Context: The Ministry of Health and Family Welfare (MoHFW) released the updated regulations under Schedule M of the Drugs and Cosmetics Rules, 1945.

Revised Pharma Manufacturing Rules Under Schedule M to Ensure Quality Control

• Aim: The revised Schedule M has been notified as to improve adherence to quality standards, and ensure good manufacturing practices and requirements of premises, plant, and equipment for pharmaceutical products.
• Drugs (Amendment) Rules, 2023: The revised rules have been notified under the Drugs (Amendment) Rules, 2023 after consultation with the Drugs Technical Advisory Board.
• Deadline to Obtain WHO-GMP Accreditation: The Ministry provided a six-month deadline for small manufacturers and 12 months for large units to obtain their WHO-GMP (World Health Organization-Good Manufacturing Practices) accreditation.

Revised Guidelines For Pharma Manufacturing Rules 

• Major changes introduced: The revised Schedule M includes:
  • The introduction of a Pharmaceutical Quality System (PQS).
  • Quality Risk Management (QRM).
  • Product Quality Review (PQR).
  • Qualification and validation of equipment.
  • A computerized storage system for all drug products.
• Guidelines for Manufacturing Pharmaceutical Drugs: The revised Schedule M has 13 parts which provide GMP guidelines for the specific requirements for manufacturing pharmaceutical drugs.
• Introduction of Five New Categories of Drugs:
  • The new categories(Not covered under Previous Rules) include pharmaceutical products containing hazardous substances such as sex hormones, steroids (anabolic and androgenic), cytotoxic substances, biological products, radiopharmaceuticals, phytopharmaceuticals, and investigational pharmaceutical products for human clinical trials.
• Application of Rules: The revised rules will be implemented based on company turnovers. 
  • Medium and small manufacturers with an annual turnover of less than Rs 250 crore will have to implement the revised rules within 12 months from its publication date, whereas large manufacturers with an annual turnover of over Rs 250 crore will be given six months.

Significance:  

• The revised regulations of Schedule M will help ensure compliance with international quality standards, benefiting both patients and the industry by promoting the manufacturing of safe, effective, and high-quality drugs.

Also Refer: 

• Generic Medicines
• India Pharma Products And Drug Safety

News Source: Business Standard

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Context: According to the report analysis by Respirer Living Sciences and Climate Trends, only 27 out of 49 cities showed a decline in PM 2.5 level over five years despite the effort put forth by the National Clean Air Programme (NCAP).

Key Highlights of Report on National Clean Air Programme (NCAP) 

• The study analyzed data from 99 cities and while others showed declines and rises, only 49 had data worth at least 60 months and for at least five years.
• India’s biggest cities report marginal declines or increasing pollution loads.
  • For Example: Delhi shows an average, annual PM 2.5 levels decline of only 5.9%.
  • Navi Mumbai, a suburb of Mumbai, has seen a 46% rise in PM 2.5 levels instead of a decline.
• Nearly 18 of the top 20 cities with the highest PM 2.5 levels in 2023 are clustered in the Indo-Gangetic Plain (IGP).
• Cities show sharp decline
  • Varanasi  is among the cities that showed a sharp decline in PM 2.5 from 2019-2023.
  • Agra too reported a 53% decline as did Jodhpur with a 50% decline.

Also Refer: Mumbai’s Air Pollution Is The Second Highest In The World

News Source: The Hindu

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Context: Tata Memorial Hospital (TMH), Mumbai, is addressing the shortage of cancer specialists through AI in cancer detection.

Bio-Imaging Bank: A Revolution in Cancer Detection

• TMH established a ‘Bio-Imaging Bank’ utilizing deep learning for an AI-driven early-stage cancer detection algorithm.
• The project incorporates data from 60,000 patients, focusing on head neck and lung cancers.
• Financial Assistance: The Department of Biotechnology funds the project in partnership with institutions such as IIT-Bombay, RGCIRC-New Delhi, AIIMS-New Delhi and PGIMER-Chandigarh. 

What is a Bio-Imaging Bank?

Definition: It is a compilation of radiology and pathology images linked to clinical information, outcome statistics, treatment specifics, and additional metadata.

