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INDIA & THE WORLD


Mahmohan Singh and Bangladesh Prime Minister Sheikh Hasina in Dhaka on 6 September 2011.The agreement in itself is historic , after signing agreements, Indian Prime Minister said that signing of the protocol on land boundary will resolve all issues relating to undemarcated boundary areas , enclaves and land under adverse possession. During the visit of Manmohan Singh to Bangladesh, India and Bangladesh signed the following agreements: (i) Framework Agreement on C ooperation for Development (ii) Protocol to the Agreement concerning the demarcation of the Land B oundary between India and B angladesh and related matters India and Bangladesh signed a historic protocol on land boundary agreement following the talks between Prime Minister
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IN D I A A N D BA N G L ADE S H

because for the first time India will have a fully demarcated boundary with one of its neighbours.In a joint statement,

(iii) A ddendum to the MOU between India and B angladesh to facilitate Overland Transit Traffic between B angladesh and Nepal

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(iv) Memorandum of Understanding for Cooperation in Renewable Energy (v ) Memorandum Understanding C onservation of Sunderban of on the

(vi) Protocol on Conservation of the Royal Bengal Tiger of the Sunderban (vii) Memorandum of Understanding on Cooperation in Fisheries (viii) Memorandum of Understanding on C ooperation between D oordarshan and Bangladesh Television (ix) Memorandum of Understanding on C ooperation between Jawaharlal Nehru University and Dhaka University (x) Agreement of Cooperation between National Institute of Fashion Design (NIF T), India and BGM EA Institute of F ashion Technology (BIFT), Bangladesh Bangladesh Prime Minister Sheikh H asina described the land boundary agreement as a historic moment in bilateral relations and added that the framework agreement on cooperation and development is a visionary document that looks not just on the reality today but also the potentials of tomorrow.India and Bangladesh also agreed to remove all barriers and improve infrastructure like road, port and rail links for enhancing bilateral trade . This was agreed after a two-day successful visit by Prime

Minister Manmohan Singh. During his visit , Manmohan Singh announced to remove 46 textiles lines , of interest to Bangladesh, from Indias negative list for the least developed countries under the South Asia Free Trade Area A greement ( S AF T A). Import duties on these items from Bangladesh will be eliminated with immediate effect.

trade relations. This augurs well for enhancing mutual trust and understanding. The Ministers agreed to jointly work to more than double bilateral trade within three years, from current levels of 2.7 Billion US dollars per annum to about 6 Billion dollars. This goal shall also be facilitated through the Memorandum of Understanding signed today between the India Trade Promotion Organization and the Trade D evelopment Authority of Pakistan. The MoU shall foster better trade promotional activities , for the benefit of business communities of both countries . The Ministers mandated their C ommerce

IN D I A A N D P A KIST A N
A t the invitation of the Commerce Minister of India, Shri Anand Sharma, the Commerce Minister of Pakistan, Makhdoom Mohammad Amin Fahim visited India from 26th September to 2nd October, 2011.

After more than three and a half decades, this is the first visit by a Pakistan Commerce Minister to India. The official level discussions were held on 28th September between the Commerce Ministers and their respective official delegations. Both Ministers noted with satisfaction that India and Pakistan are entering a new phase of full normalization of bilateral

Secretaries to pursue with vigor the task of fully normalizing bilateral trade relations . They agreed that their countries would cooperate for a high ambition of preferential trade relations under the framework of the South Asia Free Trade Agreement (SAFTA). They noted with satisfaction the joint and collaborative efforts already being made by India and
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Pakistan to liberalize trade in goods and services under SAFTA. They agreed that all mutual obligations contracted under SAF TA would be implemented with full sincerity. The Ministers appreciated the progress made and roadmap laid for trade liberalization in the April 2011 meeting of the Commerce Secretaries . They further mandated their respective Commerce Secretaries that when they meet in November , 2011 they shall lay down specific timelines to normalize all trade relationships including dismantling of all non- tariff barriers . F ull implementation of S AF T A obligations was also mandated. Both Ministers agreed that joint and concerted efforts will be made in all areas to create an enabling environment for trade and to encourage greater engagement between the business communities of both countries. They agreed to further promote greater intra-regional connectivity through road, rail, shipping and air. This meeting has been an important milestone in identification of issues impeding trade (in sectors such as cement, textiles, surgical instruments) as perceived by the business communities of both countries. Customs arrangements have also been significantly synchronized and both sides are vigorously addressing issues of infrastructure, to further promote bilateral trade through the land route of AttariWagah. The new business visa regime would allow multiple entry and
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could be for a period up to one year.The Ministers expressed the hope that such a new visa regime would rapidly expand the vistas of bilateral commerce . They emphasized that a more secure regional environment would progressively help both countries to keep liberalizing the visa arrangements for businesspersons. The Ministers agreed that the bilateral trade liberalization process should be uninterruptible and irreversible. They affirmed that both countries would cooperate and work in close coordination at multilateral forum , such as WTO and SAARC, to support each other , thereby strengthening their economies.

