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  • [pib] Cabinet approves One Nation One Subscription (ONOS) Scheme

    Why in the News?

    The Union Cabinet has approved the “One Nation One Subscription (ONOS) scheme” aims to provide nationwide access to scholarly research articles and journals.

    One Nation One Subscription (ONOS): Everything you need to know

    About • Fully digital and user-friendly Central Sector Scheme approved by the Union Cabinet.
    Aims and Objectives • Provide unified access to scholarly journals and research articles for government HEIs and R&D labs.
    • Support research through the Anusandhan National Research Foundation (ANRF) and other government initiatives, particularly in tier 2 and tier 3 cities.
    • Centralize subscriptions to reduce the financial burden on individual institutions.
    • Align with Viksit Bharat@2047, National Education Policy (NEP) 2020, and National Research Foundation (NRF).
    Structural Mandate • Information and Library Network (INFLIBNET), an autonomous inter-university center under UGC, will coordinate ONOS and ensure seamless access to research materials.
    • 6,300 institutions under central and state government management, including universities, colleges, and R&D labs.
    • A dedicated digital portal for easy access, designed for wide accessibility.
    Provisions and Eligibility Criteria • All government-run HEIs and R&D institutions are eligible.
    • 13,000 journals from 30 international publishers are available free of cost.
    • ₹6,000 crore allocated for 2025-2027; payments to publishers made centrally by INFLIBNET.

     

    PYQ:

    [2013] To obtain full benefits of demographic dividend, what should India do?

    (a) Promoting skill development

    (b) Introducing more social security schemes

    (c) Reducing infant mortality rate

    (d) Privatization of higher education

  • How should India tackle diabetes load?

    Why in the News?

    On International Diabetes Day (November 14), the Lancet shared a global study showing over 800 million adults have diabetes, and more than half aren’t receiving proper treatment.

    What is the controversy over the numbers and the difference in Testing Methodology?

    • The Lancet study reported that diabetes was significantly higher in number than the Indian Council of Medical Research (ICMR) estimates (just over 100 million). This stark contrast raises questions about the accuracy and methodology used in both studies.
    • The primary reason for the discrepancy lies in the methodologies used to measure blood sugar levels:
      • The Lancet study utilized various methods including fasting glucose and HbA1C (a three-month glycated hemoglobin average) from data across 200 countries.
      • The ICMR study relied on fasting and two-hour post-prandial blood sugar tests using an Oral Glucose Tolerance Test (OGTT), which is considered the gold standard in India.
    • Experts argue that using HbA1C can lead to inflated numbers due to its sensitivity to factors like age and anemia.
      • For instance, a person without diabetes might still show elevated HbA1C levels based on their physiological characteristics, which can skew prevalence estimates.

    What are the issues raised in the Lancet study?

    • Global Inequalities in Treatment: The study highlighted significant disparities in diabetes treatment access, particularly in low- and middle-income countries where treatment rates are stagnating despite rising diabetes cases. This raises concerns about long-term health complications for untreated individuals.
    • Rising Rates of Diabetes: The findings underscore that diabetes rates have increased dramatically, especially Type 2 diabetes, which poses a growing public health challenge. This trend is alarming given that many affected individuals are younger and at risk for severe complications.
    • Complications and Healthcare Burden: With a large number of individuals requiring treatment, there is a looming healthcare crisis regarding complications such as kidney failure, heart disease, and vision loss, which could overwhelm healthcare systems.

    What steps need to be taken? (Way forward)

    • Enhanced Awareness and Education: There is a pressing need for widespread education on diabetes prevention through nutrition and physical activity. Public health campaigns should focus on promoting healthy lifestyles to mitigate risk factors associated with diabetes.
    • Policy Changes: Governments must implement policies that restrict unhealthy food options while making healthy foods more affordable. This includes subsidies for nutritious foods and initiatives to create safe spaces for physical activity.
    • Targeted Interventions for Vulnerable Populations: Special attention should be directed towards vulnerable groups, particularly women who may be at higher risk post-pregnancy or during menopause. Tailored interventions can help address specific risk factors prevalent in these populations.
    • Investment in Healthcare Infrastructure: To effectively manage the rising burden of diabetes, there must be significant investment in healthcare infrastructure, especially in low- and middle-income countries where resources are limited.
    • Long-Term Strategic Planning: A comprehensive long-term strategy is essential to combat the growing diabetes epidemic, requiring collaboration between governments, healthcare providers, and communities to ensure sustainable health outcomes.

