Dear Industry Leaders,
We, as you all know, are passing through difficult times and as Winston Churchill said “It is the courage to continue that counts”. We have to create opportunities and need to look at newer ways of doing business as the state and the country had been under lockdown for a major period, since I last addressed you. Continuously exploring newer methods to do business is a positive thing as COVID has taught us.
Anyway, with silver lining visible in the cloud, with COVID cases dropping and lockdown set to be eased, let’s hope and pray that happier times are coming again. But with prospects of a third wave looming large, we need to be very careful.
On the Chamber’s front, we are devising ways to work effectively during these challenging times. Our routine works are going on as usual, and rest assured, our team will always be there to assist you and your business whenever and however we possibly can. As part of our efforts to support the less fortunate in our society, the Cochin Chamber has initiated a Corpus fund for Covid and other relief, in order to pool in as much money as possible. For this, the Chamber Secretariat reached out to our members and the response we received is appreciable. I take this opportunity to thank all the companies and their leaders who contributed towards this initiative and would appeal all others to join the cause to help us raise a larger Corpus.
As you might be aware, the Chamber, committed to the wellbeing of the member organizations, their employees and their families, has taken the initiative to organise a Covid Vaccination Drive. In this connection, we are happy to inform you that we have arrived at an arrangement with Apollo Adlux Hospital, Angamaly to organise the Vaccination drive for Covishield Vaccines at the Adlux Convention Centre, Angamaly starting tentatively from the 14th of June, 2021. More details pertaining to this can be found in this edition of the Chamber Voice.
The first meeting under the CEO FORUM 2021 edition was held on the 9th of this month. As informed in the previous Chamber Voice, Mr. C. Balagopal, former MD & Founder of Terumo Penpol Ltd., was the speaker at this session. I am happy to inform you that the inaugural session of the CEO FORUM was a successful one. A detailed report on this event and pictures from the session is added in this Newsletter.
The second meeting of the CEO FORUM 2021 was on the 14th of May and was a virtual one due to the ongoing Covid related Lockdown. Prof. Dr. Arup Roy Choudhury was the guest speaker and he spoke on the topic, “Together We Stand.” Prof. Dr. Arup Roy Choudhury, scripted the turnaround of NBCC and steered NTPC for 5 years and DVC and was Chief Commissioner Right to Public Service in the West Bengal Government. He addressed the CEO Forum on why we Corporates, the public and the Government should work together to overcome this economic and humanitarian crisis and come out winners. The video recording from this session is included in this edition of the newsletter.
The views of the Chamber on issues affecting the business community are considered valuable by all and the Chamber was visible in the Print and Electronic media with its views on the recent Kerala budget.
I assure one and all that we can surmount all challenges if we stand together and I assure the support of the Chamber in all your endeavors and let us convey to all that “Together We Stand”
As you are aware we have been coordinating with Aster Medcity for the proposed Covid Vaccination Drive for the last few weeks. However, due to repeated delays we have also been looking at other possibilities to go ahead with the Vaccination Drive without further delay.
In this connection, we are happy to inform you that we have arrived at an arrangement with Apollo Adlux Hospital, Angamaly to organise the Vaccination drive at the Adlux Convention Centre, Angamaly starting tentatively from the 14th of June, 2021.
Organisations that have already indicated their willingness to participate in this initiative being organized by the Chamber are required to do the following:
Send us the complete list of your employees and or their relatives who would like to receive the vaccination giving their Name, Mobile number, Id proof number (Aadhar or other id as registered on the Cowin Portal) Age Group (18-45 or Above 45) and the Dose applying for (Refer format shared below) https://mcusercontent.com/191ef60061c4ff64e2f63d6b6/files/173a6a73-ceef-24bc-52f7-980edc1d8c54/Format_for_Vaccination_Drive.xlsx
- Please indicate whether the requirement is for the first or second dose. If the second dose is required please indicate the date of the first dose. The date of 1st Dose (if already completed) needs to be provided to verify eligibility for the 2nd Dose, to comply with the Union Health Ministry advisory that the 2nd dose should not be administered before 84 days after the 1st dose).
- Arrangements for travel to the vaccination centre will need to be made personally.
- The scheduling of the vaccinations will be done by the Adlux Apollo Hospital and the same will be informed to you by us.
- As informed earlier, the vaccine that will be administered is the Covishield Vaccine and will cost Rs. 850/- per dose.Please note that an additional Rs.150 per dose will be applicable towards the facility charges as the Vaccination Drive is being organised at the Adlux Convention Centre, Angamaly. Therefore, the total cost per person will be ₹1,000 per dose for the Member Organisations and their beneficiaries.
- It is mandatory for each individual to register themselves on the Cowin Portal (https://selfregistration.cowin.gov.in/) and provide us with the registration details. As mentioned above, the scheduling will be done jointly by the Apollo Hospital and the Chamber.
- Payment for a Single Dose per person plus the registration fee should be made in advance towards the Account Details shown below at the earliest.Please write to us if you might require a Proforma Invoice for processing the payment, so that the same can be arranged for immediately. Kindly also ensure that the payment details are shared with us.Account Name: Cochin Chamber of Commerce and Industry
Branch: Angamaly South Branch
Bank: The Federal Bank LtdPlease ensure that the payment towards the Vaccination Drive is remitted only to the above mentioned account which has been opened exclusively for the Special Project – Covid Vaccination Drive.
