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Daily Current Affairs – 2020

Topic: For Prelims and Mains

Comprehensive Global Strategic Partnership (CGSP)

Why in News? 

India and the USA has recently intended to upgrade their bilateral relationship to a Comprehensive Global Strategic Partnership (CGSP).

 The CGSP will include issues such as defence, security cooperation and revitalisation of the Indo-Pacific with quadrilateral dialogue.

Economic Relations

Free Trade Agreement (FTA):

The USA has proposed the Free Trade Agreement (FTA) between the two countries.

FTA will include the restoration of benefits of low or zero duty to certain Indian exports under the Generalised System of Preferences (GSP) and market access for each other’s agricultural products.

The Trade Policy Forum will be set up as a joint study group to facilitate smooth framing of FTA.

Proposed Totalisation Agreement:

The signing of this agreement will allow Indian professionals working in the USA to get a refund of social security contribution that they make while working in the USA.

Intellectual Property Rights:

  • India and the USA have decided to come up with a comprehensive agreement on intellectual property rights (IPR).
  • A comprehensive deal on the IPR front would be a major development as India has slipped to the 40thposition on the US Chamber’s International IP Index, 2020.

Energy Trade:

  • Both countries intend to come with an energy dealin the future.
  • India imports a significant portion of its energy needs from the US, which has only increased in the past few years. The USA is the sixth-largestoil supplier to India.

Bilateral Trade:

  • The United Stateshas become India’s top trading partner surpassing China.
  • The bilateral trade between the US and Indiastood at nearly 88 billion dollars in 2018-19 compared to China which was at 87.1 billion dollars.

International Issues:

  • Quad Dialogue:S. and India stressed to revitalise the quadrilateral initiativeconsisting of Japan, the U.S., India and Australia.
  • Indo-Pacific Region:Both the countries discussed to develop and evolve the Indo-Pacific region collaboratively.

South China Sea Region.

  • Both sides took note of the efforts of the ASEANregion to create a code of conduct in the South China Sea region.
  • A code of conduct in the South China Sea region will be a set of rules outlining the norms and rules and responsibilities of, or proper practices for, an individual, party or organisation in the region.

Defence Relations:

  • USA and India have concluded the agreement for the purchase of 24 MH-6OR Seahawk, and six AH-64E attack helicopters.

Masala Bonds

Why in News?

Asian Development Bank (ADB) has listed its 10-year masala bonds worth Rs 850 crore on the global debt listing platform of India INX. The proceeds would be used to support local currency lending and investment in India.

Background:

India INX is the country’s first international exchange, located at International Financial Services Centre, GIFT City in Gujarat. ADB’s masala bonds are listed on both Luxembourg exchange and India INX.

What are Masala Bonds?

They are bonds issued outside India by an Indian entity or corporate. These bonds are issued in Indian currency than local currency.

Indian corporates usually issue Masala Bonds to raise funds from foreign investors. As it is pegged into Indian currency, if the rupee rates fall, investors bear the risk.

The first Masala bond was issued in 2014 by IFC for the infrastructure projects in India.

How does Masala Bonds help bond issuer?


As Masala bonds are issued directly in Indian rupees, the investor needs to bear the exchange rate risks. Rupee rate falls will not affect the issuer of Masala Bonds. In simpler words, as Masala Bonds are rupee-denominated bonds, the risk goes directly to the investor.

Who is eligible to invest in Masala bonds?


Investors from outside of India who would like to invest in Indian assets can invest in Masala bonds. Indian entities like HDFC, NTPC and India bulls Housing have raised funds via Masala Bonds.

Facts for Prelims

Rushikulya  River :

  • It originates from Rushikulya hills of the Eastern Ghats in Phulbani district (Odisha).
  • It is 165 kms. long with 8900 sq.kms of catchment areas.
  • It covers the entire catchment area in the districts of Kandhamal and Ganjam district of Odisha.

 

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