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  • [Sansad TV] Perspective: Green Hydrogen

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    The government has unveiled the first part of the much-awaited National Hydrogen Policy.

    In this article, we shall study some broad contours of this policy – how will it benefit producers of green hydrogen, how will it boost India’s energy security and also make India the hub of green hydrogen.

    What is Green Hydrogen?

    • Green hydrogen is hydrogen gas produced through electrolysis of water.
    • It is an energy intensive process for splitting water into hydrogen and oxygen— using renewable power to achieve this.

    Key takeaways of the Green Hydrogen Policy

    • The new policy offers 25 years of free power transmission for any new renewable energy plants set up to supply power for green hydrogen production before July 2025.
    • This means that a green hydrogen producer will be able to set up a solar power plant in Rajasthan to supply renewable energy to a green hydrogen plant in Assam.
    • It would not be required to pay any inter-state transmission charges.

    Major incentives offered

    • The government is set to provide a single portal for all clearances required for setting up green hydrogen production.
    • It will facilitate producers to transfer any surplus renewable energy generated with discoms for upto 30 days and use it as required.
    • The requirement of time bound clearances for these projects would spur investment while grid connectivity on priority will ease operational processes.
    • The energy plants set up to produce green hydrogen/ammonia would be given connectivity to the grid on a priority basis.
    • State DISCOMS may also procure renewable energy to supply green hydrogen producers but will be required to do so at a concessional rate.
    • Such procurement would also count towards a state’s Renewable Purchase Obligation (RPO) under which it is required to procure a certain proportion of its requirements from renewable energy sources.

    Hydrogen Energy: A Backgrounder

    • Hydrogen is an important source of energy since it has zero carbon content and is a non-polluting source of energy in contrast to hydrocarbons that have net carbon content in the range of 75–85 per cent.
    • Hydrogen energy is expected to reduce carbon emissions that are set to jump by 1.5 billion tons in 2021.
    • It has the highest energy content by weight and lowest energy content by volume.
    • As per International Renewable Energy Agency (IRENA), Hydrogen shall make up 6 per cent of total energy consumption by 2050.
    • Hydrogen energy is currently at a nascent stage of development, but has considerable potential for aiding the process of energy transition from hydrocarbons to renewable.

    Why hydrogen?

    • Better properties: At standard temperature and pressure, hydrogen is a nontoxic, nonmetallic, odourless, tasteless, colourless, and highly combustible diatomic gas.
    • Clean fuel: Hydrogen fuel is a zero-emission fuel when burned with oxygen. It can be used in fuel cells or internal combustion engines. It is also used as a fuel for spacecraft propulsion.
    • Ample sources: Hydrogen can be sourced from natural gas, nuclear power, biomass, and renewable power like solar and wind.
    • Phasing out carbon: India remains committed to environmental and climate causes with a massive thrust on deploying renewable energy and energy efficiency measures.
    • Diversification of our energy basket: This would be the key lever enabling this transition. That’s why the emergence of hydrogen at the centre stage is a welcome development.

    How Hydrogen can be produced?

    Commercially viable Hydrogen can be produced from –

    1. Hydrocarbons including natural gas, oil and coal through processes like steam methane reforming, partial oxidation and coal gasification
    2. Renewables like water, sunlight and wind through electrolysis and photolysis and other thermo-chemical processes.

    How is green hydrogen produced?

    • For source material, green hydrogen today is typically generated from water through a process known as electrolysis, which uses an electric current to split water into its component molecules of hydrogen and oxygen. 
    • This is done using a device called an electrolyzer, which utilizes a cathode and an anode (positively and negatively charged electrodes). 
    • This process produces only oxygen – or steam – as a byproduct. 
    • As for energy supply, to qualify as “green hydrogen,” the source of electricity used for electrolysis must derive from renewable power, such as wind or solar energy.
    • Currently the production of green hydrogen is two or three times more expensive than blue hydrogen.

    How can green hydrogen be used?

    Hydrogen can be used in broadly two ways. It can be burnt to produce heat or fed into a fuel cell to make electricity.

    • Fuel-cell  Mobility: Hydrogen electric cars and trucks
    • Container ships powered by liquid ammonia made from hydrogen
    • “Green steel” refineries burning hydrogen as a heat source rather than coal
    • Hydrogen-powered electricity turbines that can generate electricity at times of peak demand to help firm the electricity grid

    Challenges in producing Green Hydrogen

    India’s transition towards a green hydrogen economy (GHE) can only happen once certain key issues are addressed.

    • Supply-Chain Issues: GHE hinges upon the creation of a supply chain, starting from the manufacture of electrolysers to the production of green hydrogen, using electricity from a renewable energy source.
    • Technology: Green hydrogen needs electrolysers to be built on a scale larger than we’ve yet seen.
    • Storage: Either very high pressures or very high temperatures are required, both with their own technical difficulties.
    • Explosion Hazard: It is hazardous because of its low ignition energy and high combustion energy.
    • Risk to use: Automotive fuels are highly inflammable, but a vehicle laden with hydrogen is likely to be more vulnerable in case of a major accident.
    • High Cost of Production: To become competitive, the price per kilogram of green hydrogen has to reduce to a benchmark of $2/kg. At these prices, green hydrogen can compete with natural gas.
    • Energy intensivity: Creating green hydrogen needs a huge amount of electricity, which means an enormous increase in the amount of wind and solar power to meet global targets.
    • Lack of proper infrastructure, only 500 Hydrogen stations exist globally. Only countable manufacturers are involved as market players in this technology.
    • Others: Low user acceptance and social awareness. Developing after-sales service for hydrogen technology.