Please be informed that we will require a confirmation from your side along with the 100% advance latest by Friday, 11th of June, 2021.
The scheduling of the Vaccination Drive will be based on the requirements emailed to us and subject to the receipt of the advance payment towards the same on a first come, first served basis.
Please note that the respective Organisation will be liable for any ‘No shows’ as per the Vaccination Schedule, once the booking of the slots is allotted. No change whatsoever will be allowed.
Mr. Manu Varghese (9895676827) or Mr. Thomas Sebastian (9744629992) in the Chamber may be contacted for any further information regarding the Mobile Vaccination Drive.
Please send your details to firstname.lastname@example.org or reach us on 0484 2668349 (if you have not already)
We request you to limit your enquiries through emails and not calls as far as possible so as to enable our team to handle them smoothly during this time with the limited staff available in our Office.
This will enable us to coordinate a hassle-free Vaccine Drive for you.
Covid & Other Relief Fund
The Cochin Chamber has initiated an account to pool funds for Covid and other disaster-related relief works. Together with the Members of the Chamber, we hope to reach out to the needy in these times of great difficulties.
The Chamber Secretariat has sent out emails to our members, requesting to let us know if they would like to join us and the response we got was immensely appreciable.
We request you to donate a minimum of Rs 10,000 /- to the Chamber Covid and other relief Fund (details provided on the left) so that we can start in a small way.
Once we have a decent corpus, we will prioritize the causes for which the funds can be deployed so as to achieve maximum benefit. We shall keep you posted on the developments in this regard at every stage .
stay strong, stay positive and stay healthy
Chamber in News
A Quick Overview of the Indian Economy
India is becoming the fastest growing economy in the world and is predicted to become one of the top 3 Economic powers in the world over the next 10-15 years.
India’s real gross domestic product (GDP) at current prices stood at Rs. 195.86 lakh crore (US$ 2.71 trillion) in FY21, as per the second advance estimates (SAE) for 2020-21.
India is the fourth-largest unicorn base in the world with over 21 unicorns collectively valued at US$ 73.2 billion, as per the Hurun Global Unicorn List. By 2025, India is expected to have ~100 unicorns by 2025 and will create ~1.1 million direct jobs according to the Nasscom-Zinnov report ‘Indian Tech Start-up’.
India needs to increase its rate of employment growth and create 90 million non-farm jobs between 2023 and 2030’s, for productivity and economic growth according to McKinsey Global Institute. Net employment rate needs to grow by 1.5% per year from 2023 to 2030 to achieve 8-8.5% GDP growth between 2023 and 2030.
India’s foreign exchange reserves stood at US$ 582.04 billion, as of March 12, 2021, according to data from RBI.
With an improvement in the economic scenario, there have been investments across various sectors of the economy. In 2020, the total deal value in India stood at ~US$ 80 billion across 1,268 transactions. Of this, M&A activity contributed ~50% to the total transaction value. Private Equity – Venture Capital (PE-VC) sector recorded investments worth US$ 47.6 billion across 921 deals in 2020. Some of the important recent developments in Indian economy are as follows:
- India’s overall exports from April 2020 to February 2021 were estimated at US$ 439.64 billion, (a 10.14% decrease over the same period last year). Overall imports from April 2020 to February 2021 were estimated at US$ 447.44 billion (a 20.83% decrease over the same period last year).
- According to IHS Markit, Purchasing Managers’ Index (PMI) for manufacturing stood at 57.5 in February 2021.
- Gross tax revenue stood at Rs. 113,143 crore (US$ 15.58 billion) in February 2021, up from Rs. 105,361 crore (US$ 14.51 billion).
- Cumulative FDI equity inflows in India stood at US$ 749.39 billion between April 2000 and December 2020.
- India’s Index of Industrial Production (IIP) for January 2021 stood at 135.2, against 136.6 for December 2020.
- Consumer Food Price Index (CFPI) – combined inflation was 3.87% in February 2021, against 1.96% in January 2021.
- Consumer Price Index (CPI) – combined inflation was 5.03% in February 2021, against 4.06% in January 2021.
The first Union Budget of the third decade of 21st century was presented by Minister for Finance & Corporate Affairs, Ms. Nirmala Sitharaman in the Parliament on February 1, 2020. The budget aimed at energising the Indian economy through a combination of short-term, medium-term and long-term measures.
In the Union Budget 2021-22, capital expenditure for FY22 is likely to increase to increase by 34.5% at Rs. 5.5 lakh crore (US$ 75.81 billion) over FY21 (BE) to boost the economy.
Increased government expenditure is expected to attract private investments, with production-linked incentive scheme providing excellent opportunities. Consistently proactive, graded and measured policy support is anticipated to boost the Indian economy.
In March 2021, the Ministry of Electronics and IT (MeitY) invited applications for the second round of large-scale electronics manufacturing under the production-linked incentive (PLI) scheme. The window to apply for the scheme has been opened until March 31, 2021, which could be further extended in accordance with guidelines issued by the MeitY.
