Govt defines e-commerce marketplace rules, allows 100% FDI

Govt defines e-commerce marketplace rules, allows 100% FDI
DIPP has also come out with the definition of e-commerce, inventory-based model and marketplace model
The government on Tuesday allowed 100% foreign direct investment (FDI) in online retail of goods and services under the so-called “marketplace model” through the automatic route, seeking to legitimize existing businesses of e-commerce companies operating in India.
It also notified new rules which could potentially end the discount wars, much to the disappointment of consumers. This is because the rules now prohibit marketplaces from offering discounts and capping total sales originating from a group company or one vendor at 25%.

This could, however, level the playing field with offline stores, which have witnessed a slump in footfalls corresponding to the increase in e-commerce.
So far, India has allowed 100% foreign investment in business-to-business (B2B) e-commerce but none in retail e-commerce—i.e., business-to-consumer, or B2C.
Even so, Indian e-commerce companies such as Flipkart and Snapdeal have been following the marketplace model—which was not defined—and attracting large foreign investments. Marketplaces essentially act as a platform connecting sellers and buyers.

Sun may produce devastating superflares, say scientists

The Sun is capable of producing monstrous eruptions or ‘superflares’ that can not only break down radio communication and power supplies, but also affect the Earth’s ability to support life, scientists say.

Earth is often struck by solar eruptions, which comprise energetic particles that are hurled away from the Sun into space, where those directed towards the Earth encounter the magnetic field around our planet.

When these eruptions interact with the magnetic field, they cause beautiful auroras.

When the Sun pours out gigantic amounts of hot plasma during large eruptions, the Earth may have severe consequences.

Solar eruptions are, however, nothing compared to the massive eruptions we see on other stars.

Superflares had been a mystery since the Kepler mission discovered them in larger numbers four years ago. The largest observed eruption took place in September 1859, where gigantic amounts of hot plasma from our neighbouring star struck the Earth. Telegraph system worldwide went haywire, and ice core records from Greenland indicate the Earth’s protective ozone layer was damaged by the energetic particles from the solar storm. Researchers from Aarhus University in Denmark used observations of magnetic fields on the surface of almost 100,000 stars to show that these superflares are likely formed via the same mechanism as solar flares.

“The magnetic fields on the surface of stars with superflares are generally stronger than ones on the surface of the Sun,” said Christoffer Karoff from Aarhus University.

However, of all the stars with superflares that researchers analysed, about 10 per cent had a magnetic field with strength similar to, or weaker than, the Sun’s.

Therefore, even though it is not very likely, it is not impossible that the Sun could produce a superflare.

“We certainly did not expect to find superflare stars with magnetic fields as weak as the magnetic fields on the Sun. This opens the possibility that the Sun could generate a superflare,” said Karoff.

If an eruption of this size were to strike Earth today, it would have devastating consequences for not just all electronic equipment but also our atmosphere.

As a result, it will kill of our planet’s ability to support life. Evidence from geological archives has shown that the Sun might have produced a small superflare in 775 AD.

India’s case on its solar policy

The Centre is without doubt justified in saying it will contest the ruling in the World Trade Organisation against India’s policy of local sourcing of components as part of the Jawaharlal Nehru National Solar Mission. The U.S. had taken to the WTO its case against India’s policy of favouring domestic inputs in solar cells and solar modules, arguing that it amounted to a discriminatory trade practice and distorted the game. The verdict, which came last month, is a setback for India’s Solar Mission, seen as the bedrock of efforts aimed at ensuring energy security and meeting the country’s commitment to the collective global plan to limit global warming. In fact, over the last year India has scaled up its solar power ambitions, with the Narendra Modi government increasing fivefold the target set in 2009 to 100,000 MW. The WTO ruling obviously threatens the financial viability of the plan. India did offer to modify its stand on the issue, and agreed to apply the domestic content requirement only for buying solar panels used for government sector consumption. It even assured Washington that power generated from such subsidised panels would not be sold for commercial use. The U.S., however, did not agree. The challenge before the government is to sort out trade practice concerns in a manner that keeps the Solar Mission firmly on track. How it resolves the issue — and it would be well-advised to avoid standing on ego — will have repercussions not only on the country’s green energy aspirations, but also on its capacity to negotiate sectoral roadblocks to its global-level “Make in India” lobbying.

The trade rift and the WTO ruling on the solar issue have yet again brought to the fore the absurdity of seeking a level playing field in an imperfect, highly unequal world. Nations often raise protection walls in some form or the other to suit their convenience or to further their political interests. The U.S. is no exception. At least nine States in that country have programmes that provide protection to domestic manufacturers. In this inter-connected environment, the challenge really lies in balancing global trade obligations with domestic social compulsions. If the U.S. cannot have other countries engaged in practices that disadvantage American workers and American businesses, as President Barack Obama said, India too cannot wish away the job concerns of its people. By providing a ‘green angle’ to its solar power programme, India has added a new dimension to the ongoing dispute. As countries across the world race to take steps to limit climate change, concerns like these will test international organisations and rule-making to work out solutions that do not obstruct, or even delay, these efforts. The world indeed requires a spirit of accommodative co-existence for the larger global good.

