What’s in today’s article?

• Why in News?
• India-Italy bilateral relation
• Key Highlights of Italy-India Joint Strategic Action Plan 2025-2029

Why in News?

India and Italy outlined their vision for deepening bilateral cooperation in the Joint Strategic Action Plan 2025-29. The document covers various key sectors, including defence, trade, energy and space.

This Action Plan was issued after a meeting between PM Modi and his Italian counterpart Giorgia Meloni on the sidelines of G20 summit in Brazil.

India-Italy bilateral relation

• Political Relation
  • Political relations between India and Italy were established in 1947.
  • In November 2020, during a Virtual Summit between PMs of India and Italy, 2020-2025 Action Plan was adopted.
  • PM Modi paid his first official visit to Italy in October 2021 to attend the G20 Summit.
  • During this visit, a Joint Statement announcing a Strategic Partnership on Energy Transition was issued.
  • In March 2023, PM of Italy, Giorgia Meloni, paid a State visit to India. She was also the Chief Guest and Keynote Speaker at the 8th Raisina Dialogue, 2023.
    • During this visit, India and Italy announced the elevation of the bilateral relationship to the level of strategic partnership.
• Economic Relation
  • In 2023, bilateral trade between India and Italy amounted to €14.34 billion. 
    • India's exports to Italy were €9.16 billion, while imports from Italy stood at €5.18 billion, resulting in a trade surplus of €3.98 billion in India’s favor.
  • Italy is India's 4th largest trading partner in EU, after Germany, Belgium and the Netherlands. 
  • Italy is the 18th largest foreign investor in India with a cumulative FDI inflow of USD 3.53 billion from January 2000 to December 2023.
    • Indian investment in Italy is estimated around USD 400 mn.
• Defence
  • India has a huge "footprint" on Italian soil because of the supreme sacrifice made by Indian Soldiers during the Second world war and for the sake of freedom in Italy. 
    • By 1945, a total of 5782 Indian soldiers died in Italy with as many as six of them receiving the VICTORIA CROSS.
  • In February 2023, Italy deployed an official from its Embassy to the Information Fusion Center – Indian Ocean Region (IFC-IOR) to strengthen maritime security and support anti-piracy efforts in the Indian Ocean Region.
  • India and Italy are also exploring joint productions in defence and aerospace sectors as well as technology transfers.
  • India and Italy also have a Joint Working Group on Counter Terrorism.
• Energy cooperation
  • In 2021, the two countries inked a Strategic Partnership on Energy Transition to advance collaboration on areas like green hydrogen and bio-fuels.
• Cooperation in Science and Technology
  • The first India-Italy Innovation Day was held virtually on 14th July 2021. Since then, both the countries are celebrating this event every year.
• Indian Community
  • The Indian community in Italy (estimated at 180,000 including PIOs) is the third largest community of Indians in Europe after UK and the Netherlands.

