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Table of Contents:
Sr.No. Contents PageNo.
1. WOMEN EMPOWERMENT 3
2. DEMONETISATION: THE PRESENT SCENARIO 12
3. INDIA'S ECONOMIC POSITION 21
3.1 INTRODUCTION 22
3.2 INDIA-CHINA RELATIONSHIP 25
3.3 INDIA-USA RELATIONSHIP 29
3.4 INDIA’S U-TURN ON NORTH KOREAN POLICY 31
3.5 INDIA-MYANMAR RELATIONSHIP 32
3.6 INDIA’S FOREIGN TRADE 36
3.7IMPACT OF DEMONETISATION ON INDIAN ECONOMY 41
3.8 IMPACT OF GST ON INDIAN ECONOMY 42
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1.
Women EMPOWERMENT

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“It is impossible to think about the welfare of the world unless the condition of women is improved. It is
impossible for a bird to fly on only one wing.” — Swami Vivekananda
Empowerment of women is essentially the process of upliftment of economic, social and political
status of women, the traditionally underprivileged ones, in the society. It is the process of guarding
them against all forms of violence. Women empowerment involves the building up of a society, a
political environment, wherein women can breathe without the fear of oppression, exploitation,
apprehension, discrimination and the general feeling of persecution which goes with being a woman
in a traditionally male dominated structure. Women constitute almost 50% of the world’s population
but India has shown disproportionate sex ratio whereby female’s population has been comparatively
lower than males. As far as their social status is concerned, they are not treated as equal to men in
all the places. In the Western societies, the women have got equal right and status with men in all
walks of life. But gender disabilities and discriminations are found in India even today.
The paradoxical situation has been such that she was sometimes considered as Goddess and at
other times merely as aslave.India, being a country of paradoxes, is no exception. Here too, woman,
a personification of Shakti, once given a dignified status, are in need of empowerment. Women’s
empowerment in legal, social, political and economic requires to be enhanced. However,
empowerment and equality are based on the gender sensitivity of society towards their problems.
The intensification of women’s issues and rights movement all over the world is reflected in the form
of various conventions passed by the United Nations. In India, to empower women, first it needs to
kill all the demonswhichkillwomen’s rights and values in the society such as dowry system, illiteracy,
sexual harassment, inequality, female infanticide and domestic violence against women, rape,
prostitution, illegal trafficking and other issues. The most effective remedy to kill such devils is by
making women empowered by ensuring the right to equality mentioned in the constitution of India.
1.1 LEGAL RIGHTS AND CONSTITUTIONAL PROVISIONS

The principle of gender equality is enshrined in the Indian Constitution in its Preamble, Fundamental
Rights, Fundamental Duties and Directive Principles. The Constitution not only grants equality to
women, but also empowers the State to adopt measures of positive discrimination in favour of
women. Within the framework of a democratic polity, our laws, development policies, plans and
programmes have aimed at women’s advancement in different spheres. India has also ratified
various international conventions and human rights instruments committing to secure equal rights
of women. Key among them is the ratification of the Convention on Elimination of All Forms of
Discrimination Against Women (CEDAW) in 1993.
Constitutional Provisions: The Constitution of India not only grants equality to women but also
empowers the State to adopt measures of positive discrimination in favour of women for
neutralizing the cumulative socio economic, education and political disadvantages faced by them.
Fundamental Rights, among others, ensure equality before the law and equal protection law;
prohibits discrimination against any citizen on grounds of religion, race, caste, sex or place of birth,
and guarantee equality of opportunity to all citizens in matters relating to employment. Articles 14,
15, 15(3), 16, 39(a), 39(b), 39(c) and 42 of the Constitution are of specific importance in this regard.
Some of them are listed below:
• Equality of opportunity for all citizens in matters relating to employment or appointment to

any office under the State (Article 16).
• The State to make provision for securing just and humane conditions of work and for
maternity relief (Article 42).

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• Not less than one – third (including the number of seats reserved for women belonging to
the Scheduled Castes and the Scheduled Tribes) of the total number of stats to be filled by
direct election in every Panchayat to be reserved for women and such seats to be allotted by
rotation to different constituencies in a Panchayat (Article 243 D (3))
Legal Provisions: To uphold the Constitutional mandate, the State has enacted various legislative
measures intended to ensure equal rights, to counter social discrimination and various forms of
violence and atrocities and to provide support services specially to working women.
Although all laws are not gender specific, the provisions of law affecting women significantly have
been review periodically and amendments carried out to keep pace with the emerging
requirements. Some acts which have special provisions to safeguard women and their interests are:
➢ Immoral Traffic (Prevention) Act, 1956

➢ The Maternity Benefit Act, 1961(Amended in 1995)
➢ Dowry Prohibition Act, 1961
➢ The Medical Termination of Pregnancy Act, 1971)
➢ The Equal Remuneration Act, 1976
➢ The Prohibition of Child Marriage Act, 2006
➢ Indecent Representation of Women (Prohibition) Act, 1986
➢ Commission of Sati (Prevention) Act, 1987
➢ The Protection of Women from Domestic Violence Act, 2005
Special Initiatives for Women:
(i) National Commission for Women (1992): In January 1992, the Government set-up this statutory
body with a specific mandate to study and monitor all matters relating to the constitutional and legal
safeguards provided for women, review the existing legislation to suggest amendments wherever
necessary, etc.
(ii) Reservation for Women in Local Self – Government (1992):The 73rd Constitutional Amendment
Acts passed in 1992 by Parliament ensure one – third of the total seats for women in all elected
offices in local bodies whether in rural areas or urban areas.
(iii)The National Plan of Action for the Girl Child (1991 – 2000):The plan of Action is to ensure
survival, protection and development of the girl child with the ultimate objective of building up a
better future for the girl child.
(iv)National Policy for the Empowerment of Women (2001):The Department of Women and Child
Development in the Ministry of Human Resource Development has prepared a “National Policy for
the Empowerment of Women” in the year 2001. The goal of this policy is to bring about the
advancement, development and empowerment of women.
(v)Kishori Shakti Yojana(2006): This scheme aims to improve the nutritional, health and
development status of adolescent girls, promote awareness of health, hygiene, nutrition and family
care, link them to opportunities for learning life skills, going back to school and help them to gain a
better understanding of the social environment.
(vi) Swadhar(2002): this scheme aims to prevent trafficking of women and children for commercial
sexual exploitation through social mobilisation and local communities. It also facilitates the rescue of
victims from the place of their exploitation and place them in safe custody.

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(vii)BetiPadhao, BetiBachao(2015): it is a government campaign which aims to address the issue of

the declining child sex ratio, to educate the girl child and to improve the welfare of women.
(vii)Scheme for promotion of menstrual hygiene: The scheme has been launched as part of the
adolescent reproductive and sexual health(ARSH) component under Reproductive and child health
(RCH II). The scheme aims at ensuring that adolescent girls in the target group have adequate
knowledge and information about menstrual hygiene and the use of sanitary napkins, that high
quality, safe products are made available to them and that environmentally safe disposal
mechanisms are readily assessible.
1.2 PRESENT SCENARIO

We, the women of the present generation have witnessed the changes in the society especially,
those relating to the cause of women during the last couple of years. It is a fact that during this
period, the position of women in India has changed in various aspects. The constitution of India has
provided equal rights and equal opportunities for its citizens including women. However, gender
discrimination against girls and women, high infant mortality rate and maternal mortality rates and
cross violence of women, adolescence and child’s rights continue to be the challenges of the
21stcentury. Legally, women are recognized socially equal to men, but the condition of rural women
is still in the clutches of traditional roles assigned to them, since most of these women are illiterate.
When India became independent, various laws were enacted based on equal rights and
opportunities for women. With this in view, women came out and took out leadership in the field of
education, health, social work, politics, administration and so on. Mrs. Indira Gandhi rose to a
stature of highest honour when appointedas Prime Minister of India. Vijay Lakshmi Pandit, Sarojni
Naidu, Padmaja Naidu, SuchetaKripalani and Bonnily Khongmen are the name of few Indian ladies
who have joined higher political post and served the country very efficiently. Nowadays, we have
Sumitra Mahajan, who is the speaker of the Lok Sabha, Sushma Swaraj, Brinda Karat, Sheila Dixit and
Mrs. Sonia Gandhi who are a few women who have made the position and place in politics because
of their confidence, education and have shown the path to upcoming women leaders. Women are
essential and integral part of the development process including planning, decision making and
implementation. Chanda Kochhar, CEO of ICICI Bank, became the first Indian woman to receive the
prestigious Woodrow Wilson Award for Global Citizenship, joining the ranks of Hillary Clinton and
Condoleezza Rice.
Mother Theresa has devoted her entire life for the welfare of the poor, the sick and the down
trodden and has received worldwide recognition for humility and social service. With a view to
tackle issues affecting women from welfare to development and to empowerment, the Government
of India declared the year 2001 as the Women’s Empowerment year. The empowerment of women
by legislative measures have resulted in acknowledging that women have the necessary skills and
can act as the eyes and ears of the people. When we talk about making women aware of their rights,
we should be careful not to inflame their minds against the rights and responsibilities of men. Indian
women have laboured for centuries their efforts to create harmony in the domestic front to make a
prosperous society which can be termed “Labour of Love.”
Although there are different acts and schemes of the central government as well as state
government to empower the women of India, women are still discriminated and marginalized at
every level of the society whether it is social participation, political participation, economic
participation, access to education, and also reproductive healthcare. This problem of subordination
and marginalisation of women needs a solution. Empowerment of women is one of the solutions to

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the problems of inequality, subordination and marginalisation that women face in the society.
However, this kind of empowerment is only partial, for although they have economic and political
power, they are kept out of decision making or they are dependent on their husband, father or
brother for crucial decisions. Hence in order to change this situation, it is necessary that women
have to realise their own nature and understand the value of their own existence. When they realise
their own nature, they will have confidence and will participate in decision making independently.
This will be possible only when they will be empowered spiritually. However, this also means to
bring a significant change in the social mentality. Many a time, a woman has confidence and has
realised her own potential, but society prohibits and blocks her progress, her problems cannot be
solved. In other words, to solve the problems of the woman, and in order to empower her, it is also
necessary that the society has to change its patriarchal mentality.
1.2.1 SOCIAL EMPOWERMENT
➢ Health: Women and girls in India face a crisis of growing, yet unaddressed, health
needs. From the moment of conception to the end of life, the challenges to the
female sex are enormous, especially poor women who have limited access to health
care. Malnutrition begins during infancy and sets in motion a life-long cycle of poor
health. Over half of all Indian women suffer from anaemia, which acerbates
maternal morbidity. More women die of maternal death related causes in India than
in any other country in the world. Furthermore, every form of violence against
women has steadily increased since the last decade, including rapes, dowry murder
and domestic violence. According to a report by Thomson Reuters, India is the
"fourth most dangerous country" in the world for women, India was also noted as
the worst country for women among the G20 countries. A poll in October 2017 was
published by Thomson Reuters Foundation, found that Delhi was the fourth most
dangerous megacity (total 40 in the world) for women and it was also the worst
megacity in the world for women when it came to sexual violence, risk of rape and
harassment
➢ Education: Education is a key intervention in initiating and sustaining processes of

empowerment. Good quality education can help women and marginalized
communities improve their status, enable them to have greater access to
information and resources and to challenge various forms of discrimination.
Education helps strengthen democratic processes as it allows for greater and more
equitable participation. Being educated or literate leads to greater self-confidence
and self-esteem. It enables engagement with development processes and
institutions of governance from a position of strength. Poor women from socially
disadvantaged communities are invariably not literate and therefore find themselves
at a disadvantage when participating in development processes.
It is however, important to recognise that while being literate or educated is
necessary for empowerment it does not automatically ensure it. For that we need
an education that is of good quality and promotes critical thinking. From the
perspective of gender this means that education and literacy should enable women
and girls to critically analyse their situations, raise questions about their
subordination and help them make informed choices.
The literacy rate is lower for women compared to men: the literacy rate is 60.6% for
females, while for males it is 81.3%. The 2011 census, however, indicated a 2001–
2011 decadal literacy growth of 9.2%, which is slower than the growth seen during

