đŸ’„Join UPSC 2027,2028 Mentorship (July Batch) + XFactor Notes & Microthemes PDF
Talk to Mentor

Civilsdaily

Login

GS Paper: GS3

  • What is NASA’s Artemis I Mission?

    On March 17, the National Aeronautics and Space Administration (NASA) rolled out its Artemis I moon mission to the launchpad for testing at the Kennedy Space Centre in Florida, United States.

    What is the Artemis I Mission?

    • NASA’s Artemis mission is touted as the next generation of lunar exploration, and is named after the twin sister of Apollo from Greek mythology.
    • Artemis is also the goddess of the moon.
    • Artemis I is the first of NASA’s deep space exploration systems.
    • It is an uncrewed space mission where the spacecraft will launch on SLS — the most powerful rocket in the world — and travel 2,80,000 miles from the earth for over four to six weeks during the course of the mission.
    • The Orion spacecraft is going to remain in space without docking to a space station, longer than any ship for astronauts has ever done before.
    • The SLS rocket has been designed for space missions beyond the low-earth orbit and can carry crew or cargo to the moon and beyond.

    Key objectives of the mission

    • With the Artemis Mission, NASA aims to land humans on the moon by 2024, and it also plans to land the first woman and first person of colour on the moon.
    • With this mission, NASA aims to contribute to scientific discovery and economic benefits and inspire a new generation of explorers.
    • NASA will establish an Artemis Base Camp on the surface and a gateway in the lunar orbit to aid exploration by robots and astronauts.
    • The gateway is a critical component of NASA’s sustainable lunar operations and will serve as a multi-purpose outpost orbiting the moon.

    Other agencies involved

    • Other space agencies are also involved in the Artemis programme.
    • The Canadian Space Agency has committed to providing advanced robotics for the gateway.
    • The European Space Agency will provide the International Habitat and the ESPRIT module, which will deliver additional communications capabilities among other things.
    • The Japan Aerospace Exploration Agency plans to contribute habitation components and logistics resupply.

    What is the mission trajectory?

    • SLS and Orion under Artemis I will be launched from the Kennedy Space Centre in Florida, U.S. in the summer of 2022.
    • The spacecraft will deploy the interim cryogenic propulsion stage (ICPS), a liquid oxygen/liquid hydrogen-based propulsion system that will give Orion the thrust needed to leave the earth’s orbit and travel towards the moon.
    • On its way to the moon, Orion will be propelled by a service module provided by the European Space Agency (ESA).
    • The spacecraft will communicate with the control centre back on Earth through the deep-space network.
    • It will fly around 100 km above the surface of the moon and use its gravitational pull to propel Orion into an opposite deep orbit around 70,000 km from the moon, where it will stay for approximately six days.

    What are the future missions in the Artemis programme?

    • The second flight under the programme will have crew on board and will test Orion’s critical systems with humans onboard.
    • Eventually, the learnings from the Artemis programme will be utilised to send the first astronauts to Mars.
    • NASA plans on using the lunar orbit to gain the necessary experience to extend human exploration of space farther into the solar system.

     

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

  • Abel Prize awarded to American Mathematician

    The Norwegian Academy of Science and Letters has awarded the Abel prize for the year 2022 to American Mathematician Dennis Parnell Sullivan, for his contributions to topology in its broadest sense, and in particular its algebraic, geometric and dynamical aspects.

    Abel Prize

    • The Abel Prize is a prize awarded annually by the King of Norway to one or more outstanding mathematicians.
    • It is named after Norwegian mathematician Niels Henrik Abel (1802–1829) and directly modeled after the Nobel Prizes.
    • It comes with a monetary award of 7.5 million Norwegian kroner (NOK) (increased from 6 million NOK in 2019).
    • Its establishment was proposed by the Norwegian mathematician Sophus Lie when he learned that Alfred Nobel’s plans for annual prizes would not include a prize in mathematics.
    • The laureates are selected by the Abel Committee, the members of which are appointed by the Norwegian Academy of Science and Letters.

    Has any Indian won this prestigious prize?