environment.India and China also agreed to strengthen cooperation on energy efficiency and conservation , as well as on environmental protection. In order to promote sustainable development , the two sides agreed to cooperate in the renewable energy sector. The two sides agreed to host the next S ED in 2012 in India.Strategic Economic Dialogue will increase mutual understanding and trust between India and China. Through this dialogue , both nations could share their experience to achieve economic development . A lthough the bilateral trade crossed 61 billion US dollars in 2011, India was left with deficit of over 40.9 billion US dollars due to accelerated exports from China.

IN DI A AN D CHIN A

India and China held their first Strategic Economic Dialogue in Beijing on 26 September 2011. India and China agreed to deepen bilateral investment cooperation, further open up markets to each other and improve the investment

IN D I A A N D US A
Minister of Power Shri Sushilkumar Shinde visited United States of America to take part in the 8th India Investment Forum in New York.The India Investment

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Forum had distinguished gathering of top ranking India centric investors, captains of Indian and US Industries , especially those from power sector , senior government representatives, Fund Managers and Analysts.

capacity is under construction. He informed the gathering that the 12 th Plan aims at a capacity addition of nearly 100 thousand MW. The Minister said that in the 11th Plan period from 2007 to 2012, the funding requirement in

the norm. Shri Shinde said as of January 2011, all power to be procured is mandated through the competitive bidding route. He said 100% Direct Foreign Investment has been allowed for sometimes now in all segments of the power sector including power trading. The Minister said that investor confidence has returned to the sector which is amply borne out by the fact that all projects of the 11th Five Year Plan and 78,000 MW for the 12 th plan have achieved financial closure. Shri Shinde informed that 16 Ultra Mega Power Projects (UMPPs ) and 14 Inter State Transmission schemes have been identified for development by the private sector on competitive bidding route . Stating that while the bidding of four Ultra Mega Power Projects and six transmission projects have been completed, Shri Shinde said that more than 5 UMPPs are in the pipeline, for which Special Purpose Vehicles ( SPVs ) have been created by the PFC. Regarding H ydro power Shri Shinde said that estimated potential in hydro sector in India is 1,50,000 MW out of which only 30,000 MW has been harnessed. The remaining capacity needs to be developed which provides the investors an opportunity . To enable the project developer in the Hydro Sector a reasonable and quick return on investment merchant sale of up to a maximum of 40% of the saleable energy has been allowed, making investments in the sector more attractive. The Minister said that India is actively pursuing a low carbon
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C alling upon the A merican investors to invest in Indian power sector, Shri Shinde said that India has taken several measures to make the power sector investor friendly in a fast growing competitive environment, he said that an independent regulatory framework in India now provides business confidence to power companies and a fairly lucrative rate of return on equity of 15.5 per cent per annum. Highlighting the reforms in the power sector the Minister said that the E lectricity A ct 2003 allows the sector to align itself with market dynamics and clears the roadblocks especially in the way of greater participation by the private sector.Shri Shinde said that while the present installed generation capacity in India is about 1,81,000 MW, more than 80,000 MW of new power