    Policy and Economic Challenges

    • Economic sustainability: One of the biggest challenges faced by the industry for using hydrogen commercially is the economic sustainability of extracting green or blue hydrogen.
    • Technological challenges: The technology used in production and use of hydrogen like Carbon Capture and Storage (CCS) and hydrogen fuel cell technology are at nascent stage.
    • Cost Factor: These technologies are expensive which in turn increases the cost of production of hydrogen and will require a lot of investment which in turn add fiscal pressure on government.
    • Higher Maintenance costs: Maintenance costs for fuel cells post-completion of a plant can be costly.
    • Need for legal and administrative adherence: Certification mechanisms, recommendations, and regulations for different components of the system.

    Way forward

    • Hydrogen energy is at a nascent stage of development but has significant potential for realizing the energy transition in India.
    • The new policy is a futuristic vision that can help the country not only cut down its carbon emissions but also diversify its energy basket and reduce external reliance.
    • Having missed out on many technology-led innovations in the past, hydrogen presents India with the opportunity to lead the change.
    • India’s transition towards a green hydrogen economy can be a testament to the world on the achievement of energy security, without compromising the goal of sustainable development.
    • The GoI must strongly pursue the objective of creating a GHE to make India a global manufacturing hub and place itself at the top of the green hydrogen export market.

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  • Issues with corporate governance in the context of NSE scam

    Context

    Over the past 10 days, the revelations about the functioning of the National Stock Exchange (NSE) during the tenure of Chitra Ramkrishna as Managing Director and Chief Executive Officer (CEO) have raised questions about the governance.

    Managerial misconduct at NSE

    •  There was managerial misconduct at NSE.
    • An effective board of directors: That is why we need checks on management such as an effective board of directors.
    • After the board was informed about the irregularities in Mr. Subramanian’s appointment, it discussed the matter but chose to keep the discussions out of the minutes on grounds of confidentiality and the sensitivity of the matter.
    • Second, despite being aware of Ms. Ramkrishna’s transgressions, it allowed her to resign and on generous terms instead of taking action against her.
    • Third, the Public Interest Directors (PIDs) failed to keep SEBI informed about the goings-on at the NSE.

    Issues with corporate governance

    • In the corporate world, much is forgiven on grounds of performance.
    • When a performing CEO chooses to unduly favour a particular individual or individuals, boards see that as a forgivable infirmity.
    • As for dysfunctional or ineffective boards, these remain the norm despite numerous regulations, seminars and papers over the past four decades.
    • In case of the the NSE, the problem is structural.
    • Selection and absence of penalty: It has to do partly with the way board members are selected and partly with the absence of penalties where directors do not live up to their mandate.
    • Board members are selected by top management (or, in India, by the promoter who is also top management).
    • Board members have every incentive to nod their heads to whatever the management wants to be done.

    Way forward

    • 1] Diversity in the selection of board members: As long as the top management selects all board members or can influence their selection, there is little hope of any active challenge to management.
    • The top management must be allowed to choose not more than 50% of the independent directors.
    • The rest must be chosen by various other stakeholders — financial institutions, banks, small shareholders, employees, etc.
    • 2] Accountability of board members: A second thing that needs to happen is holding board members accountable for lapses.
    • Regulators act against directors where there is financial malfeasance.
    •  This must change. Regulators must penalise errant directors through a whole range of instruments — strictures, financial penalties, removal from boards and a permanent ban from board membership.
    • 3] Accountability of regulator: Regulators themselves must be held to account.
    • In the NSE affair, questions have been asked of SEBI.
    •  For instance, why did SEBI not seek the help of the cyber police to ascertain the identity of the yogi?
    • SEBI needs to explain itself.

    Conclusion

    Convulsions of outrage after particular episodes will not take us very far. We need significant institutional reform if corporate governance is not to remain an illusion.

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  • What are CRZ norms?

    The Brihanmumbai Municipal Corporation (BMC) inspected a bungalow owned by a Union Minister for alleged violation of Coastal Regulation Zone (CRZ) norms.

    What is the news?

    • The Union Minister’s bungalow named has been illicitly constructed within 50 metres of the sea in violation of the CRZ rules.
    • The crackdown assumes significance in the escalating verbal spats between the two political rivals (which were allies for years).

    What are CRZ norms?

    • In India, the CRZ Rules govern human and industrial activity close to the coastline, in order to protect the fragile ecosystems near the sea.
    • They restrict certain kinds of activities — like large constructions, setting up of new industries, storage or disposal of hazardous material, mining, reclamation and bunding — within a certain distance from the coastline.
    • After the passing of the Environment Protection Act in 1986, CRZ Rules were first framed in 1991.
    • After these were found to be restrictive, the Centre notified new Rules in 2011, which also included exemptions for the construction of the Navi Mumbai airport and for projects of the Department of Atomic Energy.
    • While the CRZ Rules are made by the Union environment ministry, implementation is to be ensured by state governments through their Coastal Zone Management Authorities.