Key Highlights of Italy-India Joint Strategic Action Plan 2025-2029

• Political Dialogue
  • Regular meetings between Heads of Government, Foreign, Trade, and Defence Ministers.
  • Annual bilateral consultations between the two Foreign Ministries.
  • Intensify ministerial-level meetings to enhance sectoral cooperation.
• Economic Cooperation and Investments
  • Strengthen bilateral trade, investment, and joint ventures in high-potential sectors (e.g., green technologies, sustainable mobility, food processing, semiconductors).
  • Promote trade fairs, business forums, and industrial partnerships.
  • Advance collaboration in automotive, infrastructure, and advanced manufacturing.
• Connectivity
  • Collaborate on sustainable transport and climate action.
  • Enhance maritime and land infrastructure cooperation, including the India-Middle East-Europe Economic Corridor.
  • Finalize a maritime and port cooperation agreement.
• Science, Technology, IT, Innovation, and Start-ups
  • Expand partnerships in critical technologies like AI, telecom, and digital services.
  • Explore Industry 4.0, clean energy, and critical minerals initiatives involving academia and SMEs.
  • Enhance STEM research collaborations, scholarships, and joint projects.
  • Launch the Indo-Italian Innovation and Incubation Exchange Programme.
• Space Sector
  • Expand ASI-ISRO collaboration on Earth observation, heliophysics, and lunar exploration.
  • Promote peaceful outer space usage and commercial space partnerships.
  • Organize an Italian space delegation visit to India by mid-2025.
• Energy Transition
  • Organize "Tech Summits" to foster industrial partnerships.
  • Collaborate on green hydrogen, biofuels, and renewable energy solutions.
  • Support the Global Biofuels Alliance and International Solar Alliance.
• Defence Cooperation
  • Hold annual Joint Defence Consultative meetings and Joint Staff Talks.
  • Enhance interoperability and cooperation in the Indo-Pacific.
  • Develop a Defence Industrial Roadmap and MoU between SIDM and AIAD.
  • Focus on maritime cooperation and defence research.
• Security Cooperation
  • Enhance cybersecurity, counterterrorism, and capacity-building efforts.
  • Hold yearly Joint Working Group meetings on international terrorism and crime.
  • Share best practices and conclude agreements on classified information protection.
• Migration and Mobility
  • Promote safe migration channels and labour training, with a pilot project for health professionals.
  • Enhance student, researcher, and academic mobility.
  • Counter irregular migration effectively.
• Culture, Academia, Cinema, and Tourism
  • Foster exchanges between universities and technical education institutions.
  • Collaborate on exhibitions, heritage preservation, and restoration projects.
  • Promote film co-productions and enhance tourism.
  • Strengthen cultural bonds and implement the 2023 Executive Programme of Cultural Cooperation.

Q.1. What are the key areas of focus in the Italy-India Joint Strategic Action Plan 2025-2029?

The action plan emphasizes cooperation in defence, trade, renewable energy, space, and technology, alongside cultural and academic exchanges to deepen bilateral ties and drive sustainable growth.

Q.2. How does the action plan strengthen economic ties between India and Italy?

It promotes trade, joint ventures, and investments in green technologies, infrastructure, and advanced manufacturing, supported by industrial partnerships and regular trade forums.

News: Defence to space, India & Italy announce 5-year action plan | MEA | Embassy of India in Rome

What’s in today’s article?

• Why in News?
• What is Competition Commission of India (CCI)?
• What is WhatsApp’s 2021 privacy policy?
• What is WhatsApp-CCI dispute?

Why in News?

WhatsApp plans to appeal the Competition Commission of India’s (CCI) ruling imposing a $25.4 million fine for anti-competitive practices related to its 2021 privacy policy. 

The policy, requiring user data sharing with Meta-owned apps for advertising, sparked concerns over competition and privacy, with allegations that WhatsApp exploited its dominant position to enforce the terms.

What is Competition Commission of India (CCI)?

• About
  • The Competition Commission of India (CCI) is a statutory body established in March 2009 under the Competition Act, 2002.
• Objectives:
  • Eliminate practices having adverse effect on competition
  • Promote and sustain competition
  • Protect the interests of consumers
  • Ensure freedom of trade in the markets of India
• Members
  • The Commission consists of one Chairperson and six members who shall be appointed by the Central Government.
• Functions of CCI
  • The commission is a quasi-judicial body who also gives opinions to statutory authorities.
  • It is also mandated to undertake competition advocacy, create public awareness and impart training on competition issues.
  • In order to fulfil its objectives, the commission may: 
    • conduct an enquiry into certain kinds of agreements and dominant position of enterprise,
    • determine whether an agreement has AAEC (appreciable adverse effects on competition).

What is WhatsApp’s 2021 privacy policy?

• About
  • In January 2021 WhatsApp rolled out a new privacy policy and had given users time till 28 February 2021 to accept and update.
  • The 2021 update introduced significant changes, particularly in sharing user data between WhatsApp and Meta’s platforms like Facebook and Instagram.
  • It allowed the sharing of user data, including phone numbers, contacts, and transaction details, for advertising and business-related purposes.
  • WhatsApp claims the update was necessary to improve business features. It assures users that private messages remain encrypted and secure.
    • The policy primarily concerns data shared with businesses and third-party apps for targeted ads and customer service integration.
• Concerns raised
  • WhatsApp's 2021 privacy policy sparked global controversy, particularly in India, over concerns about undue control over user data and limited consumer choice, with non-compliance risking app access loss. 
  • While WhatsApp claimed the update aimed to enhance business-user communication, critics feared it would commercialize personal data. 
  • The absence of comprehensive data protection laws in India heightened the backlash, prompting legal scrutiny and the CCI investigation.
• Have other countries raised objections?
  • WhatsApp has faced global legal challenges over its 2021 privacy policy.
  • European Union: In September 2021, Ireland’s data regulator fined WhatsApp GBP 225 million for failing to meet transparency requirements under the General Data Protection Regulation (GDPR). WhatsApp has appealed the decision.