Mechanism: It employs Biosensing with light to generate non-invasive visual representations of biological processes in cells, tissues, and anatomy for more accurate diagnosis and treatment.

• Bioimaging aims to intervene in biological processes with minimal disruption.
• It is utilized for acquiring information on the 3-D structure of an observed specimen externally, without physical disturbance.

What is the Role of AI that Contributes to the Identification of Cancer?

• Data Analysis by AI: It examines extensive databases of radiological and pathological images to identify features associated with specific malignancies.
• Early Identification: AI helps in Early detection of disease. It is achieved by identifying tissue changes and potential cancers.
• Utilization of Patient Data: Comprehensive patient data generated through detailed imaging helps understand behavior, treatment response, disease recurrence, and life expectancy.

• • AI and machine learning utilize this data to create predictions for cancer survival and guide treatment aggressiveness.
• Cancer Image Bank: Creating a cancer image bank facilitates the development of algorithms for various tumors.
  • Treatment responses are assessed solely through images, allowing the avoidance of unnecessary chemotherapy for predicted non-responders.
• Reduced Radiation for Children: Establishing a cancer image bank has led to a 40% reduction in radiation exposure for pediatric patients undergoing CT scans.
  • This reduction ensures lower radiation exposure for children while maintaining diagnostic quality without compromise.
• Optimizing Resource Deployment: AI can automate routine responsibilities in pathology and radiology. 
  • It enables healthcare professionals to concentrate on intricate cases and enhance patient care.

Challenges With AI Use

• Inequality Propagation: AI models, if trained on biased data, can exacerbate existing healthcare disparities, leading to unequal access and diagnosis.
• Data Quality and Quantity: Effective AI models demand substantial amounts of high-quality data that create challenges in accessing and ensuring consistency across diverse populations.
• Privacy Concerns: Utilizing sensitive medical data for AI development raises concerns about patient privacy and data security. Thus, there is a need to implement robust safeguards and transparent data handling practices.
• Regulatory Challenges: Integrating AI into clinical practice necessitates clear regulatory frameworks to ensure safety, efficacy, and ethical use. Establishing standardized guidelines and approval processes is vital for widespread adoption.
• Infrastructure and Expertise: Implementation and maintenance of AI systems require robust infrastructure and skilled professionals. These resources may not be readily available in all healthcare settings, especially in resource-constrained regions, posing challenges.

Also Refer: Casgevy Therapy – A Gene Therapy For Sickle Cell Disease

Conclusion

Artificial intelligence (AI) in treating cancer has great potential to change how we approach healthcare however, all the challenges, like biased data, rules, and insufficient infrastructure, need to be solved for AI to be used fairly and effectively in healthcare. 

News Source: Indian Express

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Context: ONGC begins ‘first oil production’ from deep-water block (KG-DWN-98/2 Block)in Krishna Godavari basin.

ONGC Begins Oil Production from Krishna Godavari Basin

• Location: The block is located  approximately 25 km from the Kakinada coast in the Krishna Godavari basin off the Bay of Bengal 
• Expected production:
  • Approximately around 45,000 barrels per day & over  10 million cubic meters of gas per day.
  • It will add 7% to current national oil production & 7% to national Natural Gas production!
  • It will help increase the ONGC’s total oil production by 11% and natural gas production by 15%.”
• The final phase of the 98/2 block project is  to begin the production of the balance of oil and natural gas by mid-2024.

About Krishna Godavari Basin

• It is an Extensive deltaic plain formed by the  rivers, Krishna and Godavari in Andhra Pradesh  and  16 adjoining areas, of the Bay of Bengal on the East Coast of India
• The basin contains about 5 km thick sediments with several cycles of deposition, ranging in age from Late Carboniferous to Pleistocene.
• Major geomorphological units:  Upland plains, coastal plains, recent Floods, and delta plains.
• Hydrocarbon potential: The Krishna Godavari Basin is an established hydrocarbon province with a resource base of 1130 MMT, of which, 555 MMT are assessed for the offshore region.
• Petroleum System: It is a petroliferous basin with commercial hydrocarbon accumulations in the oldest Permo-Triassic Mandapeta Sandstone on land to the youngest Pleistocene channel levee complexes in deep water offshore. 
• • The basin’s petroleum systems can be classified into two categories viz. Pre-Trappean and Post-Trappean in view of their distinct tectonic and sedimentary characteristics
• Depositional systems: Godavari delta system, Masulipatnam shelf-slope system, Nizampatinam shelf –slope system and Krishna delta system.

