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September 2021

Foreign Policy Watch: India-Australia

India-Australia relations


From UPSC perspective, the following things are important :

Prelims level : Malabar naval exercise

Mains level : Paper 2- India-Australia relations


A few days ago, India’s Defence Minister and External Affairs Minister held the inaugural ‘2+2’ talks with their Australian counterparts.

Transforming relations between India-Australia

  • Both are vibrant democracies which have respect for international laws and a belief in the equality of all nations irrespective of their size and strength.
  • Both draw their congruence from a rule-based international order, believe in inclusive economic integration in the Indo-Pacific region, and face challenges from a belligerent China.
  • Prime Minister Narendra Modi and Australian Prime Minister Scott Morrison elevated their bilateral strategic partnership to a Comprehensive Strategic Partnership in June 2020.
  • Growing convergence on issues: There is a growing convergence of views on geo-strategic and geo-economic issues.
  • The convergence is backed by a robust people-to-people connection.
  • Both countries have stepped up collaborations through institutions and organisations on many issues in bilateral, trilateral, plurilateral and multilateral formats.
  • Bilateral security cooperation: Given their common security challenges and in order to enhance regional security architecture, both countries have intensified bilateral security cooperation.
  • Further, elevation of their ‘2+2’ Foreign and Defence Secretaries’ Dialogue to the ministerial level emphasises the positive trajectory of their transforming relations.
  • They have also stepped up security dialogue with key partner-countries to deepen coordination in areas where security interests are mutual.
  • The Malabar naval exercise by the Quad (Australia, India, Japan, the U.S.) is a step in this direction.
  • Partnership with like-minded countries:  Beyond bilateralism, both countries are also entering into partnerships with like-minded countries, including Indonesia, Japan and France, in a trilateral framework.
  • Trade ties: Trading between India and Australia has seen remarkable growth in recent years.
  • Two-way trade between them was valued at $24.4 billion in 2020. 
  • Trade is rapidly growing and encompasses agribusiness, infrastructure, healthcare, energy and mining, education, artificial intelligence, big data and fintech.
  • An early harvest agreement by December will pave the way for an early conclusion of a bilateral Comprehensive Economic Cooperation Agreement between both countries.

Issues in deeper economic integration

  • High tariff on agri products in India: India has a high tariff for agriculture and dairy products which makes it difficult for Australian exporters to export these items to India.
  • Non-tariff barrier in Australia: At the same time, India faces non-tariff barriers and its skilled professionals in the Australian labour market face discrimination.

Consider the question “A growing convergence of views on geo-strategic and geo-economic issues between Indian and Australia makes it imperative to forge a partnership guided by principles with a humane approach. Comment.” 


The Quad has gained momentum in recent months. The time is ripe for these countries to deliberate on a ‘Quad+’ framework. The geo-political and geo-economic churning in international affairs makes it imperative for India and Australia to forge a partnership guided by principles with a humane approach.

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Slide in democratic values, India must work to fix it


From UPSC perspective, the following things are important :

Prelims level : V-Dem rating

Mains level : Paper 2- Declining democratic values


India has performed poorly in every major global democracy report in the past few years.

India’s declining performance

  • The Freedom House Index for 2021 pushed India down four points from last year, bringing its score from 71 to 67.
  • V-Dem, the world-renowned think-tank from Sweden, has similarly downgraded India.
  • It has labelled India an “electoral autocracy”.
  • The Economist Intelligence Unit (EIU) study has shown India’s ranking has taken a nosedive from 27 to 53 out of 167 countries.
  • The Reporters without Borders’ Press Freedom Report has placed India 167th out of 183 countries.
  • Freedom House has also given India a score of 2 out of 4 in terms of press freedom.

Factors pointed out by the rating agencies

  • The country has seen increased pressure being put on human rights organisations and civil rights groups.
  • Journalists and activists have been intimidated and incarcerated, and minorities have been specifically targeted.
  • Hate and polarisation are rampant.
  • The most worrying trend has been the crackdown on freedom of speech, with statistics showing a 165 per cent increase in sedition cases between 2016 and 2019.

Issues with rejecting of global democratic indexes

  • Indian government sought to challenge the rating of EIU after it released its 2021 report earlier this year.
  • An offer made by the Indian government to supply ‘accurate’ data pertaining to the democratic index was firmly refused by the EIU.
  • Shooting the messenger: This seeming retraction of Indian democratic values in global reports and the Indian indignation regarding it seems to be a clear case of shooting the messenger.
  • Harming democracy: The Indian refusal to acknowledge and remedy them is irreparably harming its democracy.
  • Trying to influence the rating agencies to doctor data to suit us is reprehensible.
  • Difficulty for policymakers: Kaushik Basu, formerly the chief economist of the World Bank, commenting on this episode has said that the tendency of fabricating data to present an alternative image has beset the Indian administration.
  • Not showcasing actual data is making it difficult for policymakers to attempt to remedy the situation.