    • R. Srinivasa Varadhan, an Indian-American citizen won the Abel Prize in the year 2007 for his valuable contribution in “probability theory and in particular for creating a unified theory of large deviation”.

     

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

  • A blow to equitable access to essential medicines

    Context

    At the height of the COVID-19 pandemic in October 2020, India and South Africa had tabled a proposal seeking a temporary waiver on COVID-19 related products from the TRIPS. Nearly 18 months later, 164 members of the WTO could not find common ground on the “waiver proposal”.

    How will the waiver help?

    •  The application and enforcement of intellectual property rights (IPRs) are affecting the timely provisioning of affordable medical products to patients.
    • Therefore, India and South Africa argued that therefore, argued that “rapid scaling up of manufacturing globally” was “an obvious crucial solution to address the timely availability and affordability of medical products to all countries in need”, and for doing so, IPRs must be waived for at least three years. 

    The EU solution

    • The EU had proposed in a submission in June 2021 that “[c]ompulsory licences are a perfectly legitimate tool that governments may wish to use in the context of a pandemic”.
    • India and South Africa, the movers of the “waiver proposal”, are among the four countries that found a “compromise outcome”.
    • Only vaccines are included: The solution is a severely truncated version of the “waiver proposal” in terms of product coverage, as only vaccines are included.
    • Generally, patent laws, including that of India’s, allow for the grant of compulsory licences if patent holders charge high prices on the proprietary medicines in exercise of their monopoly rights.
    • Moreover, such licences can usually be granted if efforts in obtaining voluntary licences from the patent holders have failed.
    • The EU proposal states there that in case of a medical urgency, as is the case now, this condition will be waived.
    • The proposal also provides that WTO members would be able to issue compulsory licences even if they do not currently have the provisions to issue them under their national patent laws.
    • Compulsory licences can even be granted using executive orders, emergency decrees, and judicial or administrative orders.

    Issues with the EU solution

    1] Eligible member criteria

    •  The waiver solution can be used only by an “eligible member”, defined as a “developing country member” of the WTO that “had exported less than 10 percent of world exports of COVID-19 vaccine doses in 2021”.
    •  This means that Bangladesh, which is still a least developed country, but has a growing pharmaceutical industry, is also excluded.
    • Restricting China: The eligibility condition seems to have been introduced to limit China’s expansion in the global vaccine market.
    • No concern for India: At the current juncture, India does not have to be concerned with the export restriction clause, as its share in global exports of vaccines was 2.4% as on January 31.

    2] Export restrictions in the form of eligibility criteria

    • While introducing the above-mentioned export restriction, the solution proposes to waive the obligation under Article 31(f) of the TRIPS Agreement.
    • Article 31(f) provides that the compulsory licences issued by any WTO member must be used “predominantly for the supply of the domestic market”.
    • But while they have proposed removal of Article 31(f), solution includes a more stringent export restriction in the form of the eligibility criteria mentioned above.

    3] Further conditions

    • The proposed condition of listing all patents covered under the compulsory licences is not a requirement under the TRIPS Agreement.
    • Similarly, there is no obligation to notify the details of licensee, the quantity and export destination under the TRIPS provisions.
    • But the EU proposal text proposes mandatory notification.

    4] Transfer of know-how is not ensured

    • According to the EU, when compulsory licences are granted, the “patent holder receives adequate remuneration”, but “[t]ransfer of know-how is not ensured”.
    • This demerit of compulsory licences would make it difficult to scale up production of COVID-19 vaccines, medicines, and medical devices in the developing world, thus constraining their availability at affordable prices.

    Conclusion

    It must be said that by accepting the “compromise outcome”, India and South Africa could jeopardise their high moral ground.  Consequently, the global community would lose an important opportunity to ensure that vaccines and medicines are accessible to all.

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

  • Make trade deals for Make in India

    Context

    It will be a good idea to look at the intent, reality, and other ramifications of India’s trade agreements, especially in regard to goods.