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the previous decade. There is a wide gender disparity in the literacy rate in India:
effective literacy rates (age 7 and above) in 2011 were 82.14% for men and 65.46%
for women. (population aged 15 or older, data from 2015).
1.2.2 POLITICAL EMPOWERMENT
Much of the country’s governance has been left to the hands of elected representatives and the
official machinery. It has been increasingly recognized that such a centralized approach has not
produced desired results, especially in terms of the inclusion of marginalized sectors within
governance processes. Notable Constitutional, legislative and policy reforms within the last decade,
including the 73rd and 74th amendments and the continued administrative decentralization through
programs like the National Rural Health Mission (NRHM), have demonstrated the Government of
India’s commitment to increasing the political participation of marginalized groups, especially poor
women. On 9 March 2010, one day after International Women's day, Rajya Sabha passed the
Women's Reservation Bill requiring that 33% of seats in India's Parliament and state legislative
bodies be reserved for women. On 22 August 2017, the Indian Supreme Court deemed instant triple
talaq (talaq-e-biddat) unconstitutional.
Women’s increased political participation has yielded positive results. First, issues central to
development, including health, nutrition, family income and education, take centre stage as women
participate in the Panchayati Raj Institutions (PRI), village development boards and other governance
structures. Secondly, women have shown that they have critical information about community
resources, are adept at managing funds, result in more inclusive governance and learn quickly about
how to lead effective community- centred development.
Despite such positive results, women remain largely excluded from the PRI and other local
governance structures. Proxy politics, power brokering and gender discrimination continue, and
many women sarpanches have had to face extreme violence for challenging existing societal power
centres. In other cases, women are only within the PRI in name, but in reality, it is male family
members who hold the power. In spite of the affirmative action in panchayati raj in favour of
marginalized communities, exclusion of caste, poverty, tribal status, gender and caste sharply
demarcate those who have political power from those who do not.
1.3 WOMEN’S ECONOMIC OPPORTUNITIES IN INDIA

India is one of the world’s fastest growing economies, with women mainly from the middle class
increasingly entering the workforce. Urban centres like Delhi and Bangalore have seen an influx of
young women from semi-urban and rural parts of the country, living alone and redefining
themselves. However, the story of economic empowerment for women is not a singular narrative;
rather it is located in a complex set of caste, class, religious, and ethnic identities.
The Global Gender Gap Report by the World Economic Forum in 2009 ranked India 114th out of 134
countries for inequality between men and women in the economy, politics, health, and education. In
equal economic opportunities and women’s participation in the labour force, India ranked 127th and
122nd respectively. The number of women in the workforce varies greatly from state to state: 21%
in Delhi; 23% in Punjab; 65% in Manipur; 71% Chhattisgarh; 76% in Arunachal Pradesh. The diversity
of women’s economic opportunities between states is due to the cultural, religious, and ethnic
diversity of each state. Northern states like Delhi and Punjab lag far behind on gender equality
measures, including the alarming sex ratio between men and women (due to son preference and
sex-selective abortion), low female literacy levels, and high rates of gender-based violence.

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In rural India, women’s economic opportunities remain restricted by social, cultural, and religious
barriers. Most notably inheritance laws embedded in Hindu and Shariat civil codes continue to
marginalize women in the household and the larger community. Rural women, particularly of lower
caste and class, have the lowest literacy rates, and therefore do not have the capacity to negotiate
pay or contracts and most often engage in the unorganized sector, self-employment, or in small
scale industry. Self-help groups (SHGs) are a widely practiced model for social and economic mobility
by NGOs and the government. SHGs provide women with the opportunity to manage loans and
savings that can be used by members for varying needs. SHGs also are used to promote social
change among the members and the community at large. Members of SHGs have used their
experiences as leverage to enter other local institutions such as the Panchayat.
Rural, low caste, and tribal women also make up 70% of domestic workers in India, a sector which is
largely unregulated and unorganized. India’s growing economy has allowed for many upper and
middle-class women to enter the workforce, and while poor rural women have little access to
education and training, there is a high demand for domestic workers in urban hubs. Domestic
workers are mostly illiterate, with little or no negotiating power for wage equity, and are highly
vulnerable to exploitation and sexual and physical abuse. There is a movement at the policy level to
organize domestic workers and to create laws to regulate minimum wage, working hours, and other
measures such as life and health insurance. Currently a national-level Taskforce on Domestic
Workers has been formed that will present recommendations to the central government on better
enforcement of rights for the many undocumented domestic workers in India.
Women are also very visible in the construction sector in India and like domestic workers, are
largely unorganized and rely on daily wagers. Women construction workers are mostly poor and
illiterate and have little negotiating power. This sector is also unregulated and highly vulnerable to
exploitation. Women workers also earn significantly less than men, although women are the ones
who do most of the backbreaking work like carrying bricks and other heavy materials on site.
On the other end of the spectrum, while India has one of the highest percentages of professional
women in the world, those who occupy managerial positions are under 3%. Most women work in
low administrative positions, and many of the young women migrating to urban centres mostly work
in service and retail industries, although more and more women are entering the IT and other
technical sectors.
1.4 PRINCIPLES TO FOLLOW FOR WOMEN EMPOWERMENT

➢ Establish high-level corporate leadership for gender equality.
➢ Treat all women and men fairly at work - respect and support human rights and non-
discrimination.
➢ Ensure the health, safety and well-being of all women and men workers.
➢ Promote education, training and professional development for women.
➢ Implement enterprise development, supply chain and marketing practices that empower
women.
➢ Promote equality through community initiatives and advocacy.
➢ Measure and publicly report on progress to achieve gender equality.

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1.5 ACTIONS TAKEN TO EMPOWER WOMEN

The United Nations Development Programme constituted eight Millennium Development Goals
(MDG) for ensuring equity and peace across the world. The third MDG is directly related to the
empowerment of women in India. The MDGs are agreed-upon goals to reduce certain indicators of
disparity across the world by the year 2015.
The third MDG is centred towards promoting gender equality and empowering women: “Eliminate
gender disparity in primary and secondary education, preferably by 2005, and in all levels of
education by no later than 2015.”
While India’s progress in this front has been brave, there are quite a few corners that it needs to cut
before it can be called as being truly revolutionary in its quest for understanding what is women
empowerment. As UNDP says:-
India missed the 2005 deadline of eliminating gender disparity in primary and secondary education.
However, the country has hastened progress and the Gender Parity Index (GPI) for Gross Enrolment
Ratios (GER) in primary and secondary education has risen. Given current trends, India is moderately
or almost nearly on track. However, as the Government of India MDG Report 2009 notes,
“participation of women in employment and decision-making remains far less than that of men, and
the disparity is not likely to be eliminated by 2015.” Achieving GPI in tertiary education also remains
a challenge. In addition, the labour market openness to women in industry and services has only
marginally increased from 13-18 percent between 1990-91 and 2004-05.
The European Union (EU) and the United Nations (UN) are embarking on a new, global, multi-year
initiative focused on eliminating all forms of violence against women and girls (VAWG) – the
Spotlight Initiative. The Initiative is so named as it brings focused attention to this issue, moving it
into the spotlight and placing it at the centre of efforts to achieve gender equality and women’s
empowerment, in line with the 2030 Agenda for Sustainable Development.
MINISTRY FOR WOMEN & CHILD DEVELOPMENT

The Ministry for Women & Child Development was established as a department of the Ministry of
Human Resource Development in the year 1985 to drive the holistic development of women and
children in the country. In 2006 this department was given the status of a Ministry, with the powers
to:-
Formulate plans, policies and programs; enact/amendlegislation, guide and coordinate the efforts of
both governmental and non-governmental organisations working in the field of Women and Child
Development.
It delivers such initiatives such as the Integrated Child Development Services (ICDS) which is a
package of services such as supplementary nutrition, health check-ups and immunization. As
mentioned earlier, the empowerment of women begins with their safety and health and this
Ministry is committed to providing them.
Swayamsidha Programme
Additionally, the Ministry is also implementing the Swayamsidha programme – an integrated
scheme for the empowerment of women at a total cost of Rs.116.30 Crores. Core to this programme
will be the establishment of women’s self-help groups which will empower women to have
increased access to all kinds of resources that they are denied, in addition to increasing their
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awareness and skills. This programme will benefit about 9,30,000 women with the setting up of
53,000 self-help groups, 26,500 village societies and 650 block societies.
National Commission for Women
The National Commission for Women is a Department within the Ministry of Women and Child
Development. It was set up exclusively to help women via the Constitution – by reviewing Legal and
Constitutional safeguards for women, recommending remedial legislative measures, by facilitating
quick redressal of grievances and by advising the Government of India on all policy matters affecting
women.
The website allows for online submission of complaints and fast redressal exclusively for women.
Additionally it is also a good resource of information for women and the Commission is committed
to helping out women in need.
1.6 THE ROAD AHEAD

India as a country is still recovering from years of abuse in the time of the Raj and more years of
economic suffering at the hands of the License Raj. It is only now that globalisation, liberalisation
and other socio-economic forces have given some respite to a large proportion of the population.
However, there are still quite a few areas where women empowerment in India is largely lacking.
To truly understand what is women empowerment, there needs to be a sea-change in the mind-set
of the people in the country. Not just the women themselves, but the men have to wake up to a
world that is moving towards equality and equity. It is better that this is embraced earlier rather
than later, for our own good. Men and women are the two halves of a whole. They are not
competitors. We must not attempt to transform women into men, because this will create a conflict
in the society. Therefore, the most important thing is that we should respect each other and work
together so that we will be able to root out the problems faced by women. Swami Vivekananda once
said, “arise away and stop not until the goal is reached.” Thus, our country should be catapulted into
the horizon of empowerment of women and revel in its glory.
We have a long way to go, but we will get there someday.

“Woman is an incarnation of ‘Shakti’—the Goddess of Power. If she is bestowed with education,
India’s strength will double. Let the campaign of ‘Kanya Kelavni’ be spread in every home; let the
lamp of educating daughters be lit up in every heart.”
—Narendra Modi

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2. DEMONETISATION: THE PRESENT

SCENARIO

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2.1 INTRODUCTION
Demonetisation is the act of changing the existing currency in another form. The old units should be
retired and replaced by new currency. In other words, demonetisation means either introducing new
notes or coins of the same currency or fully replacing the old currency with new currency. There are
many reasons why governments demonetise their nation’s currency. Some of the reasons are to
resist inflation, to resist corruption and to discourage the cash system in the country.
On 8thNovember 2016, the Prime minister of India Narendra Modi took a historic decision by
announcing that the high-denomination notes (Rs.500 and Rs.1,000) then in circulation would cease
to be legal tender. This meant that the high value notes would not be legal for transactions.
Although the old notes could be exchanged till 31st December 2016, an upper limit for cash
withdrawals of ₹10,000 per day (up to ₹20,000 per week) per account from the banks and ₹2000 per
day per account from the ATMs from 10th to 13th November was allowed. From 14 November,
₹24,000 per week from bank and ₹2,500 per day from ATM per account could be withdrawn till 31st
December if the person had a valid reason.
According to the RBI report issued on 31st march 2016, ₹500 and ₹1000 banknotes consisted around
86% of the total cash circulation, having a value of ₹15.44 lakh crore. In process of demonetisation,
97% of old notes, amounting to around ₹14.97 lakh crore were deposited in the bank before 31st
December, 2016.
OBJECTIVES OF DEMONETISATION:
• To track fake currency.
• To cut off the supply line money, arms and immunizations to terror funding.
• To transform Indian economy into cashless economy.
• To bring tax evasion to halt.
• To unearth and curb the black money.
• To curb illegal and unethical business activities such as black marketing, food adulteration,
marketing of spurious goods, human trafficking, smuggling of gold and drugs.