    Mains PYQ:

    Q Appropriate local community-level healthcare intervention is a prerequisite to achieve ‘Health for All’ in India. Explain. (UPSC IAS/2018)

  • Crimes against humanity

    Why in the News?

    UNGA committee approved a resolution to initiate negotiations for the first-ever treaty to prevent and punish crimes against humanity after Russia withdrew potentially obstructive amendments.

    What are the present laws governing the conflict?

    • The 1949 Geneva Conventions provide the foundational legal framework for humanitarian protection during armed conflicts. These treaties outline the responsibilities of states to protect civilians and ensure humane treatment for non-combatants.
    • While the International Criminal Court (ICC) addresses war crimes and genocide, there is currently no specific treaty that comprehensively covers crimes against humanity. The ICC recognizes crimes against humanity as acts committed as part of a widespread or systematic attack against civilians, which include offenses such as murder, torture, and sexual violence.
      • The ICC operates as a court of last resort, intervening only when national courts are unable or unwilling to prosecute these crimes

    Why there is a need for a treaty dealing with the Crimes Against Humanity Treaty?

    • Legal Gaps: Existing international treaties cover war crimes and genocide but do not specifically address crimes against humanity. This lack creates a legal void that allows perpetrators to evade accountability for serious offenses committed against civilian populations.
    • Increasing Incidence of Crimes: There has been a notable rise in crimes against humanity globally, with reports of such offenses in countries like Ethiopia, Sudan, Ukraine, and Myanmar. A dedicated treaty would facilitate international cooperation in prosecuting these crimes and provide a framework for justice.
    • Strengthening International Law: A new treaty would reinforce the international justice framework by imposing obligations on states to prevent and punish these crimes, thereby enhancing global standards for human rights protection.

    What would be the step towards a Crimes Against Humanity Treaty?

    • Preparatory Sessions: Scheduled for 2026 and 2027, these sessions will prepare the groundwork for formal discussions on the treaty.
    • Formal Negotiating Sessions: Three-week sessions are planned for 2028 and 2029 to finalize the treaty’s text.
    • Broad International Support: The initiative is backed by Mexico, Gambia, and 96 other countries, indicating a strong international commitment to addressing these serious human rights violations

    Way forward: 

    • Adopt a Survivor-Centric and Inclusive Approach: Ensure the treaty prioritizes the rights of victims, incorporates survivor input, and mandates comprehensive support mechanisms while maintaining a robust, enforceable legal framework.
    • Strengthen Global Collaboration: Mobilize international cooperation, with developed nations providing financial and technical assistance, to build national capacities for prosecuting crimes against humanity and preventing impunity.

    Mains PYQ:

    Q At the international level, the bilateral relations between most nations are governed on the policy of promoting one’s own national interest without any regard for the interest of other nations. This leads to conflicts and tensions between the nations. How can ethical consideration help resolve such tensions? Discuss with specific examples. (UPSC IAS/2015)

  • What is Global Alliance Against Hunger and Poverty, launched at Brazil G20?

    Why in the News?

    The recent G20 Leaders’ Summit in Rio de Janeiro, Brazil, featured the official launch of the Global Alliance Against Hunger and Poverty (referred to as “the Alliance”).

    What are the primary objectives of the Global Alliance?

    • Eradication of Hunger and Poverty: The Alliance aims to eliminate hunger and poverty by 2030, aligning with the United Nations’ Sustainable Development Goals (SDGs).
    • Support for Vulnerable Populations: It focuses on providing targeted assistance to vulnerable groups through various initiatives, including cash transfers and school meal programs.
    • Resource Mobilization: The initiative emphasizes large-scale resource mobilisation to support its objectives, aiming to reach 500 million people through income distribution programs by 2030.