News source: PIB

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Context: Recently, the Indian Defence Minister visited the United Kingdom for bilateral talks.

Key Highlights of Defense Minister UK Visit: Defense R&D Collaboration Between India and UK

• MoU for Bilateral Cadet Exchange:  A  Memorandum of Understanding (MoU) for a bilateral international cadet exchange program was signed.
• Defence Collaboration in R&D: A Letter of Arrangement (LoA) on defense collaboration in Research and Development was signed between India’s Defence Research and Development Organisation (DRDO) and the UK’s Defence Science and Technology Laboratory (DSTL).

Defense Collaboration Between India and UK

• India and UK elevated their relationship to the level of Strategic Partnership in 2004.

• At Highest Political Level: 

  • Inaugural  meeting of the ‘2+2’ foreign and defense dialogue at the Joint Secretary- Director General-level, took place in 2023.
  • Defence Consultative Group meeting at Permanent Secretary-level was held in November 2023. 
  • Prime Ministers of both countries during the G20 summit in New Delhi 2023, agreed to build ‘a modern partnership in cutting-edge defense technology, trade and innovation’. 
• India-UK 2030 Roadmap: A  ten-year bilateral plan for prioritization and raising ties to a Comprehensive Strategic Partnership. 
  • Defense and Security cooperation  as one of five pillars of the roadmap.

• Joint Exercises between India and UK at the 3 services level:

  • Exercise Ajeya Warrior: Bilateral military exercise.
  • Exercise Konkan: An annual naval exercise 
  • Ex Cobra Warrior: In March 2023, the Indian Air Force participated in this multinational air exercise in the UK.

• Steps taken by the UK: 

  • Issued an India-specific open general-export license – the first given to an Indo-Pacific country – to permit exports of certain military and dual-use goods and technology. 
  • Launched  a new organization  called Defence Partnership India to build bilateral defense ties headed by their defense minister.

• Joint Collaboration: 

• • Co-development of gas-turbine propulsion technology by Rolls-Royce and India’s Defence Research and Development Organisation (DRDO) for the next generation of Indian fighter-aircraft engines, where India will own the intellectual property as well as export-approval authority.
  • Partnership  for naval electric propulsion between the Indian government and GE (Naval), UK, and Rolls-Royce
  • Procurement of ground-based air defense systems from MBDA (UK). 

The ‘Three-I’ challenge:

• Positive intentions regarding British–Indian defence cooperation have often been derailed by the ‘three-I’ challenge posed by Indian rules and regulations pertaining to 
  • Foreign investment.
  • Intellectual-property rights and 
  • Indigenous-content requirements.

Conclusion

India and the U.K. are both trying to carve out their new identities on the global stage and their strategic convergence has allowed for the possibility of reimagining the future of their partnership.

News Source: The Hindu

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Context: Recently, the renowned Hindustani classical singer- Ustad Rashid Khan passed away in Kolkata.

About Ustad Rashid Khan:

• Ustad Rashid Khan was the 31st generation of Mian Tansen, born in Badaun (Uttar Pradesh).
• Training: He was trained by  Ustad Nissar Hussain Khan and Ghulam Mustafa Khan.
• Style of Singing: He was an exponent of the Rampur-Sahaswan gayaki (style of singing) which is closely related to the Gwalior gharana. 
  • This kind of singing features medium-slow tempos, a full-throated voice and intricate rhythmic play. 

• Exceptional expertise: His style of singing included the slow elaboration in his vilambit khayals. He also developed exceptional expertise in the use of sargams and sargam taankari (play on the scale). 
  • He was also a master of the tarana but later he made his style of rendition his own signature in the landscape of Indian classical music.
  • He also experimented with fusing pure Hindustani music with lighter musical genres. 
  • For example, in the Sufi fusion recording Naina Piya Se (Amir Khusro). 
• Awards: 
  • 2022: Padma Bhushan, Banga Bibhushan and Sangeet Mahasamman
  • 2006: Padma Shri and the Sangeet Natak Akademi Award.