    Where do they apply?

    • In all Rules, the regulation zone has been defined as the area up to 500 m from the high-tide line.
    • The restrictions depend on criteria such as the population of the area, the ecological sensitivity, the distance from the shore, and whether the area had been designated as a natural park or wildlife zone.
    • The latest Rules have a no-development zone of 20 m for all islands close to the mainland coast, and for all backwater islands in the mainland.

    New Rules under CRZ regulations

    • The government notified new CRZ Rules with the stated objectives of promoting sustainable development and conserving coastal environments.
    • For the so-called CRZ-III (Rural) areas, two separate categories have been stipulated.
    • In the densely populated rural areas (CRZ-IIIA) with a population density of 2,161 per sq km as per the 2011 Census, the no-development zone is now 50 m from the high-tide level, as against the 200 m stipulated earlier.
    • In the CRZ-IIIB category (rural areas with population density below 2,161 per sq km) continue to have a no-development zone extending up to 200 m from the high-tide line.
    • The new Rules have a no-development zone of 20 m for all islands close to the mainland coast, and for all backwater islands in the mainland.

     

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  • All you need to know about Satellite Internet

    The Reliance has launched a joint venture (JV) with European satellite-based broadband service company SES to enter the satellite internet space.

    What is Satellite Internet?

    • The technology beams the internet down from a satellite that’s orbiting the Earth.
    • Jio, Bharti Airtel Ltd’s OneWeb, and billionaire Elon Musk’s Starlink want to send thousands of these satellites to orbit.
    • OneWeb plans to launch 648 satellites, while Musk’s Starlink has permits to launch over 4,000 of them.
    • So far, OneWeb has launched over 400 satellites, while Starlink has launched over 2,000 satellites.
    • It’s worth noting that Starlink plans to launch 42,000 satellites in the coming decade. Jio’s journey has only just begun.

    Which satellites will Indian JV use?

    • The JV will use geostationary (GEO) and medium earth orbit (MEO) satellites, while Starlink and OneWeb use low earth orbit (LEO) satellites.
    • LEO satellites are cheaper to make and deploy, but require a satellite constellation working in sync to offer coverage on earth.
    • On the other hand, GEO and MEO satellites are larger, deployed in higher orbits, and therefore cost more.
    • These satellites cover a larger area and require fewer ground stations, which makes them ideal for targeted coverage area.
    • LEOs move faster and can hence provide global coverage.

    What are the advantages of satellite internet?

    • The reason telecom firms want to explore satellite internet is because there are areas where fibre connections just can’t reach.
    • Satellite networks are used to bring connectivity in such areas, which include hills and remote islands.
    • Consumer applications are new, but satellite networks have been used for ages in military applications.

    Are there any disadvantages?

    • The applications and the power of satellite internet are often exaggerated.
    • In reality, these networks have limitations, the biggest being high latency and low bandwidths.
    • Latency is all about internet speed, while bandwidth determines how many devices can connect on a network at the same time.
    • Experts say current satellite connections will bring 1-2 MB bandwidth, which just about qualifies as broadband under India’s broadband policy.
    • Trouble-shooting can be a problem because it needs specialized knowledge.

    Who can use satellite internet?

    • Militaries across the world have depended on satellite communications for a long time.
    • However, many military experts, too, consider this form to be unreliable and too expensive to be made the sole communication medium.
    • In remote areas, satellite internet can still allow businesses to open up local branches and provide digital services.
    • In theory, a bank could set up more ATMs in remote regions if it has access to satellite internet.

     

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  • EV Battery Swapping Policy

    NITI Aayog is holding a consultation on the upcoming electric vehicle (EV) battery swapping policy.

    What is BaaS?

    • Battery-as-a-service (BaaS) is seen as a viable charging alternative.
    • Manufacturers can sell EVs in two forms: Vehicles with fixed or removable batteries and vehicles with batteries on lease.
    • If you buy an electric scooter with battery leasing, you do not pay for the cost of the battery—that makes the initial acquisition almost 40% cheaper.
    • Users can swap drained batteries for a fully charged one at a swap station. The depleted batteries are then charged on or off-site.
    • The advantages of swapping include low downtimes for commercial fleets, reduced space requirements, and lower upfront costs.
    • It is also a viable solution for those who don’t have parking spots at home.

    What is battery interoperability?

    • That’s when a battery is compatible across vehicles and chargers, so you can seamlessly swap a battery at any swap station. This can help achieve scale.
    • However, manufacturer and service providers say there are safety concerns around the ‘one-size-fits-all’ model and caution too much standardization can kill innovation.

    Why hasn’t BaaS taken off yet?

    • There are economic and operational constraints.
    • Energy service providers offering swapping solutions have to charge 18% goods and services tax (GST) for swapping, compared to 5% GST on the purchase of an EV.
    • Additionally, the government’s FAME-II incentives are not offered to vehicles sold with BaaS or swap station operators.
    • While these are economic disadvantages compared to direct charging solutions, the lack of a dense and interoperable battery swap infrastructure has also hindered the roll-out.
    • Manufacturers, on the other hand, are keen to create proprietary battery and charging systems.

