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Overview of the India-UK Joint Tech Security Initiative

India and the UK have been deepening their technological and security ties through various initiatives and agreements. One of the key developments in this partnership is the India-UK Joint Tech Security Initiative, which focuses on enhancing collaboration in areas like cybersecurity, artificial intelligence (AI),telecommunications, and critical technologies. Building upon the bilateral cooperation agenda set out in the India-UK Roadmap 2030, which seeks to bolster cooperation across various sectors, including trade, climate change, antidefense, the UK and India launched the Joint Tech Security Initiative (TSI) on July 24, 2024. This initiative will priorities collaboration in critical and emerging technologies across priority sectors. Coordinating with the national security agencies of both countries, the TSI will set priority areas and identify interdependencies for cooperation on critical and emerging technologies. This, in turn, will help build meaningful technology value chain partnerships between India & the UK.

The TSI will be coordinated by the National Security Advisors (NSAs) of both countries through existing and new dialogues. The NSAswill set priority areas and identify interdependencies for cooperation on critical and emerging tech, helping build meaningful technology value chain partnerships between the two countries. Progress made on the initiative will be reviewed on a half-yearly basis at the Deputy NSA level. A bilateral mechanism will be established led by India's Ministry of External Affairs and the UK government for promotion of trade in critical and emerging technologies, including resolution of relevant licensing or regulatory issues. Both countries view this TSI as a platform and a strong signal of intent to build and grow sustainable and tangible partnerships across priority tech sectors. They will explore how to build a deeper strategic partnership between UK and Indian research and technology centres and Incubators, enhance cooperation across UK and India tech and innovation ecosystems, and create a channel for industry and academia to help shape the TSI.

The UK and India are launching new bilateral initiatives to expand and deepen their technology security partnership. These initiatives will focus on various domains, including telecoms, critical minerals, semiconductors, and energy security.

In telecoms, the UK and India will build a new Future Telecoms Partnership, focusing on joint research on future telecoms, open RAN systems, testbed linkups, telecoms security, spectrum innovation, software and systems architecture. This will include collaboration between UK's SONIC Labs, India's Centre for Development of Telematics (C-DOT), and Dot's Telecoms Startup Mission.

In critical minerals, the UK and India will expand their collaboration on critical minerals, working together to improve supply chain resilience, explore possible research and development and technology partnerships along the complete critical minerals value chain, and share best practices on ESG standards. They will establish a roadmap for cooperation and establish a UK-India ‘critical minerals’ community of academics, innovators, and industry.

Key Areas of Collaboration:

• Strengthening cybersecurity defense and enhancing resilience through joint cybersecurity exercises and information-sharing and developing common standards and best practices while collaborating with their respective organisations, ie, CERT-In and NCSC.
• Promotion of ethical AI development and deployment with AI ethics guidelines and frameworks, and efforts encouraging academic collaborations. Support for new partnerships between UK and Indian research organizations alongside existing joint programmes using AI to tackle global challenges.
• Building secure and resilient telecom infrastructure with a focus on security and exchange of expertise and regulatory cooperation. Collaboration on Open Radio Access Networks tech to name as an example.
• Critical and emerging technologies development by advancing research and innovation in the quantum, semiconductors and biotechnology niches. Promoting and investing in tech startups and innovation ecosystems. Engaging in policy dialogues on tech governance and standards.
• Digital economy and trade facilitation to promote economic growth by enhancing frameworks and agreements for it. Collaborating on digital payment systems and fintech solutions and most importantly promoting data protection and privacy standards.

Outlook and Impact on the Industry

The initiative sets out a new approach for how the UK and India work together on the defining technologies of this decade. These include areas such as telecoms, critical minerals, AI, quantum, health/biotechnology, advanced materials and semiconductors. While the initiative looks promising, several challenges need to be addressed such as the need to put robust regulatory frameworks in place, and develop a balanced approach for data privacy and information exchange in the cross-border data flows. It is imperative to install mechanisms that ensure that intellectual property is protected while the facilitation of technology transfer is not hampered. Above all, geopolitical risks need to be navigated in a manner that the tensions are reduced and a stable partnership grows. The Initiative builds on a series of partnerships between India and the UK, as well as between industry and academia.  Abilateral mechanism, led by India’s Ministry of External Affairs and the UK government, will promote trade in critical and emerging technologies, including the resolution of relevant licensing or regulatory issues.

Conclusion

This initiative, at its core, will drive forward a bilateral partnership that is framed on boosting economic growth and deepening cooperation across key issues including trade, technology, education, culture and climate.  By combining their strengths, the UK and India are poised to create a robust framework for technological innovation and security that could serve as a model for international cooperation in tech.