Must Read: Sahitya Akademi Award 2023

News Source: PIB

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Context: The Ministry of Commerce and Industry has set up a task force to identify and resolve trade barriers being faced by foreign exporters to provide greater market access to domestic goods.

Commerce Ministry Establishes Task Force To Identify And Resolve Trade Barrier Conflicts For Exporters

• Items on which high barriers are faced by Indian Exports are Chillies, tea, basmati rice, milk, poultry, in the European Union, Sesame seed, and apparel in Japan and Food, meat, fish, dairy and industrial products in China.

The Mandate of Task Force

• To look at the trade barriers and technical barriers
• To improve systems and standards
• To improve mutual recognition agreements (MRAs) with different countries 
  • Hence, product standards should be as per the requirements of the importing countries

About Non-Tariff Measures (NTMs):

• NTMs are domestic rules created to protect human, animal or plant health and environment. 
• Nature: 
  • Technical: NTM may be technical measures like regulations, standards, testing, certification, and pre-shipment inspection.
  • Non-Technical: NTM may be non-technical measures like quotas, import licensing, subsidies and government procurement restrictions.
• Concern: NTMs create hurdles for trade and are called NTBs (non-tariff barriers), when they become arbitrary, beyond scientific justification.

Also Refer: Meaning And Reasons For International Trade

News Source: Business Outlook

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Context: Recently, the Union Minister laid the foundation stone for the Modernisation of Paradip Fishing Harbour.

Paradip Fishing Harbour Set for Transformation Under PMMSY Scheme

• Central Government has approved Modernisation and Upgradation of Paradip Fishing Harbour with 100% central financial assistance under the Pradhan Mantri Matsya Sampada Yojana (PMMSY)
• Implementation: This fishing harbour project is implemented by Paradip Port Authority with a completion period of 18 months. 

About Paradip Port 

• It is a natural, deep-water port located on the confluence of Mahanadi and the Bay of Bengal in Jagatsinghpur District, Odisha. 
• Importance: It is  one of the Major Ports and an important fishing harbor in Odisha. 
• Advantage: Paradip Port enjoys the advantages of soft underwater soil so that it can be deepened to any depth depending upon the need.
• Modernisation: Modernisation will improve the Hygiene, and aesthetics and upgrade the essential infrastructure facilities, mechanizing the fish handling process. 

Government Initiatives for Development of Port Infrastructure in India 

• Sagarmala Project:

• • It promotes port-led development in the country through harnessing India’s coastline, navigable waterways, and strategic location on key international maritime trade routes. 

• Project UNNATI:

  • It will benchmark the operational and financial performance of the 12 major ports with selected Indian private ports and best-in-class international ports for identifying improvement areas.

• Passage of Major Port Authorities Act 202:

  • The Act aims to decentralize decision-making and reinforce excellence in major port governance.

• SAROD-Ports: 

• • The initiative aims to assist in the settlement of disputes through arbitrations in the maritime sector, including ports and shipping

Also Read: Indian Ports Hold The Key To Growth & Employment

Additional Reading: Major Ports in India

News Source: PIB

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Context: Ocean surface waves caused by tropical cyclones have increased over time as per the research published in the journal Nature Communications. 

Study on Tropical Cyclone Ocean Surface Waves

• The study, led by Jian Shi, Hohai University, China, looked at the global trend analysis of tropical cyclone waves for 1979-2022 based on the ERA5 wave reanalysis.
• The researchers analyzed 43 years of data on global trends in the ocean surface waves induced by tropical cyclone (TC) waves. 

Key Findings of Study 

• Increased Footprint: The maximum height and area of the wave footprint have increased significantly by about 3 percent per decade and 6 percent per decade, respectively.
• Regional Impact: The fastest-increasing rates of wave footprint (17-32 percent per decade) were in the North Atlantic, eastern Pacific and North Indian Ocean. 
• Wave Energy: According to the researchers, the rise in wave area is the primary cause of the trend of rising global wave energy.
• Wave Height: All ocean basins show a significant long-term increase in the maximum wave height, with the largest increase of 5 percent per decade in the North Atlantic.
• Economic Impact: Intense tropical cyclones can slow down the economic development of a country and India’s long-term economic damages from tropical cyclones are expected to range from $43-47 per tonne of carbon dioxide

To Read More: Tropical Cyclones

News Source: DTE

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Context: This article is based on the news “It is time for a full-scale overhaul of the Insolvency and Bankruptcy Code” which was published in the Hindu.  The Financial Stability Report (FSR) released by the Reserve Bank of India reveals the challenges faced and the need for the full-scale overhaul of the Insolvency and Bankruptcy Code  (IBC), 2016.