    Why PTAs matters

    • Amongst the existing Preferential Trade Agreements (PTAs), the most commonly used by exporters and importers, are the agreements with the ASEAN region, South Korea, Japan, and South Asian countries.
    • It is noteworthy that India has significant trade deficits with three of the aforementioned regions.
    • Another factor to note is that three of these regions have significant manufacturing capacity and investment in their own territories.
    • Thus, India’s ongoing initiatives in trade agreements must consider whether such deals strengthen imports into India or incentivize investment.
    • This is all the more important as the Centre has laid out schemes like Phased Manufacturing Programs (PMPs) and Production Linked Incentives (PLIs) to encourage investment in Make in India.

    How existing trade agreements affect Phased Manufacturing Programs(PMP)

    • How does it work? Under the PMP, calibrated reductions in customs duty rates on inputs and intermediate goods have been provided along with higher duty rates on finished products.
    • However, considering that many of the finished products are covered by zero duty rates under existing trade agreements with some regions or countries, manufacturers with existing facilities in such countries may not have a compelling reason to move manufacturing to India.
    • Similar benefits exist under other agreements and may inhibit the uptake of the PMPs by multinational manufacturing entities.

    Production Linked Incentives and trade agreements

    • Under PLIs, based on a threshold level of capital investment and incremental production, subsidies are to be given to approved applicants.
    • Such schemes cover 15 product categories as of now.
    • In some cases, the attraction of incentives could score over the benefits of importing goods under low or nil rates of duty under PTAs.

    Suggestions:

    • The PLIs could become even more attractive if it is combined with certain pre-existing special governmental schemes that reduce costs and conserve cash flow.
    • While the application window for most of the PLI schemes has closed, a few may be extended and depending on the success of current schemes, more could follow.
    • Improving trade governance: PTAs are governed by written agreements between nation states or groups of nation states and domestic laws of the signatories.
    • Contrary to a violation of a multilateral or plurilateral agreement entered into under the aegis of the WTO, enforcement mechanisms external to the parties, do not exist for PTAs.
    • The committed benefits could be allowed or disallowed by customs rules (for example the CAROTAR in India) and customs officials, conditional upon certifications and validations.
    • Mechanisms exist in the FTAs themselves to solve such matters, but in a situation where entities of different sizes and economic power attempt to resolve such issues, the resolutions may not be acceptable to all parties.
    • Better governance mechanisms are needed.

    Conclusion

    It is expected that a holistic view, keeping in mind the government’s schemes on investment and trade governance, would inform future negotiations as well as a review of existing trade agreements of India.

    Source:

    https://www.financialexpress.com/opinion/make-trade-deals-for-make-in-india/2457320/

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

    Back2Basics: CAROTAR 2020

    • CAROTAR 2020 (“Rules”) aims to add to the existing operational certification procedures which are prescribed under different trade agreements such as Free Trade Agreements (FTAs), Preferential Trade Agreement, Comprehensive Economic Cooperation Agreement and Comprehensive Economic Partnership Agreement.
    • The Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR, 2020), was notified on 21st August 2020 by the Central Board of Indirect Taxes and Customs.

  • Why the Russia-Ukraine crisis may lead to a shortage in Semiconductors?

    The global supply of semiconductors is now being threatened once again by the Ukraine crisis on account of supply of two key raw materials — neon and palladium — that are at a risk of being constrained.

    What are Semiconductors?

    • A semiconductor sits between a conductor and an insulator and is commonly used in the development of electronic chips, computing components, and devices.
    • It’s generally created using silicon, germanium, and other pure elements.
    • Semiconductors are created by adding impurities to the element.

    Why are neon and palladium important for chipmaking?

    (a) Neon

    • Neon gas is used in the photolithography process that is the most common method for fabricating integrated circuits.
    • Specifically, the neon gas is used in the laser machines that carve the integrated circuits.
    • But for use of neon gas in the semiconductor industry, the gas has to reach 99.99% purity levels — which makes it a rarity.
    • More than half of semiconductor-grade neon comes from Ukrainian companies Incas and Cryoin.