In March 2021, following the announcement of incentive schemes for mobile and IT hardware manufacturing, the government announced to consider a key scheme for establishing display fabrication units in India. The Ministry of Electronics and Information Technology (MeitY) has requested expressions of interest (EoIs) from organisations interested in establishing LCD/OLED/AMOLED/QLED-based display fabrication units in India.
In November 2020, the Government of India announced Rs. 2.65 lakh crore (US$ 36 billion) stimulus package to generate job opportunities and provide liquidity support to various sectors such as tourism, aviation, construction and housing. Also, India’s cabinet approved the production-linked incentives (PLI) scheme to provide ~Rs. 2 trillion (US$ 27 billion) over five years to create jobs and boost production in the country.
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, launched Make in India initiative with an aim to boost country’s manufacturing sector and increase purchasing power of an average Indian consumer, which would further drive demand and spur development, thus benefiting investors. The Government of India, under its Make in India initiative, is trying to boost the contribution made by the manufacturing sector with an aim to take it to 25% of the GDP from the current 17%. 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:
- In March 2021, Flipkart announced plans to expand its grocery services to >70 cities in the next six months. As a result of this planned expansion, customers in seven key cities and >40 neighbouring cities will be able to access high-quality grocery items, deals, fast deliveries and a seamless shopping experience.
- In February 2021, Amazon India announced to start manufacturing of electronics products in India. The company plans to commence its manufacturing efforts with its contract manufacturer, Cloud Network Technology, a subsidiary of Foxconn in Chennai, and start production in 2021.
- In March 2021, India and Kuwait decided to establish a joint ministerial commission to strengthen ties in sectors such as energy, trade, investment, manpower & labour and IT. According to a joint statement, the commission will be focused on developing the best platform to strengthen alliance in areas of energy, trade, economy, investment, human resources, manpower and labour, finance, culture, information technology, health, education, defence and security.
- In March 2021, the parliament approved a bill to increase foreign direct investments (FDIs) in the insurance sector from 49% to 74%. Union Minister for Finance and Corporate Affairs, Ms. Nirmala Sitharaman, who is piloting the Bill, stated that increasing the FDI limit in the insurance sector will support insurers in boosting additional funds and overcoming financial issues.
- In March 2021, the parliament passed the ‘National Commission for Allied, Healthcare Professions Bill, 2021’. Union Minister for Health and Family Welfare, Science and Technology and Earth Sciences, Mr. Harsh Vardhan stated that the law aims to meet the sector’s long-standing demands and increase professional employment opportunities.
- In March 2020, the Union Cabinet approved the revised cost estimate (RCE) of the comprehensive scheme for strengthening of transmission & distribution in Arunachal Pradesh and Sikkim at an estimated cost of Rs. 9,129.32 crore (US$ 1.26 billion) to support the economic growth in those by strengthening the intrastate transmission and distribution systems.
- In March 2020, the Union Cabinet approved a memorandum of understanding (MoU) signed between the Ministry of Agriculture and Farmers’ Welfare and the Ministry of Agriculture of the Republic of Fiji to strengthen bilateral ties and collaborate in the area of agricultural and allied sectors.
- India is expected to attract investment of around US$ 100 billion in developing the oil and gas infrastructure during 2019-23.
- The Government of India is going to increase public health spending to 2.5% of the GDP by 2025.
- For implementation of Agriculture Export Policy, Government approved an outlay Rs. 2.068 billion (US$ 29.59 million) for 2019, aimed at doubling farmers income by 2022.
India recorded the real GDP (gross domestic product) growth of 0.4% in the third quarter of FY21, as per the NSO’s (National Statistical Office) second advance estimates. This rise indicates V-shaped recovery progression that started in the second quarter of FY21.
As per Economic Survey 2020-21, India’s real GDP growth for FY22 is projected at 11%. The January 2021 WEO update forecast a 11.5% increase in FY22 and a 6.8% rise in FY23. According to the IMF, in the next two years, India is also expected to emerge as the fastest-growing economy.
India is focusing on renewable sources to generate energy. It is planning to achieve 40% of its energy from non-fossil sources by 2030, which is currently 30% and have plans to increase its renewable energy capacity from to 175 gigawatt (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. It is estimated to surpass USA to become the second largest economy in terms of purchasing power parity (PPP) by 2040 as per a report by PricewaterhouseCoopers.