What is WhatsApp-CCI dispute?

• About
  • The WhatsApp-CCI dispute involves an investigation into WhatsApp's 2021 privacy policy, which mandated user data sharing with Meta, raising concerns about anti-competitive practices and data privacy violations.
  • CCI's probe against WhatsApp
  • The CCI initiated its probe in 2021 to assess whether the policy harmed competition by unfairly exploiting user data.
  •  The CCI has now fined Meta $25.4 million and directed WhatsApp to stop sharing user data with Meta-owned apps for advertising purposes for the next five years.
  • This investigation is crucial in India, where data protection laws are still evolving. It has also sparked broader discussions about data privacy and competition law.
• Timeline of WhatsApp-CCI dispute
  • January 2021: WhatsApp announced an update to its privacy policy, mandating users to accept terms that included sharing data with Facebook and its subsidiaries.
  • March 2021: The CCI launched a suo moto investigation into the update, citing concerns over potential abuse of dominance and anti-competitive practices.
  • April 2021: WhatsApp and Meta challenged the CCI’s jurisdiction in the Delhi High Court.
  • April 22, 2021: The Delhi High Court dismissed the petitions, allowing the CCI to proceed.
  • August 25, 2022: A division bench of the Delhi High Court upheld the single judge’s decision, reaffirming the CCI’s authority.
  • October 2022: The Supreme Court dismissed appeals by WhatsApp and Meta, permitting the investigation to continue.
  • November 18, 2024: The CCI fined Meta $25.4 million and ordered WhatsApp to stop sharing user data with other Meta-owned apps for advertising purposes for five years.
  • November 19, 2024: Meta announced its intention to appeal the CCI’s decision.

Q.1. Why did the CCI fine Meta over WhatsApp’s privacy policy?

The CCI imposed a ₹213 crore fine, citing anti-competitive practices and concerns over user data sharing between WhatsApp and Meta, which allegedly exploited WhatsApp's market dominance.

Q.2. What are the main objections to WhatsApp’s 2021 privacy policy?

Critics argue the policy forces users to share data with Meta apps for advertising, limiting choice and raising privacy concerns, especially in the absence of robust data protection laws in India.

News: Meta to appeal CCI’s ₹213 crore fine for WhatsApp privacy policy change | Ministry of Corporate Affairs | Business Standard

What’s in today’s article?

• Why in News?
• What are Equity Derivatives?
• Changes Effective from November 20, 2024
• Changes to be Effective in 2025
• Conclusion

Why in News?

• The Securities and Exchange Board of India (SEBI) has introduced six key reforms to enhance the framework for equity derivatives, commonly referred to as equity futures and options (F&O).
• While three measures take effect on November 20, 2024, the remaining will be implemented in 2025.

What are Equity Derivatives?

• Meaning:
  • Equity derivatives are financial instruments that derive their value from the price movements of an underlying asset, like a stock.
  • These instruments serve as essential tools for risk management, speculation, and portfolio optimisation, allowing traders to engage with equity markets without directly owning the underlying assets.
• Types:
  • Futures contracts:
    • Definition: Agreements obligating buyers and sellers to transact an underlying equity asset at a predetermined price and date.
    • Example: Popular contracts include BSE S&P futures and Nifty IT futures.
  • Options: Contracts giving the holder the right (not obligation) to buy (call option) or sell (put option) an asset at a specific price before or on an expiration date.
  • Swaps: Contracts where parties exchange cash flows based on the return of an underlying equity asset. Used for hedging or investment purposes.
  • Forwards: Similar to futures but non-standardised and traded over the counter (OTC), making them more flexible yet riskier.
• Difference between equity and index derivatives:

• Changes Effective from November 20, 2024:
• Recalibration of contract size for Index derivatives:
  • New rule: The minimum contract size for index futures will increase to ₹15–20 lakh from the current range of ₹5–10 lakh.
  • Objective: Ensure participants take on manageable risks while trading in derivatives.
  • Impact:
    • Retail traders, who account for 40% of F&O trades, may face challenges due to higher capital requirements.
    • Institutional players, contributing 60% of turnover, are expected to fill the liquidity gap.