Financial Stability Report By RBI: Shows Inadequate Debt Recovery

• Inadequate Debt Recovery: This constitutes only 0.92% of the total debt.
• For Example:  In a recent case involving settlement by the NCLT of Reliance Communications Infrastructure Ltd. (RCIL), the settlement amounting to ₹455.92 crore, was approved against total debtor claims of ₹49,668 crore.
• Prolonged Resolution Process:  The resolution process took four years, against the maximum of 330 days for completing the Resolution Plan (RP).
• Need for Insolvency and Bankruptcy Code and NCLT Review: Since the initial objectives of maximizing debtor’s assets and timely resolution have not been fulfilled, a thorough review of the Insolvency and Bankruptcy Code (IBC) and the National Company Law Tribunals (NCLTs) is needed.

Must Read: Asset quality of Indian banks improves to decadal high: RBI

About the Insolvency and Bankruptcy Code (IBC), 2016

• Insolvency and Bankruptcy Code was enacted in 2016 to provide a robust framework for debt resolution through corporate insolvency resolution processes (CIRP) and liquidation. 
• It seeks to maximize asset value and distribute fair proceeds among creditors.
• The Insolvency and Bankruptcy Code provides for a time-bound resolution of firms, addressing the issue of firm exit in India. 

Objectives of Insolvency and Bankruptcy Code:

• Maximise the value of the debtor’s assets
• Ensure timely and effective resolution of Insolvency and Bankruptcy Code cases
• Balance the interests of all stakeholders, including creditors, debtors, and staff
• Provide for a framework to deal with cross-border insolvency cases.

Need for Insolvency and Bankruptcy Code, 2016:

• Rising NPAs: Growing burden of Non-Performing Assets and debt defaults in India.
  • As of June 2016, the total Gross Non-Performing Assets (NPAs) for public and private sector banks was around Rs. 6 lakh crore(See Image).
• Failure of Traditional Loan Recovery Mechanisms: Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI), and Debt Recovery Tribunals faced criticism for their inefficiency. 

Institutional Framework for the Insolvency and Bankruptcy Resolution:

• Insolvency and Bankruptcy Board of India (IBBI): Under the Insolvency and Bankruptcy Code 2016, IBBI has the power to make regulations for a mechanism for the disposal of assets under the code. 

• Adjudicating Authority: 

  • Debt Recovery Tribunal (DRT): It shall be the Adjudicating Authority with jurisdiction over individuals and unlimited liability partnership firms. 
    • Appeals from the order of DRT shall lie to the Debt Recovery Appellate Tribunal (“DRAT”).
  • National Company Law Tribunal (NCLT): It shall be the Adjudicating Authority with jurisdiction over companies and limited liability entities. 
    • Appeals from the order of NCLT shall lie to the National Company Law Appellate Tribunal (NCLAT).
      • NCLAT shall be the appellate authority to hear appeals from the Regulator’s orders regarding insolvency professionals or information utilities.

Achievements of Insolvency and Bankruptcy Code (IBC)

• Company Resolutions: According to the data from IBBI, the code had helped 2,622 companies (720 through resolution plans, 1,005 through appeals, reviews, or settlements, and 897 through withdrawal of insolvency proceedings till June 2023).
• Admitted Cases: By the end of September, 7,058 cases had been admitted under the Insolvency and Bankruptcy Code (IBC) framework. 
• Credit Recovery: As of September 2023,  the creditors have realised Rs 3.16 lakh crore under the resolution plans approved under the Code.
• Outperforming Board of Industrial and Financial Reconstruction (BIFR) Regime: The Insolvency and Bankruptcy Code has significantly outperformed the earlier BIFR regime in terms of the speed of resolution.
  • BIFR was established under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) for the rehabilitation and reconstruction of sick companies and the release of public funds sunk in those companies into the open market. 
• Rise in Employment Intensity: According to a report by the IIM, Ahmedabad, there has been a 50 percent rise in average employee expenses in the three years post-resolution cases, indicating a higher employment intensity in the resolved firms (listed) during the post-resolution period. 

