IMPULSE

International Business Club, MDI Gurgaon

COMPENDIUM
International Issues and Affairs
TABLE OF

C O N T E N T S
1
Armenia-Azerbaijan war: A new-age warfare

3  
Biden wins office, the reforms, and
expectations

5 
Brexit: 4 years coming to a climax

7
Decline of Multilateral Institutions and Rise in
Bilateralism

12 
Facebook, others, and their tryst with data

14
France’s complex relationship with Islamism

17
India as the economic engine for South Asia

20
Pharmaceutical exports: India’s salvation to
atmanirbhar Bharat

23
Rise of the Second wave of Covid in Europe
and its Impact on Business
ARMENIA-AZERBAIJAN WAR:
A NEW-AGE WARFARE
Within three weeks of war between the
two countries a ceasefire agreement was
signed early in November,2020 with
Azerbaijan claiming victory and Armenia
backing down. What’s interesting is
exactly 30 years ago when the countries
last fought it was Armenia that defeated
Azerbaijan. In this article we will try to
explore what changed in these 30 years
that led to such a swift victory in that part
of the world where wars and skirmishes
have lasted for decades together.
As the world was grappling with other
urgent issues like controlling the
pandemic and US elections, an under-
covered and underrated development of
the middle east took place. Above is the
map of where the countries are located.
The area of conflict is the region between
the countries called “Nagorno-Karabakh”
and is surrounded by troubled or trouble
maker countries like Iran, Turkey, and the
western part of Russia which holds its
influence indirectly, depending on which
camp you come from.
The region internationally is believed to be a
part of Azerbaijan but is mostly dominated by
separatist groups who align and vow
themselves with Armenia and that is how for
years since the last war between the
countries Armenia has held dominance over
the region. But the outcome of this war is
seen to change the dynamics slowly in favor
of Azerbaijan. While Russia has interests in
both countries, it is rumored that Turkey
helped Azerbaijan not just with arms,
ammunition, and technology but also
participated in the war sending separatists
into the region to fight against Armenia.
Eventually, Russia stepped into broker a deal
between the countries with Azerbaijan
gaining about 15-20% of the grounds into the
region. Now Russia has deployed more than
2000 soldiers in the region along the border
to ensure that peace is maintained, which is
speculated to be a proxy for gaining further
dominance over the eastern part of the
middle east.
What led to such a decisive conclusion of the
war within weeks? The answer lies in
technology and drones to be precise. While
many have imagined these unmanned since
decades now and adopted them in various
sci-fi films, this conflict was a proof and a
trailer of what warfare could look like. While
Armenia boasts of a highly motivated army,
backed by Russia to a certain extent which
had tasted victory over their foes
Azerbaijanians, the country depended on the
conventional military might which it carries.
Azerbaijan has always been a larger country,
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with more servicemen, larger fleets and
number of military strength but Armenians
were the ones who adopted newer
methods and technology back in 1990s
which helped them turn the tables.2020
was different though.Azerbaijan spent
millions of dollars in purchasing the
Turkish-made Bayraktar TB2 and the
Israeli-made Kamikaze drones. In a tactical
play, Azerbaijan used repurposed biplanes
that dates back to 1947 as baits. These
single propeller engines were converted
into unmanned single-use drones which
were sent to the Armenian defenses.
Thinking that a big threat is incoming the
Armenians activated their radars and
missile batteries, which disclosed their
positions. The Azerbaijan drones that had
been encircling the area then came in and
destroyed them wiping out the Armenian
surface-to-air missile defense. The result
of which was that while the Armenians
were fighting ready on the ground, the
army never got to prove its mettle like it
did in the 1990s. The Armenian forces
turned out to be practice targets for these
superior drones which flew undetected
from the capabilities of armored vehicles
and tanks. A journalist reported, “Now, it’s
very scary because you don’t know —
you’re sitting on the ground, you are in a
tank, and you don’t know which fellow is
loitering over you someplace, and will pick
up your electronic signatures or your heat
signatures and come drop bombs on you,”.
The numbers reported after the war said
that Azerbaijan lost only one-sixth of the
military equipment and resources
compared to Armenia.
Implications for India
While Turkey is seen to be hostile towards
India and cosying up to Pakistan, one could
imagine Pakistan eyeing these drones but
the inference goes beyond specific
examples. South Asian countries have
largely dependent of the strength of their
military in terms of the numbers. India and
China both have the largest number of
servicemen in the armed forces. India’s
capability lies in the rigorous training and
capabilities that our forces command which
has been demonstrated time and again, not
just against Pakistan in the four wars we’ve
fought and won but also in the recent
stand-offs between India and China in
Doklam and Ladakh. While India is
increasingly working towards procuring
state-of-the-art military equipment in the
last few years ranging from the Rafales to
attack helicopters and S-400s, the
Armenia-Azerbaijan war is an indication
that this might be the beginning of the end
of military being ranked and graded in the
conventional terms. Technology has
impregnated each and every facet of our
daily lives bringing in convenience and
efficiency but as technology finds more
strength and application in larger contexts,
a rejig in priorities and direction of
investment is needed.
2
BIDEN WINS OFFICE,
THE REFORMS, AND
EXPECTATIONS
After Joe Biden’s win in the US election
against Donald Trump in 2020, the
incoming president-elect will face
immense pressure to enact a laundry list
of priorities on several topics ranging
from foreign policy to the climate crisis,
reversing several of his predecessor's
significant reforms.
JOE BIDEN
But for his first 100 days in the White
House, Biden's first and most pressing
mission will be to enact a new national
strategy to tackle the coronavirus
epidemic, which has claimed more than
220,000 lives in the US and infected
millions, more than any other nation in
the world, as well as take steps to resolve
the devastating economic fallout.
Neera Tanden, who was director of
domestic policy for the Obama-Biden
presidential campaign and went on to be
a senior advisor at the Department of
Health and Human Services, said that
Biden's 'first order of business' in office
would possibly be aimed at containing the
death toll and addressing the economic
harm (HHS).
NEERA TANDEN
European diplomats expect President
Biden to reassure NATO allies quickly of
the enduring commitment of the United
States to Article 5 and restore support for
European integration. They also predict
that a Biden administration will reverse
the decision of Trump to leave the Paris
climate agreements and re-engage
diplomatically on Iran's nuclear problem,
both of which are seen by European
diplomats as profoundly symbolic of the
overall commitment of the United States
to multilateralism.
In the diplomatic domain, Biden has
promised to restart the Iran nuclear deal,
which was the Barack Obama
administration's flagship Middle East
initiative. This is a good position for India
because the "maximum pressure"
campaign of Trump against Iran had the
unintended effect of restricting India's
investment and construction of the
strategic port of Chabahar, a critical
undertaking to keep Pakistan under
control and avoid Chinese encirclement
on our western flank.
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India has to have a Plan B focused on
knowing where Biden comes from, what
he stands for, and how he can be
harnessed to advance the national
interests of India. The Biden Presidency
will remain committed to a
"comprehensive global strategic
partnership" between India and the United
States. But in the light of unprecedented
policy uncertainty that has befallen the US
in recent years, Biden would self-
consciously look to repudiate many of
Trump's acts and approaches to world
affairs.