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2.2 Some effects of demonetisation

1.Impact of demonetisation on the Indian economy: The demonetisation reduced the
consumption activity in the economy of India. But it increased the money in banks. The market
came to a slowdown. However, the increase in the deposition in the banks would be better for
economy in the future.
2.Impact of demonetisation on loans from banks in India:After the announcement of

demonetisation, the deposition in Indian bank has increased. According to Reserve Bank of India,
deposits crossed 5 trillion rupees from 10th November to 18th November. This will
automatically lead to more amounts being deposited in Savings and Current account of
commercial banks, which can be further utilised for lending purposes. However, since the
households have held on to these funds for emergency purposes, there would be withdrawals at
the second stage.
[Here MCLR refers to the Marginal Cost of Landing Rates]

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3.Impact of demonetisation on Indian financial market: After demonetisation, Indian

financial market has been following a secular falling trend. Nifty 50 fell approximately 6.3% and
S&P BSE Sensex Fell 5.9% from 8 November to 22 November.
4.Impact of note ban on Auto Assets Backed Loan: According to Moody’s investor service
demonetization has negatively impacted the Indian auto-assets backed loans in the short term.
5.Impact of demonetization on FMCG industry: FMCG industry had gone down by 1-1.5% or
Rs.3,840 crore in November, compared to October. The purchase in November had gone down by
6.4% compared to October. Purchase of personal care items such as toilet soaps, toothpaste and
shampoo had seen the greatest fall by retailers. According to consumer point of view, one out of five
housewives had reduced spending by 50% or more. They had cut spends across categories such as
biscuits, salty snacks compare to everyday essentials like atta, rice, pulse, sugar.
6.Effect on Online Transactions and alternative modes of payment: With cash transactions
facing a reduction, alternative forms of payment showed a surge in demand. Digital transaction
systems, E wallets and apps, online transactions using E banking, usage of plastic money (Debit and
Credit Cards), etc. showed substantial increase in demand. This eventually led to the strengthening
of such systems that the infrastructure required.
7. Effect on Food Inflation: Food inflation declined from 3.7 per cent (year-on-year, y-o-y) in
October 2016 to 2.6 per cent in November, to 2.0 per cent in December and further to 1.3 per cent
in January 2017. This was mainly on account of vegetables and pulses. Vegetable prices declined by
6.2 per cent on a month-on-month (m-o-m) basis in November 2016 and further by 11.7 per cent in
December 2016. The vegetable price decline continued in January 2017 albeit at a lower rate of 4.7
per cent. Pulses prices declined by 7.4 per cent between October 2016 and January 2017.
During the November-January period every year, vegetable prices usually exhibit seasonal
moderation; however, during this season, the decline in prices was more pronounced than what is
seen during the corresponding periods of previous years. The seasonal decline in prices seen in
vegetables is primarily driven by potato, onion and tomato, which together constitute a substantial
share of vegetables sub-group weight. During November 2016 to January 2017, while seasonal

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moderation was seen for potato and tomato prices, there was also a broad-based decline in prices
across vegetables such as cabbage, cauliflower, spinach and other leafy vegetables, brinjal, gourd,
peas and beans, which usually contribute little to the observed seasonal moderation in vegetables.
The large arrival of fresh winter crop, given the good moisture content in soil following normal
monsoon, contributed to the larger than usual seasonal fall in vegetables prices. As the transactions
in fruits and vegetables have always been cash intensive, following demonetisation, as cash ran dry,
there was some compression in demand for fruits and vegetables. Anecdotal evidence also pointed
to some distress sales by farmers, given the perishable nature of green vegetables and fruits. On the
whole, demonetisation induced supply chain disruptions, which could have pushed up prices,
seemed to have been more than counteracted by demand compression and distress sales of
vegetables.
8.Impact on Counterfeit currency: Demonetisation has dealt a death blow to the counterfeit Indian
currency syndicate operating both inside and outside the country. Counterfeit currency seriously
devalues the real worth of Indian currency. A study conducted by Indian Statistical Institute, Kolkata
on behalf of the National Investigation Agency (NIA) suggests that fake Indian currency notes (FICN)
amounting to Rs.400 crore are in circulation in the country at any given point of time and around
Rs.70 crore fake notes are pumped into the Indian economy every year. The estimation is based on
recovery and seizure made by various agencies. But the actual figure could be much larger. One
India report, quoting an Intelligence Bureau dossier, says fake Indian currency worth Rs.12 lakh crore
has pumped into Indian financial system over the years. Needless to say that most of the fake
currencies circulated in India are of Rs.500 and Rs.1000 denominations. It is also pertinent to
mention that the fake currency floating inside the Indian financial system is not counted within the
Rs.17 lakh crore of total currency in circulation in the country.
9.Impact of Demonetisation on Coming Financial year:According to Pranab Sen (India’s First Chief
Statistician), the targeted economic growth rates of about 7.5% presented by the Indian government
for the upcoming financial year is over optimistic. He said that the decision about ban on currency
note has adversely affected the industrial sector. It has affected the IT sector which is 45% of the
India’s Gross Domestic Product, and approximately 80% of India’s employment depends upon the IT
sector.
10.Impact on Bank Balance Sheets: Decline in currency in circulation on account of demonetisation

led to a surge in bank deposits. The demonetised notes were accepted at bank counters till
December 31, 2016. Between October 28, 2016 and January 6, 2017 (i.e., days immediately prior to
and after demonetisation for which fortnightly banking system data are available), total currency in
circulation declined by about 8,800 billion. This, in turn, was largely reflected in the sharp increase of
about 6,720 billion in aggregate deposits of the banking system even after outflows in NRI deposits
during the period.
11.Impact on Hawala Transaction: Most hawala transactions used to be carried out in the
denominations of Rs.500 and Rs.1000. With the ban on these notes,Modiji has delivered a fatal blow
to the unethical hawala traders as they were unable to carry on their trade.
2.3 Short-Term Impact of Demonetisation

The demonetisation, by removing 86 per cent of the currency in circulation, has resulted in a severe
contraction in money supply in the economy. This contraction, by wiping out cash balances in the
economy, eliminated a number of transactions for a while, since there was no or not enough of a
medium of exchange available. Since income and consumption are intrinsically related to

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transactions in the economy, there was a severe contraction in income and consumption in the
economy. This effect was more severe on individuals who earn incomes in cash and spend it in cash.
To a lesser extent, it also affected individuals who earn incomes in non-cash forms but need to
withdraw in cash for consumption purposes, since a number of sectors in the economy work
predominantly with cash.
In terms of the sectors in the economy, the sectors that were adversely affected were all those
sectors where demand is usually backed by cash, especially those not within the organised retailing.
For instance, transport services, fruits and vegetables and all other perishables, faced compression in
demand which is backed by purchasing power.
A further impact was a compression of the demand for non-essentials by all the agents in the
economy in the face of uncertainty in the availability of cash. The demand from segments which
have access to digital medium of exchange remained unaffected, but that from the rest of the
economy got compressed. This transmitted the effect to the rest of the sectors in the economy as
well.
Another sector, where one expects to see effects in the very short run, is the real estate space. With
contraction in demand from one set of agents – say agents who have earned unaccounted incomes
and placed them within the real estate space – either prices within this segment fell or transactions
ceased to happen. While of itself, this was considered a positive development and evidence of a
correction in the unaccounted incomes, it led to a compression in investments in the construction
sectorwhich had adverse income and employment consequences for the economy.
2.4 Long-Term Impact of Demonetisation

It was believed that demonetisation would have certain long run advantages but it is yet to be seen
in the Indian Economy. The expected long-term impacts of demonetisation are:
• Government revenue will boost up as more earnings would be declared. The unbanked
people will move to banking like Jan-dhan contributing towards government’s efforts of
financial inclusion.
• Demonetisation will set accountability in motion as service or sales tax is not paid by people
like local photographers, tailors etc. and thus, their income goes unaccounted.
• Collection of higher taxes will help in nation building like development of roads,
infrastructure, transportation and many others.
• Increase in nation developmental projects will demand more labour and other skilled
manpower, which will give rise to employment opportunities.
• It will bring more business in taxation i.e. GST benefits.
• Cash in system will boost educational loans and business loans thus, bringing more
opportunities.
• It will lead to better business environment, less corruption and transparency.
• Substantial increase in the demand of Digital transactions system, E-wallets, usage of plastic
money, online transactions using E-banking etc.
• Gold imports will be reduced because of the investments in gold by people as an alternative
to cash deposit in the bank.
To conclude, the decision of demonetisation had certain short-run drawbacks but in the long run, it
would prove excellent and our tax consultants will earn a huge profit because now, the people are
appointing them for the returns and filling.

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2.5 Analysis of Demonetization Effect on Different Sectors
Manufacturing Sector
Manufacturing sector has come down due to demonetisation. During this time, everyone was
getting small amount of cash that was only good to meet the daily expenses of a person and his /her
family. Same was the case with the people that were running many manufacturing firms. They didn’t
have enough cash to pay to their employees on a daily basis. The supply of workers went down
because they were not getting new notes to buy something by doing the work at firms. Some cases
were seen where the firm masters were still paying their employees in the old notes. Thus, the lack
of labour, lead to less production in manufacturing sector.
Real estate
During November-December 2016, the monthly average housing sales fell about 40% in the top nine
cities like Gurgaon, Ahmedabad, Kolkata, Chennai, Hyderabad, Bengaluru, Pune, Mumbai and Noida.
Before demonetisation, the monthly average house sales were 19000 units in the month of July and
18000 units in month of October. The government had announced the demonetization move on
November 8, raising hopes of sharp fall in prices in the property market, especially secondary or
resale segment. The real estate developers were focusing their efforts to attract customers by
offering additional free benefits like jewellery, electronic items, automobiles, holiday packages and
appliances on the purchase of housing units. Builders also offered the price guarantee, rental
assurance, and buyback schemes to bring confidence in the sector.
Stock Market
During December 2016, Indian stock market fell a bit more than the other emerging markets in Asia.
The S&P BSE Sensex was 3.8% down, which is more than more or less all other Asian emerging
markets. The extra fall in the Indian market compared to the others could be due to many factors,
including high valuations, but it is very likely that the demonetisation effect is mainly responsible for
the fall.
Tourism Sector
Demonetisation has shed its gloomy shadow on the booming tourism and hospitality industry.
India’s hospitality services were severely affected as the hotels lost a large number of pay-in-cash
due to demonetisation. Around 60 percent drop in hotel bookings were reported and peak tourism
period of November-December was badly hit.

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Textile Industry
Eighty percent of the Indian textile and clothing industry is in the decentralized sector, in the small
and medium-sized enterprises(SME) sector, and that tells the story of the impact that
demonetisation is having on the country's second largest industry. 70-75 per cent of the power loom
units had stopped production in the various textile clustersafter demonetisation as most of the
transactions happened in cash. Traders and manufacturers reported a pile up of stocks across the
value chain, and companies were not in a position to collect receivables resulting in a serious impact
on cash flows. Manufacturers were unable and unwilling to buy inputs, due to limited liquidity. The
retail consumer too, had little liquidity to splurge on clothes, which slowed down the demand
downstream. While the liquidity crunch was temporary, but it had impacted the textile industry for
the next 2-3 quarters.
To conclude demonetisation had both, positive and negative impact on the Indian economy.
2.6 CONCLUSION
Even though demonetization move created adverse short-term policy impact, the real impact of
demonetization must be assessed in the medium-term and the long-term. At this point of time, we
cannot precisely conclude whether demonetization is a failure or a success. The Government of India
has become successful to some extent. With increased transparency, trust on the Indian Economy
has increased thereby foreign investments pouring in. Demonetization move also encouraged
cashless transactions, which is a boost to the economy. A good part of black money has been
eliminated from the economy and this money can be used for development of our country.
However, by observing the previous cases of demonetisation in other countries, we must become
alert and thoughtful as to how we can sustain our growth because many countries which have done
demonetisation could not sustain the same.
Citizens of India faced so many problems due to the demonetization drive; they faced queue
problems in the banks and ATMs for depositing and withdrawing money. Citizens of India also faced
the problem of less consumption of goods due to the lack of cash liquidity. Several businesses
disrupted due to the lack of liquidity. In short run, almost all the sectors in the Indian economy have
been affected negatively due to shortage of cash. The government has to focus on the informal

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economy and needs to make appropriate policies for them so that it can formalise them in the long-
run.Some economics experts have said that the positive impact of demonetisation will be seen in the
future. We should wait to see the overall impact of the demonetisation drive.
2.7 VIEWPOINTS OF FAMOUS PERSONALITIES

Amartya Sen:
"The demonetisation of currency was a despotic act as the government broke the promise of
compensation that comes with a promissory note. Demonetisation goes against trust. It undermines
the trust of entire economy."
Manmohan Singh:
"In my opinion that the way the scheme has been implemented will hurt agricultural growth in our
country, will hurt small industry, will hurt all those people who are in the informal sector of the
economy. And my own feeling is that the national income, that is the GDP, can decline by about 2
per cent as a result of what has been done. This is an underestimate."
Arvind Virmani:
“Demonetisation is a useful method of flushing out black money, given that a large percentage of
cash holding is in these two denominations.”
Surjit Bhalla:
"If successful, this will go down as the biggest reform in India, bigger than the GST (though the two
are related) and bigger than the industrial policy reform of 1991. But, and there is a but, while the
policy is very effective in its attack on past black money, it is silent on the creation of money.