Smaller investors will benefit from reduced risk exposure, minimising potential losses.

• Rationalisation of weekly Index derivatives products:
  • New rule: Each stock exchange can now offer weekly expiry derivatives for only one benchmark index.
  • Objective: Limit speculative trading, particularly around expiry days, where options premiums are low.
  • Impact:
    • Reduces opportunities for uncovered or naked options selling.
    • Helps curb speculative trading, which accounts for approximately 70% of index derivatives volume.
    • Shields retail investors from high-risk trades that historically lead to significant losses.
• Increased tail-risk coverage on expiry days:
  • New rule: An additional 2% Extreme Loss Margin (ELM) will be levied for short-options contracts on expiry days.
  • Objective: Mitigate risks associated with heightened speculative activities and sharp price movements.
  • Impact:
    • Higher margin requirements may discourage aggressive trading.
    • Expected to reduce extreme volatility, historically responsible for significant losses exceeding ₹1,000 crore in retail accounts on peak expiry days.

Changes to be Effective in 2025:

• Upfront collection of options premium (Effective Feb 1, 2025):
  • New rule: Options premium must be collected upfront by trading members or clearing members to prevent undue leverage.
  • Objective: Discourage positions beyond available collateral and ensure responsible trading practices.
• Intraday monitoring of position limits (Effective April 1, 2025):
  • New rule: Exchanges must monitor permissible position limits intraday to prevent excessive trading volumes.
  • Objective: Curb risk from undetected intraday positions exceeding regulatory limits.
• Removal of calendar spread treatment on expiry day (Effective February 1, 2025):
  • New rule: Calendar spread benefits will no longer apply to contracts expiring on expiry day.
  • Objective: Reduce basis risk and prevent price distortions caused by rollovers and speculative trading.

Conclusion:

• SEBI's revised framework for equity derivatives focuses on reducing speculative trading, protecting retail investors, and enhancing market stability.
• While higher margin requirements and rationalised contracts may temporarily affect retail participation, these measures aim to foster a more sustainable and secure trading environment in the long run.

Q.1. What are Index derivatives?

Index derivatives are financial contracts that allow investors to trade in a group of assets represented by an index without buying each individual asset. They are made up of futures and options.

Q.2. How the Securities and Exchange Board of India (SEBI) regulates the exchange-traded equity derivatives market in India?

The SEBI regulates the exchange-traded equity derivatives market by setting eligibility conditions for derivatives exchanges and clearing corporations. These conditions are designed to ensure that trading is transparent, safe, and secure, and that investors can resolve grievances.

News: Here’s what changes for retail investors from today as Sebi’s new F&O rules kick in

What’s in today’s article?

• About SMEs
• Characteristics of SMEs
• Key Statistics
• Challenges
• Government Support
• News Summary

About SMEs

• Small and medium enterprises (SMEs) in India are businesses that are categorized as small-scale industrial (SSI) or medium-scale industrial units. 
• They are a key part of the Indian economy and are classified based on their annual turnover and investment in equipment and plants.

Characteristics of SMEs

• Classification:
  • Micro Enterprises: Investment up to ₹1 crore and turnover up to ₹5 crore.
  • Small Enterprises: Investment up to ₹10 crore and turnover up to ₹50 crore.
  • Medium Enterprises: Investment up to ₹50 crore and turnover up to ₹250 crore.
• Diverse Sectors:
  • Operate across manufacturing, retail, IT, textiles, and more.
  • Significant role in rural industrialization.
• Scalability:
  • SMEs often act as ancillary units, supplying to large industries while fostering entrepreneurship.