The Biden presidency would be less

transactional and aggressive to
conventional US partners and allies than
Trump's. Biden's track would be the liberal
one of separating friends (especially
democracies) from enemies (authoritarian
countries), and being charitable to the
former if Trump's populist world view
considered every single nation on earth an
economic rival that takes advantage of the
US via unfair laws.

A Biden presidency does not afford to lift

the huge Trump-era tariffs on China,
owing to the bipartisan anti-China
sentiment and completely negative public
view of China in American society. India, by
comparison, in Washington, is not a "red
meat" political issue. If Biden is in the Oval
Office, it is probable and worth following
through with an early and friendly closure
of the trade war with India. It would be a
booster for the post-Covid economic
recovery of India.

4
BREXIT: 4 YEARS COMING
TO A CLIMAX?
Recently, the UK and the European Union (EU)
have agreed to continue Brexit trade deal
talks and abandon the 31st December
deadline, the end of the transition period for
a post-Brexit trade agreement.
Under the Withdrawal agreement
between the UK and the EU, a transition
period of 11 months was finalized until
31st December 2020.
1. During this period, the UK continues to
participate in the EU’s Customs Union and
in the Single Market.
2. The transition period makes sure that
there is not a sudden shock but a degree
of continuity that allows both parties to
secure an orderly Brexit, minimizing
disruption for the citizens, businesses,
public administrations, as well as for the
international partners.
KEY POINTS
In the negotiations on the post-Brexit
trade agreement, significant differences
T should be administered by a joint
remain on three critical issues: level
playing field, governance, and fisheries.
Level Playing Field:
1. What measures there should be to ensure
a “level playing field” for businesses
between the UK and the EU and the role
of the European Court of Justice.
2. Deadlock over the EU’s demands for
a mechanism that would make tariff-
free trade with both sides maintaining
fair competition for business through a
regulatory “level playing field”.
3. The UK rejected the “evolution
mechanism” or “equivalence
mechanism”. This mechanism intends
to deter the UK from undercutting the
EU if the bloc decides to raise its
standards in areas such as
environmental rules or workers’ rights.
4. The UK could not accept a deal that
left it bound to EU rules in the future.
Governance:
1. The UK wants to strike out a deal
through bilateral talks with EU
leaders.
2. However, the EU had already
proposed that the mechanism
committee of EU-UK officials, with
the arbitration in case of disputes
and the negotiations must be
conducted on behalf of all of the
bloc’s 27 member states by the
committee.
5
 Fisheries:

1. The key focus is on access to UK waters by the EU’s fishing fleets.

2. According to reports, France is leading the charge in this area and demanding
access rights for at least 10 years, a demand the UK is unwilling to give in to,
claiming it fails to meet its take back control criteria for leaving the bloc.

Possibilities After Failed Negotiations:

If a deal is not reached before the December-end deadline, the “most likely” outcome
remains a no-deal Brexit on World Trade Organization (WTO) terms on 1st January.

1. In a no-deal situation, the UK would immediately leave the EU with no agreement

about the divorce process (term used for the UK’s separation from the EU), leave
the single market and customs union arrangements overnight.
2. The UK will have to immediately leave EU institutes and other bodies like the
European Court of Justice and Europol, its law enforcement body and will no longer
contribute to the EU budget.

Without a trade deal, cross-Channel trade will revert to WTO rules, with tariffs driving
up prices and generating paperwork for importers and border checks and taxes will be
introduced for goods travelling between the UK and the EU.