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3.
INDIA’S ECONOMIC POSITION

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3.1 INTRODUCTION
India has emerged as the fastest growing major economy in the world as per the Central
Statistics Organisation (CSO) and International Monetary Fund (IMF) and it is expected to be
one of the top three economic powers of the world over the next 10-15 years, backed by its
strong democracy and partnerships. At present, India is the world’s seventh-largest
economy, sitting between France and Italy. Its GDP growth recently dipped to 5.7%; still,
India is growing faster than any other large economy except for China.
India's economic growth is likely to be below 7 per cent in fiscal year 2018, say experts,
citing GST disruption and lingering impact of note ban. "It is difficult for GDP to cross 7 per
cent this fiscal unless the base is revised downwards. The economy is expected to do well in
the third and fourth quarter," SBI Research Chief Economist Soumya Kanti Ghosh told PTI.
Ghosh said the GDP growth would be 6.5 per cent on unchanged base last year. Elaborating
further, Ghosh said the growth could be higher if the last year's expansion is revised
downwards because lower base last fiscal would result in higher growth. The Indian
economy grew 7.1 per cent in 2016-17, against 8 per cent in 2015-16. India's foreign
exchange reserves were US$ 404.92 billion in the week up to December 22, 2017, according
to data from the RBI.
“India’s growth story has a two-part narrative. The first is a slowdown and gradual recovery
in the short run, likely over FY18 and FY19, as key sectors revive from disruptions related to
the implementation of GST,” the global financial services major said in a research note.The
subsequent narrative is of brighter growth prospects in the medium term (FY20 and
beyond), when growth is expected to reap the benefits of recently undertaken structural
reforms, it added. The report further said the recovery in India’s GDP growth will likely be
relatively gradual, preventing price pressures from rebounding and allowing the Reserve Bank of
India to keep rates on hold for the time-being.
According to HSBC, once the impact of transient factors wanes, inflation will settle around RBI’s 4
per cent target. “We expect inflation to average 3.4 per cent over FY18 (ending the year in March at
4.3 per cent),” it said adding “accordingly, we forecast RBI will keep the repo rate on hold, as the
rate-cutting cycle of the central bank looks set to have ended, with most inflation risks tilted to the
upside.” The Reserve Bank in its fifth bi-monthly review of this fiscal had kept repo rate unchanged
at 6 per cent and reverse repo at 5.75 per cent while raising the inflation forecast for the remainder
of 2017-18 to 4.3-4.7 percent. India’s economic success in recent years has helped to ensure that
South Asia is the fastest-growing region in the world – but it faces significant challenges alongside its
opportunities for further growth. India is home to 1.34 billion people – 18% of the world’s
population. It will have overtaken China as the world’s most populous country by 2024. It has the
world’s largest youth population, but isn’t yet fully capturing this potential demographic dividend –
over 30% of India's youth are NEETs (not in employment, education or training), according to the
OECD.
Market size: India's gross domestic product (GDP) grew by 6.3 per cent in July-September 2017
quarter as per the Central Statistics Organisation (CSO). Corporate earnings in India are expected to
grow by over 20 per cent in FY 2017-18 supported by normalisation of profits, especially in sectors
like automobiles and banks, according to Bloomberg consensus.

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The tax collection figures between April-June 2017 Quarter show an increase in Net Indirect taxes by
30.8 per cent and an increase in Net Direct Taxes by 24.79 per cent year-on-year, indicating a steady
trend of healthy growth. The total number of e-filed Income Tax Returns rose 21 per cent year-on-
year to 42.1 million in 2016-17 (till 28.02.17), whereas the number of e-returns processed during the
same period stood at 43 million.
India has retained its position as the third largest start-up base in the world with over 4,750
technology start-ups, with about 1,400 new start-ups being founded in 2016, according to a report
by NASSCOM.
India's labour force is expected to touch 160-170 million by 2020, based on rate of population
growth, increased labour force participation, and higher education enrolment, among other factors,
according to a study by ASSOCHAM and Thought Arbitrage Research Institute.
India's foreign exchange reserves were US$ 404.92 billion in the week up to December 22, 2017,
according to data from the RBI.
Recent Developments: With the improvement in the economic scenario, there have been various
investments in various sectors of the economy. The M&A activity in India increased 53.3 per cent to
US$ 77.6 billion in 2017 while private equity (PE) deals reached US$ 24.4 billion. Some of the
important recent developments in Indian economy are as follows:
• Indian companies raised Rs.1.6 trillion (US$ 24.96 billion) through primary market in 2017.
• Moody’s upgraded India’s sovereign rating after 14 years to Baa2 with a stable economic
outlook.
• India received net investments of US$ 17.412 million from FIIs between April-October 2017.
• The top 100 companies in India are leading in the world in terms of disclosing their spending
on corporate social responsibility (CSR), according to a 49-country study by global
consultancy giant, KPMG.
• The bank recapitalisation plan by Government of India is expected to push credit growth in
the country to 15 per cent, according to a report by Ambit Capital.
• India has improved its ranking in the World Bank's Doing Business Report by 30 spots over its
2017 ranking and is ranked 100 among 190 countries in 2018 edition of the report.
• India's ranking in the world has improved to 126 in terms of its per capita GDP, based on
purchasing power parity (PPP) as it increased to US$ 7,170 in 2017, as per data from the
International Monetary Fund (IMF).
• The Government of India has saved US$ 10 billion in subsidies through direct benefit
transfers with the use of technology, Aadhaar and bank accounts, as per a statement by Mr
Narendra Modi, Prime Minister of India.
• India is expected to have 100,000 start-ups by 2025, which will create employment for 3.25
million people and US$ 500 billion in value, as per Mr T V Mohan Das Pai, Chairman,
Manipal Global Education.
• The total projected expenditure of Union Budget 2018-19 is Rs.23.4 lakh crore (US$ 371.81
billion), 9 per cent higher than previous year's budget, as laid out in the Medium Term
Expenditure Framework (MTEF).
• India received the highest ever inflow of equity in the form of foreign direct investments
(FDI) worth US$ 43.4 billion in 2016-17 and has become one of the most open global
economies by ushering in liberalisation measures, as per the mid-year economic survey of
India.

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• The World Bank has stated that private investments in India is expected to grow by 8.8 per
cent in FY 2018-19 to overtake private consumption growth of 7.4 per cent, and thereby
drive the growth in India's gross domestic product (GDP) in FY 2018-19.
• The Niti Aayog has predicted that rapid adoption of green mobility solutions like public
transport, electric vehicles and car-pooling could likely help India save around Rs 3.9 trillion
(US$ 60 billion) in 2030.
• Indian impact investments may grow 25 per cent annually to US$ 40 billion from US$ 4
billion by 2025, as per Mr Anil Sinha, Global Impact Investing Network's (GIIN’s) advisor for
South Asia.
• The Union Cabinet, Government of India, has approved the Central Goods and Services Tax
(CGST), Integrated GST (IGST), Union Territory GST (UTGST), and Compensation Bill.
• Indian merchandise exports in dollar terms registered a growth of 30.55 per cent year-on-
year in November 2017 at US$ 26.19 billion, according to the data from Ministry of
Commerce & Industry
• The Nikkei India manufacturing Purchasing Managers’ Index increased at the fastest pace in
December 2017 to reach 54.7, signalling a recovery in the economy.
Government Initiatives: In the Union Budget 2017-18, the Finance Minister, Mr. Arun Jaitley,
verified that the major push of the budget proposals is on growth stimulation, providing relief to the
middle class, providing affordable housing, curbing black money, digitalisation of the economy,
enhancing transparency in political funding and simplifying the tax administration in the country.
India's unemployment rate has declined to 4.8 per cent in February 2017 compared to 9.5 per cent
in August 2016, as a result of the Government's increased focus towards rural jobs and the Mahatma
Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme.
The Government of Maharashtra has set a target to double farm income by 2022 through measures
like large scale micro irrigation, water conservation, expansion of formal cash credit coverage, crop
insurance and agriculture diversification, as per Mr Vidyasagar Rao, Governor of Maharashtra.
Numerous foreign companies are setting up their facilities in India on account of various government
initiatives like Make in India and Digital India. Mr. Narendra Modi, Prime Minister of India, has
launched the Make in India initiative with an aim to boost the manufacturing sector of Indian
economy, to increase the purchasing power of an average Indian consumer, which would further
boost demand, and hence spur development, in addition to benefiting investors. The Government of
India, under the Make in India initiative, is trying to give boost to the contribution made by the
manufacturing sector and aims to take it up to 25 per cent of the GDP from the current 17 per cent.
Besides, the Government has also come up with Digital India initiative, which focuses on three core
components: creation of digital infrastructure, delivering services digitally and to increase the digital
literacy.
Some of the recent initiatives and developments undertaken by the government are listed below:
• The Government of India has succeeded in providing road connectivity to 85 per cent of the
178,184 eligible rural habitations in the country under its Pradhan Mantri Gram Sadak
Yojana (PMGSY) since its launch in 2014.
• A total of 15,183 villages have been electrified in India between April 2015-November 2017
and complete electrification of all villages is expected by May 2018, according to Mr Raj

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Kumar Singh, Minister of State (IC) for Power and New & Renewable Energy, Government of
India.
• The Government of India has decided to invest Rs.2.11 trillion (US$ 32.9 billion) to
recapitalise public sector banks over the next two years and Rs.7 trillion (US$ 109.31billion)
for construction of new roads and highways over the next five years.
• The mid-term review of India's Foreign Trade Policy (FTP) 2015-20 has been released by
Ministry of Commerce & Industry, Government of India, under which annual incentives for
labour intensive MSME sectors have been increased by 2 per cent.
• The India-Japan Act East Forum, under which India and Japan will work on development
projects in the North-East Region of India will be a milestone for bilateral relations between
the two countries, according to Mr Kenji Hiramatsu, Ambassador of Japan to India.
• The Government of India will spend around Rs.1 lakh crore (US$ 15.62 billion) during FY 18-
20 to build roads in the country under Pradhan Mantri Gram Sadak Yojana (PMGSY).
• The Government of India plans to facilitate partnerships between gram panchayats, private
companies and other social organisations, to push for rural development under its 'Mission
Antyodaya' and has already selected 50,000 panchayats across the country for the same.
• The fiscal deficit of the Government of India, which was 4.5 per cent of the gross domestic
product (GDP) in 2013-14, has steadily reduced to 3.5 per cent in 2016-17 and is expected
to further decrease to 3.2 per cent of the GDP in 2017-18, according to the Reserve Bank of
India (RBI).
• The Government of India plans to implement a new scheme, named 'Sasti Bijli Har Ghar
Yojana' with an outlay of Rs.17,000 crore (US$ 2.64 billion), to provide electricity to around
40 million un-electrified households in the country.
• The Government of India and the Government of Portugal have signed 11 bilateral
agreements in areas of outer space, double taxation, and nano technology, among others,
which will help in strengthening the economic ties between the two countries.
• India's revenue receipts are estimated to touch Rs 28-30 trillion (US$ 436- 467 billion) by
2019, owing to Government of India's measures to strengthen infrastructure and reforms
like demonetisation and Goods and Services Tax (GST).
Road Ahead: India's gross domestic product (GDP) is expected to reach US$ 6 trillion by FY27 and
achieve upper-middle income status on the back of digitisation, globalisation, favourable
demographics, and reforms.
India is also focusing on renewable sources to generate energy. It is planning to achieve 40 per cent
of its energy from non-fossil sources by 2030 which is currently 30 per cent and also have plans to
increase its renewable energy capacity from 57 GW to 175 GW by 2022.
India is expected to be the third largest consumer economy as its consumption may triple to US$ 4
trillion by 2025, owing to shift in consumer behaviour and expenditure pattern, according to a
Boston Consulting Group (BCG) report; and is estimated to surpass USA to become the second
largest economy in terms of purchasing power parity (PPP) by the year 2040, according to a report
by PricewaterhouseCoopers.
3.2 INDIA-CHINA RELATIONSHIP

2017 was an extremely difficult year for China-India relations. With military tensions close to their
disputed border, increasing competition in their neighborhood, and growing strategic mistrust,
Beijing and New Delhi’s relations reached a nadir in 2017. Happily, the damage 2017 has inflicted on
the relationship between the two Asian giants is not irreparable. Nevertheless, it reflects larger