    Issues with BaaS

    • There is a need for standardization of safety specifications  as well as  the battery.
    • Swapping in the various permutations and combinations of batteries at a station  where  they  have not been tested for compatibility could lead to safety hazards.
    • Also, mandating only one type of battery to  be eligible for  concessions  would be  disadvantageous  to  many  players.

    Who offers BaaS in India?

    • Bengaluru-based startup Bounce is the first e-two-wheeler maker to sell its scooters with BaaS, and claims to have achieved a million battery swaps.
    • Others like Ola Electric and Ather have stuck to direct charging solutions, while Hero Electric offers both fixed and removable batteries.
    • Many makers are working with energy service providers to offer battery swapping.
    • The global precedent is a mixed bag: Ample, which offers swaps in the US, has found success with commercial fleets, while most personal users charge at home.

    Why is Battery Swapping needed?

    • High Cost of EVs: An EV, by industry standards, is 1.5-2x costlier than IC Engine counterpart and at least half the cost is from the battery pack.
    • Cost reduction: Many manufacturers are offering batteries separately from a vehicle, reducing the cost. In that case, a fleet owner can buy vehicles without battery and utilize battery swapping.
    • Range Anxiety: Another major reason stopping people from buying EVs is range anxiety, or in simple terms, the fear of battery getting empty without finding a charging station.
    • Inadequate charging infrastructure: Unlike petrol pumps, EV charging stations are rare to spot and that further increases the range anxiety exponentially, especially while going on a road trip.
    • Hazard management: In case of a Swapping Station, one can simply locate a station, go and replace the empty battery with a new one.

     

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  • What is Presidential Fleet Review?

    The President of India recently took part in the Indian Navy’s 12th Presidential Fleet Review.

    What is the President’s Fleet Review?

    • In simplest terms, it is the country’s President taking stock of the Navy’s capability.
    • It showcases all types of ships and capabilities the Navy has.
    • It takes place once under every President, who is the supreme commander of the armed forces.
    • The President is taken on one of the Naval ships, which is called the President’s Yacht, to look at all the ships docked on one of the Naval ports.
    • The yacht will be distinguished by the Ashoka Emblem on her side and will fly the President’s Standard on the Mast”.

    Importance of Presidential Fleet Review

    • A fleet review is usually conducted once during the tenure of the President.
    • So far, 11 Presidential Fleet Reviews have been conducted since Independence, of which two have been International Fleet Reviews, in 2001 and 2016.
    • In terms of significance, the Navy’s Presidential review is second only to the Republic Day Parade.
    • The President will be given a 21-gun salute before embarking on the yacht.

    Do all naval ships participate?

    • The idea is to showcase not all the Navy’s ships, but every type of ship — and the kind of capabilities it has at that time.
    • The review also includes merchant ships as well.

    What else happens in the fleet review?

    • In this most formal of naval ceremonials, each ship dressed in full regalia will salute the President as he passes.
    • The President will also be reviewing the Indian Naval Air Arm in a display of spectacular fly-past by several helicopters and fixed-wing aircraft.
    • In the final stage of the review, a mobile column of warships and submarines will steam past the Presidential Yacht.

    How many of these reviews have been held?

    • There have been 11 President’s Fleet Reviews since Independence.
    • The first was conducted in 1953, under Dr Rajendra Prasad.
    • The next one was done not by the President but by the then Defence Minister, Y B Chavan, in 1964.
    • Since then, it has been the President reviewing the fleet.
    • The longest gap between reviews was of 12 years — between 1989 (President R Venkatraman) and when 2001 (President K R Narayanan).
    • The last one was done in 2016, under President Pranab Mukherjee.

    Significance of the event

    • It is one of the most important events for the Navy, which is essentially showing its allegiance and commitment to defending the country.
    • It is a long-standing tradition followed by navies across the world, and according to Navy officials it is a strong bond that links seafarers of the world.
    • Historically, a Fleet Review is an assembly of ships at a pre-designated place for the purpose of displaying loyalty and allegiance to the Sovereign and the state.
    • In turn, the Sovereign, by reviewing the ships, reaffirms his faith in the fleet and its ability to defend the nation’s maritime interest.
    • It is perhaps conceived as a show of naval might. Though it still has the same connotation, assembling of warships without any belligerent intentions is now the norm in modern times.

     

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  • A case for specialists

    Context

    Given the fact that political input in economic policymaking is becoming dominant as regional and state-level issues assume overriding significance, it’s perhaps time to consider sheltering economics from politics and vice versa.

    Continuity in policy

    • The sudden withdrawal of farm laws last year and the repeal of the land acquisition ordinance in 2015 are two examples of policy backsliding in an otherwise decent record of policy continuity since 1991.
    • The overall trajectory of tariffs has been downward and average tariffs are now below 10 percent compared to over 400 percent before 1991.
    • As a favored rule, domestic policy priorities should not be held hostage to external pressures, but they can and ought to be used to push through difficult and desirable domestic reform.

    Challenges in achieving high growth

    • Challenges in reforms: Relying on chance events to drive reform might work in rare circumstances, but not when the aspiration is to become a $10 trillion economy by 2030.
    •  Realizing this target or even coming close to it will require sustained growth of over 15 percent per annum in nominal GDP — that’s no mean task.
    • The golden period of India’s growth fetched an 8.1 percent increase in real GDP between 2004 and 2009.
    • Even during this period, the growth story was cut short by the global financial crisis and devilled intermittently by institutional weaknesses.
    • Failure of institutions: The coal scam and the 2G scam are examples of the inability of institutions to keep pace with rapid growth.
    • As growth occurs, institutions also require sophistication, knowledge, and some (not complete) protection from political interference.