It would have a far-reaching impact on the way business and trade is conducted in
Europe and could spoil the relations between the UK and the EU.

WAY FORWARD

There is a soft Brexit and there is a hard Brexit but the UK needs to find a way for a
semi-soft Brexit so that people do not bear the sudden shock of leaving the EU at
once.

The EU’s core idea is that the member nations are stronger together and pooling
the resources and initiatives is the best way of achieving common goals. Even if the
UK has moved out of the EU, it will continue to move forward as a bloc of the 27
countries. Meanwhile, other nations of the world will have to accommodate
themselves according to the shifting balance of power and politics.

6
DECLINE OF MULTILATERAL INSTITUTIONS AND RISE IN
BILATERALISM

Rise of Multilateralism in mid-20th century

For much of the second half of the 20th and the early 21st century the US acted as a
champion of the multilateral system and Western universalism through soft power and
military intervention. With the end of the Cold War, the multilateral system gained a new
momentum as global exchanges accelerated and more inclusive, multi stakeholder
approaches allowed for the participation of new actors, including civil society
organisations and private businesses.

State of crisis for multilateralism

More recently, multilateralism has entered a state of crisis or decline. The backlash against
the predominance of the West and the rising tide of populism have been eroding the liberal
values underpinning the multilateral system.

7
While previously major powers were at
least paying lip service to the multilateral
agenda, some leaders, like US President
Donald Trump, are openly disavowing or
contesting it.
Pursuing an aggressive “America first”
policy, the Trump administration has
relinquished the traditional role of the US
as herald of the international liberal order
and withdrawn from the Paris climate
convention, the Iran nuclear deal, and the
Trans-Pacific Partnership.
China, aiming to bend the multilateral
system in its favor, is setting up parallel
governance structures such as the
Shanghai Cooperation Organisation or the
China Development Bank. The EU, a
traditional champion of multilateralism, is
internally divided and losing influence on
the international scene. The G8 has shrunk
to the G7, and a trade war is looming
between the US and China. Concurrently,
the UN and its manifold agencies have been
losing their lustre, criticized for their lack of
efficiency, and ideological infighting. The
WTO has failed to conclude the
negotiations of the Doha Agenda started in
2001, as bilateralism and protectionism are
resurging worldwide, and its dispute
settlement system has stalled. The
complex architecture of arms control set
up at the end of the Cold War is threatened
by the dismantling of the Iran nuclear deal.
Multilateral efforts to address climate
change have made symbolic progress at
best. The stakes are high as the crisis of the
liberal international order comes at a time
when multilateralism and concerted global
action seem more necessary than ever.
Pressing global issues such as major
conflicts, climate change, migration
flows, global economic shocks, arms
control, and cybersecurity may indeed
only be solvedcollectively. As the current
COVID crisis is illustrating, while existing
multilateral mechanisms such as the
WHO have excruciatingly shown their
limits and shortcomings, alternative
routes of unilateralism and
uncoordinated action at the state levels
have proven dead ends in containing the
spread of the virus and are unlikely to
address the global repercussions of the
pandemic.
More effective and better-endowed
mechanisms of global governance are
needed to anticipate, prevent and
manage future outbreaks and mitigate
their devastating consequences not just
epidemiologically but also on the social
and economic level.
The changing nature of
Multilateralism
It has been argued that far from being on
the verge of collapse, the multilateral
system was merely undergoing a
profound mutation – one that might even
end up making it more effective and
better adapted to the realities of the 21st
century. Global governance has indeed in
many ways gained in complexity,
buoyancy and density. It now consists of
a multi layered system of regimes,
agreements, networks, and initiatives.
What we may thus be witnessing is not so
much the demise of global governance
per se but rather the decline of one
8
particular type of multilateralism,
propagated by Western liberal hegemony
and the concomitant intergovernmental
agreements and institutions set up after
WWII.
Rise of Bilateralism
With rising backlash against the west and a
tide of populism against multilateralism,
there are several bilateral relations being
established for the mutual benefit of the
both nation states. A comparative is given
here for ready reference.
Rise of Bilateralism
The bilateral trade between the US and
India is approximately 62 percent in
goods and 38 percent in services.
Politically- the two countries are
proactively engaged on multiple fora
together.
Strategically- high level of
convergence, specifically in the Indo-
Pacific region.
Defense Cooperation- There has been
tremendous progress in the past few
years, as, until 2008, India hardly
bought any defense supplies from the
US. However, in recent times, India has
signed a deal for buying defense
supplies worth almost 18 billion dollars
from the US and another three billion
dollars’ worth of defense supply in the
pipeline.
Trade relationship- Trade has
increased 10 times in the last 15 years.
The US is India’s largest trading partner,
with trade between the two countries
standing at 87.95 billion dollars.
Significance: India is a trade deficit
country in most cases; however, it has a
trade surplus with the US. The trade
surplus was about 26 billion dollars in
2018, and currently stands at 21 billion
dollars.
The Indian IT sector contributes to
almost 9% of the country’s GDP, and
the bulk of it is exported to the US.
In the last two years, India has had
another contract with the US to buy oil
and gas worth seven billion dollars.
US Concerns regarding trade
with India:
The US has concerns over its trade ties
with India, as it is one of the top
countries with which the US has a huge
trade deficit.
The current policy US is looking at the
trade relations with each country in the
bilateral context and thus would want
every surplus or deficit to be addressed
and a balance to be brought about. This
is in contrast to the earlier norms
where only the global picture was
considered.
How much progress India got
out of Trump’s visit in 2020?
There were multiple issues that posed
a problem such as trade, tariffs,
subsidies, data localization and
intellectual property.
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The dairy sector is extremely
vulnerable in the present condition.
Intellectual property would always
present a hurdle between both
countries.
However, the entire gamut of the
agreements did not cover labor. H1B
visas are a very important issue for
balance.
What does the US want from
India with respect to the issue
of trade surplus?
The US wants India to lower its tariffs
and work towards balancing the trade
surplus.
However, India has a view that a
bilateral trade relationship shouldn’t be
evaluated with the balance of trade as
a parameter. This would cause the
overlooking of the actual value-added
due to the trade between the countries.
Issues
India is aggrieved that the US has
imposed tariffs on Aluminum and steel
supplies from India to the US ostensibly
on the grounds of National Security.
National Security cannot be used to
invoke trade measures against India, as
India is a strategic trade partner of the
US.
The US has revoked India’s developing
country status
The US continues to take a hard line in
terms of trade and is trying to push and
get the maximum advantage that it can
get from India.
Would the lack of a major trade
deal affect the US-India
relationship?
No, the discussions regarding the trade
deal are open-ended until both countries
find a suitable middle ground.
However, the absence of a trade deal
would not be an indication of a
disturbance in the relationship between
the two countries, as there are other
important aspects for maintaining the
bilateral relationships between the two
countries.
The strategic, political, and defence
relations of India with the US have very
much strengthened over time, thus, both
the countries would have to negotiate and
find a suitable agreement for their trade
deals with time.
Is the coronavirus epidemic in
China an opportunity for India
and the US going forward?
China’s current situation is a genuine
problem, but it has caused the value
chains to be disrupted.
This is a self-created problem to a certain
extent, as it was the US who initiated the
process of bringing China into the WTO
during the 1990s
China had utilized the Rules and
Regulations of the WTO, upon entering
the WTO, to enhance the market access
for itself and regulate the manufacturing
process in China.
10
The business which moved out of China relocated largely back to the US, Vietnam and
other countries. Very few moved into India. Thus, India must decide its role in the new
value chain arrangements.