    (b) Palladium

    • It is used for multiple purposes in semiconductor and electronic manufacturing.
    • It is used to coat electrodes that help control flow of electricity.
    • It is also used in plating of microprocessors and printed circuit boards — which is an essential process of chip making.
    • Russia accounts for nearly half the global supplies of palladium and the multiple trade sanctions on Moscow threaten to constrain the availability of the element.

    Why was there a shortage in semiconductors?

    • The trigger point was the beginning of the Covid-19 pandemic and the subsequent lockdowns across the world that forced chip-making facilities to shut in countries like Japan, South Korea, China and the US.
    • A key feature in a chip shortage is that it almost always causes cascading effects, given that the first one creates pent-up demand that becomes the cause for the follow-up famine.

    How is the Russia-Ukraine crisis protracting this shortage?

    • Palladium and neon are two resources that are key to the production of semiconductor chips.
    • Russia supplies over 40 per cent of world’s palladium and Ukraine produces 70 per cent of neon.

    How long will the semiconductor shortage last?

    • The answer to that question is a function of two variables:
    1. Existing stockpiles of these raw materials with chip manufacturers
    2. Time for which the crisis in Ukraine prevails
    • If a deal is not brokered in the coming months, expect the chip shortage to get worse and for industries highly dependent on them to be similarly affected.
    • This means significant risks are ahead for many automakers, electronic device manufacturers, phone makers, and many other sectors that are increasingly reliant on chips for their products to work.

     

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

  • National Land Monetisation Corporation (NLMC)

    The Union Cabinet has approved the creation of the National Land Monetisation Corporation (NLMC), the Special Purpose Vehicle (SPV) announced in the Union Budget 2021-22 to carry out monetisation of government and surplus land holdings of public sector undertakings (PSU).

     What is the NLMC?

    • The NLMC will be a firm, fully owned by the government, to carry out the monetisation of government and public sector assets in the form of surplus, unused or underused land assets.
    • It will fall under the administrative jurisdiction of the Ministry of Finance and will be set up with an initial authorised share capital of â‚č5,000 crore and a paid-up capital of â‚č150 crore.
    • Apart from monetising underutilised or unused land parcels of Central Public Sector Enterprises (CPSEs), the Corporation will also facilitate the monetisation of assets belonging to PSUs that have ceased operations or are in line for a strategic disinvestment.
    • The surplus land and building assets of such enterprises are expected to be transferred to the NLMC, which will then hold, manage and monetise them.

    What will it do?

    • The setting of the NLMC will speed up the closure process of the CPSEs and smoothen the strategic disinvestment process.
    • It will also enable productive utilisation of these under-utilised assets by setting in motion private sector investments.
    • It will boost new economic activities such as industrialisation, boosting the local economy by generating employment and generating financial resources for potential economic and social infrastructure.
    • Besides managing and monetising, the NLMC will act as an advisory body and support other government entities and CPSEs in identifying their surplus non-core assets.
    • It will help monetising them in an efficient and professional manner, maximising the scope of value realisation.

    What does monetization mean?

    • When the government monetises its assets, it essentially means that it is transferring the revenue rights of the asset (could be idle land, infrastructure, PSU) to a private player for a specified period of time.
    • In such a transaction, the government gets in return an upfront payment from the private entity, regular share of the revenue generated from the asset, a promise of steady investment into the asset, and the title rights to the monetised asset.
    • There are multiple ways to monetise government assets; in the case of land monetisation of certain spaces like offices, it can be done through a Real Estate Investment Trust (REIT).

    What are REITs?

    Ans: REITs a company that owns and operates a land asset and sometimes, funds income-producing real estate. Assets of the government can also be monetised through the Public Private Partnerships (PPP) model.

    Why need monetization?

    • There are different reasons why the government monetises its assets.
    • One of them is to create new sources of revenue.
    • The economy has already been hit due to the coronavirus pandemic and revenues are essential to fulfil the Modi government’s target of achieving a $5 trillion economy.
    • Monetisation is also done to unlock the potential of unused or underused assets by involving institutional investors or private players.
    • Thirdly, it is also done to generate resources or capital for future asset creation, such as using the money generated from monetisation to create new infrastructure projects.

    How will the NLMC function?