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trends and indicates that Sino-Indian relations increasingly stand at a crossroads, with growing
likelihood that they could go in the wrong direction. Hence, New Delhi and Beijing need to start
rethinking their relations in 2018.
The past year witnessed several episodes that seriously damaged China-India relations and put them
on a downward trajectory. Several of these were serious but rather routine, such as the tensions
around the Dalai Lama’s visit to the disputed state of Arunachal Pradesh and China’s continued
blocking of the bid to design Jaish-e-Mohammed chief Masood Azhar as a global terrorist. However,
these were minor compared with three episodes that shook bilateral relations and had serious
strategic consequences.
The most important episode was the unprecedented Doklam military standoff, a two-and-a half-
month test of wills prompted by China’s construction of a road in territory it disputes with Bhutan,
not far from a strategically key section of the China-India border. The standoff featured
unprecedented Indian military involvement in its two neighbors’ territorial dispute and a shockingly
strong Chinese reaction, which included implicit military threats against India and a massive media
campaign against New Delhi, the first such campaign against India in decades.
What made the Doklam standoff particularly intense was its linkage to two important issues. One is
the China-India competition for influence in Bhutan, which reflects the wider competition for
influence in South Asia prompted by China’s growing power in the region and India’s desire to
protect what it sees as its own sphere of interest. The other is the unresolved and increasingly
unstable China-India territorial dispute, which has seen growing militarization in recent years, a
destabilizing competition to build infrastructure around the de facto border, and frequent incidents,
including large standoffs in 2013 and 2014. Both issues indicate the tightening of the China-India
security dilemma. While the Doklam standoff was eventually resolved, likely to avoid derailing the
September BRICS summit in Beijing, it has left a deep sense of mistrust between the two sides.
India’s decision to boycott the Belt and Road Initiative (BRI) summit held in Beijing in May, which
even Chinese adversaries such as Japan and the United States attended, was another major blow to
China-India relations. To China, the boycott was not only a signal of India’s hostility to its most
important international project, but also an affront both to Beijing’s self-image as international
leader and, personally, to the BRI’s champion, President Xi Jinping. The most important immediate
reason for this unprecedented snub was the fact that the China-Pakistan Economic Corridor, the
crucial Pakistan leg of the BRI, includes projects in Pakistan-held Kashmir, which India claims, thus
legitimizing Pakistan’s position on the issue and establishing facts on the ground.

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However, at deeper level, India’s decision to not attend reflected New Delhi’s profound unease with
the BRI, a project that in its eyes would extend Chinese power in South Asia, encircle India, and bring
Beijing and Islamabad even closer. Hence, the episode underlined the tension between Beijing’s
push to build a new, China-centered economic and political order in Asia and the Indian Ocean
Region and India’s deep suspicion of such an order. It also demonstrated that the economic promise
of Sino-Indian relations, embodied in the opportunities the BRI offers, cannot override strategic
concerns, a conclusion with worrying implications for the future.
The last event that quietly damaged China-India relations in 2017 was India’s decision in November
to join the revived Quadrilateral Security Dialogue (Quad), a strategic dialogue between the United
States, Japan, India, and Australia with a naval component. Beijing has opposed the Quad as a
potential anti-Chinese alliance of democracies aimed at containing it and checking its maritime rise
in the Indo-Pacific; that opposition played a major role in the dialogue’s earlier abandonment. India’s
decision to join the resurrected but still somewhat amorphous Quad inevitably reflects its worries
about China’s growing power and assertiveness, particularly in the Indian Ocean, and Delhi’s
readiness to hedge against them. It also matches well with India’s gradual rapprochement with the
United States, which has accelerated under the leadership of Prime Minister Narendra Modi and
which is partly motivated by a desire to hedge against the Middle Kingdom.
Thus, the Quad decision feeds into Beijing’s growing, albeit somewhat exaggerated, fear that India
would join the United States and Japan in containing Beijing, a suspicion which has long silently
poisoned China-India relations. The Quad decision also impacts Sino-Indian relations by involving
India more deeply in China’s maritime disputes in the South China Sea and the East China Sea,
although Delhi has refrained in its statements on the Quad from mentioning freedom of navigation
and overflight and maritime security, subjects related to the disputes. In sum, India’s decision to join
the Quad is a reflection of the intensifying security dilemma between the two sides and the growing
role of the larger geopolitics of Asia in their relationship.
These three episodes made 2017 a particularly tough year for China-Indian relations, with serious
impact on how the two sides see each other. On the positive side, none of these events has done
irreversible damage to bilateral relations. On the negative, all three episodes represent a particularly
severe manifestation of larger trends that have adversely impacted the China-India relationship in
recent years.
One such trend is the intensification of the Sino-India security dilemma, particularly along the two
great powers’ increasingly militarized and disputed border, as seen in the Doklam standoff, and in
the Indian Ocean, as represented by the India’s decision to join the Quad. Another trend is the
increase in the China-India competition in South Asia, exemplified by the Doklam standoff, which
involved Bhutan. Here it is worth pointing that Bhutan is an important arena of this competition, as
Beijing hopes to move Thimphu to establish formal relations with China, resolve its territorial dispute
with the Middle Kingdom — thus enabling China to put pressure on India in their territorial dispute
— and weaken its traditional alignment with Delhi. Yet another trend is the increase in bilateral
tensions over China’s push to build economic, infrastructure, and transportation links in Asia
centered on itself. India fears that prospect would restrict its own economic and strategic space, a
fear expressed in New Delhi’s boycott to the BRI summit. Finally, mutual mistrust has increased due
to New Delhi’s growing closeness to Washington and Beijing’s fear that this would lead Delhi to form
an anti-Chinese alignment with the United States.
These trends and the episodes of the last year clearly point to the emergence of a larger and much
more worrying picture of bilateral relations. Two major, ongoing changes define this picture. First,
the China-India relationship is in the process of transformation and is slowly arriving at a crossroads.

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The strategic and economic landscape of Asia has been changing as the rise of Chinese power
transforms both Asia and the Indian Ocean Region, and fuels greater competition between the
Middle Kingdom on one hand and the United States and Japan on the other. These tectonic changes
are transforming the international environment in which the Beijing-Delhi relationship operates and
mean that the relationship cannot continue as before.
Just as important, the competitive element of the bilateral relationship, expressed in the four trends
above, which are likely to strengthen, has increased at the expense of its cooperative element,
centered on trade, investment, and partnership on global governance issues such as climate change
and reforming global institutions, all areas in which there has been little progress recently. This
means that the underlying dynamics of China-India relations are changing, and the two sides will be
forced by developments such as the BRI’s expansion and their growing security dilemma to come up
with a new relationship.
Finally, China and India have found it much more difficult to manage their tensions and
disagreements, as evidenced by the Doklam standoff and India’s boycott of the BRI summit, a signal
that the present format of the relationship is not working. All this indicates that the China-India
relationship is increasingly standing at a crossroads and the two sides will have to choose in what
direction they will go, or, if they don’t, accept the road that inertia would choose for them.
As China has increased its presence around India and has begun to vigorously shape Asia’s strategic
landscape to its advantage, India has adopted a much tougher and more decisive stance toward
Beijing. The three episodes above clearly outline these dynamics. While this picture has been
developing for a long time, it has emerged much more forcefully in recent years, as the rise of both
powers has accelerated, Beijing’s influence in South Asia has increased and China has begun to
establish the foundations of a new Asian order promoted through the BRI. This has enhanced the
mistrust and the security dilemma between the two sides, already worsened by a long list of factors:
instability on the border, the reinvigoration of the China-Pakistan alliance, the disappointing pace of
Sino-Indian economic relations, naval and arms competition, and India’s rapprochement with the
United States and Japan. The result has been a downward trajectory in China-India relations, which,
if it continues unchecked, would turn the two sides into adversaries.
In short, China and India need to choose the future course of their relationship, and it is increasingly
likely that ties would go in the wrong direction. The costs and risks of such a turn of events would be
formidable, as would the missed opportunities for cooperation, trade, and investment between
Asia’s two giants. To avoid such an outcome, both sides need to rethink their policy vis-à-vis each
other and reshape their relationship.
Paradoxically, in a way, the events of 2017 provide a good starting point. The shock of the Doklam
standoff and, to lesser extent, the BRI boycott have sent a warning that things are heading in the
wrong direction. Hopefully this shock would foster a debate on how to change policy and improve
relations before further deterioration occurs. A good way to start this debate is by asking why
relations deteriorated so much in 2017 and how to navigate and address the issues and trends which
produced this deterioration. Inevitably, such rethinking would be painful as it would require
changing established positions, confronting hardliners domestically, and making difficult
concessions. However, it is much better than the alternative: the emergence of an adversarial
relationship between Beijing and Delhi.
2017 was a very bad year for China-India relations, leaving a heavy legacy for 2018. However, it also
leaves homework for Beijing and Delhi; to rethink their deteriorating relations. If the two sides do

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their homework well, 2018 and the coming years might see a sorely needed improvement in one of
Asia’s most important relationships.
3.3 INDIA-USA RELTIONSHIP

Eliminating the hesitations of history, India and the United States have built a strong and strategic
bilateral relationship and continues to contribute the stability and prosperity of the world. The first
Prime Minister of India Jawaharlal Nehru likened American Imperialism to that of British. He
propounded and propagated the Non-Alignment Principle whereby India refused to join either the
capitalistic US or the communist Soviet Union.
India’s socialistic economic principles and deep skepticism to the US hegemony resulted in its
predilections towards USSR much to the ire of the West. As the ideological Cold War ended after a
myriad of international convergences and divergences, India was forced to look West given the
paradigm shift in the geopolitics of the world and in Francis Fukuyama’s words “End of History”.
Today both India and US are among the most vibrant foreign cohorts and strategic partners.
Why India Matters to the USA?
• India is an indispensable partner for the United States. Geographically, it sits between the two
most immediate problematic regions for U.S. national interests. The arc of instability that
begins in North Africa goes through the Middle East, and proceeds to Pakistan and Afghanistan
ends at India’s western border.
• The Indian landmass juts into the ocean that bears its name. With the rise of Asian economies,
the Indian Ocean is home to critical global lines of communication, with perhaps 50 percent of
world container products and up to 70 percent of ship-borne oil and petroleum traffic transiting
through its waters.
• India’s growing national capabilities give it ever greater tools to pursue its national interests to
the benefit of the United States. India has the world’s third-largest Army, fourth-largest Air
Force, and fifth largest Navy. All three of these services are modernizing, and the Indian Air
Force and Indian Navy have world-class technical resources, and its Army is seeking more of
them.
• India is an important U.S. partner in international efforts to prevent the further spread of
weapons of mass destruction.
• India’s broad diplomatic ties globally (most importantly in the Middle East), its aspirations for
United Nations (UN) Security Council permanent membership, and its role in international

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organizations such as the International Atomic Energy Agency makes New Delhi an especially
effective voice in calls to halt proliferation.
• India’s position against radicalism and terrorism corresponds with that of the United States.
• India’s English-speaking and Western-oriented elite and middle classes comfortably partner
with their counterparts in U.S. firms and institutions, including more than 2.8 million Indian
Americans. The U.S. higher education system is an incubator of future collaboration, with more
than 100,000 Indian students in American universities.
• As India modernizes and grows it will spend trillions of dollars on infrastructure, transportation,
energy production and distribution, and defence hardware. U.S. firms can benefit immensely by
providing expertise and technology that India will need to carry out this sweeping
transformation.
• India-USA cooperation is critical to global action against climate change.
• India is genuinely committed to a world order based on multilateral institutions and
cooperation and the evolution of accepted international norms leading to accepted
international law.
• Indian culture and diplomacy have generated goodwill in its extended neighborhood. New Delhi
has positive relations with critical states in the Middle East, in Central Asia, in Southeast Asia,
and with important middle powers such as Brazil, South Africa, and Japan—all of the strategic
value to the United States. India’s soft power is manifest in wide swaths of the world where its
civil society has made a growing and positive impression.
• Indian democracy has prospered despite endemic poverty; extraordinary ethnic, religious, and
linguistic diversity; and foreign and internal conflicts.
Why the United States matters to India?
• America remains the critical stabilizing force in Asia through its military and diplomatic power
projection and commitments to the region.
• The twentieth century bore witness to a multi generation U.S. efforts to prevent the emergence
of any hostile hegemony on the Eurasian landmass, a function that the United States continues
to fulfill today with the help of its Asian partners.
• China has chosen episodically to ignore global nonproliferation norms, a pattern of behavior
that the United States has assiduously sought to curtail. Though no nation can a priori prevent
future Chinese proliferation activities, only a U.S.-led international effort has any chance of
success.
• India will be better able to protect its national interests in Pakistan and Afghanistan in
coordination with the United States.
• The United States will continue to be important for India’s economic success. India’s economy
has been built around unleashing domestic consumption rather than relying on exports.
• The United States has also remained one of the top sources of foreign direct investment in
India, bringing important managerial expertise, capital, and technology with it to the dynamic
Indian market.
• The United States has a long-term commitment to maintain security and freedom of navigation
on the high seas, something critical to India as a net energy importer.
• Washington retains unparalleled power and influence in global governance institutions.
• As India seeks a larger role in the UN Security Council and international monetary institutions,
U.S. support for India will be critical to reforms that benefit New Delhi’s national interests.