    Who are the key stakeholders involved in this initiative?

    • The Alliance has 148 founding members, including 82 countries such as India, Brazil, and Bangladesh.
    • It includes participation from 26 international organizations, such as the Food and Agriculture Organization (FAO) and UNICEF.
    • Nine financial institutions and 31 philanthropic foundations and non-governmental organizations are also involved in supporting the Alliance’s goals.

    How will Alliance function?

    • The Alliance serves as a platform for countries to share best practices and access technical expertise or financial support from other member nations.
    • It offers more than 50 evidence-based policy instruments that member countries can utilize to develop their national strategies against hunger and poverty.
    • Unlike traditional funding bodies, the Alliance does not have an exclusive fund but acts as a matchmaking entity connecting countries in need with donors and technical support providers. Its operational costs are estimated at $2-3 million annually, funded by member contributions.

    What challenges does the Global Alliance aim to address in combating hunger and poverty?

    • Impact of COVID-19: The pandemic has exacerbated issues of hunger and poverty, reversing progress made toward the SDGs. The Alliance aims to counteract these setbacks by fostering international cooperation.
    • Global Inequalities: It addresses deepening social, racial, and gender inequalities that have been intensified by recent global crises.
    • Food Insecurity Projections: Current trends suggest that without intervention, millions will continue to live in extreme poverty and hunger by 2030—double the target levels set in the SDGs. The Alliance seeks to reverse these projections through coordinated action.

    Conclusion: The Global Alliance Against Hunger and Poverty aligns with SDGs 1 (No Poverty) and SDG 2 (Zero Hunger) by mobilizing resources, fostering collaboration, and implementing targeted interventions to combat hunger, poverty, and inequalities, ensuring a sustainable and inclusive future.

    Mains PYQ:

    Q Poverty and malnutrition create a vicious cycle, adversely affecting human capital formation. What steps can be taken to break the cycle? (UPSC IAS/2024)

  • International Cooperative Alliance (ICA)

    Why in the News?

    • India is set to host the International Cooperative Alliance (ICA) Global Cooperative Conference in Delhi this month.
      • It will mark the first time in the 130-year history of ICA that the ICA General Assembly and Global Cooperative Conference are being hosted in India.

    About the International Cooperative Alliance (ICA):

    Details
    About • Established in 1895 to unite, represent, and serve cooperatives globally.
    • Represents 315 cooperative federations and organizations from 107 countries.
    • Estimated to represent about 1 billion individuals worldwide across various sectors like agriculture, banking, fisheries, health, housing, insurance, and more.
    • It has held consultative status with the UN Economic and Social Council (ECOSOC) since 1946, making it the first NGO to receive this status.
    • Custodian of the internationally recognized definition, values, and principles of cooperatives. 
    Structure of ICA • Governing Board: A 20-member board responsible for overseeing activities.
    • General Assembly: Highest governing authority, with representatives from member organizations, convened at least annually.
    • ICA is divided into four regional organizations:

    1. ICA Asia-Pacific (New Delhi, India),
    2. ICA Africa (Nairobi, Kenya),
    3. Cooperatives Europe (Brussels, Belgium), and
    4. ICA Americas (San JosĂŠ, Costa Rica).

    • 8 sectoral organizations representing cooperatives in various sectors like agriculture, banking, fisheries, and more.
    • 5 thematic committees focused on cooperative development, economic sustainability, social responsibility, and advocacy.

    Powers and Functions of ICA • Represents cooperatives in international forums, particularly within the United Nations and other multilateral organizations.
    • Influences international policies related to social and economic development and sustainable cooperative businesses.
    • Promote and define cooperative identity globally, ensuring cooperatives adhere to internationally recognized principles.
    • Collects and publishes data about the cooperative sector via reports like the World Cooperative Monitor and ICA Global 300 index.
  • International Criminal Court (ICC)

    Why in the News?