    • The firm will hire professionals from the private sector with a merit based approach, similar to other specialised government companies like the National investment and infrastructure Fund (NIIF) and Invest India.
    • This is because asset monetisation of real estate requires expertise in valuation of property, market research, investment banking, land management, legal diligence and other related skill sets.
    • The NLMC will undertake monetisation as an agency function and is expected to act as a directory of best practices in land monetisation.

    How much land is currently available for monetisation?

    • According to the Economic Survey 2021-2022, as of now, CPSEs have put nearly 3,400 acres of land on the table for potential monetisation.
    • They have referred this land to the Department of Investment and Public Asset Management (DIPAM).
    • As per the survey, monetisation of non-core assets of PSUs such as MTNL, BSNL, BPCL, B&R, BEML, HMT Ltd, Instrumentation Ltd etc are at different stages.

    What are the possible challenges for NLMC?

    (a) Volatile market situation

    • The performance and productivity of the NLMC will also depend on the government’s performance on its disinvestment targets.
    • In FY 2021-22, the government has hardly been able to raise expected amounts through various forms of disinvestment.
    • For example, the Life Insurance Corporation IPO, which was supposed to raise â‚č60,000 crore is now shrouded in uncertainty owing to the Russia-Ukraine crisis making stock markets volatile.
    • If the IPO does not hit the markets by the end of March, the government would be missing its disinvestment targets by a wide margin.

    (b) Issues with transfer of rights

    • The process of asset monetisation does not end when the government transfers revenue rights to private players.
    • Identifying profitable revenue streams for the monetised land assets, ensuring adequate investment by the private player and setting up a dispute-resolution mechanism are also important tasks.

    (c) Unattractiveness of PPP Model

    • Posing as another potential challenge would be the use of Public Private Partnerships (PPPs) as a monetisation model.
    • For instance, the results of the Centre’s PPP initiative launched in 2020 for the Railways were not encouraging.
    • It had invited private parties to run 150 trains of the Indian Railways but when bids were thrown open, nine clusters of trains saw no bidders.

     

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

  • Virtual Digital Assets

    The government has clarified that investors won’t be allowed to offset losses in one crypto asset against gains in another, and that crypto mining infrastructure costs will not be included in the cost of acquisition to be claimed as a deduction.

    How are crypto investments taxed?

    • The Union Budget 2022-23 in February proposed that gains from virtual digital assets or crypto assets would be taxed at 30% irrespective of the individual’s income tax slab.
    • In addition, a 1% tax deducted at source or TDS was introduced on the transfer of such assets.
    • The government did not say if crypto assets are to be treated as currency, commodity, or security, and a clarification is expected in due course via separate legislation.
    • Gifting of crypto assets to non-relatives is also taxed in the hands of the recipient if the value exceeds â‚č50,000 in a year.

    How does crypto tax differ from others?

    • If listed shares are sold within 12 months of purchase, short-term capital gains (STCG) tax is applied on the gains, while beyond one year, long-term capital gains (LTCG) tax is levied.
    • STCG is levied at 15.6%, including cess, while LTCG for gains over â‚č1 lakh is 10.4%, including cess.
    • There is no provision of long-term or short-term crypto assets, while gains are taxed at a flat rate of 30%.
    • Investors in equities can offset the loss in one stock against another, while they can carry forward both short-term and long-term loss for eight assessment years.
    • This has not been allowed in crypto.

    How will crypto tax impact investors?

    • In a fiscal year, if an investor had made gains in bitcoin and losses in ether, he or she will have to pay tax at 30% on gains in bitcoin.
    • Further, the absence of loss set-off provision would cause a double whammy —paying taxes on gains and no offset of losses.
    • Tax experts believe that in certain cases, the effective rate of taxation can even cross 100% on crypto investments.

    How will miners be affected?

    • The government has clarified that mining infrastructure will also not be eligible to be deducted as the cost of acquisition.
    • So far, it was understood by some that crypto generated during the ‘mining’ process is taxable only on the profits, after accounting for mining expenses such as electricity.
    • But with the latest explanation, a 30% tax plus cess and surcharges will be levied on such transactions.
    • Experts believe that crypto mining operations would become non-profitable under the current announcement.