    Need for the fiscal council for budget-making process

    • The Monetary Policy Committee (MPC) in 2016, replaced RBI’s internal decision-making driven by the central bank governor to include three external experts to strengthen and bring transparency into monetary policy decisions. 
    • This can be extended to other important government functions, such as the budgetary process
    • Successive finance commissions and the Fiscal Responsibility and Budget Management (FRBM) Review Committee have recommended the creation of a fiscal council that, like the MPC, will bring transparency in the budget-making process.
    • The idea is simple, moderate the influence of the political agenda and powerful interest groups that could, and often do, capture the process.

    Suggestions on policymaking

    • It is art and science: Policymaking is nothing if not art that invokes science when expedient.
    • Domain experts should be an integral part of the formulation process.
    • Implementation, of course, can be left to the executive.
    • When the TRAI was first set up, it had a healthy combination of domain experts and public policy professionals, resembling a specialized regulatory agency that reflected a serious intent to strengthen capacity.
    • Importance of domain experts: Instead of going down the chosen path, TRAI has reversed gear and today resembles a government department.
    • In fact, this is the same affliction with almost all regulatory and policy institutions that are now a feature of India’s increasingly market-based economy.
    • As more sectors (for example, the Gati Shakti initiative) engage the private sector, lessons from the last quarter-century should not be wasted — domain expertise is conspicuous by its absence in regulatory and policy institutions.

    Way forward

    • Create a cadre of professionals: Commissions tend to be made up of retired civil servants or retired judges.
    • This is worrying and, therefore, it is vital to create a cadre of professionals with technical expertise for the complex tasks of managing the policy processes.
    • Distancing politics from the policy: The net needs to be cast wider so that politics and policy are distanced, not completely but certainly more than it is today.

    Consider the question “Politicians and economists have a love-hate relationship; they can’t do without each other. In context of this examine the issues with policymaking in India and why role of the domain expert is important in policymaking today?”

    Conclusion

    India should not be in a situation in which it is in perpetual hostage to vested interests of politics and business.

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  • [Burning Issue] India-UAE Relations

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    Context

    India’s approach towards FTAs is now focusing more on gaining meaningful market access and facilitating the Indian industry’s integration into global value chains. As Union Minister of Commerce and Industry Piyush Goyal has repeatedly emphasized, India would no longer be signing trade agreements just to join a group, but the new approach of FTA negotiations would respond to the need of new emerging dynamics in international trade and the Indian economy.

    What is a Free Trade Agreement (FTA)?

    It is an arrangement between two or more countries under which they agree to end tariffs and non-tariff barriers on a large value of imports from partner countries.

    Coverage: The agreement may also cover, among others, services, investment, and economic cooperation.

    • FTA normally covers trade in goods (such as agricultural or industrial products) or trade in services (such as banking, construction, trading etc.).
    • FTA can also cover other areas such as intellectual property rights (IPRs), investment, government procurement and competition policy, etc.

    Main focus: The focus of an FTA is primarily on economic benefits and encouraging trade between the countries by making it more efficient and profitable. But FTAs may also have political, or strategic benefits.

    India’s revamped FTA strategy

    • Gaining meaningful market access: India’s approach towards FTAs is now focusing more on gaining meaningful market access and facilitating Indian industry’s integration into global value chains.
    • Under the revamped FTA strategy, the Government of India has prioritised at least six countries or regions to deal with, in which the United Arab Emirates (UAE) figures at the top of the list for an early harvest deal.
    • The others are the United Kingdom, the European Union, Australia, Canada, Israel and a group of countries in the Gulf Cooperation Council (GCC).
    • The early harvest deal is to be enlarged into a comprehensive FTA in due course of time.

    Why does the FTA with UAE matter?

    • Important economic hub: The UAE has emerged as an important economic hub not just within the context of the Middle East/West Asia, but also globally.
    • Strategic location: The UAE, due to its strategic location, has emerged as an important economic centre in the world.
    • Although the UAE has diversified its economy, ‘the hydrocarbon sector remains very important followed by services and manufacturing.
    • Within services, financial services, wholesale and retail trade, and real estate and business services are the main contributors.
    • As part of the GCC, the UAE has strong economic ties with Saudi Arabia, Kuwait, Bahrain, and Oman, meaning the UAE shares a common market and a customs union with these nations.
    • Under the Greater Arab Free Trade Area (GAFTA) Agreement, the UAE has free trade access to Saudi Arabia, Kuwait, Bahrain, Qatar, Oman, Jordan, Egypt, Iraq, Lebanon, Morocco, Tunisia, Palestine, Syria, Libya, and Yemen.