Indian Power Sector had been estimated at USD 230 billion, and the similar investment is anticipated for 12th Plan. Allaying the apprehensions of investors on the availability of fuel , Shri Shinde said India is working on increasing imports as well as domestic production of coal. He said a Group of Ministers has been formed to quickly address the coal shortage issue. The Minister added that in order to increase the availability of gas, India is working on an RLN G pooling mechanism.On the policy front, Shri Shinde said that the National Electricity Policy, 2005 and the Tariff Policy, 2006 have paved the way for renewed interest amongst both developers and investors. He said the bidding documents have been standardized and the competitive bidding route is slowly becoming

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growth strategy which includes Super C ritical Technology in Thermal Plants , the rapid induction of C lean C oal Technologies and a sharper focus on renewables .H e said that international majors like Mitsubishi , Toshiba , H itachi , Alstom and Ansaldo have already started the process of partnering with Indian manufacturers to set up Super Critical Manufacturing facilities in India . H e also highlighted Indias commitment towards renewable energy and said that India plans to add 20,000 MW of solar power by 2022. H e said that the State E lectricity Regulatory C ommissions ( S E R C s ) are mandating a minimum Renewable Purchase Obligations (RPOs) to Discoms and a mechanism for trading of Renewable E nergy C ertificates ( R EC s ) through power exchanges has also started working in India. He said that an investment of Rs. 74,000 crores ($ 15 billions ) would be required for energy efficiency initiatives in India. He said that in order to improve confidence among the F inancial Institutions , a robust and transparent energy audit system has been created. Sharing that both the Partial Risk Guarantee F und and the Venture Capital F und are being created for boosting investments in the area of energy efficiency, the Minister said that a National Mission on Enhanced Energy Efficiency is under implementation.During the visit Shri Shinde also addressed CEOs meet organised by USIBC. Shri Shinde was on a five day visit
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to the US A which aimed at enhancing cooperation between the two countries in the power sector .

IN D I A A N D GE RM A NY

Technology as the nodal agency has funded the projects developed by DST-TIFAC under the CAR programme. The ministries of Heavy Industry, Electronics and Road Transportation have been

International Advanced Research Centre for Powder Metallurgy & New Materials (A R C I ) H yderabad of India and the Fraunhofer Society of G ermany has signed a path breaking cooperative R&D agreement in the field of automotive technologies. This partnership is a result of the dialogue between the Indian C ore G roup on A utomotive R &D (CA R ) and German Fraunhofer Society (FhG) some time ago.CAR is a major initiative of the G overnment of India to promote collaborative R &D among Indian Industry , R&D Institutions and Academia for the benefit of the automotive industry. The CAR programmes were initiated by the Principal Scientific A dviser to the G overnment of India . The D epartment of Science &

the other members of the CAR apex committee and provided funds where necessary. FhG is a leading industrial R &D organization in Europe. With a view to exploring the possibility of collaboration between CARFhG workshops were held in India and G ermany . D istinguished experts drawn from Indian academia, national laboratories and industry and F raunhofer institutes participated in the workshops and identified projects under four broad themes : Materials , Manufacturing , A utomotive E lectronics and Propulsion in short-term, mediumterm and long-term categories. The first of the collaborative projects MultiJoin is the basis of the agreement signed today between the German and Indian sides .A special feature of this

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project arises from the way R&D projects were identified . Multijoin project priority was industry-driven and Government supported . MultiJoin project aims at enabling light weighting of automotive body through hybrid designs involving multi-materials. F our Indian institutions , ARCI Hyderabad, IISc Bengaluru, IIT Madras and A R A I Pune ; four Fraunhofer institutions IWU, IWS, I FA M and IZ F P ; with participation of Indian automotive OEMs will work on evaluation of four different joining techniques to join aluminium, steel and plastic in dissimilar combinations leading to development of design guidelines for incorporation of the newly generated knowledge into automotive body designs. Optimal technology concepts including appropriate quality control strategies based on a cost benefit analysis will be implemented in production by interested industries.

IN D I A A N D SOUT H AF RI CA
India and South Africa agreed to strengthen bilateral cooperation in the MSM E ( micro , small and medium enterprise) sector. South Africa houses many prominent centres of learning and excellence. The MSME sector accounts for a large share of industrial output, employment and exports in both countries . There are immense opportunities of cooperation and strategic alliances in MSM E sector, which could be in the form of joint ventures , technology collaborations or marketing tieups.

