In Today’s News:
- RIC and its significance.
- The government of India notifies 100% FDI in Air India for NRIs.
1. RIC and its significance
Though there were calls for a westward shift in India’s foreign policy, India’s engagement with Russia and China is also important.
Prelims GS – International Relations
Refer to the Prelims content of RIC on 19th June 2020.
Mains GS2 – International Relations
Significance of RIC and its relevance to India:
- When RIC commenced in the early 2000s, Russia-India-China were positioning themselves for a transition from unipolar to Multipolar world order.
- All three countries considered their relationship with the United States as an essential part to fulfil their global ambitions.
- Therefore, RIC was not an anti-U.S. partnership.
- Initial stages of RIC boosted relations of India with Russia and China.
- The political, defence, and energy pillars of the India-Russia strategic partnership were enhanced through RIC.
- India’s relation with China also increased through RIC. The 2003 decision to bring a political approach to the boundary dispute and to develop other cooperation, encouraged a multi-sectoral surge in relations with China.
- India is a member of the Shanghai Cooperation Organization in which Russia and China are very important members.
- These are all some examples of how India is cooperating multilaterally with Russia and China.
- The bilateral arms of the India-Russia-China triangle will, therefore, remain important.
2. The government of India notifies 100% FDI in Air India for NRIs
The government of India has notified amendments to Foreign Exchange Management rules and has allowed NRIs for 100% foreign direct investment (FDI) in Air India. Now, NRIs have been given permission for 100% FDI in Air India through Automatic Route.
Prelims GS – Economic Development
- Foreign Direct Investment takes place when an investor establishes foreign business operations or acquires foreign business assets, and establishes ownership or controls interest in a foreign company.
- FDI brings in a long term capital for the economy.
- FDI is not only bringing money but also knowledge, skills, and technology.
Routes of FDI:
- Automatic Route: Under the Automatic Route, the non-resident investor or the Indian company does not require any approval from the Government of India for the investment.
- Government Route: Under the Government Route, prior to investment, approval from the Government of India is required. Proposals for foreign direct investment under Government route, are considered by respective Administrative Ministries/Departments.
Mains GS3 – Economic Development
Benefits of FDI:
- Increased Employment and Economic Growth
- Human Resource Development
- Exchange Rate Stability
- Development of Backward Areas
- Increase in Exports
- Improved Capital Flow
- Creation of a Competitive Market
- Provision of Finance and Technology
- Stimulation of Economic Development
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