Note: Conversion rate used for March 2021 is Rs. 1 = US$ 0.014
Source: Click Here
Recent Cabinet Decisions
April – 2021
- MoU between the India and Bangladesh on the establishment of a framework of cooperation in the area of trade remedial measures – 20 Apr 2021
- Cabinet approves Memorandum of Understanding between the Institute of Chartered Accountants of India and Chartered Accountants Australia and New Zealand – 20 Apr 2021
- Cabinet approves Mutual Recognition Agreement between the Institute of Chartered Accounts of India and theCertified Practising Accountant,Australia – 20 Apr 2021
- MoU between Competition Commission of India (CCI) and Administrative Council for Economic Defense of Brazil (CADE) – 20 Apr 2021
- Cabinet approves Bangalore Metro Rail Project Phase 2A and Phase 2B – 20 Apr 2021
- Cabinet approves Amendments to the Finance Bill, 2021 – 20 Apr 2021
- Union Cabinet approves Production Linked Incentive (PLI) Scheme for White Goods (Air Conditioners and LED Lights) – 07 Apr 2021
- MoU between India and Japan for Academic and Research Cooperation and Exchange – 07 Apr 2021
- Cabinet approves Production Linked Incentive scheme ‘National Programme on High Efficiency Solar PV Modules’ – 07 Apr 2021
May – 2021
- Cabinet approves Memorandum of Understandings (MoUs) entered into by Institute of Cost Accountants of India (ICoAl) and Institute of Company Secretaries of India (ICSI) with Foreign Countries/Organisations – 25 May 2021
- Cabinet approves Creation of one post of Director in Senior Administrative Grade (SAG), at National Disaster Response Force Academy, Nagpur – 25 May 2021
- Cabinet approves Opening of a new Consulate General of India in Addu City, Maldives – 25 May 2021
- Cabinet approves Memorandum of Understanding between Institute of Chartered Accountants of India and Qatar Financial Centre Authority – 12 May 2021
- Cabinet approves transfer of land of ITBP to Government of Uttrakhand for development of Aerial Passenger Ropeway System – 12 May 2021
- Cabinet approvesProduction Linked Incentive scheme “National Programme on Advanced Chemistry Cell Battery Storage” – 12 May 2021
- Cabinet gives ex-post facto approval to MoU between India and UK on Global Innovation Partnership – 05 May 2021
- Cabinet approves MoU between India and United Kingdom of Great Britain and Northern Ireland on Migration and Mobility Partnership – 05 May 2021
- Cabinet approves allocation of additional foodgrain to NFSA Beneficiaries under Pradhan Mantri Garib Kalyan Anna Yojana (Phase III) for another period of two months – May and June, 2021
CEO FORUM 2021 - 6th Edition - Inaugural Session
Make in Kerala: The Development and Growth of Manufacturing SMEs in Kerala - 09.04.2021
The Inaugural Session of the 6th edition of the CEO FORUM Breakfast Meeting was held on Friday the 9th of April, 2021. Mr. C. Balagopal, Former MD & Founder, Terumo Penpol Ltd, and Independent Director, Federal Bank Ltd. was the Guest Speaker at this Session. The topic for this meeting was, “Make in Kerala – The Development and Growth of Manufacturing SMEs in Kerala.”
Mr. K. Harikumar, President of the Cochin Chamber of Commerce & Industry delivered the Welcome Address and introduced Mr. C. Balagopal to the CEOs of the Forum. In his address he, welcomed all the members of the Chamber and of the CEO Forum to the next edition. He also thanked the sponsor “Club Mahindra” for their support of this edition. Mr. Harikumar also welcomed the participants to invite their CEO friends to join the Forum. He then invited the New Member of the Chamber, Altacit Global, to address the Forum.
Ms. Nayantara Sanyal, Associate Partner of Altacit Global, Cochin, a new member of the Chamber introduced the organization she represents to the meeting. Ms. Sanyal thanked the Chamber for the opportunity and made a presentation about her firm and their activities.
Mr. C. Balagopal commenced his address by thanking the Cochin Chamber and its Executive Committee Members, for inviting him to be the Guest Speaker for the Session. Mr. Balagopal said that he has known the Cochin Chamber and the role it has played in Kerala for a long time now.
In his opening remarks, he told a story about how a Team from BMW Germany, came to Kerala looking out for possibilities to start their plant here. His story emphasised the positive side of the ease of doing business in Kerala when compared to the other States in the country.
He added a few more stories in line with the dilemma we Keralites have about doing business here and said that while we feel it is difficult to do business in Kerala,probably because of our limited exposure, it is even more difficult it is to do business elsewhere in our country or outside. It is only here that businesses see Trade Union leaders come for discussions with a clear agenda and well prepared. In other states it’s a different situation all together. There the intention is to browbeat and harass the employer into submission. Mr. Balagopal also said, that his statements doesn’t mean that there are no issues in Kerala. He said that practices like Hartals and Nooku Kooli etc are problems to be tackled.
Mr. Balagopal, said that “Kerala is perceived to be a difficult place to do Business especially manufacturing and this perception is based mainly on what is seemed to be militant trade union activity and an unhelpful Government. This is perceived to have led to the untimely demise and migration of many business in Kerala.” He said that these are not wrong perceptions or based on wrong information, but like most issues, the picture is incomplete based on partial information. The image this portrays is red flags and closed industries. This perception can be changed with the right information being put out he said.
There is a structural transformation of the manufacturing sector in Kerala, which was inevitable. Inevitable because most of it was caused by exogenic factors which has nothing to do with the industry, Mr. Balagopal explained. Elaborating his point, he said that the political developments in the State led to the emergence of Trade Unions, which in turn led to the rise in wages and so and so forth. This has brought up the average wage in Kerala to between 30%-40% across the board, in comparison with the rates of the same sectors in any other States in the country.
Wages is one of those things that only keeps going up, it never comes down, and the very rare events when wages comes down are during times of distress, and no business wants to create that. Kerala has been one place which has been truly global even before the word Globalisation came into being, Mr. Balagopal added.