    India-UAE Bilateral Relations

    • The relation has greatly flourished especially after the accession of H. H. Sheikh Zayed Bin Sultan Al Nahyan, as the ruler of Abu Dhabi in 1966, and subsequently with the creation of UAE federation in 1971.
    • The greater push has been achieved in bilateral relations when the visit of India’s Prime Minister to the UAE in August 2015 marked the beginning of a new strategic partnership between the two countries.
    • Further, during the visit of the Crown Prince of Abu Dhabi to India in January 2017 as the chief guest at India’s Republic Day celebrations, it was agreed that bilateral relations were to be upgraded to a comprehensive strategic partnership.
      • This gave momentum to launching negotiations for an India-UAE comprehensive economic partnership agreement.
    • Indian Diaspora in UAE: Around 3 million Indians are living harmoniously in the UAE.
    • UAE – A willing partner: As India seeks to enhance economic engagement and deepen security cooperation with the Gulf, it finds a willing partner in the UAE.
    • India being a natural partner: As UAE ‘Look[s] East’ to find partners for its economic growth and with security concerns emanating from turmoil in West Asia and growing threat from terrorism, it finds a natural partner in India.
    • UAE has a special place due to its business-friendly atmosphere, willingness to invest in the Indian economy and its important role in maintaining peace and stability in the region.
    • India’s West Asia policy:  The UAE occupies a key place in India’s West Asia policy. The high-level visit from both sides has given a new impetus to this partnership.
    • In 2017 the two sides signed the agreement on Comprehensive Strategic Partnership (CSP).

    Why UAE is tilting towards India?

    • Geopolitical conditions as Iran is threatening continuously to close the Strait of Hormuz in case there is a conflict with Saudi Arabia or US. This will adversely affect UAE as well.
    • Failure of Pakistan to meet expectations: UAE saw Pakistan as a partner and incorporated a deep economic and security relationship with it. But in the present day, Pakistan does not seem to be of much help to UAE.
      • Already facing internal issues, Pakistan failed to come to the aid of Saudi Arabia in its war against Iran-backed rebels in Yemen and has been unable to curb jihadists operating from its land across West Asia.
    • India is an important destination for oil and energy purchase as the US is on the way of becoming hydrocarbon independent.
    • UAE’s massive sovereign wealth funds can act as a great resource in the development of infrastructure in India.
    • Issue of Terrorism: There has been a rising convergence between India and UAE on the terror issue and both the countries talked of the need to combat terror groups without any discrimination.
      • Recently,five UAE diplomats were killed in an attack in Kandahar in Afghanistan.
    • Violent conflicts around without any resolutions: Countries like Syria, Iraq, Libya and Yemen are suffering from violent conflicts. The Gulf Cooperation Council (GCC) has not produced expected results.

    What is the Economic Significance of the UAE?

    • The UAE has emerged as an important economic hub not just within the context of the Middle East/West Asia, but alsoglobally.
      • The UAE, due to its strategic location, has emerged as an important economic centre in the world.
    • In recent years, the UAE, through its ‘Vision 2021’, has sought to diversify its economy and reduce its dependency on oil.
      • Since 2012, growth has been led, according to a World Trade Organisation document, by the non-hydrocarbon sectors reflecting the successful diversification of the economy.
    • Although the UAE has diversified its economy, the hydrocarbon sector remains very important followed by services and manufacturing.
      • Within services, financial services, wholesale and retail trade, and real estate and business services are the main contributors.

    India-UAE trade and investment ties

    • Trade and commerce forms the backbone of the bilateral relations. UAE has been one of India’s leading sources of FDIs. India and the UAE established diplomatic relations in 1972.
    • The India-UAE total trade merchandise has been valued at U.S.$52.76 billion for the first nine months of the fiscal year 2021-22, making UAE India’s third largest trade partner after China and the United States.
    • The UAE accounts for 8 percent of India’s oil imports and was fifth largest supplier of crude oil to India.
    • As India and the UAE strive to further deepen trade and investment ties, the soon-to-be-announced early harvest agreement comes at the most opportune time.
    • The aim is to boost bilateral merchandise trade to above U.S.$100 billion and services trade to U.S.$15 billion in five years.
    • Attractive export market: As we are witnessing a big turnaround in manufacturing, the UAE would be an attractive export market for Indian electronics, automobiles, and other engineering products.
    • Ninth biggest investor: The UAE’s investment in India is estimated to be around U.S.$11.67 billion, which makes it the ninth biggest investor in India.
    • On the other hand, many Indian companies have set up manufacturing units either as joint ventures or in Special Economic Zones for cement, building materials, textiles, engineering products, consumer electronics, etc.

    Advanced Technology and the Knowledge Economy

    • In 2018, in an effort to keep pace with the changing technological imperative to attain their national aspirations, India and UAE signed a MoU to generate an estimated $20 billion in the span of a decade.
    • The Emirates have stepped up efforts to invest in the development of the knowledge economy by expanding “golden visa” residency permits in order to attract the best minds to the country so as to fuel the knowledge economy.
    • These ten-year visas are granted to doctors, engineers, PhD scholars and specialists in high-end technology fields such as artificial intelligence (AI), Big Data, virology and epidemiology.

    Space Cooperation

    • Space is a new arena in which India and the UAE have collaborated through the work of the UAE Space Agency (UAESA) and the Indian Space Research Organization (ISRO).
    • Space cooperation between India and the UAE gained quick momentum during Prime Minister Modi’s visit to the Emirates in 2015.
    • Together, the two space agencies have developed the nano-satellite, Nayif-1, which was launched from the Satish Dhavan Space Centre, Sriharikota in India.
    • The two countries are likely to work together on Emirates’ ‘Red planet Mission’. 