The total trade between the two countries in the financial year 2010-11 was 10.6 billion US dollars, higher than bilateral trade target of 10 billion US dollars by the year 2012, set during the visit of South African President Jacob Zuma to India in June, 2010. A revised bilateral trade target of 15 billion US dollars has been set for the year 2014. South Africa is Indias 2nd largest trading partner in Africa. There is, however , ample scope of diversifying the existing trade basket by bringing in many more manufactured goods . There is active contact between India and South Africa in multilateral fora, particularly at the N A M , C ommonwealth , G-77, G-20, N AA SP and WTO . B oth countries are part of the IBSA trilateral initiative. Both countries are currently non - permanent members of the UN Security C ouncil (2011-2012). S A rendered pro-active support in the

NSG decision to enable full civil nuclear cooperation with India. SA recently participated in the BRICS summit held in China in April, 2011.

IN D I A A N D MY A NM A R
India and Myanmar on 27 September 2011 agreed to set a 3 billion US dollars as trade target. The trade target will be achieved by 2015. At present, the bilatral trade between India and Myanmar is 1.5 billion US dollars. This was decided at a fourth meeting of joint trade commission which was attended by the Union Commerce Minister, Anand Sharma and the Myanmars Minister of Commerce, U. Win Myint.India and Myanmar also agreed to build a Land Custom Station at IndiaMyanmar Border (Mizoram) to facilitate the movement of vehicles and goods entering and leaving Mizoram. Both nations noted that the border trade point at Moreh on the Indian side and
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Tamu on the Myanmar side had huge potential for normal trade. It should be noted that one third of Indias imports of pulses and one- fifth of Indias imports of timber are from Myanmar . At present , pulses and wood products accounts for 97.5 percent of Myanmars total exports to India while pharmaceuticals and buffalo meat accounted for 45 percent of Indias total exports to Myanmar . India and Myanmar implemented the India-ASEAN (Association of Southeast Asian Nations) Free Trade Agreement (F T A) on 1 September 2010. India had also implemented the D uty F ree Tariff Preference (DFTP) scheme for Myanmar in January 2009, under which Myanmar would gain market access for 94 per cent of Indias products at zero duty. India and Myanmar have also increased the list of items for border trade from 22 to 40.

modules will be considered by the two countries.

2011. The - two - day joint secretary level talks between

IN DI A A ND ISRAE L
India and Israel have decided to enhance cooperation in Tourism Sector . This was decided at a meeting between Stas Misezhnikov, Tourism Minister of Israel and Union Tourism Minister, Subodh Kant Sahai held in New Delhi on 5 September 2011.Both the countries have decided to consider exchanging experience in destination management and promotion . Manpower development will be another area of cooperation between India and Israel. Exchange programme for teachers, students, and exchange of information on teaching
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Tour operators and travel agents of both the countries will interact with each other in order to promote two - way tourism between India and Israel. The possibilities for promoting package tours in either of the countries will also be explored by the travel trade of two countries. Tourist traffic from Israel to India was 40581 in 2009, which rose to 43539 in the year 2010. A n agreement between India and Israel on cooperation in the field of tourism was signed in New D elhi in May , 1993. Both the countries have rectified this agreement. India Tourism Office located in Frankfurt is responsible for promoting India as a tourist destination in the Israeli market.

IN D IA A N D NE P A L
India and Nepal resumed bilateral talks on security issues in Kathmandu on 22 September

India and Nepal was resumed after a gap of four years. The last one was held in New Delhi in 2007.Besides information sharing and security issues , India and Nepal also discussed about construction of the Nepal Police Academy at Panauti with Indian assistance of 5 billion Nepali rupees . The two nations also deliberated on border management and trans -border crime, human trafficking and smuggling of fake Indian currency through the open border.Although India-Nepal agreement to hold joint-secretary level security talks every six months is in place, the security talks were not held for the past four years . India and Nepal share 1800 km long border between them.

