The Covid-19 situation continues to deteriorate in India and cause contraction that the country has never seen since its independence. The Government is making desperate attempts to revive the economy and marginal effects can be seen in the increase in exports. Changes in the foreign direct investment policy for the defence sector were announced. The country is also working towards establishing a regulatory framework on non-personal data.

Worst Economic ContractionThe Indian economy saw its worst contraction in decades, with Gross Domestic Product (GDP) shrinking by a record 23.9% in the April to June quarter in comparison to the same period last year, according to data released by the National Statistical Office, Ministry of Statistics and Program  Implementation in its Press Note on Estimates of Gross Domestic Product for the First Quarter (April to June) 2020-21. The contraction reflects the severe impact of the COVID-19 lockdown, which halted most economic activities, as well as the slowdown trend of the economy even pre-Covid-19. Economists expect this to contribute to a contraction in annual GDP this year, which may be the worst in the history of independent India.

FDI in Defence Enhanced – The Department for Promotion of Industry and Internal Trade, Ministry of Commerce & Industry recently released Press Note No. 4 (2020 Series) for enhancing the limit of foreign direct investment (FDI) in the defence sector to 74% under the automatic route from the existing 49%. The FDI limit was increased to beyond 74% under the government (approval) route from existing 49%, wherever it is likely to result in access to modern technology or for other reasons to be recorded. Apart from this, the other change was that foreign investment in the defence sector will now be subject to scrutiny on grounds of national security and the Government reserves the right to review any foreign investment in the defence sector that affects national security. The government has been focusing on the defence sector to act as an engine for boosting manufacturing in the country, and is aiming to achieve a turnover of Rs 1.75 lakh crore, including exports worth Rs 35,000 crore, by 2025. As of last year, the defence industry, along with the aerospace and shipbuilding industry, was estimated to be worth Rs 80,000 crore, of which the share of public sector units (PSUs) was nearly 80%, or Rs 63,000 crore.

Ease of Doing Business State Rankings – The latest ease of doing business rankings for Indian states, released by the Department for Promotion of Industry and Internal Trade (DPIIT), have thrown up some interesting results. The absence of more industrialised states such as Tamil Nadu and Maharashtra from the top rungs and the presence of states such as Uttar Pradesh (which was in the past far behind but has now shot up to all-India number 2) in the top ranks has surprised many. The objective of DPIIT’s reform exercise is to provide a business-friendly environment, for which the regulations in a state have to be made simpler. Therefore, it devised a methodology to rank the states according to the ease of doing business (EoDB) in a state.

Marginal Revival in ExportsIndia’s outbound shipments are showing signs of a turnaround in September for the first time in seven months with merchandise exports expanding by 8.3% in the first three weeks of this month. However, an imminent second wave of covid-19 in many European economies, including the UK, may threaten a nascent recovery in external demand for Asia’s third-largest economy. Exports rose 8.3% to $18 billion, while imports declined 24.88% to $26.8 billion, leaving a trade deficit of $8.8 billion during the same period, according to provisional official trade data from 1 to 21 September reviewed. Non-oil exports rose 3.5%, while non-oil imports dipped 18.7% during the same period in September.

India’s merchandise trade has been weakening even before the pandemic hit the economy and external demand. In 13 of the last 15 months starting June 2019, India’s exports have been in negative territory. However, since March of this year, both exports and imports started declining in high double digits, even temporarily leading to a trade surplus in June for the first time in 18 years.

Non-Personal Data Framework – The Ministry of Electronics & Information Technology, Government of India had constituted a Committee of Experts to deliberate on a Data Governance Framework. The committee has drafted its report and had invited feedback on the report till September 13, 2020. The feedback will help the committee finalize its report. The report touches upon several emerging and innovative ideas on non personal data such as attempts to give definition of non personal data and the concept of community data and the appropriate rights and privileges over this data, defines three categories – Public, Community and Private, definition of a new concept called Data Business, Open access meta-data registers, Consent for anonymisation of data, sensitivity of Non-Personal Data, defined purposes for data sharing as sovereign purpose, core public interest purposes and economic purposes. The report recommends the establishment of a Non-Personal Data Regulatory Authority with an enabling role as well as enforcing role.

Posted by Sourish Mohan Mitra

Sourish Mohan Mitra, India-qualified lawyer from Symbiosis Law School, Pune and currently working as an in-house counsel in Delhi, India; views expressed are personal; he can be reached at; Twitter: @sourish247

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