India also needs to focus on the development of newer technology as the new value
chains would be centred around 5G technology, quantum computing, machine learning
etc.

India has to look for opportunities within the integrated global value-chain, and in the
decoupling process between the US and China in terms of the production processes.
However, to do so, India must focus on its own development first, in order to ensure that
it can take advantage of the events occurring internationally.

Way Forward
The Wuhan crisis has taught us that every nation will have to play a role in the global
value chain. India would have to stop its dependence on China for its Active
Pharmaceutical Ingredients (API). It would have to revive the API manufacturing capacity
of the country.

India would have to work on its manufacturing capacity and quality. India would also
have to create a suitable environment for private investments, as it’s currently an issue.

India would also have to work on its own development in order to be able to take
advantage of international events and not become vulnerable in the face of a crisis.

11
FACEBOOK, OTHERS AND THEIR TRYST WITH DATA
Data privacy has become a critical subject
much debated and often feared about.
Increasingly as billions of people accept the
world of smartphones and the internet into
their lives, their data is recorded and
tracked by techniques and means beyond a
common man’s imagination.
In all the conversations about data privacy
most often fingers are pointed at one giant
to be the biggest culprit among the other
tech giants and that is Facebook. Facebook
started out as a social media website that
helps people connect with friends and
family over the internet, see what people
they know or aspire to be are up to, and
essentially helped the world as a whole
stay connected with each other in a far
more efficient and easier way. Today,
Facebook as a parent company has under
its umbrella the largest social media
platforms of the world - Facebook,
Messenger, Instagram, and WhatsApp.
Essentially this means it holds a repository
of every user’s personal data, their
shopping, political, entertainment
preferences to name a few. Of course, this
is logical as Facebook and other social
media platforms are closed-ended, which
means they make money when you stay
logged in and that’s how Facebook evolved
from just a platform where you see what
your friends are up to, to monetizing that
very data. Knowing each and every user
accurately enough helps these companies
assure advertisers the kind of success they
have never seen before. For example, if a
user follows the page of Manchester
United, it is highly likely that he/she could
be a potential customer for the new
season’s jersey being sold by Nike. These
seem to be harmless examples but
stemming from this very application of
targeted communication which is
personalized to an extent that nobody else
can figure out what exactly gets fed to a
particular user thanks to AI and ML, it
became a potential tool for manipulation.
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That’s where the problem originated from
and while there were recurring issues and
violations over the years, the impact was
never large enough for the entire world to
take account of the situation until the
Cambridge Analytica scandal broke out and
the allegation of manipulation of
perceptions of the voters in the 2016 US
elections came to light.
Facebook and other social media platforms
were never intending any ill, but the way
these algorithms work in the background
resulted in skewing of opinions and
bombardment of information and clips
which were neither tested or verified for its
correctness and while many were taken
down after enough people reported it, it
was too late. A study revealed that
Facebook uses the preferences and content
that engages a user and keeps feeding
similar content to keep the user online and
scrolling while they push advertisements
every few swipes. A very successful
strategy one must admit, but what happens
is that the feed a user sees is only a part of
a larger set of information which gets
ignored and opinions become stronger
often mistaken for facts, and creates a
divide and a slightly skewed version of the
world as per their own biases and
preferences. That has led to a divide like
never seen before.
There have now been numerous occasions
when the big tech has been slapped with
fines and notices as a constant reminder to
get things in order but the war chest it has
built over the years takes no hit. It is almost
as if governments and councils now look at
the fines as a source of income every now
and then, when things get out of control
and becomes evident to the world. Today
Facebook and other tech companies are in
reality giants and can be thought of how
the banks were imagined to be in the last
decade, mammoth organizations and too
big to upset, not just fail. Also, many of the
tools serve the purpose of those few sitting
in power corridors of the world and have
little incentive to ask the tech companies to
tow the lines.
Facebook and others have over the past
two years and since the congressional
hearings began in 2018, ramped up the
checks and balances, added warnings to
caution the user before watching content
that might be aggressive in nature,
introduced the “forwarded” header to
messages that spread like wildfire. These
steps are a baby step towards what ought
to be in terms of controlling and monitoring
the type of information that spreads across
these platforms. Likewise allowing users
more and more control of their profiles and
feed is a utopian world that we hope for.
Given that Facebook’s tag line was “It’s free
and always will be” had very little choice
but to make users a product for whom the
advertisers pay. Facebook no longer says
so and since 2019 the tag line has been
changed to “It’s quick and easy”. It would be
foolish to think that Facebook and other
platforms would stop intruding in our lives
the way they do without them finding an
alternate source of monetizing their
operations, but what we could hope for is
once they do, they will do away with
compromising data privacy for good.
13
FRANCE’S COMPLEX RELATIONSHIP WITH ISLAMISM
The complex relationship between Islam and
France is the center of controversy since a
long time. Despite of the fact that Islam is the
second most widely followed religion in
France, with a population of 5-6 million of
French citizens propagating the religion of
Islam yet shares an Intense and complex
relationship. France witnessed many waves
of immigration, be it from European nations
or former colonies in Africa and Maghreb. The
immigrant groups from European Nations
blended in the French culture seamlessly but
the situation for the immigrant groups
arriving from the African parts and Maghreb
was not the same as it was for other
immigrant groups. Discrimination against the
