Aviation Current Affairs - 2020

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India, Rwanda sign MoUs in innovation, aviation and visa requirements

India and Rwanda have inked three agreements in the fields of innovation, aviation and visa requirements to boost bilateral relations.

These agreements were signed in Kigali in the presence of Vice President Mohammed Hamid Ansari and Rwandan Prime Minister Anastase Murekezi during a business forum meet. Vice President is the first Indian leader to officially visit Rwanda. He launched India-Rwanda innovation growth programme.

Three important agreements signed are
  • Bilateral air service agreement between two countries.
  • Agreement for exemption of visa requirements for diplomatic and service passports.
  • Agreement for establishment of an Entrepreneurship Development Centre in Rwanda duly financed by India,
Background

Vice President Hamid Ansari visited Rwanda on the first leg of his 2-nation visit to East Africa. Later he will travel to Uganda, the second leg of his tour to another East African country. Both Rwanda and Uganda are important from India’s viewpoint of trade, especially in the pharmaceuticals, automobiles, mechanical appliances and machinery sectors. Since 2012, India’s trade with Rwanda has doubled and it is one of Uganda’s largest trading partners and largest investors.

India-Africa Relations

  • India is key partner of African nations in the 1950s and 1960s. However in the past decade, India lost influence in Africa to China and other Asian nations.
  • In recent years, India is seeking to broaden its general outreach to resource-rich Africa and establish its footprint in sub-Saharan Africa.
  • India has positioned itself as a partner of choice to African countries in areas such as education, healthcare, investment and trade.
  • In 2014-15, India-Africa trade was almost $70 billion and Indian investments in Africa in the past decade was amounted to $30-35 billion.
  • The figures, however, are low in comparison with the Africa’s trade and investment ties with China which is around $200 billion. China has built large infrastructure projects like roads, railways, airports and government buildings in Africa.
  • Together, President Pranab Mukherjee, Prime Minister Narendra Modi and Vice President Ansari have visited 12 African nations in 2016.
  • This was in keeping with PM Modi’s promise to maintain the tempo of interaction with Africa, made to leaders to 54 African nations during the 3rd India-Africa summit in New Delhi in October 2015.

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Union Government approves 100% FDI in Aviation, Defence and e-commerce sectors

The Union Government has eased foreign direct investment (FDI) norms for nine sectors to give impetus to job creation and ease of doing business in the country.

Decision in this regard was taken at a high-level meeting chaired by Prime Minister Narendra Modi. With these changes, India becomes most open economy in the world for FDI.

Some of these sectors are

  • Food products: In this sector, 100% FDI under government approval route has been approved.
  • It will include trading in food products including through e-commerce, in respect of food products manufactured or produced in India.
  • Defence Sector: Present FDI regime in this sector permits 49% FDI participation in the equity of a company under automatic route.
  • Now, FDI beyond 49% has now been permitted through government approval route, in cases resulting in access to modern technology in the country or for other reasons.
  • FDI limit also has been made applicable to Manufacturing of Small Arms and Ammunitions covered under Arms Act, 1959.
  • Pharmaceutical Sector: In this sector, 100% FDI under automatic route in greenfield pharma has been approved. FDI up to 100% under government approval in brownfield pharma also has been approved.
  • Aviation Sector: 100% FDI under automatic route in Greenfield and Brownfield Airport Projects to aid in modernization of the existing airports to establish a high standard.
  • Animal Husbandry: 100% FDI allowed in Animal Husbandry (including breeding of dogs), Aquaculture, Pisciculture and Apiculture under Automatic Route without requirement of controlled conditions.
  • Single Brand Retail Trading: Entities undertaking single brand retail trading have been relaxed from local sourcing norms up to 3 years.
  • Entities engaged in of single brand retail trading of products having ‘state-of-art’ and ‘cutting edge’ technology have been relaxed from local sourcing norms up to 5 years.

Comment

With these liberalised changes in FDI Policy, Union government has permitted 100% FDI under government approval route for almost every sector, including defence except in few sectors mentioned in the small negative list.  In this list, FDI continues to be prohibited in atomic energy, lottery, gambling, real estate and Real Estate Investments Trusts (REIT) and railways operations.

Background

Since 2014, Union Government has brought major FDI policy reforms in a number of sectors, including Insurance, Pension Sector, Defence, Construction Development and Broadcasting etc. Measures undertaken by the Union Government have resulted in increased FDI inflows at 55.46 billion dollars in the financial year 2015-16. This was the highest ever FDI inflow in India for a particular financial year.

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