Concluding his address, Mr. Balagopal said on the basis of the evidence of the last 20 years and on the basis of studying 50 companies for a new book he is writing, it appears that Kerala will become a model for the rest of the country to follow and for the rest of the country to realise where they have gone wrong especially in terms of human capital. He also said that, Kerala is the best place/State to do business in India.
Following the Guest Speaker’s speech, Mr. Sabarish S. Head of Corporate Businessm Club Mahindra Holidays, the sponsor for this edition of the CEO FORUM Breakfast Meetings, made a presentation about Club Mahindra, its properties and welcomed all the delegates to their properties.
Mr. P.M. Veeramani, Vice-President of the Cochin Chamber wound up the meeting with a Vote of Thanks.
The session was attended by around 30 CEOs.
CEO FORUM 2021 - 6th Edition
Virtual Meeting: TOGETHER WE STAND - 14.05.2021
The Second meeting of the CEO FORUM 2021-22 was held virtually on the 14th of May, 2021 due to the Lockdown in place.
Prof. Dr. Arup Roy Choudhury was the Guest Speaker at this session and he spoke on the topic “We Stand Together.”
The meeting began with a Welcome Address by Mr. K. Harikumar, the President of the Cochin Chamber. Mr. Harikumar welcomed all the CEOs and gave a brief introduction of Prof. Dr. Arup Roy Choudhury.
Dr. Choudhury, in his opening statement, said that “it is during the difficult times that we get stronger.” He emphasized on the importance of the topic chosen for the session and how important it is for the Chamber Members, their families and Business as a whole to be there for each other like a large family during these testing times. Prof. Dr. Choudhury recalled how joint families work and the unity embedded in such families. He said that these are the lines and concepts we need to follow and to take inspiration from these days.
Throughout his talk, he gave several instances supporting his thoughts and ideas.
Prof. Dr. Choudhury’s brief presentation was around the 3 main points to design the thinking process for the way forward for Business; Inspiration, Ideation and Implementation.
Dr. Choudhury was kind enough to respond to several questions, the members of the CEO FORUM had raised.
Ms. Kavita Thiba, Head-Institutional Sales, Club Mahindra Holidays representing the CEO Forum Sponsor gave a quick presentation on the Corporate Membership that Business Leaders could consider once Hospitality Industry finds its revival post the pandemic.
Mr. P.M. Veeramani, the Vice-President of the Chamber wrapped up the session with a Vote of Thanks
The European Commission (‘EC’) published its “Proposal for a Regulation of the European Parliament and of The Council Laying Down Harmonised Rules on Artificial Intelligence (Artificial Intelligence Act) and Amending Certain Union Legislative Acts” (‘Draft Regulations’) on April 21, 2021. The intent is to regulate the utilization of Artificial Intelligence (‘AI’), in view of a structured growth of AI and harmonization of AI with individual needs of a citizen. The Draft Regulations took inspiration from the White Paper on AI (‘White Paper’) which was made public in February, 2020.
THE WHITE PAPER
The White Paper acknowledged the undisputed reliability of healthcare and various other sectors on the use of AI and the potential risks of such reliability which include, among others, data breaches and data collection. The White Paper essentially set out options to harmonize AI and tries to balance the risks and benefits associated with AI.
THE DRAFT REGULATIONS
The draft regulations is the first of its kind towards regulation of AI. The Policy, followed by 85 draft articles, have been published by the EC, with the aim of balancing the adversarial impacts with the irrefutable contributions of AI in Healthcare, Climate Change, Agriculture. etc.
Due to the absence of a definite description of AI, which is imperative in establishing clear categories of AI to be brought within the ambit of regulation, Article 3 of the Draft Regulations seeks to resolve the conundrum by establishing a precise definition of AI as “software that is developed with one or more of the techniques and approaches listed in Annex 1 and can, for a given set of human-defined objectives, generate outputs such as content, predictions, recommendations, or decisions influencing the environments they interact with.”
According to Annex 1 of the draft regulations, an AI comprises of “(a) Machine learning approaches, including supervised, unsupervised and reinforcement learning, using a wide variety of methods including deep learning (b) Logic and knowledge-based approaches, including knowledge representation, inductive (logic) programming, knowledge bases, inference and deductive engines, (symbolic) reasoning and expert systems (c) Statistical approaches, Bayesian estimation, search and optimization methods.”
Article 5 of the draft regulations provides for a blanket ban on certain AI practices such as use of AI which is detrimental to natural persons or exploits the vulnerabilities of a specific group based on age, mental disabilities. etc. It is pertinent to note that the draft regulations have been promulgated based on the bifurcation of AI depending on the level of risk posed i.e. low, high and unacceptable risk AI. The intent is to regulate High-Risk Ais’ i.e., AI that pose a risk to health, safety and fundamental rights, as per Article 6 read with Article 7. Certain compliance requirements and risk management systems have been proposed under Article 8 and 9 for such AIs.
Transparency obligations have been imposed on the basis of manipulations that the AI possess, for systems that interact with humans or are used to detect emotions or determine association with social categories based on biometric data or generate or manipulate content known as ‘deep fakes’ under Article 13 and 52. The obligations of the providers of High-Risk AI along with obligations of product manufacturers, importers, distributors and users or any other third party has been provided under Chapter 3 of Title III of the draft regulations.