Muslim citizens is not a new phenomenon, it
bloomed with every wave of immigration.
France has emerged as the brewing pot of
controversies and have pitted numerous
Islamic nations against France.
France’s definition of secularism holds no
place for religion in public domains and it
has been confronted by many immigrant
groups, but the biggest difficulty has been
with its Muslim citizens.
There has been a great deficit in the effort
from the government’s side while tackling
this issue, in the recent speech of French
president Macron, he highlighted the issue
that there is a need to curb down the
heated issue.
Recent situation in France
Recently, a teenager of mere 18 years of
age decapitated a 47-year-old teacher
Samuel Paty, the teenager belonged to the
Chechen refugee group. This incident
happened a few days after Paty displayed
caricatures of Prophet Muhammad to
students. President Macron happened to
release a statement fueling anger amongst
the Islamic groups, he addressed Islam as
14
the religion in crisis and plagued by radical
temptations. After the shocking incident,
President Macron in his speech “We will
continue, we will defend the freedom that
you taught so well, and we will bring
secularism.” He said France would “not give
up cartoons, drawings, even if others back
down”.
His speech stirred violence within France
but he acknowledged that France will not
back down from building a French version
of Islam which will be enlightened and will
integrate itself in the way of French
culture, he pointed out that French
secularism is not the issue, the issue lies
with political religious manifestations
which often leads to high rates of school
drop outs and many other community
practices which are not in conformity of
law of the Republic and it opposes our
values, equality and human dignity.
President’s speech angered many Islamic
countries and groups within France and the
opposing mass labelled the President as
‘Islamophobic’.
In 2015, killings at Charlie Hebdo Office over
publication of cartoons of Prophet
Mohammed, it was a huge turning point. It
was followed by a lethal terrorist attacks in
the city of Paris, mass shooting in cafes and
suicide bombings and another mass
shooting at a theatre, France had the
highest number of citizens leaving to join
hands with ISIS in that very year of attacks.
After such terrorist infiltrations and mass
attacks Macron’s stand on Islam seems to
be like a political necessity. Current
situation in France cannot be neglected by
any political leader of high position and
power.
Many believed that the killing of Paty was a
continuation of previous terror attacks. In
light of the current crisis and tense
environment, the President announced a
bill to crack down the Islamic radicalism. It
revolves around range of measures,
including school education reforms to
ensure Muslim children do not drop out,
stricter controls on mosques and
preachers, and has caused concern among
Muslims in France. Following the
announcement of the bill, many Islamic
countries have been angered and have
demonstrated strong opposition through
Anti-French protests and by boycotting
French products. The complex relationship
of France and Islam is no more an issue
that was hidden inside the border of the
country, it is now globally well-known, and
many have shown strong disapproval with
the actions taken and statements
published by the authorities of France.
On October 16, when an 18-year-old
Chechen refugee in France beheaded
schoolteacher Samuel Paty, 47, days after
he had shown caricatures of Prophet
Mohammed to his students, President
Macron said: "We will continue… We will
defend the freedom that you taught so well
and we will bring secularism." He said
France will "not give up cartoons, drawings,
even if others back down".
Macron made a controversial speech days
before the murder of Paty. "He stated that
"Islam is a worldwide religion in crisis
today," plagued by radical temptations and
a longing for a reinvented jihad that is the
destruction of the other.
15
“The speech, and Macron's
pronouncements after the killing of Paty,
have infuriated many Islamic countries,
with Turkey and Pakistan taking the lead in
condemning the French President of
Islamophobia. After the address, Turkish
President Recep Tayyip Erdogan, who has
long-standing rows with France and
Marcron, challenged Macron's mental
health over gas reserves off Cyprus, over
Nagarno Karabakh and over the wars in
Libya and Syria.
Macron has also revealed, for good
measure, a controversial "anti-separatism"
bill to crack down on Islamic radicalism to
be introduced in Parliament in December. It
provides for a number of initiatives,
including changes to school education to
ensure that Muslim children do not drop
out, tighter restrictions on mosques and
preachers, and created concern among
Muslims in France.
“Islam is a violent religion” this attitude is
present in the heart and mind of many,
even in the modern world. On the contrary
these myths of Islam promote violence
surfaced with a rise in terrorism from west
to the center. Many believe that Islam is
not capable of accepting modern and new
cultural evolution, it is believed by many
that Islam rejects the concept of equality
amongst the two sexes and it stands as an
issue when it comes to non-Islamic
followers to accept Islamic follower. The
concept of secularism in France is believed
to be rigid when it comes to practicalities
and it faces the great challenge of
multiculturalism.
The French approach towards secularism is
basically that the people have to adhere to
the body of the nation and it totally ignores
the existence of different cultural groups
within the country. The problem lies when
it comes to tackle down the issues
prevailing in a particular community
carrying a different cultural practice than
that is generally followed in France, the
question arises that should the state
intervene directly or not because these are
sensitive issues and can broil anger
amongst the group involved in the matter,
stirring up the peace. The state faces social
pressure from all the citizens of different
beliefs to enforce and respect their
personal laws and practices.
The demographic changes happening in
France changes related to cultural sects
are about to rise. The challenge is to give a
place to religions in the public domain
without running the risk of any of them
becoming hegemonic and recovering their
institutional authority on an individual's
conscience.
Muslims demanding freedom of expressing
their religion and beliefs is seen as a threat
to French secularism, also known as laÃc̄ité
and instead of providing them freedom,
they are restricted. The government
requires to identify the need to develop and
evolve the existing principles followed and
mound it according to the need of the
current situation as law is ever-changing.
16
INDIA AS THE ECONOMIC ENGINE FOR SOUTH ASIA