Worst bleaching on record for Great Barrier Reef: scientists

Results based on the aerial surveys of more than 500 coral reefs from Cairns in Australia to Papua New Guinea.

The most pristine section of the Great Barrier Reef is currently experiencing the worst mass bleaching event in its history, with the overwhelming majority of reefs being ranked in the most severe category, Australian scientists warned on Tuesday.

The results are based on the aerial surveys of more than 500 coral reefs from Cairns in Australia to Papua New Guinea.

High bleaching levels

“Almost without exception, every reef we flew across showed consistently high levels of bleaching, from the reef slope right up onto the top of the reef,” said Professor Terry Hughes, convener of the National Coral Bleaching Taskforce.

“We flew for 4000 km in the most pristine parts of the Great Barrier Reef and saw only four reefs that had no bleaching. The severity is much greater than in earlier bleaching events in 2002 or 1998,” said Prof. Hughes.

No idea where it stops

“Even more concerning, we have not yet found the southern limit of the bleaching,” he said.

“We will be conducting further aerial surveys this week in the central Great Barrier Reef to identify where it stops. Thankfully, the southern Reef has dodged a bullet due to cloudy weather that cooled the water temperatures down,” he said.

It is clear from up above

Multiple research vessels and island research stations are also documenting the coral bleaching, with in-water research confirming what is clearly seen from the air, that the majority of reefs north of Cairns are undergoing bleaching and that virtually all species of corals are being affected.

“We could see extensive bleaching even among the most robust ‘massive’ corals,” said James Kerry, Project Manager of the National Coral Bleaching Taskforce, who also participated in the aerial surveys.

Unprecedented phenomenon

“The fact that these hardy species have also turned white shows just how severe summer conditions have become on the northern Great Barrier Reef. Residents we spoke to in Cape York were shocked by what they are seeing, telling us that they had never experienced anything like this before,” said Mr. Kerry.

“Scientists in the water are already reporting up to 50 per cent mortality of bleached corals, but it’s still too early to tell just what the overall outcome will be,” said Prof. Hughes.

Abnormal eco conditions

Coral bleaching occurs when abnormal environmental conditions, like heightened sea temperatures cause corals to expel tiny photosynthetic algae, called ‘zooxanthellae.’

The loss of these colourful algae causes the corals to turn white, and ‘bleach.’ Bleached corals can recover if the temperature drops and zooxanthellae are able to re-colonise them, otherwise the coral may die.

Towards military self-reliance

The Defence Procurement Policy 2016 made public this week is a step forward in increasing the participation of India’s private sector in military manufacturing. It replaces the last DPP unveiled in 2013, and has several recommendations for improving indigenous procurement. The DPP, the governing manual for all defence procurement, was part of a set of military reforms undertaken to address the many deficiencies noticed during the 1999 Kargil war. Since the first one in 2002, the DPP has been revised periodically. The new policy places the highest preference to a newly incorporated procurement class called ‘Buy Indian-IDDM’, with IDDM denoting Indigenous Designed Developed and Manufactured. This category refers to procurement from an Indian vendor, products that are indigenously designed, developed and manufactured with a minimum of 40 per cent local content, or products having 60 per cent indigenous content if not designed and developed within the country. The policy has also liberalised the threshold for offset liabilities for foreign vendors — now the obligation to invest at least 30 per cent of the contract value in India will kick in at Rs.2,000 crore, a significant increase from the previous Rs.300-crore mark. The policy lays stress on micro, small and medium enterprises (MSMEs), and on “Make in India”. A 10 per cent weightage has been introduced for superior technology, instead of selecting the lowest bidder only in financial terms.

DPP 2016, however, falls far short of the expectations raised by the Narendra Modi government’s ambitious “Make in India” push that aims to transform the country into a global manufacturing hub. India is the world’s largest importer of defence equipment, and indigenising production is key to such a plan. The DPP is noticeable for the absence of Chapter VII, titled ‘Strategic Partners and Partnerships’, which the Defence Minister said would be notified separately. Under Strategic Partnerships, select Indian private companies were to be given preferential status in major defence projects. The inability of the Centre to finalise a credible policy to radically increase indigenous military manufacturing is a sure sign that India will remain heavily dependent on defence imports. Given the country’s robust financial growth, one of its greatest leveraging points is the annual spend on procurement. India has all the necessary prerequisites for a robust military-industrial complex: a diverse private sector, a large base of engineering institutes, and a growing defence budget. The fact that India faces a combination of security threats from both state and non-state actors is an obvious reason why it needs to be self-reliant in military equipment. There is another important reason why India needs an indigenous military-industrial complex: it will significantly reduce the potential for corruption in military procurement. However, the new procurement policy does not inspire hope that domestic defence production will grow sufficiently. It may not be just an irony that the policy has been released as India hosts yet another Defexpo event, in Goa, where global vendors are hawking their war machines to a technologically famished Indian military.