Article 30 casts an obligation on each member state to establish a Notifying Authority who shall be vested with the responsibility for undertaking necessary procedures for monitoring and assessment under the draft regulations.
Although the draft regulations provide for stringent regulation for utilization of AI, certain measures to promote the growth of AI such as provision for a controlled environment for testing innovative AI have been provided for under Article 53, with special focus on small-scale providers and start-ups under Article 55.
The aspect of governance is provided for under Title VI of the draft regulations which establishes the European Artificial Intelligence Board to assist the European Commission along with establishing other National Competent Authorities. Title VIII provides for enforcement mechanisms to keep in check strict observance of the regulations, the contravention of which would result in imposition of penalties as provided under Title X from Articles 70 to 72.
RESPONSE TO DRAFT REGULATIONS
Upon publication, the draft regulations have garnered widespread acclamations on the ground that such regulations are a way forward for promoting dependable, transparent, and trustworthy AI for safeguarding the rights of EU citizens. The question of whether such similar regulations can be introduced in the foreseeable future in India needs to be analysed in view of the immense contribution of AI, especially in the healthcare sector given the pandemic.
WAY FORWARD: AN INDIAN PERSPECTIVE
Due to collection of large amounts of granular data, privacy concerns such as re-identification, de-anonymization, misuse of data, profiling etc. are bound to arise. India has established a draft Data Protection Bill 2019, while encouraging the growth of AI dependence. There are certain implications of the growth of AI on the proposed privacy framework.
As per Section 3(20) of the Personal Data Protection Bill, 2019 (‘PDP) ‘harm’ “includes bodily or mental injury, financial loss or loss of property, loss of employment, any discriminatory treatment among others”. Section 4 of the bill casts an obligation on data fiduciaries to process personal data in a fair and reasonable manner bearing in mind privacy concerns of the principal. Since, AI systems operate by processing the data collected such regulations apply to AI technologies as well.
The Ministry of Commerce and Industry, Government of India, had established an AI taskforce in 2017 to help identify 10 domains which are of importance to India such as Fintech and Education wherein AI plays a crucial role. Subsequently, the Ministry of Electronics and Information Technology established committees to scrutinise the legal and ethical implications of AI. In January 2020, NITI Aayog, published its framework ‘AIRAWAT’ for establishing an “AI specific cloud computing infrastructure in India”. Recently, NITI Aayog published the “Approach Document for India Part 1 – Principles for Responsible AI” in February 2021 for promoting responsible AI for all. Although there have been Government initiatives and recommendations as mentioned above, stringent regulations for keeping in check the utilization of AI in alignment with the aim of public safety is in dire need to be established.
It is pertinent to note that the lack of legal engagement has left a void in the India’s AI landscape. There is an absence of a regulatory body, ministry, or department which has been tasked with understanding the implications and opportunities arising out of AI. Therefore, regulation of AI through a full-fledged legal framework is long overdue. AI being a means to an end, as stated by Commissioner for Internal Market, Thierry Breton, needs to be regulated to make dependable AI available for an efficacious end.
*The authors are Partner and Associate respectively, with Shivadass & Shivadass (Law Chambers). The Authors would like to acknowledge the contributions of Mr. Patel Sharan Goud, a 4th Year law student from School of Law, Christ (Deemed to be University).
The contents and comments of this document do not necessarily reflect the views/position of Shivadass and Shivadass (Law Chambers) but remain solely of the author(s). For any further queries or follow up, please contact email@example.com.
 Proposal for a Regulation on a European approach for Artificial Intelligence. https://digital-strategy.ec.europa.eu/en/library/proposal-regulation-european-approach-artificial-intelligence.
 The EU Draft Regulations for AI: Curbing Potential or Preventing misuse? https://www.lexology.com/library/detail.aspx?g=dc7c2758-ab7f-4af5-873d-aab84c35189f
 WHITE PAPER On Artificial Intelligence – A European approach to excellence and trust https://ec.europa.eu/info/sites/default/files/commission-white-paper-artificial-intelligence-feb2020_en.pdf
 Europe fit for the Digital Age: Commission proposes new rules and actions for excellence and trust in Artificial Intelligence. https://ec.europa.eu/commission/presscorner/detail/en/ip_21_1682
 The Personal Data Protection Bill, 2019. http://220.127.116.11/BillsTexts/LSBillTexts/Asintroduced/373_2019_LS_Eng.pdf
 Report of Task Force on Artificial Intelligence. https://dipp.gov.in/whats-new/report-task-force-artificial-intelligence
 AIRAWAT- Establishing an AI specific cloud computing infrastructure in India- An Approach Paper. https://niti.gov.in/sites/default/files/2020-01/AIRAWAT_Approach_Paper.pdf
 Approach Document for India Part 1 – Principles for Responsible AI. https://niti.gov.in/sites/default/files/2021-02/Responsible-AI-22022021.pdf
 Europe fit for the Digital Age: Commission proposes new rules and actions for excellence and trust in Artificial Intelligence. https://ec.europa.eu/commission/presscorner/detail/en/ip_21_1682
The Supreme Court of India in its landmark judgement in Naz Foundation v. Government of N.C.T. of Delhi (‘Naz Foundation’), recognized the rights of consenting adults to freedom of life and dignity without discrimination, not limited to freedom of sexual intercourse. From a jurisprudential standpoint, a progressive approach has been adopted to examine the constitutionality of Section 377 of the Indian Penal Code, 1860 (‘IPC’). Naz Foundation had filed a Public Interest Litigation (‘PIL’) at the High Court of New Delhi, challenging the constitutional validity of Section 377 on the grounds that it violated the fundamental right to equality, dignity, and privacy of consenting individuals.