References

• https://www.hindustantimes.com/india-news/india-uk-launch-joint-tech-security-initiative-101721876539784.html
• https://www.gov.uk/government/publications/uk-india-technology-security-initiative-factsheet/uk-india-technology-security-initiative-factsheet
• https://www.business-standard.com/economy/news/india-uk-unveil-futuristic-technology-security-initiative-to-seal-fta-soon-124072500014_1.htm
• https://bharatshakti.in/india-uk-technology-security-initiative/

Introduction 

Governments worldwide are enacting cybersecurity laws to enhance resilience and secure cyberspace against growing threats like data breaches, cyber espionage,  and state-sponsored attacks in the digital landscape. As a response, the EU Council has been working on adopting new laws and regulations under its EU Cybersecurity Package- a framework to enhance cybersecurity capacities across the EU to protect critical infrastructure, businesses, and citizens. Recently, the Cyber Solidarity Act was adopted by the Council, which aims to improve coordination among EU member states for increased cyber resilience. Since regulations in the EU play a significant role in shaping the global regulatory environment, it is important to keep an eye on such developments.

Overview of the Cyber Solidarity Act 

The Act sets up a European Cyber Security Alert System consisting of Cross-Border Cyber Hubs across Europe to collect intelligence and act on cyber threats by leveraging emerging technology such as Artificial Intelligence (AI) and advanced data analytics to share warnings on cyber threats with other cyber data centres across the national borders of the EU. This is expected to assist authorities in responding to cyber threats and incidents more quickly and effectively. 

Further, it provides for the creation of a new Cybersecurity Emergency Mechanism to enhance incident response systems in the EU.  This will include testing the vulnerabilities in critical sectors like transport, energy, healthcare, finance, etc., and creating a reserve of private parties to provide mutual technical assistance for incident response requests from EU member-states or associated third countries of the Digital Europe Programme in case of a large-scale incident.  

Finally, it also provides for the establishment of a European Cybersecurity Incident Review Mechanism to monitor the impact of the measures under this law. 

Key Themes

1. Greater Integration: The success of this Act depends on the quality of cooperation and interoperability between various governmental stakeholders across defence, diplomacy, etc. with regard to data formats, taxonomy, data handling and data analytics tools. For example, Cross-Border Cyber Hubs are mandated to take the interoperability guidelines set by the European Union Agency for Cybersecurity (ENISA) as a starting point for information-sharing principles with each other.  
2. Public-Private Collaboration: The Act provides a framework to govern relationships between stakeholders such as the public sector, the private sector, academia, civil society and the media, identifying that public-private collaboration is crucial for strengthing EUs cyber resilience. In this regard, National Cyber Hubs are proposed to carry out the strengthening of information sharing between public and private entities.  
3. Centralized Regulation: The Act aims to strengthen all of the EU's cyber solidarity by outlining dedicated infrastructure for improved coordination and intelligence-sharing regarding cyber events among member states. Equal matching contribution for procuring the tools, infrastructure and services is to be made by each selected member state and the European Cybersecurity Competence Centre, a body tasked with funding cybersecurity projects in the EU. 
4. Setting a Global Standard: The underlying rationale behind strengthening cybersecurity in the EU is not just to protect EU citizens from cyber-threats to their fundamental rights but also to drive norms for world-class standards for cybersecurity for essential and critical services, an initiative several countries rely on.

Conclusion

In the current digital landscape, governments, businesses, critical sectors and people are increasingly interconnected through information and network connection systems and are using emerging technologies like AI, exposing them to multidimensional vulnerabilities in cyberspace. The EU in this regard continues to be a leader in setting standards for the safety of participants in the digital arena through regulations regarding cybersecurity. The Cyber Solidarity Act’s design including cross-border cooperation, public-private collaboration, and proactive incident-monitoring and response sets a precedent for a unified approach to cybersecurity. As the EU’s Cybersecurity Package continues to evolve, it will play a crucial role in ensuring a secure and resilient digital future for all. 

Sources

• https://www.consilium.europa.eu/en/press/press-releases/2024/12/02/cybersecurity-package-council-adopts-new-laws-to-strengthen-cybersecurity-capacities-in-the-eu/ 
• https://data.consilium.europa.eu/doc/document/PE-94-2024-INIT/en/pdf 
• https://digital-strategy.ec.europa.eu/en/policies/cybersecurity-strategy 
• https://www.weforum.org/stories/2024/10/cybersecurity-regulation-changes-nis2-eu-2024/

Introduction

In a groundbreaking move, India's Reserve Bank has embarked on a transformative journey with its Central Bank Digital Currency (CBDC) project. As the world grapples with the evolving landscape of digital finance, the implications of India's CBDC initiative extend beyond its borders, potentially reshaping global payment systems. The Union Minister of State for Finance, Shri Pankaj Chaudhary, revealed that on October 7, 2022, the Reserve Bank of India released a proposal note on Central Bank Digital Currency (CBDC). Two pilot projects using blockchain-based technology are described in the concept note: Digital Rupee-Wholesale (e₹-W) and Digital Rupee-Retail (e₹-R). Launched on November 1, 2022, the bulk trading pilot aims to increase intermediary competitiveness, particularly in the resolution of trades in the secondary market involving sovereign debt. In parallel, on December 1, 2022, the retail banking pilot, known as e₹-R, got underway in a limited user group with eight banks taking part in stages.