    Will crypto tax trigger an investor exodus?

    • The crypto industry has been unequivocal in criticizing the tax proposals.
    • Thanks to the tearing rally in crypto assets over the past two years, it is estimated by some that more than 20 million Indian investors have poured more than â‚č1 trillion into cryptos.
    • However, the industry leaders fear that the lack of provision to offset losses will drive away users from KYC-compliant exchanges and platforms to the underground peer-to-peer grey market, which would defeat the purpose of regulation.

     

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

  • Russia’s offer of cheaper oil is tempting, but India must be cautious

    Context

    With oil above $100, the government now has to spend twice as much to import oil as it did earlier. Russia has offered to sell oil at lower prices to India. It is a hard temptation for India to resist. But one that comes with profound and long-lasting consequences.

    Issues in buying oil from Russia

    1] Impact on India’s export due to threat of the secondary sanction by the US

    • The demise of the Soviet Union made it easier for India to abandon the Soviet-influenced ideology of a planned economy and veer towards the American version of a market economy.
    • Now, in the reverse ideological direction, Russia’s offer of cheaper oil has hidden and direct costs that India will have to deliberate upon.
    • Whenever global crude oil prices have risen above $100 in the past, India was able to cushion that shock primarily through growth in exports.
    • When oil prices were similarly high, exports rose to nearly 25 per cent of nominal GDP, which helped India withstand the shock.
    • However, exports now have fallen dramatically to 18 per cent of GDP, which must be revived.
    • The US is India’s biggest export market.
    • The US has already cautioned India about abetting Russia by buying Russian oil.
    • It remains to be seen if the US will impose secondary sanctions against India for buying discounted Russian oil, but that threat looms large.

    2] Cascading de-dollarisation

    • With US sanctions against Russia, it will insist on payment in rubles.
    • If India is forced to accept trading in rubles with Russia, then it is very likely that China, which is India’s second-largest trading partner, may also insist on payments in Chinese yuan.
    • Saudi Arabia may also insist on trading in a currency other than the US dollar.
    • This cascading “de-dollarisation” phenomenon will further irk and antagonise the US, since it weakens the dollar’s status as the world’s reserve currency.
    • If India is forced to purchase Russian oil in rubles and potentially trade in yuan with China and others, it can catapult India into the centre of a geo-economic war that it can ill afford.

    Opportunity for India

    • The Russia-Ukraine conflict can be an opportunity for India to step up and capture global market share in goods and services.
    • There is already talk of India capitalising on wheat exports, albeit a tiny share of India’s overall exports, as a fallout of global sanctions against Russian wheat.

    Conclusion

    Exports remain India’s biggest hope for a long-term sustainable economic recovery with ample job creation. India cannot risk being isolated in future global trade for near-term discounted oil deals with Russia.

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

  • [pib] Exercise LAMITIYE 2022

    The 9th Joint Military Exercise LAMITIYE-2022 between the Indian Army and Seychelles Defence Forces (SDF) is being conducted at Seychelles Defence Academy (SDA), Seychelles.

    Exercise LAMITIYE

    • Lamitiye, which in Creole means friendship, is a biennial training event being conducted in Seychelles since 2001.
    • This year, it will feature a range of complex military drills, demonstrations and discussions, officials said.
    • The objective of the joint training exercise is to build and promote bilateral military relations in addition to exchanging skills, experiences and good practices between both the armies.
    • Both sides will jointly train, plan and execute a series of well-developed tactical drills for neutralization of likely threats that may be encountered in a semi-urban environment.
    • The exercise will also witness showcasing of new-generation equipment and technology for conducting joint operations.

    Significance of the exercise

    • LAMITIYE is crucial and significant in terms of security challenges faced by both nations in the backdrop of the current global situation and growing security concerns in the Indian Ocean region.

    Tap to read more about:

    Various Defence Exercises in News

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

  • Textile Industry in India

    Context

    South Asia became a major player in the global textiles and clothing market with the onset of the third wave of global production.