    The International Criminal Court (ICC) has issued arrest warrant for Israeli PM Benjamin Netanyahu accusing them of war crimes and crimes against humanity.

    About the International Criminal Court (ICC)

    Details
    What is it? • First international permanent court to prosecute individuals for serious international crimes.
    • Established under the Rome Statute (1998, w.e.f 2002).
    • 124 countries are States Parties to the Rome Statute.• Headquarters: The Hague, Netherlands.
    Structural Mandate • Official languages: English, French, Arabic, Chinese, Russian, and Spanish.
    • Members: 124 States Parties to the Rome Statute; Palestine (2015) and Malaysia (2019) became the latest members.
    • Notable non-members: India, Israel, the US, Russia, Ukraine, and China.
    • Funding: By contributions from member states and voluntary contributions.
    • Enforcement: Relies on state cooperation for enforcement, as it does not have its own police force.
    Composition   • Judges: Consists of 18 judges elected by the Assembly of States Parties for a term of 9 years.
    • Prosecutor: Leads the Office of the Prosecutor and investigates crimes.
    • Additional Components: Includes the Trust Fund for Victims (2004), Detention Centre, and the Assembly of States Parties.
    Jurisdiction  Prosecutes 4 main crimes:    

    1. War Crimes: Violations of the laws of war.
    2. Crimes against Humanity: Acts like murder, enslavement, and torture.
    3. Genocide: Intent to destroy a national, ethnical, racial, or religious group.
    4. Crimes of Aggression: Unjustified military action against another state.

    • ICC can only prosecute crimes committed after the Rome Statute’s entry into force (July 1, 2002).

     

    PYQ:

    [2018] “Rule of Law Index” is released by which of the following?

    1. Amnesty International
    2. International Court of Justice
    3. The Office of UN Commissioner for Human Rights
    4. World Justice Project
  • A bilateral investment treaty with a ‘bit’ of change

    Why in the News?

    The bilateral investment treaty (BIT) between India and the United Arab Emirates (UAE), signed earlier this year, has recently been made public. This new treaty will replace the 2014 India-UAE investment agreement and holds significant importance.

    What is the Bilateral Investment Treaty (BIT) for investors?

    • The Model BIT is a framework established by India to guide negotiations for bilateral investment treaties, aiming to protect foreign investments while balancing the state’s regulatory rights.
    • It emphasizes clear definitions, local remedies, and limits on investor-state dispute settlement (ISDS) claims.

    Background of  2024 BIT: 

    • The 2014 India-UAE investment treaty, formally known as the Bilateral Investment Promotion and Protection Agreement (BIPPA), was established to enhance economic cooperation and protect investments between India and the United Arab Emirates.
    • This treaty aimed to create a stable and predictable investment climate for investors from both countries, facilitating foreign direct investment (FDI) flows.
    • The 2014 BIPPA was replaced by a new Bilateral Investment Treaty (BIT) signed in February 2024, which came into effect in August 2024.
    • This new BIT introduces several changes aimed at improving investment protection and reducing arbitral discretion while maintaining India’s regulatory sovereignty.

    What are the implications of India’s revised Model BIT for foreign investors?

    • Enhanced Investor Protection: The new BIT aims to provide greater protection for foreign investments while balancing the state’s right to regulate. This is expected to boost investor confidence by assuring minimum standards of treatment and non-discrimination.
    • Quicker Access to ISDS: The reduction of the local remedies exhaustion period from five years to three years allows investors to access international arbitration more quickly if disputes arise, potentially making India a more attractive destination for foreign investments.
    • Clearer Definitions and Reduced Discretion: By refining the definition of what constitutes an investment and removing subjective criteria related to the significance of investments for host state development, the BIT reduces arbitral discretion, which can lead to more predictable outcomes in dispute resolution.

    How does the India-UAE BIT depart from the Model BIT?