    Security and Defence Cooperation

    • Another significant pillar of India-UAE ties is reflected in their growing cooperation in security and defense sector.
    • With the spread of radicalism in Gulf and South Asia, India looks to enhance security cooperation with UAE to counter terrorist threats and combat radicalization.
    • ‘Desert Eagle II’, a ten day air combat exercise, was held between the air forces of India and UAE.

    What is an Interim Trade Agreement (ITA)?

    • An interim or early harvest trade agreement is used to liberalise tariffs on the trade of certain goods between two countries or trading blocs before a comprehensive FTA is concluded.
    • Government’s emphasis on interim agreements may be tactical so that a deal may be achieved with minimum commitments and would allow for contentious issues to be resolved later.
    • Recently, India and Australia have announced plans to conclude an ITA in March 2022.
      • India is also looking to complete an early harvest agreement with the UAE and the UK in the first half of 2022.

    Challenges

    • The UAE tariff structure is bound with the GCC, and the applied average tariff rate is 5%. Therefore, the scope of addressing Non-Tariff Barriers (NTBs) becomes very important.
    • The reflection of NTBs can be seen through Non-Tariff Measures (NTMs) which have mostly been covered by Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT).
    • The UAE has 451 SPS notifications.
    • Most of the notifications are related to consumer information, labelling, licensing or permit requirements and import monitoring and surveillance requirements.
    • These compliances pose a challenge for Indian exporters.

    Way Forward

    (1) Needs to ensure the execution of the investment projects with the required expertise

    • Potential areas to enhance bilateral trade include defence trade, food and agricultural products as well as automobiles. Medical tourism can be an important area where India can attract Emiratis.
    • Indian companies with expertise in renewable energy sector can invest in UAE.
    • In defence sector, there is a need to further enhance cooperation through joint training programmes.

    (2) Manifold Benefits of India-UAE Trade Agreements

    • With India’s newfound strength in exports, a trade agreement with an important country such as the UAE would help sustain the growth momentum.
    • As we are witnessing a big turnaround in manufacturing, the UAE would be an attractive export market for Indian electronics, automobiles, and other engineering products.
    • As both the UAE and India are aggressively pursuing FTAs with several important countries, not only companies from these two countries but also MNCs from other geographies too would find the UAE and India an attractive market to invest in.

    (3) Improving the relations with the GCC

    • As part of the GCC, the UAE has strong economic ties with Saudi Arabia, Kuwait, Bahrain, and Oman and shares a common market and customs union with these nations.
    • Under the Greater Arab Free Trade Area (GAFTA) Agreement, the UAE has free trade access to Saudi Arabia, Kuwait, Bahrain, Qatar, Oman, Jordan, Egypt, Iraq, Lebanon, Morocco, Tunisia, Palestine, Syria, Libya, and Yemen.
    • This FTA with the UAE will pave the way for India to enter the UAE’s strategic location, and have relatively easy access to the Africa market and its various trade partners.
    • This can help India to become a part of that supply chain especially in handlooms, handicrafts, textiles and pharma.

    (4) Solving the issue of UAE’s Non-Tariff Barriers (NTBs) 

    • The UAE tariff structure is bound with the GCC (applied average tariff rate is 5%), therefore, the scope of addressing Non-Tariff Barriers (NTBs) becomes very important.
    • The reflection of NTBs can be seen through Non-Tariff Measures (NTMs) mostly covered by Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT).
    • The SPS notifications are mainly related to live poultry, meat, and processed food and the TBT notifications are related to fish, food additives, meat, rubber, electrical machinery, etc.
    • The FTA agreement must try to bring more transparency and predictability in the use of NTBs so that their compliance becomes less cumbersome.

    Conclusion

    India-UAE Relations have become a pivot of India’s Extended Neighborhood and Look West Policy in the region. Shared economic visions and geopolitical outlooks have spurred the two sides to seek to expand cooperation across multiple domains, notably in investment, technology, the knowledge economy, and defense and security. The recently signed India-UAE free trade agreement will enable two-way investment flows and help achieve ambitious export targets.

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  • Tapping technology for multilingual learning

    Context

    As the theme of International Mother Language Day 2022, it has much relevance in reshaping Indian higher education.

    India’s unique cultural and linguistic diversity

    • According to the Language Census in 2018, India is home to 19,500 languages or dialects, of which 121 languages are spoken by 10,000 or more people in our country.
    • For centuries, India has been home to hundreds of languages and thousands of dialects, making its linguistic and cultural diversity the most unique in the world. 
    • Our linguistic diversity is one of the cornerstones of our ancient civilisation.
    • Impact of globalisation: While languages are among the key bridges that ensure cultural and civilisational continuity, globalisation and Westernisation have impacted not just the growth but also the survival of many of our dialects in this rich cultural and linguistic tapestry.
    • Therefore, International Mother Language Day has special significance to the Indian context.

    Endangered languages

    • In November 1999, the UNESCO General Conference approved the declaration of February 21 as International Mother Language Day, in response to the declining state of many languages.
    • According to the UN agency, at least 43% of the estimated 6,000 languages spoken in the world are endangered.
    • UNESCO has been striving to protect the cultural and linguistic diversity of member-states through pro-active international measures.
    • It is our collective responsibility to revive and revitalise the 196 Indian languages which fall under the “endangered” category.