Concerns Associated with Insolvency and Bankruptcy Code

• Poor Recovery Rates: According to the report,  banks or FCs are recovering an average of just 10-15% in NCLT-settled cases of large corporates.
  • In contrast, banks collect complete interest on loans extended to farmers, students, MSMEs, and housing, including penalty interest for delays, displaying complete disparity with the treatment of corporations.
• Prevalence of Haircuts: The 32nd report of the Parliamentary Standing Committee on Finance highlighted low recovery rates with haircuts as much as 95%.
  • Videocon Case: Taken over by the Vedanta Group, the banks recovered only 5% of the loan outstanding on the declaration date. 
    • A ‘haircut’ refers to the amount of money lenders need to sacrifice as part of a loan resolution process.
• Delay in Resolution Process: While the time taken under Insolvency and Bankruptcy Code is lower than what it used to take before Insolvency and Bankruptcy Code, it continues to exceed the expected timelines. 
• • The average time to close the resolution process is around 653 days.
  • More than 71% of cases have been pending (for) more than 180 days.
• Inadequate Contingency Planning for Mitigating Project Risks: According to a former RBI official,  banks are inadequately conducting contingency planning, particularly for mitigating project risks. 
  • Stress tests and simulation models used by banks do not incorporate extreme stress scenarios, including assessing the borrower’s ability to withstand them and determining the potential haircut imposed by banks in such cases. 
  • Corporations that underwent liquidation under the Insolvency and Bankruptcy Code reported only 5 percent of assets under their ownership, highlighting lenders’ inadequate risk management practices.
• Issues with Resolution Professionals (RPs): The RP has been accused of  violating the code of conduct and not acting in the best interest of creditors.
  • Some RPs allegedly advocated for the company’s liquidation rather than resolution, as the resolution process would provide them with a greater fee.

• • The Parliamentary Standing Committee revealed that disciplinary actions have been taken against 123 Insolvency Professionals (RPs). 
  • For Example, 60% of the RPs inspected were found to be indulging in malpractices.
• Shortage of Staff at the National Company Law Tribunal (NCLT): Currently, NCLT has 55 members as opposed to the sanctioned strength of 63 members.

Also Refer: India’s Forex Reserves Up by $2.54 bn 

Way Forward to the Insolvency and Bankruptcy 

• Redesigning the Fast-Track Corporate Insolvency Resolution Process (FIRP): It will allow financial creditors to drive the insolvency resolution process for a Corporate Debtor outside of the judicial process while retaining some involvement of the Adjudicating Authority (AA) to improve the legal certainty of the outcome.
• Structuring the Resolution Plan: As proposed by the IBBI,  the resolution plan needs to be structured in two parts to streamline the CIRP and prevent delays in executing the resolution plan.
  • Part A: To deal with inflow, that is, payments under the resolution plan, payment of insolvency resolution process cost, etc.
  • Part B: To deal with distribution to the various stakeholders. 
• Ceiling on Haircuts: There is a need to fix a ceiling on haircuts, which has not been implemented yet.
• Ceiling on Maximum Credit: The RBI must implement a maximum ceiling of credit to a single corporate house at ₹10,000 crore, reducing banks’ burden during write-offs.
• Establishing Adequate Bench Strength: This will curtail the delays and lead to the time-bound nature of the corporate insolvency resolution process.
  • Given the increasing volume of cases, the sanctioned strength of NCLT members needs to be further increased to ensure higher disposal rates.
• Judicial Training to NCLT Members: Experts have suggested that bureaucrats appointed as technical members must undergo judicial training before being appointed to NCLT.
  • It needs to be ensured that the tribunal is immune from executive interference by stopping the appointment of bureaucrats to such bodies.
• Contingency Plans for banks: Banks need to factor in the financial risk situations of the firms and implement a backup/contingency plan in their appraisal process. 
• Pre-packaged insolvency resolution framework for corporate debtors: The pre-packaged insolvency resolution framework needs to be expanded to certain categories of corporate debtors like micro, small, and medium enterprises (MSMEs).

