News Wrap


Since 2005, transnational surrogacy was a thriving business in India. The total assisted re-production sector in India is reportedly worth between £305 million and £1.6 billion. While legal in India since 2002, the industry has never been regulated. In 2015, the Indian government effectively banned paid surrogacy for foreigners. The government filed an affidavit in the Supreme Court, arguing that commercial surrogacy on the part of foreigners invited the exploitation of poor women. The Indian Council of Medical Research, a government regulatory body, has ordered fertility doctors not to accept new foreign surrogacy clients. The Indian Home Ministry followed up by denying visas to foreigners seeking surrogacy. Now international surrogacy has become illegal and virtually impossible in India. The ban was inspired by concern for poor women, and also by the unappealing image foreign surrogacy gave India. In 2011, surrogate mothers were paid at most Rs 2.75 lac (£2835). Overseas clients came from countries where commercial surrogacy is illegal—as in Australia and most of Europe—or expensive. In USA, states where commercial surrogacy is legal, the process costs between $75,000 and $120,000 in 2015, which is roughly three to four times, what it cost in India. Foreign parents tended to have very little contact with the women they hired to bear their children.

Credit ratings
Due to India’s ‘‘high risk’’ credit rating, foreign banks have stopped opening branches in India, as they need to set aside a lot more capital, and they feel it is ‘‘not worth’’ doing so. Greater demand on banks to hold capital in the post financial crisis scenario has come at a cost. India’s credit rating is BAA, which implies higher risk. The lowest investment grade rating with a high risk profile has been assigned to India, by various global agencies. Proposals to do away with banks cause serious costs on the system. Retail inflation has risen in India to 5.39% (April 2016) from 4.83% (March 2016). But industrial output has fallen flat, growing at only 0.1% (March 2016). The annual food inflation rose sharply to 6.32% from 5.21%. The annual retail inflation in the rural economy was relatively higher at 6.09%, against 4.68% in the urban areas.

Eat and possess beef
On 06 May 2016, the Bombay High Court allowed people to consume beef imported from other states, even as it upheld the Maharashtra government’s ban on slaughter of beef in the state of Maharashtra. The court observed that a ban on imported beef would be ‘‘an infringement of right of privacy, which is a fundamental right’’. The court observed that the objective of the ban was to protect the cow and its progeny. The ban on beef was not to prevent citizens from eating beef that may be brought from a state or a country where there is no prohibition on cow slaughter. Citizens of India are protected from unnecessary state intrusion into their homes, under Article 21 of the constitution. The court struck down a provision in the Maharashtra Animal Preservation (Amendment) Act, 1976, which put the burden on a person found to be in possession of beef, to prove his innocence, as that too infringes on the fundamental rights of a person. The state economy being predominantly agricultural, the court appreciated the state government’s contention that the cow progeny excreta is recognised as a source of rich organic manure, which enables farmers to avoid the use of chemicals, as well as inorganic manure.

Sanctions and financial ties
Russia is exploring deeper financial ties with China, owing to western sanctions. As part of measures aimed at reducing reliance on the west, Russia has signed a deal that would link China’s national electronic payment network into its own credit card system. Chinese and Russian financial markets are being integrated. Russia is in talks to issue sovereign debt in renminbi. The agreement with Unionpay, which is usable in 141 countries, according to its website, would ease the way for international acceptance of the ‘‘Mir’’ credit card, that Russia has issued recently. Russia has struggled to find western banks willing to underwrite a planned $3 billion Eurobond, after the USA warned them off the deal. US and EU sanctions over the Ukraine conflict, largely cut off Russia from western markets. Visa and Master Card continue to operate in Russia. But they are banned by the US, from doing business with two Russian banks, accused by the US of close links to the Kremlin. Many of Russia’s largest banks and corporations are unable to raise finance in dollars. Russia’s economy has been hurt by historically low oil prices, and led to an increase in financial needs. China is easing international access to its onshore bond market, estimated at $6 trillion, the third largest in the world. Over the past year, several western banks and corporates, including HSBC and Daimler, as well as South Korea, have issued so-called ‘panda bonds’’. Russia and China are promoting the integration of financial infrastructure. The dual taxation treaty between the two countries, unlocks cross-border investment by lifting taxation on capital gains and coupons.

Vol. 49, No.2, Jul 17 - 23, 2016