Way forward

  •  A committee of secretaries’ meeting on January 30, 2020 discussed how India fared on various important parameters based on 32 internationally recognised indices in order to improve the performance on these indices.
  • The desire to introspect and analyse what needs to be done to improve is correct and laudable.
  •  Let NITI Aayog and all concerned organisations focus on improving our performance in all the declining indicators.

Consider the question “Ranking of the various agencies shows the declining trend of democratic values in India. What are the reasons for such decline?vSuggest the steps to arrest this decline.” 


Instead of denying these rankings and the reports of these agencies, India must work on fixing them.

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Foreign Policy Watch: India-SCO

Can the SCO be the regional body that stabilizes Afghanistan?


From UPSC perspective, the following things are important :

Prelims level : SCO

Mains level : Role of SCO in Afghan Peace

On the face of it, the summit meeting of the Shanghai Cooperation Organisation (SCO) this week in Dushanbe, Tajikistan, is well placed to lead the stabilization of Afghanistan after the American retreat.

About SCO

  • After the collapse of the Soviet Union in 1991, the then security and economic architecture in the Eurasian region dissolved and new structures had to come up.
  • The original Shanghai Five were China, Kazakhstan, Kyrgyzstan, Russia and Tajikistan.
  • The SCO was formed in 2001, with Uzbekistan included. It expanded in 2017 to include India and Pakistan.
  • Since its formation, the SCO has focused on regional non-traditional security, with counter-terrorism as a priority.
  • The fight against the “three evils” of terrorism, separatism and extremism has become its mantra. Today, areas of cooperation include themes such as economics and culture.

India’s and the SCO

  • India and Pakistan both were observer countries.
  • While Central Asian countries and China were not in favor of expansion initially, the main supporter — of India’s entry in particular — was Russia.
  • A widely held view is that Russia’s growing unease about an increasingly powerful China prompted it to push for its expansion.
  • From 2009 onwards, Russia officially supported India’s ambition to join the SCO. China then asked for its all-weather friend Pakistan’s entry.

Afghanistan and SCO

  • Afghanistan has been engaged with the SCO for over 15 years.
  • In 2012, Afghanistan became an observer in the SCO when then-Afghan president Hamid Karzai visited China.
  • In 2015, Kabul applied for full membership in the group.
  • Kabul sought to be a member of the SCO as it believes that it is a natural candidate.
  • Geographically, Afghanistan is a part of the SCO region.

Limited (or No) progress made by SCO

  • For all the political hype, the SCO has not deepened regionalism in Central Asia.
  • Two decades after its formation — it was set up just weeks before the 9/11 attacks on New York and Washington — the institutional promise of the SCO remains just that — a promise.
  • Seen from the subcontinent, the SCO certainly looks better than the South Asian Association of Regional Cooperation (SAARC).
  • That India and Pakistan, whose differences have prevented even regular meetings of SAARC, are actively participating in the SCO, would point to its attractiveness.
  • But then SAARC is such a low bar.

Opportunities for role-play in Afghanistan

The crisis in Afghanistan presents a major opportunity for the SCO to realize its regional ambitions.

  • Involvement of regional superpowers: The SCO’s importance for Afghanistan seems self-evident when you look at its sponsors and members. Its founding leaders are the two great powers of the east — Russia and China.
  • Neighborhood are members: Its other initial members were Uzbekistan, Tajikistan, Kyrgyzstan, and Kazakhstan to the north and northeast of Afghanistan.
  • Observers vested interest: Besides Afghanistan, Iran, Belarus and Mongolia are observers. Iran is said to be on track for full membership.
  • Many dialogue partners: The SCO has a number of “dialogue partners”. They include Armenia and Azerbaijan from the neighboring Caucasus region and Turkey a step further to the West. Nepal and Sri Lanka from the subcontinent and Cambodia from southeast Asia are also dialogue partners.

Issues with SCO

  • China centrism: For an organization that bears the name of Shanghai, but is focused on Central Asia, its associates look disparate.
  • Lack of coherence: The Central Asian members of the SCO have quarrels of their own, and have struggled to develop collective approaches to their common regional security challenges.
  • Dint go beyond dialogues: As it broadened its membership, the SCO has, unsurprisingly, struggled to deepen institutional cooperation.
  • Not comprehensive: There is also one important country missing in the mix. It is Turkmenistan, which shares an 800 km border with Afghanistan and a 1,150 km border with Iran.
  • Neutrality of members: The organizing principle of Turkmenistan rulers is absolute “neutrality” — think of it as an extreme form of “non-alignment”. It refuses to join any regional institution, political or military.
  • Individual interests: Russia’s effort to build a regional institution in its Central Asian periphery ran parallel to its plans for the so-called “strategic triangle” with China and India. India and Pakistan, needless to say, are poles apart on the Taliban.

No common interest in Afghan Peace

  • The US military retreat from Afghanistan has brought cheer to both Moscow and Beijing, although publicly they criticize President Joe Biden’s hasty retreat.
  • The US retreat might weaken the glue that binds Moscow and Beijing in Central Asia or tightens it.
  • Although Russia and China are closer to each other than ever before, their interests are not entirely the same in Central Asia.