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• The United States retains a sizable technological edge on many commercials, aerospace, and
defence technologies, the access to which benefits Indian national interests as well as Indian
firms and customers.
India-USA: Five Pillars of Strategic Partnership
1. Strategic Issues
2. Energy and Climate Change
3. Science and Technology
4. Health and Innovation
5. Education and Development
India-US Trade Relations
• There are more than 50 bilateral dialogue mechanisms between the two governments.
• India-USA bilateral trade in goods and services increased from $104 billion in 2014 to $114
billion in 2016.
• Both countries have made a commitment to facilitate actions necessary for increasing the
bilateral trade to $500 billion.
• In June 2016, Prime Minister Modi and President Obama pledged to explore new opportunities
to break down barriers to the movement of goods and services, and support deeper integration
into global supply chains, thereby creating jobs and generating prosperity in both economies.
• The U.S. is the fifth largest source of foreign direct investments into India.
• Among large Indian corporations having investments in the U.S. include Reliance Industries
Limited, Tata Consultancy Services, Wipro, Essar America, Piramal, Mahindra, Lupin, Sun
Pharma, etc.
• There are several dialogue mechanisms to strengthen bilateral engagement on economic and
trade issues, including a Ministerial Level Economic and Financial Partnership and a Ministerial
Trade Policy Forum. For greater involvement of private sector in the discussions on issues
involving trade and investment, there is a bilateral India-USA CEO’s Forum.
• India and the US have set up a bilateral Investment Initiative in 2014, with a special focus on
facilitating FDI, portfolio investment, capital market development and financing of
infrastructure.
• US firms will be lead partners in developing Allahabad, Ajmer and Vishakhapatnam as Smart
Cities.
3.4 India's U-Turn on North Korean Policy

On July 7, 2017, India’s Ministry of External Affairs (MEA) released a strongly worded statement
condemning North Korea’s July 4 intercontinental ballistic missile (ICBM) launch. In their statement,
Indian MEA officials described Pyongyang’s ballistic missile program and nuclear proliferation links as
posing a grave threat to India’s security and international peace. The Indian MEA also called on all
international supporters of North Korea to be held accountable for their actions.
India’s strident condemnations of North Korean belligerence follow a string of anti-Pyongyang

actions authorized by Indian Prime Minister Narendra Modi. In April, India aligned with United

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Nations (UN) stipulations by banning all trade with North Korea, with the exception of shipments of
food and medicine. This decision brought an abrupt end to a decade of growth in India-North Korea
trade links.
While India possesses little leverage over North Korea, these policy shifts have profound implications
for both Pyongyang and New Delhi. As India and North Korea have a long history of trade links and
cordial diplomatic ties, India’s implementation of UN sanctions against Pyongyang could slow the
progress of North Korea’s ballistic missile program and weaken its economy. In addition, India’s
policy shift on North Korea will help Modi strengthen India’s relationships with South Korea and the
United States, increasing New Delhi’s diplomatic profile and access to foreign investment.
The Impact of India’s Suspension of Trade with North Korea: Even though India was a less
significant trade partner for Pyongyang than China or Russia, New Delhi’s decision to suspend trade
links deals a significant blow to North Korea’s ballistic missile program. The Center for Space Science
and Technology in Asia and the Pacific (CSSTEAP) located in Dehradun, India was one of the few
institutes in the world that provided technical training for North Korean students after the UN issued
its first set of sanctions against North Korea’s nuclear program in 2006.
Before the UN discovered the CSSTEAP’s sanctions violations in 2016, the institute provided at least
30 North Korean scientists with training courses that could greatly assist the development of
Pyongyang’s nuclear and ballistic missile programs. UN officials were especially alarmed by courses
offering satellite communications training and instructions for launch vehicle testing to North
Koreans.
While Indian officials have downplayed the links between these courses and WMD development, the
North Korean government’s appointment of Paek Chong-ho, a CSSTEAP alumnus, to a senior
leadership position in the agency governing Pyongyang’s 2012 satellite launch, gives credibility to UN
officials’ concerns.
In addition to the collapse of technology-sharing links, the breakdown of economic ties between
India and North Korea will make Pyongyang’s hard currency shortage even more acute. According to
Indian government data, India was North Korea’s third largest trade partner in 2015-16, exporting
$111 million in goods to North Korea while importing $88 million from Pyongyang.
The loss of these trade links will further increase North Korea’s economic dependency on China, at a
time when Pyongyang’s relationship with Beijing has become increasingly tense. The suspension of
New Delhi-Pyongyang trade links will also have diplomatic reverberations. As India welcomed North
Korean Foreign Minister Ri Su-yong to New Delhi in 2015 and has historically abstained from UN
resolutions criticizing North Korea’s human rights abuses, the loss of India as a diplomatic partner
will heighten the DPRK’s international isolation.
3.5 INDIA-MYANMAR RELATIONSHIP

India shares a long land border of over 1600 Km with Myanmar as well as a maritime boundary in
the Bay of Bengal. Four north-eastern states viz. Arunachal Pradesh, Nagaland, Manipur and
Mizoram share boundary with Myanmar. These geo-strategic realities encompass our broader
interests in the Indian Ocean region. Both countries share a heritage of religious, linguistic and
ethnic ties. Further, Myanmar is the only ASEAN country adjoining India and, therefore, our gateway
to South East Asia with which we are seeking greater economic integration through India's 'Look
East' and now 'Act East' Policy. Business opportunities that emerge from a surging economy in
Myanmar also provide new vistas for engagement.

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Building on our civilizational relationship, since the 1990s India adopted a policy of working on
improved Government-to-Government relations. The landslide victory by Aung San Suu Kyi-led
National League for Democracy (NLD) in November 2015 general elections and the formation of NLD
government has provided opportunities to strengthen the engagement building on our previous
efforts.
Various institutional mechanisms have infused dynamism to the bilateral ties. The first meeting of
the India-Myanmar Joint Consultative Commission (JCC) co chaired by EAM and Myanmar FM U
Wunna Maung Lwin was held (July 16, 2015, N. Delhi). Development cooperation, security, trade &
commerce, consular,defence and cultural matters were among issues discussed.Secretary-level
meetings include Foreign Office Consultations at the level of Foreign Secretary/Dy Foreign Minister.
The 16thForeign Office Consultations were held (May 25, 2017) between Foreign Secretary Dr. S.
Jaishankar and Myanmar MOS for Foreign Affairs U Kyaw Tinwhen issues pertaining to boundary,
security & border management, connectivity, trade & investment, Indian Line of Credit, among other
issues were reviewed. The 21thNational Level Meeting (NLM) at Home Secretary/ Dy. Home
Minister-level was held on 5-6 July 2017, Nay Pyi Taw. Joint Secretary-level meetings include Sectoral
Level Meetings (SLM) led by MHA (22nd SLM;19-20 Dec 2016, Mandalay) and Regional Border
Committee Meetings (RBCs) (10th RBC;9-11 May 2017Kalay). The first Joint Boundary Working
Group led by Joint Secretary, MEA met on January 6-7, 2016 in Nay Pyi Taw. Commercial issues are
discussed in Joint Trade Committee (JTC) held at Commerce Minister-level (on 27 June 2017,
N.Delhi). JWG on Border Trade and Border Haat, Railways and Shipping are held to discuss
connectivity related issues.
High-level Visits: Regular high-level visits have further strengthened bilateral relationship. After
the visit of PM Rajiv Gandhi in 1987, high-level visits resumed, including by Sr. Gen. Than Shwe
(2004, 2010), President Abdul Kalam (2006), Vice Sr. Gen. Maung Aye (2008), Vice President Ansari
(2009) and President U Thein Sein (Oct 2011, Dec 2012).Then PM Dr. Manmohan Singh’s State Visit
to Myanmar took place (May 2012) after 25 years, apart from Agreements and MOUs,a USD 500
million Line of
Credit was signed with then President U Thein Sein. Currently, India's commitment to Myanmar's
development stands at over US$ 1.726 billion, which is more than the assistance offered by other
countries.
Prime Minister Narendra Modi attended the 12thASEAN-India Summit and 9thEast Asia Summit (Nov
11-13, 2014, Nay Pyi Taw). During the visit, PM called on then President U Thein Sein, met Daw Aung
San Suu Kyi (DASSK) and interacted with over 300 members of the PIO community. EAM Sushma
Swaraj attended 4thEast Asia Summit FMM and 21st ASEAN Regional Forum Ministerial Meeting
(August 08-10, 2014, NPT) and visited on August 11, 2014. In a demonstration of India’s support to
the peace process NSA (October 15, 2015) attended the Nationwide Ceasefire Agreement ceremony
as signatory witness.
DASSK-led NLD Government was sworn-in on 30 March 2016 giving India an opportunity to step up
the engagement. MOS (I/C) for Commerce & Industry Nirmala Sitharaman visited Yangon leading the
first high-level foreign business delegation on May 18-20, 2016 and addressed the Business
Conclave. NSA visited Myanmar as Special Envoy of Prime Minister on 16 June 2016 and met
President U Htin Kyaw (PHK) and DASSK. MOS Shri V.K. Singh met State Counsellor DASSK on the
sidelines of 14th India-ASEAN FMM (26 July 2016, Vientiane, Laos). EAM visited Nay Pyi Taw on 22
August 2016 and had warm interactions with State Counsellor and PHK, underlining India’s support

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for Myanmar. PM Narendra Modi met State Counsellor DASSK on the sidelines of 14th India-ASEAN
Summit and 11th East Asia Summit (8 Sept 2016, Vientiane).
Myanmar President U Htin Kyaw undertook a State Visit to India from August 27-30, 2016. During
the visit President U Htin Kyaw held wide-ranging discussions with Rashtrapatiji and Prime Minister
Narendra Modi. Four documents were signed: MOU on Cooperation in Traditional Medicine,
Renewable Energy, Construction of 69 bridges in the Tamu-Kyigone-Kalewa section and Cooperation
in the Construction of Kalewa-Yagyi road section of the same Trilateral Highway. PHK was
accompanied by spouse and also visited Bodh Gaya and Agra.
State Counsellor Daw Aung San Suu Kyi undertook a State Visit to India on 17- 19 October 2016 after
participating in the BRICS-BIMSTEC Outreach Summit 16 October, Goa, when she met Rashtrapatiji,
PM and EAM. 3 MOUs on Power, Insurance and Banking supervision were signed. India assured
support for creation of livelihoods, upgradation of skills, reconstruction of roads, power, education
facilities and health infrastructure for Myanmar people.
Defence & Security Cooperation has strengthened over the years. Exchange of high-level visits,
signing of MoU on Border Cooperation, training, Army, Air Force and Naval Staff Talks are important
indicators in this direction. CNS Admiral Sunil Lamba (1-4 Nov 2016) andCOAS Gen. Bipin Rawat (27-
31 May 2017) visited Myanmar and held wide-ranging discussions on enhancing the scope and depth
of defence relations.In July 2017, Sr Gen Min Aung Hliang, C-in-C
Myanmar Defense Services visited India, in what was his second visit in as many years, giving an
opportunity to further cement defence ties. Myanmar side has provided assurances at the highest
levels that it will cooperate with India in taking necessary action in preventing the use of Myanmar
territory for anti-India activity.
Commercial Cooperation: A bilateral Trade Agreement was signed in 1970. Bilateral trade has been
growing steadily to reach US$2178.44 million (2016-17), of which Indian exports amounted to
US$1111.19 million and Indian's imports to US$1067.25 million. India is the fifth largest trading
partner of Myanmar but trade remains below potential. Agriculture sector dominates trade,
particularly supply of beans & pulses to India ($ 809million, 2016-17) and timber ($ 156 million).
India's exports to Myanmar include sugar ($ 424 million), pharmaceuticals ($ 184 million), etc.
Border trade via Moreh and Zawkhatar reached to $ 87.89 million; Indian exports being $ 24.44
million and Indian imports being $ 63.46 million.
India is presently the tenth largest investor with an approved investment of US$ 740.64 million by 25
Indian companies (as of 30Jun 2017). Most India's investments have been in oil & gas sector. 100%
FDI is allowed in select sectors. Indian companies have evinced interest in investing in Myanmar and
major contracts have been won by Indian companies.
Besides normal trade, both sides have also taken steps to bolster trade across the land border.
Cooperation in the banking sector is crucial for investment and trade. United Bank of India signed
banking agreements with banks of Myanmar (MFTB, MICB, MEB, and 9 private banks) to facilitate
bilateral trade. United Bank of India, Indian Overseas Bank, EXIM bank and State Bank of India have
representative offices in Yangon. In March 2016, State Bank of India was awarded a Commercial
Banking License and commenced operations from 3 October 2016.
Myanmar is an important partner in our energy relations with other countries.MOS for Petroleum &
Natural Gas, Shri Dharmendra Pradhan visited Myanmar from 20-24 Feb 2017 during which both
sides discussed opportunities for cooperation in varied areas.