    • Exhaustion of Local Remedies: As noted, the India-UAE BIT lowers the exhaustion period from five years to three years, reflecting India’s responsiveness to concerns about lengthy legal processes in its judicial system.
    • Removal of Development Significance Criterion: The BIT omits the requirement that investments must significantly contribute to the host state’s development—a criterion present in the Model BIT. This change simplifies the definition of what constitutes an investment eligible for protection, reducing subjective interpretations by ISDS tribunals.
    • No Reference to Customary International Law: Unlike the Model BIT, which links treaty violations to customary international law (CIL), Article 4 of the India-UAE BIT does not reference CIL, thereby limiting arbitral discretion and providing clearer grounds for evaluating state actions against investments.
    • Prohibition on Third-Party Funding: The new treaty explicitly disallows third-party funding in ISDS proceedings, which may impact investors’ ability to finance their claims against states without personal financial risk.

    What are the positives and future opportunities for India-UAE BIT relations?

    • Strengthened Economic Cooperation: The BIT is expected to enhance bilateral economic ties by providing a stable legal framework that encourages investment flows between India and the UAE, both of which have significant stakes in each other’s economies.
    • Increased FDI Inflows: With UAE being a key source of foreign direct investment (FDI) for India, estimated at around $19 billion, the new treaty is anticipated to stimulate further investments, benefiting various sectors in both countries.
    • Alignment with Broader Economic Agreements: The BIT complements other agreements such as the Comprehensive Economic Partnership Agreement (CEPA), reinforcing a comprehensive framework for economic collaboration beyond just investment protection.
    • Potential Influence on Future Treaties: India’s approach in negotiating this BIT may serve as a model for future treaties with other countries, reflecting a more flexible stance that could attract additional foreign investments while still safeguarding national interests.

    Conclusion: The India-UAE BIT offers stronger investment protection, quicker dispute resolution, and clearer definitions, fostering bilateral economic ties. This new agreement balances investor rights and state regulation, encourages increased FDI, strengthens economic cooperation, and could influence future treaties for enhanced global investment.

    Mains PYQ:

    Q How will the I2U2 (India, Israel, UAE and USA) grouping transform India’s position in global politics? (UPSC IAS/2022)

  • [21st November 2024] The Hindu Op-ed: An overturning of Sri Lanka’s old political order

    PYQ Relevance:

    Q) ‘India is an age-old friend of Sri Lanka.’ Discuss India’s role in the recent crisis in Sri Lanka in the light of the preceding statement. (UPSC CSE 2022)

    Mentor’s Comment:  UPSC Mains have always focused on Regional Geopolitics (2019), Bilateral Ties (2022) and Neighbourhood  Policy (2013).

    Political shifts in the Asian continent can be characterized by several distinct phases, reflecting the diverse historical, social, and economic contexts of various countries. Recent years have seen significant protests and movements demanding political change (e.g., Hong Kong protests, Myanmar coup), reflecting a desire for democratic governance and human rights.

    Today’s editorial focuses on the recent elections in Sri Lanka that illustrate a significant departure from traditional political dynamics, characterized by the decline of elite control and the rise of reformist movements.

    This content can be used for presenting ‘Bilateral ties’ between India-Srilanka and ‘Asian Geopolitics’.

    _

    Let’s learn!

    Why in the News?

    The Sri Lankan Presidential election held in September 2024, marked the historic shift in Asian democracy.

    What led to the significant political shift in Sri Lanka?

    • Economic Crisis: The country faced its worst economic crisis, leading to high inflation, shortages of essentials, and widespread public discontent.
    • Public Protests: The ‘Aragalaya’ Mass Movement protests against the government highlighted demands for accountability and change, reflecting the anger over economic mismanagement.
    • Rejection of Established Parties: Voters grew frustrated with traditional political elites, particularly the Rajapaksa family, and sought alternatives.
    • Rise of New Political Forces: National People’s Power (NPP) emerged as a popular choice by advocating for reform and anti-corruption measures, appealing to those wanting a break from the past. Dissanayake’s left-wing platform attracted voters looking for state intervention and social welfare solutions.

    How does this election reflect a departure from traditional political dynamics?