The said PIL became a topic of public debate as the PIL sought to enforce the non-existent rights of consenting adults, which according to LGTBQIA opposition, was disrupting the Indian society’s traditional core. The Naz Foundation Case was subsequently overruled by the decision rendered in Suresh Kumar Koushal v. Naz Foundation by the Supreme Court. The constitutional validity of Section 377 was determined by the Court, and it was upheld in its entirety. The Supreme Court agreed that certain sexual acts are contrary to nature’s order and the argument that the impugned law is discriminative of LGBT community was rejected by the Apex Court. The Court determined that the law did not violate substantive due process, the right to life, or the right to privacy enshrined under Article 21 of the Constitution. Furthermore, the Delhi High Court in the Naz Foundation Case was chastised by the Apex Court for relying heavily on foreign judgments.
Eventually, the Suresh Kumar Koushal case was overruled by the decision rendered in Navtej Singh Johar v. Union of India by a Constitutional bench of the Supreme Court. In so far as it criminalized consensual sexual activity between adults of the same sex, the Supreme Court of India unanimously held that Section 377 of the IPC which criminalized “carnal intercourse against the order of nature,” was unconstitutional. The Apex Court held that discrimination based on sexual orientation violated the right to equality and criminalizing consensual sex amongst adults in private violated their right to privacy basis the fact that sexual orientation is an integral part of self-identity.
An imperative feature of the decision rendered by the Delhi High Court in Naz Foundation Case, is the revolutionised interpretation of Section 377 of the IPC. The High Court relied upon unexplored jurisprudence on the right of privacy and dignity, thereby, creating uncertainty of the judgement’s legitimacy. On the contrary, the use of a constitutional approach by the Delhi High Court would have proven successful in striking down Section 377 on the grounds of arbitrariness. Instead, the Court undisputedly took a longer route and analysed the provisions of the Indian Constitution with the aid of comparative constitutional law.
The High Court not only referred to the South African Constitution but also relied on the US Supreme Court’s decision in Lawrence v. Texas wherein the criminalization of sodomy in Texas was struck down by rejecting the popular morality argument established in the case of Dudgeon v. the United Kingdom. These references give ample scope for a lengthier discussion about the use of comparative constitutional law methods in the Naz Foundation case.
THE LEGITIMACY OF CONSTITUTIONAL BORROWING IN JUDICIAL DECISION-MAKING
In the case of Lawrence v. Texas, the judge rejected foreign sources also termed as “dangerous data” which would allow judges to legitimize outcomes that would otherwise be impermissible. This view should be understood in the context of democracy, which prioritizes historical and social experiences of a particular context. Comparative constitutional law helps a country understand the nuances and approach by other countries in interpreting basic tenements of the Constitution (and protecting its citizens). This process helps builds the Constitution and increases the judicial assessment.
Another important aspect of such comparative approach is its reliance on several constitutions across the world over on an issue that is inextricable to the notions of morality. The universalism embraced by the High Court is against the notions of cultural relativism or cultural nationalism, a category of the broader notion of self-domination, which rejects all comparative materials owing to the fact that it is not a part of India’s cultural context. A related argument is that reliance on foreign sources that have come into existence pursuant to the Indian Constitution coming into force, could have had little to no influence on its drafting and should not be used as an aid to interpret its provisions. There have been several valid concerns for the legitimacy of comparative constitutional law in judicial decision-making in its entirety which can be identified through the Naz Foundation case.
DEFENDING THE COMPARATIVE METHODOLOGY IN NAZ FOUNDATION CASE
The Delhi High Court used a comparative style wherein it invited cultural relativists who have rejected comparative constitutional law by considering a number of legal systems where the law against sodomy had been abolished. The Naz Foundation case had immunized itself from cherry-picking and encouraged borrowing legal principles from other countries considering which is an immense step forward. The case had rejected the outdated assumption of comparative constitutional law and seeks to have laws implemented that are present in the countries which are ideal for borrowing.
The turning point in the Naz Foundation case is the nullification of the age-old argument that LGBT rights is a western concept and is against traditions of the societies. Taking a practical viewpoint, comparative constitutional law in judicial decision-making is convenient for legal change and is important for countries where the legislature has been inefficient to update the laws and establish international norms. In the context of Section 377, the purpose which is served by the constitutional self-critique is understandable. The development of the English laws relating to Sodomy was reiterated by the High Court along with the Wolfenden Committee Report which suggested its abolition, giving greater legitimacy to the use of international laws.