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Development Cooperation: We have extended development assistance on generous terms. We are

committed to provide grant-in-aid assistance amounting to almost Rs 4000 crore (of total
commitment of approx. US$ 1726 million). These include support for the Kaladan Multimodal
Transit Transport Project; the Trilateral Highway Project, which is an East-West corridor connecting
our Northeast with Myanmar and Thailand; the Rhi-Tiddim road; supply of Bailey bridges; assistance
for border area development in the Naga Self-Administered Zone by financing bridges, roads,
schools and small health centres; assistance in setting up institutions for higher learning and
research, namely Myanmar Institute of Information Technology, Advance Centre for Agricultural
Research and Education, Myanmar-India Entrepreneurship Development Centre, Myanmar-India
Centre for English Language Training, India-Myanmar Industrial Training Centres, assistance in public
health by supporting upgradation of Yangon Children's Hospital, Sittwe General Hospital etc.
Disaster Relief: India has responded promptly and effectively to assist Myanmar in humanitarian
relief operations following natural calamities like Cyclone Mora (2017), Komen (2015), Cyclone
Nargis in 2008, and earthquake in Shan State in 2010. We provided immediate relief material
through INS Gharial: clothing, tents, rehabilitation supplies medical assistance, among others. During
Cyclone Komen, biomass gasifiers, solar torches & lanterns, replaced 16 damaged transformers and
a grant of USD 200,000 to repair the Shwedagon Pagoda complex in Yangon were provided. We
gave assistance of USD 1 million for relief, reconstruction work in the quake affected Shan State, of
which 250,000 was cash grant and the remainder for reconstruction of 1 high school and 6 primary
schools. US$200,000 cash was donated for Rakhine State rehabilitation. India provided US$ 1 million
to Myanmar in Rakhine State which was used to construct 10 schools. We have offered to provide
support in capacity building in disaster risk mitigation as well as in strengthening Myanmar's
National Disaster Response Mechanism.
Culture: India and Myanmar share close cultural ties and a sense of deep kinship given India's
Buddhist heritage. Building on this shared heritage India is undertaking some key initiatives:
Restoration of the Ananda Temple in Bagan and GOI donation of a 16 foot replica of the Sarnath
Buddha Statue which has been installed at the premises of Shwedagon pagoda in Yangon. The
‘Samvad-II’ Interfaith dialogue was held on 6-7 August 2017, Yangon. The event was graced by Shri
Ram Naik, Governor of Uttar Pradesh, Shri Yogi Adityanath, Chief Minister of Uttar Pradesh and MOS
Home Shri Kiren Rejiju.ICCR and Sitagu International Buddhist Academy organised an International
Conference on Buddhist Cultural Heritage from 15-17 December 2012.Performances by cultural
troupes have been organized on a regular basis. Myanmar troupes and artistes have participated in
South Asian and ASEAN cultural events in India. We have responded to Myanmar's interest in
restoring and renovating two historic temples in Bodh Gaya built by Myanmar rulers King Mindon
and King Baygyidaw. These temples and inscriptions will now be restored with the assistance of the
Archaeological Survey of India as a bilateral friendship project.
Indian Diaspora: The origin of the Indian community in Myanmar is traced to the mid-19thcentury
with the advent of the British rule in Lower Burma in 1852. The two cities Yangon and Mandalay had
a dominating presence of Indians in civil services, education, trade and commerce during the British
rule. There are varying estimates of 1.5-2.5 million people of Indian origin living and working in
various parts of Myanmar. A large number of the Indian community (nearly 150,000) live in Bago
(Zeyawaddy and Kuayktaga) and Tanintharyi Region and Mon State, primarily engaged in farming.
The 7000 strong NRI community in Myanmar mainly lives in Yangon and Mandalay, engaged in
export-import business or employees of MNCs based in India, Singapore and Thailand. Bilateral
Cooperation in Regional/ Sub-regional context: Myanmar's membership of ASEAN, BIMSTEC and
Mekong Ganga Cooperation has introduced a regional/sub-regional dimension to bilateral relations
and imparted added significance in the context of our "Act East" policy. Myanmar has generally been

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supportive of India's stand to various international organisations. For our part, we have supported
Myanmar's association with SAARC as an observer; Myanmar formally acquired such status in 2008.
3.6 INDIA’S FOREIGN TRADE
3.6.1 OCTOBER 2017

I. MERCHANDISE TRADE
EXPORTS (including re-exports): Exports during October 2017are valued at US$ 23098.18 million
as compared to US$ 23360.61million during October,2016, a decline of 1.12 percent in dollar terms.
However, during April-October 2017-18 exports have exhibited a positive growth of 9.62 per cent in
Dollar terms. In Rupee terms, during October 2017 exports were valued at Rs.150325.95 crore as
compared to Rs.155926.73 crore during October,2016, registering a decline of 3.59per cent.
During October 2017, Major commodity groups of export showing positive growth over the
corresponding month of last year are Engineering Goods (11.77%), Petroleum Products (14.74%),
Organic & Inorganic Chemicals (22.29%), Cotton Yarn/Fabrics/made-ups, Handloom Products etc.
(4.83%), Marine Products (8.52%) and Plastic & Linoleum (24.46%).
Cumulative value of exports for the period April-October 2017-18 was US$170286.55 million
(Rs1097858.68 crore) as against US $155344.40 million (Rs1039297.59 crore) registering a positive
growth of 9.62per cent in Dollar terms and 5.63per cent in Rupee terms over the same period last
year.
Non-petroleum and Non-Gems and Jewelry exports in October 2017 were valued at US$ 16604.63
million as against US$ 16202.27 million in October 2016, an increase of 2.48%. Non-petroleum and
Non-Gems and jewelry exports during April -October 2017-18 were valued at US$ 124281.02 million
as compared to US$ 111556.32 million for the corresponding period in 2016-17, an increase of
11.41%.
IMPORTS: Imports during October 2017 were valued at US$ 37117.01 million (Rs.241562.31 crore)
which was 7.60per cent higher in Dollar terms and 4.91per cent higher in Rupee terms over the level
of imports valued at US$ 34495.09 million (Rs.230246.81 crore) in October, 2016. Cumulative value
of imports for the period April-October 2017-18 was US$ 256434.21 million (Rs.1653435.01 crore) as
against US$ 209834.98 million (Rs.1403911.51 crore) registering a positive growth of 22.21per cent
in Dollar terms and 17.77per cent in Rupee terms over the same period last year.

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Major commodity groups of import showing high growth in October 2017 over the corresponding
month of last year are Petroleum, Crude & products (27.89%), Electronic goods (7.04%), Machinery,
electrical & non-electrical(17.43%), Coal, Coke & Briquettes, etc.(66.28%) and Organic & Inorganic
Chemicals (30.49%).
CRUDE OIL AND NON-OIL IMPORTS: Oil imports during October, 2017 were valued at US$ 9286.74
million which was 27.89 percent higher than oil imports valued at US$ 7261.23million in October
2016.Oil imports during April-October, 2017-18 were valued at US$ 56252.00million which was
20.23per cent higher than the oil imports of US$ 46788.46million in the corresponding period last
year.
In this connection it is mentioned that the global Brent prices ($/bbl) have increased by 15.87% in
October 2017 vis-Ã -vis October 2016 as per World Bank commodity price data (The pink sheet).
Non-oil imports during October, 2017 were estimated at US$ 27830.27 million which was 2.19per
cent higher than non-oil imports of US$ 27233.86 million in October, 2016. Non-oil imports during
April-October 2017-18 were valued at US$ 200182.20 million which was 22.78per cent higher than
the level of such imports valued at US$ 163046.52 million in April-October, 2016-17.
II. TRADE IN SERVICES (for September, 2017, as per the RBI Press Release dated 13th
November, 2017)
EXPORTS (Receipts): Exports during September2017 were valued at US$ 13,732 million (Rs.
88490.24 Crore) registering a positive growth of 0.23per cent in dollar terms as compared to positive
growth of 3.97per cent during August2017 (as per RBIs Press Release for the respective months).
IMPORTS (Payments): Imports during September2017 were valued at US$ 8,450 million (Rs.
54452.56 Crore) registering a negative growth of 2.40 per cent in dollar terms as compared to
positive growth of 18.05per cent during August2017 (as per RBIs Press Release for the respective
months).
III.TRADE BALANCE
MERCHANDISE: The trade deficit for October 2017 was estimated at US$ 14018.83 millions against
the deficit of US$ 11134.48 million during October2016.
SERVICES: As per RBIs Press Release dated 13th November 2017, the trade balance in Services (i.e.
net export of Services) for September, 2017 was estimated at US$ 5,282 million.
OVERALL TRADE BALANCE: Taking merchandise and services together, overall trade deficit for
April-October 2017-18 is estimated at US$ 52550.66million as compared to US$ 22132.58 million
during April-October 2016-17. (Services data pertains to April-September2017-18 as September2017
is the latest data available as per RBIs Press Release dated 13th November2017).

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3.6.2 NOVEMBER 2017

I. MERCHANDISE TRADE
EXPORTS (including re-exports): Exports during November 2017 have exhibited high positive
growth of 30.55 per cent in dollar terms. vis-à-vis November 2016. This is on the pattern of positive
growth in exports in last thirteen months with a dip of 1.12 per cent in October 2017 vis-à-vis same
period last year.
Exports during November 2017 are valued at US $ 26195.76 million as compared to US $ 20066.26
million during November,2016. In Rupee terms, exports were valued at Rs. 169912.50 crore as
compared to Rs.135699.47 crore during November,2016, registering a rise of 25.21 per cent.
During November 2017, Major commodity groups of export showing positive growth over the
corresponding month of last year are Engineering Goods (43.76%), Petroleum Products (47.68%),
Gems & jewelry (32.69%), Organic & Inorganic Chemicals (54.28%), and Drugs & Pharmaceuticals
(13.39%).
Cumulative value of exports for the period April-November 2017-18 was US $ 196482.31 million (Rs
1267771.18 crore) as against US $ 175410.66 million (Rs.1174997.07crore) registering a positive
growth of 12.01 per cent in Dollar terms and 7.90 per cent in Rupee terms over the same period last
year.
Non-petroleum and Non-Gems & jewelry exports in November 2017 were valued at US $ 19247.56
million as against US $ 15104.42 million in November 2016, an increase of 27.43 %. Non-petroleum
and Non-Gems and jewelry exports during April -November 2017-18 were valued at US $ 143528.58
million as compared to US $ 126660.74 million for the corresponding period in 2016-17, an increase
of 13.32%.
IMPORTS: Imports during November 2017 were valued at US $ 40024.96 million (Rs.259612.29
crore) which was 19.61 per cent higher in Dollar terms and 14.73 per cent higher in Rupee terms
over the level of imports valued at US $ 33461.87 million (Rs. 226288.21 crore) in November, 2016.

