International Relations - Current Affairs for January,2017

Month and Year:   
▼ India-Japan to collaborate on freight rail services   [01-19-17]

India will partner Japan for providing scheduled freight rail services between Delhi and Bengaluru.

Japanese Ministry of Land, Infrastructure, Transport and Tourism has picked logistics firm Nippon Express.

It will collaborate with Indian Railways and Container Corporation of India for providing rail services.

The services will transport finished cars as well as general cargo.

The first train service will depart from Delhi for Bengaluru on January 20 and will make a return journey on January 24.

The transit time for the service is less than 70 hours on each side.

The train service would lead to additional freight volumes. It would also promote increased frequency on the route.

Presently, only one time-tabled freight train is running on the Delhi-Bengaluru route.

Nippon Express will be the first major foreign player running a time-tabled freight train for Indian railways.

Japan is also heading India’s high-speed bullet train project between Mumbai and Ahmedabad.

Of an estimated ₹97,636 crore, 81% of the funding for the 508-km project will come in as a loan from Japan.

Further, Japan International Cooperation Agency (JICA) is providing assistance to the Indian Railways in the Delhi-Mumbai Industrial Corridor and the Chennai-Bengaluru Industrial Corridor.

JICA signed an agreement with the Indian government to provide ₹6,100 crore in loans for the Dedicated Freight Corridor Project.

▼ India and Singapore signed third protocol for amending DTAA   [01-2-17]

India and Singapore on 30th Dec 2016 signed the 3rd protocol for amending Double Taxation Avoidance Agreement (DTAA).

This revisiting of the treaty is important as it will help the government in its efforts to eliminate black money from India.

The DTAA was signed or avoidance of double taxation as well as for prevention of fiscal evasion in relation to the taxes on income.

It will come to an effect from 1 April 2017.

It provides for source-based taxation of capital gains arising on transfer of shares in a company.

This amendment will help in curbing the revenue loss as well as in preventing double non-taxation.

It will also streamline the slow of investments.

During the two years called as transition period (from 1 April 2017 to 31 March 2019) the capital gains on shares will be taxed at half of normal tax rate (in source country), subject to fulfilment of conditions in Limitation of Benefits clause.

It also inserts provisions to facilitate relieving of economic double taxation in transfer pricing cases.

It enables application of domestic law and measures concerning prevention of tax avoidance or tax evasion.

However, the amendment grandfathers all investments in shares made before 1 April 2017.

The grandfathering will be subject to fulfilment of conditions in Limitation of Benefits clause as per 2005 Protocol.

The amendments are in line with India’s commitment under Base Erosion and Profit Shifting (BEPS) Action Plan.

Know More About BEPS

  • The OECD’s Action Plan on BEPS was published in July 2013 with a view to addressing perceived flaws in international tax rules.
  • The 40 page Action Plan was negotiated and drafted with the active participation of its member states.
  • It contained 15 separate action points or work streams, some of which were further split into specific actions or outputs.
  • The Plan was squarely focused on addressing these issues in a coordinated, comprehensive manner, and was endorsed by G20 leaders and finance ministers at their summit in St. Petersburg in September 2013.

Chronology of events
Union Cabinet has given approval for the signing of an agreement between India and Portugal for cooperation in the field of agriculture and allied sectors.
India and Portugal have signed six memorandum of understandings (MoUs) including in defence cooperation.
India and the US have signed a memorandum of understanding (MoU) on cooperation in the field of cybersecurity.
India and the United States has signed MoU (Memorandum of Understanding) to collaborate in the fields of developmental activities and aid in third world countries.
India has signed Memorandum of Understanding (MoU) with Sri Lanka to construct 3000 rain water harvesting systems in Rin Jaffna District at a cost of 300 million Rupees (Sri Lankan).