Why India lags in innovation

International patent applications filed from India dropped to 1,423 last year—as compared to Japan’s 44,235, China’s 29,846 and South Korea’s 14,626 in the same period

Prime Minister Narendra Modi’s flagship Make in India initiative seems to be a grand success. It has notched up overseas investment commitments of more than $400 billion over the past two years. India will have turned a new leaf in attracting foreign direct investment if these commitments are realized.

The government plans to create 100 million new factory jobs by 2022 and increase manufacturing’s share in the economy to 25% during the next six years. That India is open to international business and willing to remove all regulatory hurdles to embrace foreign capital has become a clarion call of Modi and his finance minister almost on a daily basis.

But, in one area, the Make in India programme is yet to generate positive results. This is the area of “incidence and location of innovation”, which is a pre-requisite for generating new knowledge in science and technology.

Consider international patent applications filed from India to assess the innovative activity generated by the much-publicized Make in India initiative. According to figures released by the Geneva-based World Intellectual Property Organization under the Patent Cooperation Treaty, international patent applications filed from India dropped to 1,423 last year—as compared to Japan’s 44,235, China’s 29,846 and South Korea’s 14,626 in the same period.

In 2014, Indian research and manufacturing entities, both in the private and public sector, filed 1,428 international patent applications as compared to 42,381 by Japan, 25,548 by China, and 13,117 by South Korea.

The US, numero uno in the arena of innovation and inventions thanks to the sustained large-scale public funding to the Centers for Disease Control and Prevention and the defense department, filed 57,385 international patent applications last year.

Surprisingly, the filing of patent applications by Indian firms and research departments over the past three years remained almost flat with 1,320 in 2013, 1,428 in 2014 and 1,423 in 2015.

While the US, Japan, China and South Korea continue to dominate global patent activity, India remains a bit player. China, a late entrant into the world of innovation and inventions, is now racing ahead in its long march to be the world’s champion of the latest technologies. It has developed technologies across areas, including solar technologies for harnessing renewable power.

China’s Huawei Technologies, with 3,898 patent applications, almost three times the number of patent applications filed from India, ranks first among companies in the world.

Paradoxically, at a time when India has eclipsed China as the world’s fastest growing major economy with its gross domestic product forecast to increase to 7.6% in the fiscal year through March, it has performed poorly in generating measurable innovative activity.

Despite sending an orbiter to Mars and making strides in fields such as pharmaceutical products, India is nowhere to be seen on the international science and technology radar.

It is a different issue that the country’s most talented human resources continue to dominate inventions in several areas abroad.

How does one explain India’s poor performance in creating new knowledge that is useful for tackling its bread-and-butter as well as environmental problems? Is it because of an attempt to ‘saffronize’ science based on ancient claims of landmark scientific discoveries (the Pythagorean theorem, zero, genetics and plastic surgery, among others), thereby undermining the need for fresh research on the ground that everything is already there in the Vedas? Is it due to a lack of investment in basic and applied science and technology that is essential for innovation which, in turn, accelerates the pace of intellectual property activities? Can innovation and inventions happen in India when there is no transmission of existing knowledge, which is the basis for the generation of new knowledge?

These are some questions that continue to baffle analysts and historians of science.

“The problem of demarcation between science and pseudoscience is not merely a problem of armchair philosophy; it is of vital social and political relevance,” said Imre Lakatos, a Hungarian philosopher.

Surely, this could not be truer anywhere than it is in India today, according to Meera Nanda, a science historian. “All possible lines of demarcation between legitimate science and ideas pretending to be scientific are being erased,” said Nanda.

Lamenting the lack of rigorous scientific study, mathematician and historian D.D. Kosambi once said: “...the western mechanism of scientific study is blunted in our (Indian) hands to a crude toy for producing the feeblest of memoirs and papers, for grabbing a few allowances and grants.” Unfortunately, he said, “Renaissances are not ‘made’ in this fashion; they have to bloom as the expression of a new form of society, one far more productive and kinder to its members than the older one.”