Conclusion

Improving operational infrastructure, providing clarity in legal interpretation, streamlining procedures, developing a robust insolvency ecosystem, and enhancing mechanisms for cross-border insolvency are crucial steps in ensuring the effective implementation of the Insolvency and Bankruptcy Code. 

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Context: Recently, a new joint report “Digital Trade for Development” was released which looks into opportunities and challenges for developing economies arising from digital trade.

About the IMF Report on Digital Trade for Development

• Published by: It is a joint publication by the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), the United Nations Conference on Trade and Development (UNCTAD), the World Bank and the World Trade Organization. 

Key Highlights of IMF Report on Digital Trade for Development

• Digital Transformation: The world is witnessing a paradigm shift with the advent of digital transformation.
  • Today, an estimated 5.4 billion people can connect to the internet, yet one-third of the global population remains offline.
• New Opportunities: Cross-border digitally delivered services are a rapidly growing segment of international trade presenting new opportunities. 
  • With a nearly fourfold increase in value since 2005, digital trade outpaces goods and traditional services, comprising 54% of total services exports. 
• Policy Challenges: The report explores specific policy issues, including the WTO’s moratorium on customs duties on electronic transmissions, regulation of cross-border data flows, competition policies, and consumer protection.

Must Read: OECD’s International Migration Outlook 2023

What is Digital Trade?

• Digital Trade Definition: According to the OECD, digital trade encompasses digitally-enabled transactions of trade in goods and services that can either be digitally or physically delivered, and that involve consumers, firms, and governments. 
  • For example: 
    • Purchase and physically deliver a paper book through an online marketplace. 
    • Purchase and digital delivery of an e-book.
• Digital Economy: Economic activities conducted or facilitated through digital technologies. 
• Digitalisation and Changing Trade: Digitalisation increases the scale, scope and speed of trade and allows firms to bring new products and services to more digitally-connected customers across the globe. 

Digital Trade in India: Status & Vision

• India’s Trillion-Dollar Digital Opportunity: It is an endeavor of the Ministry of Electronics and Information Technology (MeitY) to present India’s Digital Vision and the potential of India to attain $1 trillion of economic value of digital economy by 2025. 
• Economic Value of Digital Trade: According to the All India Management Association and the Hinrich Foundation research, the economic value of digital trade in India, including exports, has the potential to grow 14 times to $512 billion from $35 billion by 2030 if cross-border data flows and storage are fully facilitated.

Also Refer: Vision India@2047: Transforming India into a Developed Nation

Government Initiatives to Boost Digital Trade in India

• Digital India Programme: The program aims to establish better connections between citizens and the government via e-services and deliver government services in a cost-effective and transparent manner. 
  • For example, as per budget announcement for FY 2022-23, the 12 DTH Channels would be expanded to 200 PM e-Vidya DTH TV Channels, ensuring e-service delivery. 
• AI for All Strategy: Artificial Intelligence (AI) for All is a self-learning online program designed to raise public awareness about AI which aims to demystify AI for people from all walks of life and build a ‘Digital First Mindset’.
• Digital Infrastructure Built on India Stack: India Stack consists of open Application Programming Interfaces (APIs) that unlock essential economic elements such as identity, digital payments, and data. This creates a platform for easy transactions and the delivery of goods and services.
  • The Aadhaar layer provides online bio-metric-based digital identities to individuals. 
• Government eMarketplace (GeM): The government has also digitized procurement of goods and services by creating a centrally managed GeM, one of the largest procurement platforms. 
  • GeM has surpassed ₹2 Lakh Crore in Gross Merchandise Value (GMV) within less than 8 months of the current fiscal year (2023-24), surpassing the total GMV inscribed at the end of last fiscal year.
• Pandemic Relief Services: Bringing relief to people during the COVID-19 pandemic, were driven on India’s digital public infrastructure i.e. COWIN, a technology platform created by the government to control the rollout of the world’s largest vaccination program.

