to see a significantly higher number from Google. The idea is that India is a big source of revenue for tech companies. However, because these companies do not have a significant economic presence (SEP) in India, they might not pay their fair share of taxes. This is where India’s new proposed framework comes in. Multinational tech companies achieve scale without volume; they are structured in a way to pay less taxes. The proposal currently in the works will change that and make companies liable to be taxed.The complication here is that we live in a world where technology is a variable in international relations. Most giant tech companies are American and operate from Silicon Valley. The Trump administration might not like Big Tech but it will retaliate against other countries taxing Silicon Valley. The Americans have already postured against this seriously before. When faced with the prospect of data localization by India, Trump’s White House considered capping H-1B visas. The United States has already announced an inquiry into France’s proposal to tax Facebook, Google, Amazon, and Apple. There is a good chance that the matter might end in tariffs for France. This is something India has to consider as it goes ahead with taxing American Big Tech. Trump himself has been aggravated by the tariffs India places on the United States. He called out Modi and called the tariffs “no longer acceptable” during the G-20 summit. India’s push for digital taxation will likely provoke a similar reaction from the White House.The other stakeholder here is Silicon Valley itself. It is unclear how firms will react to thinner profit margins in India. There is a possibility that they could acknowledge market leverage while lobbying through third parties. The other end of the spectrum is that they could threaten to pull out of the market, leaving India with no direct substitutes. One possible outcome of a proposed Indian tax could also be the loss of future possible investment in India. If the government decided to tax Facebook and Google on revenue generated in India, they could see it as a sign to invest more in other markets. At the moment, India could be too big of a market to ignore. However, the imposition of taxes going forward might take away the incentive to innovate for the Indian consumer. It would also translate into the slower deployment of new AI-based technologies by large tech corporations, potentially slowing down India’s advancement in the AI race.All of the options above are highly unlikely, though. What is most likely to happen is the revision of a new framework with Big Tech at the table. Because both parties, the Modi government, and Big Tech, have a lot at stake, a compromise seems like the rational outcome. This way Google and Facebook can have a say in deciding how they are taxed and how much they should have to pay. A mutually consented tax rate could be beneficial for all stakeholders. It would keep investment flowing while not forcing India to look for domestic substitutes. It would also ensure that India does not rely on Chinese substitutes, doubling the scale of Chinese digital companies. However, just because this seems like the rational way forward does not mean that it is the one that will be taken. There are so many ways that an Indian digital tax could play out; we can only hope that policymakers will have carefully considered its impact on India’s foreign relations.Modi, Trump, China, and Silicon Valley — it is all a fascinating mess. It also goes to show how technology has inserted itself into foreign policy and geopolitics. As the Modi government might consider taking France’s lead, it is a step toward taxation coming to terms with the digital economy. How this ends globally will determine profit margins in Silicon Valley and development budgets in New Delhi.This article was first published in The Diplomat. 

On Trump's Kashmir comment

ThePrint's daily roundtable Talkpoint posed a question related to PM Modi's conversation with US President Trump on the latter's offer to mediate on the Kashmir issue. The question was: Is PM Modi allowing Trump to play policeman in India-Pakistan tensions over Kashmir?My response:Policeman is an incorrect metaphor to use. The act of policing involves ensuring compliance with an underlying rule of law. No such enforceable force of law exists in the domain of international relations. Instead, power is the currency in international relations. It is precisely for this reason that Trump’s stance and actions on India-Pakistan tensions are important following the Narendra Modi government’s move to abrogate Article 370.The real issue then is how the Modi government can deal with a powerful stakeholder like Trump now. While India needs the US in order to increase its own economic and military power, the US-China structural rivalry makes India a very important player in the US strategic calculation. Pakistan doesn’t feature in any of these forces driving the India-US equation.For its part, Pakistan will try to use the Kashmir issue to drive a wedge between the US and India. From Pakistan’s standpoint, returning to the India-Pakistan hyphenation era in the eyes of the US is desirable. And given Pakistan’s role in the ongoing talks between the US and the Taliban, Pakistan’s case is likely to carry more weight than it otherwise would. India’s challenge will be to continue isolating the US-India relationship from the ongoing India-Pakistan dynamic. This task will become more challenging if the security situation in Kashmir worsens.Read other views on ThePrint here. 

India’s No First Use is badass enough. Modi govt needn’t change it to be more muscular

A day after India’s 73rd Independence Day, the Narendra Modi government threatened Pakistan with the possibility of a nuclear attack if it scales up cross-border terrorism and militancy against India. The Modi government appears to have calculated that the fear of an Indian nuclear strike will raise Pakistan’s costs of cross-border terrorism, thus deterring its use. The biggest problem with this bold new approach is that it will work only to the extent that the Pakistanis believe India’s threats are credible.Read more

Kashmir Decision Could be Distracting India From Its National Security Priorities

The recent Indian political manoeuvre involved deeper integration of Jammu and Kashmir by watering down Articles 370 and 35A of the Indian constitution as also the strengthening of the control by the Centre through the change of the statehood status of Jammu and Kashmir and its simultaneous bifurcation into the Union Territories of Jammu and Kashmir and Ladakh. An elected assembly, on the lines of the existing arrangement for the Union Territory of Delhi, is envisaged only for Jammu and Kashmir.Read more

Why Xi won’t be sending the PLA to quell Hong Kong protests

The eleven-week-long protest movement in Hong Kong has reached a critical phase. Earlier this week, thousands of protesters converged on the city’s airport, paralysing operations and disrupting nearly 1,000 flights. The airport was finally cleared on Thursday after clashes between riot police and the protesters. The scenes of chaos played out as the top leadership of the Communist Party of China met for its annual conclave at the beachside town of Beidaihe.The situation in Hong Kong undoubtedly must have been on top of the agenda. The protests, which initially focussed on an extradition bill put forward by the city’s government, have now evolved into a larger battle for autonomy from Beijing’s tightening grip. In the process, peaceful demonstrations have given way to anger and violence.These turns of events indicate an increasing sense of unease that Beijing is now seriously contemplating the use of force. This, of course, remains a possibility. The Basic Law of the Hong Kong Special Administrative Region empowers local authorities to request Beijing for such assistance. The PLA, in fact, already has troops stationed at a garrison in Hong Kong. However, given the current scenario, it is highly unlikely that Xi will deploy the armed forces to quell the protests.Read the full article published in The Hindu

From AFSPA to street protests, Modi govt needs new thinking in J&K with Article 370 gone

While the constitutionality of the government’s actions, with respect to scrapping Article 370, has been challenged in the Supreme Court, we should not expect the judiciary to overrule the decision entirely. What ought to be of utmost concern now is: Where do we go from here? How do we try to make India — including Jammu and Kashmir, and Ladakh — a better place than it was before 5 August 2019? What are the necessary policies that the Modi government must adopt to prevent the situation from deteriorating further?

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