Key Statistics

• Contribution to GDP: SMEs contribute approximately 30% to India’s GDP.
• Exports: Account for nearly 48% of India's total exports.
• Employment: Provide employment to over 110 million people across urban and rural areas.
• Number of Enterprises: Over 63 million registered SMEs operate in India.

Challenges

• Access to Finance: Limited funding options and high borrowing costs.
• Technology Adoption: Low penetration of advanced technologies.
• Regulatory Compliance: Complex procedures and frequent policy changes.
• Global Competition: Difficulty competing with large-scale industries and international players.

Government Support

• Schemes and Initiatives:
  • MSME Samadhan: Resolves payment issues.
  • Prime Minister’s Employment Generation Programme (PMEGP): Encourages entrepreneurship.
  • Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGTMSE): Offers collateral-free loans.
  • Production Linked Incentive (PLI) Scheme: Supports manufacturing SMEs.
• Digital Platforms:
  • Udyam Registration: Simplifies the registration process for SMEs.
  • TReDS (Trade Receivables Discounting System): Improves cash flow management.

News Summary

• The Securities and Exchange Board of India (SEBI) has proposed new guidelines to make Small and Medium Enterprise (SME) Initial Public Offerings (IPOs) safer for investors.
• The changes aim to enhance compliance, reduce risks, and improve transparency in the SME IPO segment, which has seen increased retail participation in recent years.
• Key Proposals:

• Minimum IPO Size: Introduction of a minimum IPO size of ₹10 crore, replacing the current scenario where no minimum is mandated.
• Hike in Application Size: Increase in the minimum IPO application size to ₹4 lakh, from the current ₹1 lakh.
• Promoter Restrictions: Limit the sale of promoter shares to 20% of the issue size during the IPO.
• Profitability Requirement: SMEs must show a minimum operating profit of ₹3 crore in two out of the three years prior to filing IPO papers.
• Disclosure and Monitoring:
  • IPO offer documents must be made public for at least 21 days before listing.
  • A compliance monitoring agency will oversee the utilization of funds raised through IPOs.
  • SMEs must disclose quarterly results and shareholding patterns, similar to larger listed companies.
• Rationale Behind the Changes:
  • These measures follow concerns over inflated valuations, fund misutilization, and investor losses in the SME segment.
  • SEBI's proposals aim to safeguard smaller retail investors and ensure the SME market remains healthy and trustworthy.

Q1. When was the Ministry of Skill Development established?

The Ministry of Skill Development and Entrepreneurship is a ministry of the Government of India which came into existence on 9 November 2014 and gazetted on 8 December 2014.

Q2. What is SEBI’s objective?

The Securities and Exchange Board of India (SEBI) was established in 1992 to protect investors' interests, regulate the securities market, and promote its development.

News: Explained | Small and Medium Enterprises (SMEs)

India has claimed the top spot as the fastest-growing economy among G20 nations, with a projected GDP growth rate of 7% for 2024. This achievement showcases India’s economic strength and adaptability despite global challenges. The rankings, unveiled during the G20 summit in Rio de Janeiro, Brazil, emphasize the growth disparity within the group and pave the way for discussions on sustainable development, global governance reforms, and strategies to address poverty, hunger, and inequality.

Indian Economy- Key Highlights

India's Economic Leadership

• 7% GDP Growth: India leads the G20 with a projected growth rate of 7% for 2024, showcasing its resilience and rapid economic progress amidst global uncertainties.

Top Growth Rankings in G20:

• India: 7% (First place)
• Indonesia: 5% (Second place)
• China: 4.8% (Third place)
• Russia: 3.6% (Fourth place)
• Brazil: 3% (Fifth place, host nation)

Performance of Other Regions and Countries:

• African Region: 3% growth.
• USA: Seventh position with 2.8% growth.
• Western Powers:
  • Canada: 1.3%, Australia: 1.2%.
  • France, EU, UK: 1.1%.
  • Italy: 0.7%, Japan: 0.3%, Germany: 0% (lowest among advanced economies).