IN D I A A N D URU G U A Y
The Government of the Republic of India signed a Double Taxation

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Avoidance Agreement (DTAA) with the Oriental Republic of Uruguay for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income and on capital on 8 th September , 2011. The D TAA provides that business profits will be taxable in the source state if the activities of an enterprise constitute a permanent establishment in that state . Such permanent establishment includes a branch, factory , etc . Profits of a construction , assembly or installation projects will be taxed in the state of source if the project continues in that state for more than six months. Profits derived by an enterprise from the operation of ships or aircraft in international traffic shall be taxable in the country of residence of the enterprise . Dividends , interest and royalty income will be taxed both in the country of residence and in the country of source. However, the maximum rate of tax to be charged in the country of source will not exceed 5% in the case of dividends and 10% in the case of interest and royalties . C apital gains from the sale of shares will be taxable in the country of source and tax credit will be given in the country of residence.The Agreement further incorporates provisions for effective exchange of information including banking information and assistance in collection of taxes between tax authorities of the two countries in line with internationally accepted standards including anti -abuse provisions to ensure that the

benefits of the Agreement are availed of by the genuine residents of the two countries.The A greement will provide tax stability to the residents of India and Uruguay and facilitate mutual economic cooperation as well as stimulate the flow of investment, technology and services between India and Uruguay.

enter into long term agreements with the Indian buyers on commercial terms. The two Ministers took stock of the current status of trade and commercial linkages between India and C anada . They also discussed steps to be taken by both sides to intensify the interaction between the government and the private sector stakeholder on both sides.Minister

IN D I A A ND CA N ADA

Government of India and Canada agreed that residual issues with regard to F oreign Investment Protection Agreement (FIPA) and B ilateral Social Security Agreement (SSA) between the two countries have been resolved and both agreements could now be signed at an opportune time. Mr . Edward F ast , Minister of International Trade of Canada also confirmed that the Canadian side has delinked the SSA from FIPA. Indias Commerce Minister Anand Sharma raised the issue of constrained supply of Potash from Canada to the Indian buyers.He said that the G overnment of Canada should view this matter from a strategic perspective and urge the Canadian businesses to

Sharma underscored the need to convene the meeting of the IndiaCanada CEO Forum at an early date so that the agenda for positive engagement between the businesses of the two countries could be furthered . Minister Sharma strongly raised the problems being faced by professionals of the Indian IT industry in obtaining appropriate visas for Canada. He said that this was limiting services trade between the two countries. In this regard, he asked Minister Fast to sensitize the relevant Canadian authorities to remove impediments to the movement of IT professionals from India to Canada. Minister Fast said that the Canadian government had
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recently changed its policy and under the revised guidelines Canada was giving appropriate multiple entry visas if the passports were of 10 year validity.

recently gave humanitarian assistance of 1 million dollars to Libya.

IN D I A A N D ZIM BAB W E
India and Zimbabwe agreed to expedite the ratification of BIPA ( Bilateral Investment Promotion

IN D I A AN D LI B Y A

India announced support for Libyas Transitional National C ouncil in the UN on 17 September 2011. The Union government of India supported the acceptance of credentials of the delegation of the TN C, to attend the 66th session of UN General Assembly in New York. The TNC delegation was headed by its President Mustafa Abdel Jalil . India participated as an observer in the Libyan Contact Group meeting in Istanbul in July 2011. Indias charge d affaires to Libya, at present based in Tunis, formally established contact with the TNC mission in Tunis. India
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and Protection A greement ) between India and Zimbabwe for further strengthening the investment and trade ties between the two countries. This was one of the important outcomes of the bilateral meetings between H onble minister of state Commerce and Industries Mr . Jyotiraditya M. Scindia and his counterpart minister from Zimbabwe G overnment . Mr . Scindia was on a visit to Zimbabwe accompanied by a business delegation .He offered Indias full support in the development of telecom , highways and railways sectors. In