The digital asset known as e₳-R is issued across financial institutions for Person-to-Person (P2P) and Person-to-Merchant (P2M) transactions. It is intended to serve as a virtual currency that represents legal money and exhibits characteristics similar to actual cash. Based on input gathered during the continuing trial phases, the RBI intends to progressively broaden the pilot project's scope.

Central Bank Digital Currency Pilot Projects

Central Bank Digital Currency (CBDC), which the Central Bank of India is promoting, may easily perform an essential part in payments made across borders, according to Reserve Bank Governor Shaktikanta Das. The CBDC is going to be expanded to the international financial markets after being implemented as a trial in both the retail and wholesale industries.

CBDC in International Payments

He emphasized that although physical currency will still exist, the CBDC will eventually replace all forms of money worldwide.  

"CBDC is going to be the future currency of the world and it is necessary that every central bank, every country works on CBDC," he stated. He also stated that as worldwide commerce moves more and more around science and technology, CBDCs will play a significant role since they can effectively and affordably speed up payment processing across different countries. Regarding India's foreign exchange reserves, the governor stated that the selection to increase the resources as a safety net and protection versus contagion possibilities was made consciously.

CBDCs' Place in the Transnational Economic Revolution

In certain economies worldwide, having a CBDC internationally accessible could lead to more replacements for foreign currencies rather than the home currencies, which could cause financial aggregates to become volatile and change the mix of instruments of exchange.

CBDC may have benefits related to first-mover savings of scale, and other consequences even in everyday circumstances. If nations with global currencies have established CBDCs, they could strengthen current advantages and disadvantages, including consequences, particularly in terms of revenue. In a similar vein, CBDC might alter the structure of international liquidity while safeguarding asset supply. Additionally, and particularly if imposed abruptly, CBDC may, in certain circumstances, result in significant capital movements and associated repercussions on the foreign exchange rate as well as additional asset prices. Furthermore, nations may encounter difficulties in getting ready for virtual currencies issued by central banks.

The worldwide and international scope of CBDCs accessible to immigrants may become particularly apparent in situations where there is a widespread flight safety concern. In these circumstances, converting a CBDC into a foreign currency would make it possible for capital markets to deleverage more quickly. The elimination of debt challenges could show up as tight finance constraints and abrupt swings in foreign exchange markets if CBDCS expedited its flight from uncertainty.

Deposits of Foreign Exchange and Self-Dependency

Reserve Bank Governor Shaktikanta Das stated "We must rely on ourselves. We must maintain our robust reserves. In order to achieve that goal, we have been amassing quite substantial reserves, and the outside world has come to feel quite confident that India would be able to fulfil its contractual responsibilities to the international community no matter what the obstacles," 

Involvement of RBI in the Currency Market

Given that the trading community was confident that the Reserve Bank of India would be capable of and able to fulfil its contractual responsibilities, the value of the Indian rupee did not decline as dramatically. The RBI governor stated that the RBI does participate in the economy, but that "our engagement operates in two ways," he would not hesitate to acknowledge this.

The Value of Macroeconomic and Budgetary Cooperation

According to RBI Governor Das, the RBI makes purchases and sales of dollars based on the direction in which the financial sector is trending. However, the RBI does not intend to set a certain level for the rupee because it does not consider any specific threshold for the Indian rupee's conversion rate against the US dollar. He also emphasized how crucial it is for both the financial and monetary authorities to work together.

Conclusion

India's CBDC project signals a transformative shift in the global digital finance landscape. Governor Shaktikanta Das envisions CBDCs as the future global currency, emphasizing their role in international payments. The potential impact on financial systems, cross-border transactions, and the need for self-reliance underscore the significance of India's CBDC initiative in shaping the evolving dynamics of the digital economy. As the project progresses, close cooperation between financial and monetary authorities becomes imperative for navigating the challenges and opportunities associated with this groundbreaking venture.

References

• https://economictimes.indiatimes.com/news/economy/policy/central-bank-digital-currency-can-play-important-role-in-cross-border-payment-rbi-guv/articleshow/104706717.cms
• https://www.bis.org/cpmi/publ/d174.pdf
• https://bfsi.economictimes.indiatimes.com/news/fintech/explained-how-rbi-is-leveraging-upi-to-push-the-use-of-retail-cbdc/103591989
• https://www.imf.org/en/News/Articles/2022/02/09/sp020922-the-future-of-money-gearing-up-for-central-bank-digital-currency
• https://www.business-standard.com/economy/news/cbdc-pilot-projects-show-promising-results-rbi-governor-shaktikanta-das-123102601171_1.html