    • Rejection of Established Parties: The election resulted in a substantial loss for established parties, particularly the Rajapaksa-led SLPP and the SJB, signaling a clear rejection of the political elite that has dominated Sri Lankan politics for decades.
    • Shift in Voter Sentiment: Voters expressed a strong desire for change, driven by the economic crisis and widespread protests. This shift indicates a demand for leaders who prioritize the needs of ordinary citizens over elite interests.
    • Multi-Ethnic Appeal: The NPP made significant inroads in Tamil-majority areas, such as Jaffna, traditionally dominated by Tamil nationalist parties. This marks a notable shift towards a more inclusive political landscape.
    • Increased diversity in Representation: The new parliament features a record number of first-time MPs and women, reflecting a broader representation of society and moving away from the previously homogenous political class.
    • Ideological Shift and Leftist Policies: The NPP’s Marxist orientation represents a departure from previous neoliberal policies, appealing to voters seeking state intervention to address economic challenges.

    How India will be impacted due to the political shift in Sri Lanka?

    • Enhanced Bilateral Relations: The new government under Anura Kumara Dissanayake is likely to seek closer relations with India, promoting cooperation in trade and cultural exchanges.
    • Strategic Considerations: Sri Lanka may aim for a balanced relationship with both India and China, potentially renegotiating Chinese deals to align more with Indian interests this time.
    • Tamil Rights and Ethnic Issues: Addressing the concerns of the Tamil population will be crucial for maintaining good relations with India, given the historical ties between Tamils in both countries.
      • Dissanayake’s ability to manage internal challenges, such as ethnic tensions and economic issues, will be essential challenging factor for regional stability and bilateral relations.
    • Economic Dependency: Sri Lanka’s economic recovery will likely rely on Indian assistance, reinforcing India’s role as a key partner.
    Did you Know?

    India has traditionally been among Sri Lanka’s largest trade partners and Sri Lanka remains among the largest trade partners of India in the SAARC. India was Sri Lanka’s largest trading partner with an overall bilateral merchandise trade of US$ 5.45 billion in 2021.

    Way Forward: Sri Lanka has faced significant turmoil and deserves the opportunity to navigate its democratic recovery without external interference. Instead of focusing on exploiting Sri Lanka, major powers (USA, China, and India) should prioritize democratization within their own countries, which would ultimately benefit Sri Lanka’s progress.

  • Chancay Port Project in Peru

    Why in the News?

    The Chancay Port was inaugurated in Peru by Chinese President Xi Jinping.

    About Chancay Port Project:

    • The Chancay Port Project was inaugurated in Peru as part of a new land-sea corridor linking China with Latin America.
    • It is funded under Belt and Road Initiative (BRI), with a total cost of $3.6 billion.
    • The port can accommodate vessels up to 18,000 TEUs (twenty-foot equivalent unit), the largest shipping vessels in the world.
    • Ownership: 60% of the port is owned by China Ocean Shipping (Group) Company (COSCO), with the remaining stake held by a local company.
    • It is expected to generate $4.5 billion annually for Peru, equivalent to 1.8% of the country’s GDP.
    • Key Exports: The port will handle exports like copper, blueberries, soybeans, and lithium from the lithium triangle (Bolivia, Chile, and Argentina).

    Geo-strategic Location:

    • Proximity to Lima: Located 78 km north of Lima, Peru’s capital, in the small fishing town of Chancay.
    • Natural Deep-Water Port: Chancay is a natural deep-water port, ideal for accommodating large vessels.
    • Trade Gateway: Positioned strategically to facilitate trade between South America and Asia, reducing transit time for goods between the two continents.
    • Alternative to North America: It eliminates the need for Latin American exports to transit through ports in North America, offering a more direct route to Asia.

    Why it is a concern for USA?

    • Chinese Influence in Latin America: The US has traditionally viewed Latin America as its sphere of influence. The Chancay Port increases China’s economic and geopolitical presence in the region.
    • Strategic Gateway for China: The port strengthens China’s access to critical resources in South America, including lithium and copper, raising concerns about China’s growing dominance in the region.
    • US Trade Routes Disruption: The port reduces transportation time between Latin America and Asia, which could disrupt existing US trade routes and diminish its role as a trade facilitator.

