India-Qatar Current Affairs - 2020

Roar of the sea: Naval Exercise between Qatar and India

A three-day naval exercise, Za’ir-Al-Bahr (Roar of the Sea) is being conducted between November 17 and November 21, 2019 between the Indian and Qatar Naval Forces. The aim of the exercise is to enhance interoperability between the naval forces.

Highlights

  • From the Indian side, the Missile Stealth Frigate INS Trikand and Patrol Aircraft P8-I along with Rafale aircraft are to attend the exercise
  • The exercise is being held for the first time.
  • Both the P8 and Rafale are newly procured defense machines of India.
  • The exercise will include Air defense, Surface action, interdiction operation, maritime surveillance and anti-terrorism
  • The Qatar Emiri Naval Forces participating in the exercise include Anti-Ship Missile equipped Barzan Class Fast Attack craft and Rafale aircraft

Significance

The Geographical location of Qatar is significant for the country being located near the major petroleum deposits in the Persian Gulf . Also, the joint exercises will help in adding protection to the Indian ships sailing through the region. Around 110 billion USD of Indian trade happens through the region. As per 2018, it includes 50 billion USD of imports and 60 billion USD of exports.

Defense Relations

The first diplomatic defense agreement between India and Qatar was signed in 2008. According to the agreement the countries permit annual defense training. However, an exercise between the countries is being conducted for the first time.

Cabinet approves revision of DTAA between India and Qatar

The Union Cabinet has given its approval for revision existing Double Taxation Avoidance Agreement (DTAA) between India and Qatar. The purpose of revision is for avoidance of double taxation and for prevention of fiscal evasion with respect to taxes on income. The existing DTAA between India and Qatar was signed in April 1999 and came into force in January, 2000. The

Features of Revised DTAA

  • It updates provisions for exchange of information to latest standard. It includes Limitation of Benefits (LOB) provision to prevent treaty shopping and aligns other provisions with India’s recent treaties.
  • It meets minimum standards on treaty abuse under Action 6 and Mutual Agreement Procedure under Action 14 of G-20 OECD Base Erosion & Profit Shifting (BEPS) Project to which India is participating.

Treaty Shopping

Under it, a resident of third country invests by taking advantage of fiscal treaty between India and another contracting state. This has greatly contributed in encouraging FDI in country but has been medium of tax evasion. The roots of Treaty shopping are in inconsistencies among international tax regimes. If there is dissimilarity of tax systems, it can lead to distortion of investment flows. It can be controlled by introduction of limitation of benefit clause (LOB) and other clauses which limit benefits to residents of two countries only.