    Role of technology: This year’s theme

    • Globally, the role of technology came to the fore during the COVID-19 pandemic when school shutdowns forced educators and learners to adapt themselves to online education.
    • The theme of International Mother Language Day in 2022 — “Using Technology for Multilingual Learning: Challenges and Opportunities” — is one of special relevance to us.
    • The central idea is to leverage technology to support and enrich the teaching-learning experience on a multi-lingual level.
    •  It also aims at achieving a qualitative, equitable and inclusive educational experience.
    • Inevitably, the widespread use of technology would fast-track development.
    • Multilingual education predicated on the increasing use of one’s mother tongue is a key component of inclusion in education. 
    • Seen in its entirety, this is in line with Prime Minister Narendra Modi’s vision of “sabka saath, sabka vikas, sabka vishwas”.

    Direction of NEP

    • The National Education Policy (NEP) 2020 encourages the use of mother tongue as the medium of instruction till at least Class five but preferably till Class eight and beyond.
    • The use of mother tongue in teaching is bound to create a positive impact on learning outcomes, as also the development of the cognitive faculties of students.
    • There is a pressing need to create and improve scientific and technical terminology in Indian languages.
    • We have been able to create a large English-based education system which includes colleges that offer courses in medicine and multiple disciplines of engineering.
    • This impressive system paradoxically excludes a vast majority of learners in our country from accessing higher education.

    Way forward

    • The need to build an effective multilingual education system across diverse streams and disciplines becomes all the more imperative.
    • In this context, the collaboration between the AICTE and IIT Madras to translate some courses on the central government’s e-learning platform, Study Webs of Active Learning for Young Aspiring Minds (SWAYAM) into eight regional languages such as Tamil, Hindi, Telugu, Kannada, Bengali, Marathi, Malayalam and Gujarati, is commendable. Such tech-led initiatives will serve to democratise higher education.
    • At the same time, the decision of the AICTE to permit B. Tech programmes in 11 native languages, in tune with the NEP, is a historic move.
    • Our policy-planners, educators, parents and opinion leaders must bear in mind that when it comes to education in mother tongue and local languages, we can take the cue from European countries as well as Asian powers such as Japan, China and Korea, among others.

    Conclusion

    Co-existing over centuries, borrowing from and nurturing each other, our languages are interwoven with our individual, local and national identity.

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  • What is Permanent Indus Commission?

    A 10-member Indian delegation will visit Pakistan for the annual meeting of the Permanent Indus Commission (PIC) from March 1-3.

    Agenda this year

    • Pakistan has some objections on Indian hydroelectric projects namely Pakal Dul (1,000 MW), Lower Kalnai (48 MW) and Kiru (624 MW) in Chenab basin in Jammu and Kashmir.
    • Pakistan has raised objections on the design of these projects.
    • India, however, asserts that the design of the project is fully compliant with the provisions of the Indus Waters Treaty (IWT).

    Permanent Indus Commission

    • The PIC is a bilateral commission consisting of officials from India and Pakistan, created to implement and manage the goals and objectives, and outlines of the IWT.

    Indus Waters Treaty, 1960

    • The Indus Waters Treaty is a water-distribution treaty between India and Pakistan, brokered by the World Bank signed in Karachi in 1960.
    • According to this agreement, control over the water flowing in three “eastern” rivers of India — the Beas, the Ravi and the Sutlej was given to India
    • The control over the water flowing in three “western” rivers of India — the Indus, the Chenab and the Jhelum was given to Pakistan.

    Rights accorded to India

    • The treaty allowed India to use western rivers water for limited irrigation use and unrestricted use for power generation, domestic industrial and non-consumptive uses such as navigation, floating of property, fish culture, etc.
    • It lays down precise regulations to build any water or hydel projects.
    • India has been given the right to generate hydroelectricity through run-of-the-river projects on the western rivers subject to specific criteria for design and operation.
    • The pact also gives the right to Pakistan to raise objections to designs of Indian hydroelectric projects on the western rivers.

    Based on equitable water-sharing

    • Back in time, partitioning the Indus rivers system was inevitable after the Partition of India in 1947.
    • The sharing formula devised after prolonged negotiations sliced the Indus system into two halves.
    • Equitable it may have seemed, but the fact remained that India conceded 80.52 percent of the aggregate water flows in the Indus system to Pakistan.
    • It also gave Rs 83 crore in pounds sterling to Pakistan to help build replacement canals from the western rivers. Such generosity is unusual of an upper riparian.
    • India conceded its upper riparian position on the western rivers for the complete rights on the eastern rivers.
    • Water was critical for India’s development plans.

    Significance of the treaty

    • It is a treaty that is often cited as an example of the possibilities of peaceful coexistence that exist despite the troubled relationship.
    • Well-wishers of the treaty often dub it “uninterrupted and uninterruptible”.
    • The World Bank, which, as the third party, played a pivotal role in crafting the IWT, continues to take particular pride that the treaty functions.

    Need for a rethink

    • The role of India, as a responsible upper riparian abiding by the provisions of the treaty, has been remarkable.
    • However, of late, India is under pressure to rethink the extent to which it can remain committed to the provisions, as its overall political relations with Pakistan becomes intractable.

     

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