Digital Trade and Associated Opportunities in India

• Increased Efficiency: Adopting digital technologies reduces manual tasks and enhances operations, leading to cost reductions, quick decision-making, and a competitive edge.
  • For instance, adopting advanced technologies, such as AI, Machine learning, blockchain, and cloud computing, will improve the efficiency of Indian businesses, making them globally competitive.
• Innovation and Competitiveness: Digital trade enables firms to use new and innovative digital tools to overcome barriers to growth, helping facilitate payments, enabling collaboration, avoiding investment in fixed assets through cloud-based services, and using alternative funding mechanisms such as crowdfunding.
• Elevated Customer Experience: Digital transformation enables businesses to tailor services to customer needs, offering personalized experiences and constant digital support, bolstering customer satisfaction and loyalty.
• Insightful Data Analysis: The extensive data generated by digital means provides critical insights into consumer preferences and market movements, aiding data-driven decisions and fostering business growth.
  • For instance, personalised advertisement by using technology and data, retailers are in a position to show the right product to the right person, at the right time, in the right place. 
• Expanded Global Reach: Digital transformation offers access to international markets, allowing businesses to extend their reach and explore new revenue streams and global opportunities.

Challenges Associated with Digital Trade in India

• Global Disparities in Digital Preparedness: Developed countries dominate trade in digitally deliverable services. By contrast, the shares of least developed countries (LDCs) and landlocked developing countries (LLDCs) of digitally deliverable services trade are much lower than for services in general.
  • For instance, in 2022, high-income economies were responsible for over 82% of global exports of digitally delivered services, meanwhile, 17% of digitally delivered services exports originated from middle-income economies, with China and India accounting for 6% and 5%, respectively. 
• Domestic Regulatory Environment: India’s evolving data governance framework is informed by multiple policy concerns including building indigenous data storage, boosting domestic digital investments, enhancing governmental control over data, etc. This complex framework makes it more cumbersome and costly for firms to engage in digital trade.
  • For instance, digital trade is where some of the biggest U.S. tech companies including Amazon, Google, Meta, Intel, etc. have flagged multiple policy barriers to trading with India in a note titled “Key threats to digital trade 2023”.
• Digital Divide: There is a grave digital divide in India wherein gaps exist in internet usage and access to digital infrastructure and a significant portion of the population lacks internet access. 
  • According to the Internet in India Report 2022, the digital divide between states, with Bihar (32%) having less than half the level of internet penetration than the leading state, Goa (70%).

Way Forward to the Digital Trade

• Facilitating Regulatory Environment: Policies and regulations should enable remote transactions, enhance trust in digital markets, promote affordable access, and support cross-border deliveries. 
  • A predictable and interoperable environment that provides appropriate safeguards related to online transactions (such as data privacy, consumer protection and cybersecurity) is essential for the digital trade ecosystem to thrive. 
  • Estimates suggest that improved digital connectivity is twice as effective at lowering trade costs in the middle- and low-income economies with an enabling regulatory environment for digitally delivered services. 
• Bridging the Digital Divide: International financial and technical support is needed to build the capacity of developing economies like India to improve connectivity and skills and regulate areas relevant to digital trade. 
  • For instance, initiatives like the WTO-led Aid for Trade, the UNCTAD-led eTrade for all and the World Bank-led Digital Advisory and Trade Assistance (DATA) Fund can help. 
  • Digital connectivity is one of the three priority areas in the WTO Aid for Trade work program for 2023-24, and recent Aid for Trade commitments to the ICT sector stand at US$ 2.16 billion in 2021-22.
• International Cooperation in Digital Trade: International cooperation is increasingly addressing rules on digital trade, with progress mainly observed in bilateral and regional trade agreements. 
• • For instance, the WTO Work Programme on E-commerce, initiated in 1998, underscores the need to update existing rules to accommodate the evolving nature of digital trade. 
• Regulatory Issues Beyond Trade: Cooperation on balanced global data governance, effective regulation of market power in digital markets, and robust consumer protection frameworks are vital. 
  • Global solutions are required for regulatory issues like cross-border data flows, competition, and consumer protection. 
• Maximising Positive Impact of Digital Trade: According to the ‘Data Opportunity: The Promise of Digital Trade’ report, to maximize the positive impact, issues such as red tape on digital enterprises, restricting cross-border data flows, and providing imbalanced copyright and intermediate liability regulations, need to be addressed. 

Also Read: India To Be A $ 7 Trillion Economy By 2030: CEA 

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