In South Asia, India is the largest and the most populous country with economic and
military capabilities that exceed those of all its South Asian neighbors combined. Thus,
India is the fulcrum, the center of gravity for the entire region.
This provides an opportunity for India to become a powerful engine of growth for the
entire region, by forging a close partnership of each neighbor especially in overcoming
the challenges posed by the pandemic.

Challenges
South Asia has close to a quarter of the world population and high population density.
Also, these countries have limited health infrastructure capacities, and thus countries in
the region are at risk of simply getting overwhelmed with high Covid-19 cases. At the
beginning of the pandemic, it appeared as if its spread in South Asia was not too severe.
However, in the last couple of months, the infection has proliferated in the region at a
shocking rate.

The pandemic has hurt the economy severely in the South Asian region. Many of the
countries were already facing major economic challenges, and the pandemic has
exacerbated the problem further. In April, the World Bank had estimated that the region’s
overall growth rate would fall to 1.8 to 2.8% in 2020, its worst performance in 40 years.
Since then, projections have become even more dismal. In April, IMF’s World Economic
Outlook expected Indian GDP growth to be 1.9% in 2020 and 7.4% in 2021, by June it had
revised the projection to expect a growth rate of -4.5% in 2020 and 6% for 2021.

17
In the immediate aftermath of the pandemic, borders have become even harder than
before. To contain the spread of the pandemic countries have imposed restrictions on
trans-border movement.

This situation has severely impacted the handling capacity of freight corridors. It has
resulted in congestion at major seaports such as JNPT Mumbai, Chittagong, and Colombo.
Also, there is a huge dependence on manual transshipment at the border points. With
this, there is a lack of digital processing and automated inspections. Thus, it only adds to
an already severe and inefficient system.

Policy attention needs to focus on the revival of the freight transport sector within the
region, which will be central to ensuring uninterrupted regional supply chains. In May,
officials from India and Bangladesh held discussions to explore effective ways to reduce
congestion at custom stations and facilitate the smooth movement of essential
commodities. Currently, cargo trains are permitted between Petrapole- Benapole, Gede-
Darshana, Rohanpur-Singhabad, and Radhikapur-Birol.