particular, in the rail sector where India had gained considerable expertise in laying of tracks and development of rolling stock , IRCON and RITES could assist Zimbabwe in the expansion and rehabilitation of its rail infrastructure . In the aviation sector also India could provide technical assistance to Zimbabwe.Mr. Scindia informed his Zimbabwe counterpart that it had been decided to further strengthen the India-Zimbabwe bilateral ties by setting up Rural technology Park and Food testing laboratory in Zimbabwe. Mr. Scindia stressed that there is scope for significant diversification of Indian exports to Zimbabwe , and Zimbabwean exports to India , and to substantially increase the present low level of bilateral trade of US $ 125 mn registered in 2010-11. He highlighted the fact that in the coming years maximum growth will be from south-south trade amongst the countries of Asia, Africa and Latin America. The minister also appreciated the contribution of 10000 strong Indian Diaspora in Zimbabwe to the economy of Zimbabwe . Speaking about the potential areas of cooperation between the two countries , he mentioned that Zimbabwe has the worlds largest platinum reserves and also possesses large reserves of gold, coal, asbestos, copper, nickel and iron ore.Indian mining companies could partner Zimbabwean mining majors in key value - added activities . H e also mentioned about other business sectors, such as renewable energy , where Indian and Zimbabwean

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companies could strike project partnerships. India is helping Zimbabwe in capacity building and assisting in developing its own research and knowledge base by sharing experiences in various sectors such as SME, Power, Agriculture etc. Zimbabwe will soon join other A frican countries that are benefiting from the Pan-African eNetwork , a project that will connect all 53 countries of the A frican Union (A U ) with a satellite and fibre optic for sharing Indias expertise in education and health. Government of India also provides assistance to Zimbabwe under the ITEC programme for capacity building.

IN D I A A N D BH UT A N

IIDEM platform in India. Quraishi agreed to that and offered to train

IN D I A A N D TURK E Y
India and Turkey agreed for future cooperation in coal related areas during the meeting between Sriprakash Jaiswal, Minister of Coal, Government of India and Taner Yildiz, Minister for Energy and Natural Resources , government of Turkey on 12 September 2011. The meeting took place at Istanbul, Turkey on the sidelines of the 22nd World Mining C ongress inaugural session . India and Turkey discussed about the energy situation in the two countries , particularly in the field of coal mining. India offered technical cooperation to develop coal and lignite deposits and coal washing in Turkey. Turkey is planning to set up some 15000 MW coal based power generation plants and requested Indian companies to participate in the tenders.

India and B hutan signed a Memorandum of Understanding for a period of five years to facilitate exchange of knowledge and experience , information , material, expertise and technical knowhow, training of personnel and development of human resources in electoral matters and also for taking up joint initiatives and providing assistance to others . The MoU was signed during the visit of Chief Election C ommissioner SY Quraishi to B hutan on 16-18 September 2011. The C hief E lection Commissioner of India offered to create a SAARC Resource Centre at the India International Institute of D emocracy and E lection Management for preserving and nurturing election related documentation in relation to S AA R C countries . The C hief Election Commissioner of Bhutan asked for training of their newly inducted officers through the

Bhutanese election officials during the process of forthcoming State elections.

IN D I A A N D U GA N DA
The government - run Indian Institute of Foreign Trade (IIFT) setup its first overseas campus in Kampala , Uganda to assist students of A frican nations understand the nuances of globalisation and capacity-building in the continent.The new institute, named India-Africa Institute of Foreign Trade (IAIFT), is being set up as a part of the Indian governments initiative to help develop a higher education system in African countries in specialised fields.It will be a panAfrica institute- part of Indias commitment for capacity-building in Africa. Established in 1963 by the government of India, During the India-Africa Forum Summit in 2008, Prime Minister Manmohan Singh had announced that India would help establish 19
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educational institutions in Africa. II F T is one of them and the African Union wanted it to be set up in Kampala.

IN D I A A N D E STONI A
India signed D T AA (D ouble Taxation Avoidance Agreement) with E stonia on 19 September 2011 and forged a pact to work with it in the field of information, communications and technology

(ICT).The DTAA and the pact on ICT was signed during the visit of communications and Information Technology Minister Kapil Sibal to Estonia. Estonia is a state in the Baltic region of Northern Europe. Kapil signed the D T AA with E stonian Minister of F inance Jurgen Ligi.India will also set up a Chair on Cyber Security in Tallinn University and a Chair on Indian languages, history and literature in

another of E stonias universities . The government of E stonia also announced 20 scholarships for Indian students that enroll with E stonian universities for accredited doctoral programme leading to a PhD degree in information and communication technology , environment technology , biotechnology , material technology power engineering or health.

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