JUSTIFYING THE USE OF FOREIGN SOURCES TO INTERPRET THE INDIAN CONSTITUTION
The use of comparative constitutional law in this case, specifically through instruments of international conventions and foreign decisions, must pass the tests laid down by the Indian Constitution in order to aid as a rational tool. This has been done by making the act of untouchability and the concept of sexual orientation analogous through the contextualization of the Indian legal and social past. Since the act of untouchability stands condemned by the Constitution of India, discrimination based on sexual identity must also be denounced for the same. The social inclusiveness of the constitution framing bodies makes the courts emphasize that constitutional morality precedes public morality in the protection of Articles 14, 15, 19 and 21 of the Indian Constitution.
This judicial decision is of higher legitimacy as it has made the use of comparative constitutional law without diluting the very principles of constitutionalism in the country. The pertinent question which needs to be answered is the extent of flexibility of the Indian Constitution to change progressively. In the present case of Naz Foundation, one can observe flexibility recognized by the High Court of Delhi despite the permanence that any constitutional document is expected to have.
*The authors are Partner and Associate respectively, with Shivadass & Shivadass (Law Chambers). The Authors would like to acknowledge the contributions of Mr. Sumonto Chakravarty, a 4th Year law student from School of Law, Christ (Deemed to be University).
The contents and comments of this document do not necessarily reflect the views/position of Shivadass and Shivadass (Law Chambers) but remain solely of the author(s). For any further queries or follow up, please contact firstname.lastname@example.org.
- Naz Foundation v. Government of N.C.T. of Delhi and Others, 160 (2009) D.L.T. 277.
- Section 377 of the Indian Penal Code, 1860 – Unnatural Offences.
- Suresh Kumar Koushal v. Naz Foundation, (2014) 1 SCC 1.
- Navtej Singh Johar v. Union of India, AIR 2018 SC 4321
- This alternative has been proposed by Vikram Raghavan in his critique of the Delhi High Court’s judgment, available at http://lawandotherthings.blogspot.in/2009/07/navigating-noteworthy-and-neb- ulous-in.html. For an understanding of the Indian Judiciary’s interpretation of the constitutional right to equality and the requirement of non-arbitrariness, see M. P. Jain, Indian Constitutional Law, New Delhi, 2007, pp. 856-7.
- Lawrence v. Texas, 539 U.S. 558 (2003).
- Dudgeon v. United Kingdom, Appl. No. 7525/76, Council of Europe: European Rights, 22 October 1981, available at: http://www.unhcr.org/refworld
- Lawrence v. Texas, 539 U.S. 558 (2003).
- A. L. Parrish, Storm in a Teacup: The U.S. Supreme Court’s Law, University of Illinois Law Review 637 (2007), p. 653
- A. Watson, Comparative Law and Legal Change, The Cambridge Law Journal 37(2) (1978), pp. 313, 317.
- S. Choudhry, How To Do Comparative Constitutional Law in India: Naz Foundation, Same Sex Rights, and Dialogical Interpretation (2010), p. 14, available at http://papers.ssrn.com/sol3/pa- pers.cfm?abstract_id=l 673378.
- Pavle Nikolic has discussed the nature and role of a constitution in democratic societies. See P. Nikolic, Constitutional Review of Laws by Constitutional Courts and Democracy: Problem of Legitimacy, in: M.P. Singh (ed.), Comparative Constitutional Law, Lucknow 2011, pp. 33-37.
- C. Saunders, The Use and Misuse of Comparative Constitutional Law Indiana Journal of Global Legal Studies 13(1) (2006), pp. 37, 49.
- M. Khosla, Inclusive Constitutional Comparison: Reflections on India’s Sodomy Decision, American Journal of Comparative Law (201 1), pp. 23-4, available at http://papers.ssrn.com/sol3/papers.cfm? abstract_id= 1 690567.
- Brenda Cossman, for example, argues that Canadian jurisprudence on same-sex marriages has been imported very little by other States. See B. Cossman , Migrating Marriages and Comparative Constitutionalism, in: S. Choudhry (ed.), The Migration of Constitutional Ideas, Cambridge 2008, pp. 209, 211.
- Khosla, note 14, p. 11; C.F. W. Menski, Comparative Law in a Global Context: The Legal Systems of Asia and Africa, Cambridge 2006, p. 46
- Section 1 of the Sexual Offences Act, 1 967 decriminalised consensual sexual men in the United Kingdom. See /. Loveland, Constitutional Law, Administrative Rights – A Critical Introduction, London, 2006, p. 637
- Supra note 1, p.82
- Supra note 1, pp. 130-1
- Article 14 of the Indian Constitution – Equality before law
- Article 15 of the Indian Constitution – Prohibition of discrimination on grounds of religion, race, caste, sex or place of birth.
- Article 19 of the Indian Constitution – Protection of certain rights regarding freedom of speech, etc.
- Article 21 of the Indian Constitution – Protection of life and personal liberty.
- Supra note 1, pp. 86
- For a detailed discussion of the expansion of Article 21, see B. Errabbi, The Right to Personal in India: “Gopalan” Revisited with a Difference, in: M. P. Jain (ed.), Comparative Constitutional Law Lucknow 2011, p. 533.
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