18
Opportunities
India is the third-largest producer of
pharmaceuticals in the world with a share of
10% of global production. Thus, India can
position itself to play a critical role in the
search for a COVID-19 vaccine and its
equitable distribution in the region. Within
its pharmaceutical industry, it is at the
forefront of generic drug production. Thus, it
can also effectively leverage its position as
a global vaccine hub by making the vaccine
available in regional and global markets at a
low price. Currently, there are 14 big
government-backed projects spread across
eight cities of the country that are leading
the search for a vaccine.
India can effectively leverage already
existing direct links between district
administrations in India’s border states and
their counterparts across the border to
institutionalize interagency cooperation in
the region. For instance, District Magistrates
and officials from Mizoram and Tripura have
in the past held regular exchanges with their
counterparts in Bangladesh to evolve
shared strategies. Similarly, Manipur and
Myanmar’s Sagaing Division have also
successfully collaborated in the past to
expedite modalities of a private sector
initiative in the health sector to conduct
corrective surgeries in Myanmar.
A major price swing was observed in food
items during the lockdown due to major
supply disruption. Thus, India is well-
positioned to assist the neighborhood to
alleviate any concerns of potential food
scarcity. In June, its food reserves stood at a
whopping 83.3 million MT, more than twice
the national minimum required stock of 41.1
million MT (as on 1 July of each year). India
can take some steps immediately to assist
the neighborhood and create a regional food
safety net. Currently, the regional
commitment to the SAARC Food Bank stands
at 486,000 MT, which is inadequate. Even
though currently India is by far the largest
contributor to the Bank, its contribution
represents only 0.3% of the national reserve
that the country currently holds. Thus, ease
of access and more contribution to the stock
will help forge better relations with other
countries and will help them a lot.
The current situation warrants co-operation
from each country to overcome the
challenges posed by the pandemic. Given
the importance of international trade for the
region’s growth, it is critical for South Asia
to work together to minimize the impact of
COVID-19 on it. The current pandemic is
expected to have disastrous consequences
for international trade. Early estimates by
the World Trade Organization expect global
trade to fall by 13%-32% in 2020.26 This
would mean that even the most optimistic
scenario will be similar to the 2008 Financial
Crisis and the worst case will be akin to the
Great Depression. In this situation, India has
a significant role to play and has a lot of
areas and ways in which it can forge the co-
operation better.
19
PHARMACEUTICAL EXPORTS: INDIA’S SALVATION TO
ATMANIRBHAR BHARAT

Atmanirbhar Bharat
With the Coronavirus pandemic, India has taken a step towards self-reliance with the
Aatmanirbhar Bharat Mission. The aim is to make the country and its citizens
independent and self-reliant in all senses. He further outlined five pillars of Aatma
Nirbhar Bharat – Economy, Infrastructure, System, Vibrant Demography and Demand.
One of the key strategic areas where these pillars can be strengthened in the
pharmaceutical sector.

Pharma Sector Size

Indian Pharma sector has grown rapidly in the last 50 years with Indian firms having an
almost 85 percent share and global, 15 percent in India. India is the largest provider of
generic drugs globally. Indian pharmaceutical sector supplies over 50% of global demand
for various vaccines, 40% of generic demand in the US, and 25% of all medicine in the UK.

The pharmaceutical industry values at around 36 billion dollars and market turnover
reached 19.1 billion in 2019. Indian pharma sector is expected to reach 100 billion dollars
by 2025. India’s domestic pharma market turnover has been 20.03 billion dollars in 2019
with an increase of 9.8% over the previous year.

The pharma sector has also performed incredibly well in the market with Nifty returns of
around 10.94% for the past 9 years.

India has a huge influx of medical students joining the industry and with this
demographic advantage. Which is an essential growth opportunity that the government
can tap on. Indian pharma firms spend around 2-10% on R&D activities.

China Dependence
But, the pharma sector has its own set of challenges. One of the biggest challenges is the
overdependence on China for the procurement of APIs (Active Pharmaceutical
Ingredient). API is the active ingredient that is contained in the medicine which produces
the intended effects. Most of the API manufacturing has been set up in China for easier
and cheaper manufacturing. API forms 23-25% of the drug’s Retail price in which China
has a margin of 15-25% lesser against indigenous manufacturers. Indian imports 70% of
its APIs and intermediaries from China. India has a trade deficit of about 50 billion dollars
consistently for over 50 years due to this reason.

20
Because of the rising tensions between India and China During the months of May and
June, the API prices shot up steeply which shows the vulnerability of India due to the
imbalance in trade with China. Since the Galway Valley faceoff, anti-Chinese sentiments
have been high and the pandemic has been a wake-up call for the Indian government to
take more actions.

India's Pharmaceutical sector also faces a negative outlook of having lesser quality
medicines and biosimilars. But India has the largest number of USFDA approved factories
outside the USA. The issue is intrinsic in the system rather than the companies. The local
regulatory body i.e. CSSCO and state FDA are not accredited by the WHO, without the
regulators becoming world-class, Indian pharma companies becoming world-class is a
problem.

New Actions
There needs to be corrective action taken with the support of the government to ensure
that the import dependence of API, KSM (Key Starting Materials and other intermediaries.

One big step in this direction is that the Cabinet has announced an incentive to 10 sectors
including auto, Pharma, and textiles for INR 2lakh crore to boost manufacturing and make
it self-reliant. Under this INR 15,000 crore financial outlay over five year period has been
approved by the Department of Pharmaceuticals.

21
In addition, the PLI (Production Linked Incentive) scheme has been notified by the
government for APIs and KSM in India. This will allow investors to propose the
establishment of greenfield facilities for the main 53 drug intermediates and bulk drugs
that were previously not manufactured in India.