    PYQ:

    [2017] What is the importance of developing Chabahar Port by India?

    (a) India’s trade with African countries will enormously increase.

    (b) India’s relations with oil-producing Arab countries will be strengthened.

    (c) India will not depend on Pakistan for access to Afghanistan and Central Asia.

    (d) Pakistan will facilitate and protect the installation of a gas pipeline between Iraq and India.

  • Is imposing tariffs on Chinese imports a good idea?

    Why in the News?

    After the election of the USA, Prez Donald Trump plans to impose tariffs of up to 60% on Chinese imports and 10% on EU imports to address the U.S.-China trade deficit and reduce unfair subsidies.

    What are the economic impacts of imposing tariffs on Chinese imports?

    The imposition of tariffs, particularly those proposed by the U.S. on Chinese imports, can have domestic and international economic consequences. 

    • Increased Domestic Prices: Tariffs raise the cost of imported goods, leading to higher prices for U.S. consumers. This can contribute to domestic inflation, especially if tariffs are applied broadly across consumer goods.
    • Impact on Trade Deficit: While tariffs may help reduce the trade deficit by discouraging imports, they can also lead to a rise in domestic production costs, which might not fully offset the increased prices for consumers.
    • Shifts in Consumption: Tariffs may shift consumer preferences away from imported goods towards domestically produced items. This could boost local industries and potentially increase domestic supply, helping to moderate inflation if production meets demand.
    • Global Trade Relations: The introduction of tariffs can provoke retaliatory measures from affected countries, leading to trade wars that can disrupt global supply chains and negatively impact international trade dynamics.

    How might China respond to increased tariffs?

    • Retaliatory Tariffs: Historically, China has imposed tariffs on U.S. goods in response to American tariffs. This could include targeting products from politically sensitive regions or sectors in the U.S. to maximize political impact.
    • Currency Manipulation: China may allow its currency, the yuan, to depreciate, making its exports cheaper and counteracting the effects of U.S. tariffs.
    • Increased Domestic Support: The Chinese government could implement fiscal stimulus measures to bolster domestic industries affected by U.S. tariffs, including subsidies for exporters and incentives for local production.
    • Diversification of Trade Partners: China might further diversify its trade by strengthening ties with other countries and participating in regional trade agreements that exclude the U.S., reducing its reliance on American markets.

    Do tariffs achieve their intended goals?

    • Trade Balance Improvement: While tariffs are designed to improve the trade balance by reducing imports, their success is contingent upon consumer behaviour and whether domestic producers can meet demand without significant price increases.
    • Political Ramifications: Retaliatory actions from China can undermine the intended benefits of tariffs, leading to a cycle of escalation that may harm both economies. The political fallout from these actions can also influence U.S. domestic politics, particularly if key industries are adversely affected.
    • Long-Term Economic Impact: The long-term economic impact may be limited if countries like China successfully adapt through measures such as currency adjustments or finding alternative markets for their goods.

    How can India benefit from it? 

    • Market Diversification: India can capture U.S. market share by exporting goods as American buyers seek alternatives to Chinese imports.
    • Supply Chain Shift: India can attract companies relocating production from China, leveraging its manufacturing policies and workforce.
    • Boost in FDI: Heightened U.S.-China tensions may increase Foreign Direct Investment in India as firms diversify investment destinations.

    Way forward: 

    • Strengthen Manufacturing and Exports: Enhance domestic production capabilities through schemes like PLI and focus on exporting goods demanded by the U.S., such as electronics, textiles, and pharmaceuticals.
    • Attract Global Investments: Improve ease of doing business, offer tax incentives, and promote India as a reliable alternative to China for global supply chains and FDI inflows.

    Mains PYQ:

    Q The USA is facing an existential threat in the form of China, that is much more challenging than the erstwhile Soviet Union.” Explain. (UPSC IAS/2021)