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Cumulative value of imports for the period April-November 2017-18 was US $ 296459.17 million (Rs.
1913047.30 crore) as against US $ 243296.85 million (Rs. 1630199.71 crore) registering a positive
growth of 21.85 per cent in Dollar terms and 17.35 per cent in Rupee terms over the same period
last year.
Major commodity groups of import showing high growth in November 2017 over the corresponding
month of last year are Petroleum, Crude & products (39.14%), Electronic goods (24.97%), Pearls,
precious & Semi-precious stones (85.80%), Machinery, electrical& non-electrical (23.24%) and Coal,
Coke & Briquettes, etc. (51.80%).
CRUDE OIL AND NON-OIL IMPORTS: Oil imports during November, 2017 were valued at US $
9550.97 million which was 39.14 percent higher than oil imports valued at US $ 6864.25 million in
November 2016. Oil imports during April-November, 2017-18 were valued at US $ 65802.97 million
which was 22.65 per cent higher than the oil imports of US $ 53652.71 million in the corresponding
period last year.
In this connection it is mentioned that the global Brent prices ($/bbl) have increased by 34.73 % in
November 2017 vis-à-vis November 2016 as per World Bank commodity price data (The pink sheet).
Non-oil imports during November, 2017 were estimated at US $ 30473.99 million which was 14.57
per cent higher than non-oil imports of US $ 26597.62 million in November, 2016. Non-oil imports
during April-November 2017-18 were valued at US $ 230656.20 million which was 21.63 per cent
higher than the level of such imports valued at US $ 189644.14 million in April-November, 2016-17.
II. TRADE IN SERVICES (for October, 2017, as per the RBI Press Release dated 15th
December 2017)
EXPORTS (Receipts): Exports during October 2017 were valued at US $ 14,152 million (Rs.
92103.06 Crore) registering a positive growth of 3.06 per cent in dollar terms as compared to
positive growth of 0.23 per cent during September 2017 (as per RBI’s Press Release for the
respective months).
IMPORTS (Payments): Imports during October 2017 were valued at US $ 8,700 million (Rs.
56620.73 Crore) registering a positive growth of 2.96 per cent in dollar terms as compared to
negative growth of 2.40 per cent during September 2017 (as per RBI’s Press Release for the
respective months).
III.TRADE BALANCE
MERCHANDISE: The trade deficit for November 2017 was estimated at US $ 13829.20 million as
against the deficit of US $ 13395.61 million during November 2016.
SERVICES: As per RBI’s Press Release dated 15th December 2017), the trade balance in Services (i.e.
net export of Services) for October, 2017 was estimated at US $ 5,452 million.
OVERALL TRADE BALANCE: Taking merchandise and services together, overall trade deficit for
April-November 2017-18 is estimated at US $ 60927.86 million as compared to US $ 30095.19 million
during April-November 2016-17. (Services data pertains to April-October 2017-18 as October 2017 is
the latest data available as per RBI’s Press Release dated 15th December 2017).

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3.6.3 Economic Survey 2016-17: Here's how Indian economy fared

on trade, FDI and debt
Finance Minister Arun Jaitley today tabled the Economic Survey 2016-17 Volume-2 in the
Parliament. The Survey report focuses on various aspects of the Indian economy and explains at
length what the country's economic conditions are and how it is expected to perform. From
structural reforms to the launch of the GST to impacts of demonetisation, it has focused on almost
every economic decision including privatisation of Air India and rationalisation of energy subsidies.
In a part of its report, the Economic Survey has explained the current position of Indian economy on
overall trade, external debt and inflow of foreign funds under Foreign Direct Investment or FDI.
TRADE DEFICIT: Reflecting the slowly improving world economic situation, India's exports turned
positive at 12.3 per cent in 2016-17. This along with a marginal decline in imports by 1.0 per cent
resulted in narrowing down of trade deficit to USD 112.4 billion in 2016-17 as compared to USD
130.1 billion in 2015-16. The current account deficit narrowed down progressively to 0.7 per cent of
GDP in 2016-17 from 1.1 per cent of GDP in 2015-16 led by sharp contraction in trade deficit.
Economic Survey said that India's balance of payments situation which was benign and comfortable
during 2013-14 to 2015-16, further improved in 2016-17 as current account deficits lowered,
resulting in further accretion of foreign exchange reserves.
FDI: The Survey noted that gross FDI has increased to USD 60.2 billion in 2016-17 from USD 55.6
billion in 2015-16. Net FDI inflows at USD 35.6 billion, however, moderated marginally by 1.1 per
cent from USD 36.0 billion in 2015-16. Among the major economies running current account deficit,
India is the second largest foreign exchange reserve holder after Brazil with reserves at USD 386.4
billion as on 7th July, 2017.
EXTERNAL DEBT: Most of the external debt indicators of India improved at end-March 2017
compared end-March, 2016. India's aggregate external debt stock at end-March 2017 stood at USD
471.9 billion registering a decline of USD 3.1 billion (2.7 per cent) over end-March 2016. The ratio of
external debt to GDP fell to 20.2 per cent from 23.5 per cent, while foreign exchange reserves
provided a cover of 78.4 per cent to external debt compared to 74.3 per cent in the previous year.
Debt service ratio fell to 8.3 per cent from 8.8 per cent and ratio of concessional debt to total
external debt increased to 9.3 per cent from 9.0 per cent. Short term debt (residual maturity) to
total external debt fell to 41.5 per cent from 42.7 per cent. Short term debt (residual maturity) to

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forex reserves also fell to 52.9 per cent from 57.4 per cent. Cross country comparison of external
debt indicates that India continues to be among the less vulnerable countries.
3.7 Impact of Demonetisation on Indian Economy

In the year 2016, Prime Minister Narendra Modi announced the scrapping of high-value banknotes
which amounted to 86% of currency in circulation. The demonetisation of currency notes was
supposed to be an attack on black money, on counterfeit notes, and projected as part of a broader
push to promote digitization and non-cash payments. A year later, progress on all these counts
appears to be very modest, and the question was raised as whether this exercise was needed at all
to fulfil its stated aims.
The costs imposed by the currency-scrapping exercise were, however, quite severe, at least in the
short term, disrupting ordinary life across the country for several weeks. The hardest-hit were those
in rural areas, where access to banking and the internet are quite low. A 2016 Reserve Bank of India
(RBI) report on branch authorization policy classified 93% of rural centres in the country as
unbanked, with the population dependent on roving banking correspondents and on distant urban
or semi-urban branches. Access to the internet is equally patchy, with only 3% of households in
underdeveloped rural areas reporting access to internet in a 2016 consumer economy survey.
Economic costs: The rural and informal economy suffered disproportionately because most
transactions are cash-based. The liquidity squeeze led to a pile-up at wholesale markets, leading to a
sharp decline in the Wholesale Price Index (WPI) of perishables such as fruits and vegetables in the
immediate aftermath of demonetisation. By turning farm markets into buyers’ markets,
demonetisation may have also contributed to the decline in prices of pulses. Rural consumer
sentiment too took a hit, with domestic sales of two-wheelers plunging sharply. Car sales also
declined but the decline was less severe than in the case of two-wheelers.
The slowdown in the economy, which started before demonetisation, also seems to have been
exacerbated by demonetisation. New project announcements declined sharply in the wake of
demonetisation, a Centre for Monitoring Indian Economy (CMIE) analysis showed, hurting the capex
cycle.
Contrary to what some economists predicted, the dividend from RBI to the government was lower
because of demonetisation. RBI’s domestic earnings declined as it had to pay interest of Rs17,426
crore after it mopped up excess liquidity in the banking system following demonetisation. The
previous year, the central bank had earned interest of Rs506 crore in its liquidity management
operations. RBI’s printing costs also went up because of the move.
Uncertain benefits: The one big promise of demonetisation was a rapid expansion in the tax base
but the actual results have been quite modest. According to the finance ministry’s estimates
published in the latest Economic Survey, the tax base expansion attributable to demonetisation was
Rs10,600 crore, lower than what RBI spent on interest expenses, and equivalent to only 0.1% of
India’s gross domestic product (GDP). The full effect on tax collections “will materialize gradually” as
reported income of new taxpayers grows, said the survey. How far such gains materialize remains to
be seen.
Another stated aim of demonetisation was to detect and eliminate counterfeit notes. The growth in
detected counterfeit notes after demonetisation has not been unusually large, shows RBI data, even
as counterfeits of the freshly issued notes have already emerged in the system.

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Demonetisation did provide a boost to non-cash payments in the short term but that effect may be
waning, with the cash-to-GDP ratio back to double-digits. There seems to have been some impact on
the stock of black money (rather than the flow), given that the construction sector has been hit hard.
But this may also have led to large-scale job losses. The proportion of high-value notes (Rs500 and
above)—often viewed as conduits of black money—has also been rising as new notes have entered
the system. At the end of fiscal year 2017 (FY17), the proportion of high-value notes stood at 74%,
considerably lower than that in FY16. But this figure may rise significantly by the end of FY18.
3.8 Impact of GST on Indian Economy

On 1st July 2017, the government made an ambitious shift to what it promised was a modern,
transparent and technology-driven indirect tax system to sharpen the competitive edge of a $2.3
trillion Indian economy riven by internal trade barriers and a raft of central, state and local taxes.
The goods and services tax (GST) was hailed as the biggest tax reform by India in 70 years of
independence, a potential game-changer that would, at one stroke, unite the country of 1.3 billion
people into a common market by dismantling inter-state tariff barriers.
GST subsumed 17 central, state and local taxes in line with the “one nation, one market, one tax”
concept on which it was based. The new regime had tax slabs for goods and services—5%, 12%, 18%
and 28%.
A little less than 100 days since it kicked in, the new system is yet to settle down. While many of the
lofty and intangible goals set by the government will take time to achieve, the transition has
witnessed inevitable shocks.
Businesses slowed production ahead of the rollout of GST to minimize tax complications while
shifting to the new system. This in part led to economic growth in the April-June quarter
decelerating to 5.7%, the slowest pace in three years, from 6.1% in the preceding three months.
Businesses and traders also struggled to measure up in the first two monthly tax-filing cycles, making
headlines about inadequate preparedness for the massive tax reform.

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THE END!

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2. DEMONETISATION: THE PRESENT SCENARIO 12

3. INDIA'S ECONOMIC POSITION 21

3.2 INDIA-CHINA RELATIONSHIP 25

3.3 INDIA-USA RELATIONSHIP 29

3.4 INDIA’S U-TURN ON NORTH KOREAN POLICY 31

3.5 INDIA-MYANMAR RELATIONSHIP 32

3.6 INDIA’S FOREIGN TRADE 36

3.7IMPACT OF DEMONETISATION ON INDIAN ECONOMY 41

3.8 IMPACT OF GST ON INDIAN ECONOMY 42

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1.1 LEGAL RIGHTS AND CONSTITUTIONAL PROVISIONS

• Equality of opportunity for all citizens in matters relating to employment or appointment to

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➢ Immoral Traffic (Prevention) Act, 1956

Special Initiatives for Women:

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(vii)BetiPadhao, BetiBachao(2015): it is a government campaign which aims to address the issue of

1.2 PRESENT SCENARIO

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1.2.1 SOCIAL EMPOWERMENT

➢ Education: Education is a key intervention in initiating and sustaining processes of

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1.2.2 POLITICAL EMPOWERMENT

1.3 WOMEN’S ECONOMIC OPPORTUNITIES IN INDIA

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1.4 PRINCIPLES TO FOLLOW FOR WOMEN EMPOWERMENT

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1.5 ACTIONS TAKEN TO EMPOWER WOMEN

MINISTRY FOR WOMEN & CHILD DEVELOPMENT

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1.6 THE ROAD AHEAD

We have a long way to go, but we will get there someday.

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2. DEMONETISATION: THE PRESENT

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2.2 Some effects of demonetisation

2.Impact of demonetisation on loans from banks in India:After the announcement of

[Here MCLR refers to the Marginal Cost of Landing Rates]

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3.Impact of demonetisation on Indian financial market: After demonetisation, Indian

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10.Impact on Bank Balance Sheets: Decline in currency in circulation on account of demonetisation

2.3 Short-Term Impact of Demonetisation

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2.4 Long-Term Impact of Demonetisation

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2.5 Analysis of Demonetization Effect on Different Sectors

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2.7 VIEWPOINTS OF FAMOUS PERSONALITIES

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3.2 INDIA-CHINA RELATIONSHIP

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3.3 INDIA-USA RELTIONSHIP