The government has proposed to spend over INR 6940 crore as the incentive during the
tenure of this scheme. The final proposals of PLI for individual sectors will be appraised
by the Expenditure Finance Committee (EFC) and approved by the Cabinet.

The government has also started focusing on in-house R&D such as low-cost portable
ventilators by IIT Roorkee. These innovations must be commercialized rapidly on large
scale with the assistance of the government. Also, the government can boost Indian
pharma R&D by implementing streamlined and accelerated regulatory and testing
pathways for all drugs. The increase in overall R&D can provide a long-term thrust to
Indian pharmaceuticals. Three recommended moves to enable this are encouragement of
R&D expenses and outcomes; increase in availability of funding for R&D; and creation of
a closer cooperation process between public institutions like CSIR laboratories and
NIPERs with private R&D.

This initiative can be made much more broad-based by launching a structured export-
incentive plan for Indian pharmaceutical manufacturers, to promote a greater supply of
drugs to global markets in the medium term.

The government can take major steps to reform the pharma sector to make it a strategic
key area for the Indian economy. Government should create a stable and supportive
regulatory environment where there is a transparent, easy and coherent regulatory
policy in the drug approval and pricing process. The government can also create an
independent Ministry of Pharmaceuticals, this will ensure better policymaking and
expedite investment approvals.

Thus, there is an opportunity for the Indian pharmaceutical industry to play a larger role
in ensuring global drug supply-security, and potential financial incentives can play a
significant role in making this happen.

The Indian pharmaceutical industry is a strategic industry for the nation. Pharma can do
for India what software was able to do in the 1990s and 2000s. This pandemic has
strengthened this claim further and there is a bright future for the pharma sector in the
coming years.

22
RISE OF SECOND WAVE OF COVID IN EUROPE AND ITS
IMPACT ON BUSINESS
What caused this?
Hasty reopenings across the continent;
like stadiums, theatres, and museums
Fewer restrictions and cross border
travel allowance
Sluggishness in reintroducing
restrictions when cases began rising at
the end of summer
Policy confusion where local and
national governments are controlled by
different political parties. Eg- UK and
Spain
Current situation:
Over 105,000 people died in November in
the 31 countries monitored by the
European Center for Disease Control and
Prevention
Just as Europe was coming out of
the clutches of the virus, its zest for
a break led to devastating
consequences.
The numbers observed for the
second wave are stronger than the
first (especially in Central and
Eastern European countries like
Belgium and the Czech Republic),
pushing governments towards
lockdowns and restrictions, adding
new scars to an already weakened
European economy.
Economic Impact:
The economic impact of the second wave is
likely to be less severe than the first, owing
to less stringent restrictions and
acclimatization to the new normal.
Outside of hospitality and tourism,
workplaces have either adjusted to remote
working or developed ways to work in a
more coronavirus-secure way, limiting the
disruption in sectors such as construction
and manufacturing.
Supply chain restrictions as seen during the
first wave are unlikely. This is beneficial for
the healthcare sector, as supply chains for
relevant medical equipment have been
established and suppliers have increased
their capacity.
23

Markets are reacting to the slowing pace of
economic recovery and renewed public
health measures. The strong relative
performance in the eurozone equity market
that we saw in September has come to a halt
with the resurgence of Covid cases. Analysts
say that full-year 2020 earnings in Europe
will fall by almost two-fifths compared with
2019, before recovering in 2021.
Overall, manufacturing is doing reasonably
well, fueled by strong demand for durable
goods and improving demand for exports
(Germany is doing especially well in this
regard with the rest of the eurozone faces
difficulty). However, the same cannot be said
for the services sector which has seen a
weakening of demand for consumer-facing
services because of the onset of the second
wave.
Effect on Trade:
In the initial few months of the
pandemic, shipping companies canceled
many scheduled sailings due to a sharp
drop in demand, disruption of supply
chains, and fear that the virus would
hamper economic activity for a long
Expert Say:
The peak of the second wave is most
likely to occur in early January.
There isn’t a clear winning strategy
between prioritizing lockdowns and
prioritizing businesses.
Under the second wave, there is very
little separating countries like Sweden
and Switzerland who have taken a
relaxed approach compared to France,
Italy, and Spain who have locked down
hard
period. Later, with a humble recovery rate,
companies were longing to obtain goods
from overseas to meet consumer demand
during the holiday season.
During this period, the cost of using
container ships to transport goods has
soared compared to a year ago (by 63% to
transport goods from Asia to the USA),
especially since September. The growth of
demand shows both expectations of strong
consumer demand as well as depleted
inventories.
Companies are skeptical that the current
surge in virus infections could spiral out of
control, once again disrupting supply
chains. Thus, boosting inventories is of
utmost importance.
The rise in shipping costs also shows the
challenges shipping companies face in
meeting the increased demand after a
period of disruption. A shortage of
container shipping has led some companies
to opt for air transport, boosting the cost of
air transport by 20% since July.
24
From India's perspective, Europe accounts for around 20% of India's exports and 15% of imports.
The fresh round of lockdowns in Europe have marred the nascent signs of recovery in the global
economy. With Christmas and New Year coming up, orders were generally not canceled but
postponed.

A silver lining for India is that we are not an export-oriented economy. While exports might be
impacted to some extent, India Inc will have to look at the domestic market to see if there is a
continuation of demand.

25
The International Business Academic Club
MDI Gurgaon