G20 Summit 2024: Key Themes

• G20 Summit 2024: Fostering Global Collaboration in Rio de Janeiro

The highly anticipated G20 Summit is being held in Rio de Janeiro, Brazil, from November 18 to 19, 2024, bringing together leaders from all 19 G20 member nations and the European Union. The event focuses on tackling some of the most pressing global challenges, including eradicating hunger, poverty, and inequality, advancing sustainable development, and reforming global governance systems to ensure a more equitable and inclusive international order.

• India’s Active Role at the Summit
  Prime Minister Narendra Modi, representing the world’s fastest-growing economy among G20 countries, was warmly received in Brazil, underscoring India’s proactive leadership on the global stage. Modi's presence highlights India’s commitment to fostering multilateral cooperation and addressing shared global concerns.
• A Platform for Global Economic Diversity
  This year’s summit also sheds light on the economic disparities among G20 nations, emphasizing the importance of collaborative efforts to navigate challenges such as climate change, geopolitical tensions, and economic uncertainties. By prioritizing collective action, the G20 Summit aims to chart a roadmap for inclusive growth and sustainable progress across nations.

About G-20 Summit

Origins and Early Role (1999)
The G20 was established in 1999 in the aftermath of the 1997–98 Asian Financial Crisis, which deeply impacted East and Southeast Asian economies. Initially, it served as a platform for Finance Ministers and Central Bank Governors from major industrialized and developing nations to discuss global economic and financial stability. This forum provided an avenue for dialogue on macroeconomic policies and strategies to avert future financial disruptions.

Transition to Leaders’ Level (2008)
The G20’s significance grew during the 2008 Global Financial Crisis, leading to its elevation to include Heads of State or Government. This transformation enabled high-level crisis coordination, with leaders addressing pressing global economic challenges directly. The G20 played a pivotal role in stabilizing the global economy during this period of financial turmoil.

2009 Declaration as a Premier Forum
In 2009, the G20 was officially declared the "premier forum for international economic cooperation." Since then, leaders have convened annually, solidifying its role as a leading platform for global economic governance and dialogue. Discussions have extended beyond macroeconomic stability to encompass sustainable development, poverty alleviation, and global governance reforms.

G20 Membership and Global Representation

The G20 comprises 19 countries—Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, and the United States—along with the European Union. At the 2023 New Delhi Summit, the African Union was included as a member, expanding the group’s representation and reflecting its commitment to inclusive global governance. Together, G20 members represent 85% of global GDP, 75% of international trade, and two-thirds of the world’s population.

G20 2024 Summit in Rio de Janeiro

The 2024 G20 Summit, held in Rio de Janeiro, Brazil, on November 18–19, focuses on critical issues such as combating hunger, poverty, and inequality, advancing sustainable development, and reforming global governance systems. This year's discussions highlight the economic diversity within the G20 and the necessity of collaborative efforts to address shared global challenges.

India: Leading the Growth Rankings

India has emerged as the fastest-growing economy among G20 nations, with a projected GDP growth rate of 7% for 2024. This achievement underscores India’s resilience and leadership amidst global economic uncertainties. Other notable growth projections include Indonesia (5%), China (4.8%), and Brazil (3%). In contrast, advanced economies like Germany (0%), Japan (0.3%), and Italy (0.7%) lag behind, reflecting the diverse economic realities across member nations.

G20 as a Platform for Collective Progress

As a global economic powerhouse, the G20 remains at the forefront of addressing economic, social, and environmental challenges. Its evolving role underscores the importance of multilateral cooperation and inclusive policy making in ensuring a stable and sustainable global economy. The inclusion of the African Union and focus on pressing issues reaffirm its commitment to equitable growth and shared prosperity. 

India as the fastest Growing G20 Economy FAQs

Q1. What is the 7th largest economy in the world?
Ans. The 7th largest economy in the world is India.

Q2. Which country is the largest economy in G20?
Ans. The United States is the largest economy in the G20.

Q3. Is India the seventh largest economy of the world?
Ans. Yes, India is currently the seventh largest economy in the world.

Q4. Which country is the fastest growing in the G20?
Ans. India is the fastest growing economy in the G20.

Q5. What is India's rank in fastest growing economy?
Ans. India ranks first in the fastest growing economy in the G20.

Q6. Which country has the largest economy in G20?
Ans. The United States has the largest economy in the G20.