    Textile industry in Bangladesh

    • Bangladesh overtook India in exports in the past decade as Indian labour costs resulted in products becoming 20% more expensive.
    • Bangladesh joined the league in the 1980s, owing to the outbreak of the civil war in Sri Lanka.
    • Lower production costs and free trade agreements with western buyers are what favour Bangladesh, which falls third in the line as a global exporter.
    • Bangladesh has been ahead of time in adopting technology.
    • Bangladesh also concentrates on cotton products, specialising in the low-value and mid-market price segment.

    Where does India stand?

    • The progress of India and Pakistan in readymade garments is recent when compared to their established presence in textiles.
    • India holds a 4% share of the U.S.$840 billion global textile and apparel market, and is in fifth position.
    • India has been successful in developing backward links, with the aid of the Technical Upgradation Fund Scheme (TUFS), in the cotton and technical textiles industry.
    • However, India is yet to move into man-made fibres as factories still operate in a seasonal fashion.

    Challenges ahead

    1] Fourth Industrial revolution and robotic automation

    • The Fourth Industrial Revolution (4IR) has been shifting focus from production machinery to integrating technology in the entire production life cycle.
    • The production cycle incorporates all digital information and automation including robotics, artificial intelligence (AI), virtual reality, 3D printing, etc.
    • Robotic automation exemplifies production efficiency, especially in areas such as cutting and colour accuracy.
    • The Asian Development Bank anticipates the challenges of job losses and disruption, inequality and political instability, concentration of market power by global giants and more vulnerability to cyberattacks.
    •  With a 7% unemployment rate, India faces the challenge of job creation in the wake of increased automation.
    • The World Bank expects this trend to accelerate in the post-COVID-19 market.
    • The 4IR may result in unemployment or poor employment generation, primarily affecting a low skill workforce.

    2] Sustainability challenge

    • Sustainability is also an important consideration for foreign buyers.
    • Bangladesh’s readymade garments initiated ‘green manufacturing’ practices to help conserve energy, water, and resources.
    • Textile and apparel effluents account for 17%-20% of all water pollution.
    •  The Indian government is committed to promoting sustainability through project sustainable resolution.

    3] Labour issues

    • Access to affordable labour continues to be an advantage for south Asia.
    •  In addition, a country such as India with a very high number of scientists and engineers could lead, as is evident in the areas of drones, AI and blockchain.
    • India’s potential lies in its resources, infrastructure, technology, demographic dividend and policy framework.
    • The creation of a Centre for the Fourth Industrial Revolution is indicative of India’s intent.

    Way forward

    • Digitalisation and automation in areas such as design, prototyping, and production are key in order to stay abreast, and in controlling production quality and timely delivery.
    • Sustainable practices such as regenerative organic farming (that focuses on soil health, animal welfare, and social fairness), sustainable manufacturing energy (renewable sources of energy are used) and circularity are being adopted.
    • Tax exemptions or reductions in imported technology, accessibility to financial incentives, maintaining political stability and establishing good trade relations are some of the fundamental forms of support the industry needs from governments.
    • The U.S. trade war on China owing to human rights violations along with its economic bottlenecks, opens doors for India and Pakistan as they have strong production bases.
    • Similar to China, India has a big supply — from raw material to garments.
    • Bangladesh has also risen as a top exporter in a cost competitive global market.
    • India’s proposed investments of US$1.4 billion and the establishment of all-in-one textile parks are expected to increase employment and ease of trade.
    • India extended tax rebates in apparel export till 2024, with the twin goals of competitiveness and policy stability.
    • Labour law reforms, additional incentives, income tax relaxations, duty reductions for man-made fibre, etc. are other notable moves.
    •  Newer approaches in the areas of compliance, transparency, occupational safety, sustainable production, etc. are inevitable changes in store for South Asia to sustain and grow business.
    • Finally, there is a need for governments’ proactive support in infrastructure, capital, liquidity and incentivisation.

    Conclusion

    Ensuring government support for financial incentives, upgrading technologies and reskilling labour are key challenges.

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)