The greatest obstacles to research in any underdeveloped country are those needlessly created by scientists or a scholar’s colleagues and fellow citizens, according to Kosambi. Instead of throwing money “away on costly fads like atomic energy”, Kosambi argued more than six decades ago for developing “solar energy, neglected by the advanced countries because they have not sunlight as much as the tropics”. He also squarely blamed the religious system of beliefs for India’s backwardness.

At the World Economic Forum meeting in Davos over two months ago, a prominent Indian IT businessman, who asked not to be identified, said that his greatest worry about India is the increasing “saffornization”, which is slowing progress in science and technology.

“Science is the cognition of necessity; freedom is the recognition of necessity,” Kosambi had famously said, for finding out why a certain thing happens, which we can then turn to our advantage rather than be ruled helplessly by the event.

In the current climate that seems to foster “un-questioning”, the Make in India push could turn out to be a new phase for producing indentured labourers for the 21st century than building a reservoir of scientists and technologists. Alas, such a programme cannot coexist with anachronistic and antediluvian social beliefs, which undermine scientific inquiry and questioning.

ISIS and Europe’s questions of identity

A redressal of internal fissures in Europe has to accompany military action

Last week, the Brussels bombings, coming on the heels of the Paris attacks in November, underlined Europe’s vulnerability and the scope of the Islamic State (ISIS) network and operations within its boundaries. This week, ISIS has been pushed out of Palmyra in Syria by the Syrian army, reversing gains made 10 months ago. These contrasting developments hint at the shape of ISIS’s continuing evolution. And as importantly—perhaps more so—they underscore the question of Europe’s response and the fundamental nature of the European project.

Brussels and Paris mark the beginning of a new phase—the rise of a more focused, efficient ISIS network in Europe. The two years preceding them were a learning curve; failed attacks mounted under the direction of Abdelhamid Abaaoud, the man who oversaw the Paris attacks, lacked planning and the requisite skill set. ISIS operatives in Europe have been training to use triacetone triperoxide—their signature explosive, easily made from freely available items such as nail polish remover—since 2013. But it is difficult to master because of its unstable nature and using it requires a degree of professional training.

The recent attacks have shown that ISIS has begun to attain that. And they are paired with a shift in tactics hinted at last March by Boubaker al-Hakim, a leading French jihadist, who advised followers to “stop looking for specific targets. Hit everyone and anything”. In effect, the group is shifting from insurgency tactics—taking aim at targets with strategic or symbolic value—to a more distilled form of terrorism, creating as much chaos and pain as possible with the largest potential number of victims.

And therein lies the European Union’s greatest dilemma. In the wake of Brussels, as in the wake of Paris, there will be a focus on the state’s security apparatus and the operational details of its anti-terrorism efforts. This is as it should be. The poor security infrastructure of a number of European states and the patchwork nature of the EU’s intelligence networks—confined by national boundaries and hobbled by ineffective information sharing when up against a threat that, thanks to the Schengen system, faces no such constraints—must be addressed.

But the deeper questions pertaining to European multiculturalism are more difficult to get a grip on. It is a given that the vast majority of Europe’s Muslims have no truck with the Islamic State’s ideology, objectives or tactics. Issues of integration and economic opportunities, however, are not new. And the alienation and ghettoization they have caused in France, Belgium and elsewhere on the continent have resonated in unhealthy fashion.

In Belgium in the 1990s, for instance, arms and ammunition were sourced by jihadists in Brussels for Algerian terrorists attempting to establish an Islamic state, while Belgian residents travelled to fight in Chechnya and elsewhere.

It is easier to have a meaningful conversation about such issues in times of economic plenty. European states failed to do so. The conflict proliferating in West Asia, driving a million refugees and economic migrants to the EU each year, has exacerbated the stress in the European economies present since 2008. And an ugly nativist response has arisen from the right of European politics and entered the mainstream across the continent, capitalizing on the understandable fears of a populace uncertain about the cultural and economic impact of the surge in immigration.

The ISIS understands this perfectly and is capitalizing upon it in both strategic and tactical terms. As far as the former goes, recent reverses on the ground in Syria and Iraq—in the past six months, it has lost about 30% of the territory it held at its peak in 2014—led it to shift focus from controlling territory to spreading its influence in Europe and elsewhere in a meeting of top leaders shortly before the Paris attacks, as reported by The Guardian. And as for the latter, the flow of immigrants into Europe serves to heighten political and economic tensions on the continent—a plus from ISIS’s perspective—and makes it that much easier for the group to recruit consequently radicalized Muslims with European passports to form sleeper cells.

Difficult days await Europe, not just in facing the security threat but in examining and defining European identities. Military action against the core of ISIS in West Asia by regional and western actors may degrade its capabilities and resources. But addressing the tensions and fissures in the EU require those difficult conversations if European societies are to maintain their essence without giving in to far-right xenophobia.

Is Europe equipped to fight the menace of ISIS?