Russian alternatives to SCO

(1) Central Security Treaty Organisation

  • While military confidence-building measures have grown under the SCO banner, Russia had its own security organisation for the region, called the Central Security Treaty Organisation (CSTO).
  • Three of the SCO members — Kazakhstan, Kyrgyzstan, and Tajikistan — along with Armenia and Belarus are members of the CSTO.
  • Russia sees itself as the sole protector of the former Soviet Republics and may not be ready to share that role with China — “yes” to coordination, but “no” to a Sino-Russian security dyarchy.

(2) Eurasian Economic Union

  • Moscow also appears reluctant to back Chinese proposals to promote trade integration under the SCO banner; it prefers the Eurasian Economic Union (EAEU) under its own leadership.
  • China is not a member of either CSTO or EAEU. This is one reason for the weakness of SCO regionalism.

Other deterrents

(1) Affinity with Taliban

  • China has openly admitted to cooperating with the Taliban by restoring all formal diplomatic ties. It is the first such country to acknowledge the Taliban.
  • Turkmenistan too, which is not part of SCO, has been quite open to engaging the Taliban in sync with its principles of neutrality.
  • Some Russian analysts see Turkmenistan as the potential weak link in the defense against the Taliban’s potential threats to the region.
  • Uzbekistan seems open to a cautious engagement with the Taliban.

(2) Iranian aspirations for unwarranted interference (just like Turkey does regarding Kashmir)

  • Iran, which has ethnic and linguistic links with the Persian-speaking Tajiks, appears equally worried about the Taliban’s policies towards minorities.
  • As Moscow and Beijing, Tehran was happy to see the Americans leave in humiliation and appeared hopeful of a positive engagement with the Taliban.
  • Those hopes may have been suspended for now, if not discarded.

What can the SCO do now?

  • The Afghanistan debacle presents an opportunity for the SCO to play a constructive role in meeting the region’s burgeoning security challenge.
  • Providing humanitarian relief, tending to refugees, facilitating an inclusive dialogue and national reconciliation constitute immediate and long-term goals in which the organization can fill a role.
  • The SCO can also pressure the Taliban to share power with other domestic actors and refrain from providing sanctuary to foreign terror organizations (through foreign funds from Saudi*).
  • It can suspend Afghanistan’s observer status, curtail border traffic or withhold recognition, investments, and aid, should Kabul be found wanting.

Way forward

  • While the SCO is not an impressive regional institution, it remains an important diplomatic forum.
  • India has sought to make full use of the SCO’s diplomatic possibilities without any illusions about its effectiveness.
  • At the SCO summit this week, PM Modi would remind other leaders of the “three evils” that the SCO set out to defeat — terrorism, extremism, and separatism.
  • Few would disagree that the Taliban embodied all the three sins in the past. Today, the Taliban and its mentor Pakistan say the sinner wants to become a saint.
  • India must focus on finding common ground with those members of the SCO who do share India’s concerns about Afghanistan.


  • Given this divergence, it is unlikely that the SCO can come up with a “regional solution” for the Afghan crisis.
  • The only real Afghan convergence today is between Pakistan and China.
  • Expect them to try and nudge the SCO towards a positive engagement with the Taliban.

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Goods and Services Tax (GST)

GST Council may consider bringing petrol, diesel under GST


From UPSC perspective, the following things are important :

Prelims level : GST Council

Mains level : Commodities left out of GST purview

The GST Council might consider taxing petrol, diesel and other petroleum products under the single national GST regime.

About GST Council

  • The GST Council is a constitutional body that aims to bring together states and the Centre on a common platform for the nationwide rollout of the indirect tax reform.
  • It is an apex member committee to modify, reconcile or to procure any law or regulation based on the context of goods and services tax in India.
  • It dictates tax rate, tax exemption, the due date of forms, tax laws, and tax deadlines, keeping in mind special rates and provisions for some states.
  • The predominant responsibility of the GST Council is to ensure to have one uniform tax rate for goods and services across the nation.

How is the GST Council structured?

  • The GST is governed by the GST Council. Article 279 (1) of the amended Indian Constitution states that the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A.
  • According to the article, the GST Council will be a joint forum for the Centre and the States. It consists of the following members:
  1. The Union Finance Minister will be the Chairperson
  2. As a member, the Union Minister of State will be in charge of Revenue of Finance
  3. The Minister in charge of finance or taxation or any other Minister nominated by each State government, as members.

Terms of reference

  • Article 279A (4) specifies that the Council will make recommendations to the Union and the States on the important issues related to GST, such as the goods and services will be subject to or exempted from the Goods and Services Tax.
  • They lay down GST laws, principles that govern the following:
  1. Place of Supply
  2. Threshold limits
  3. GST rates on goods and services
  4. Special rates for raising additional resources during a natural calamity or disaster
  5. Special GST rates for certain States

Why bring Petro/Diesel under GST?

  • GST is being thought to be a solution for the problem of near-record high petrol and diesel rates in the country, as it would end the cascading effect of tax on tax.
  • The state VAT is being levied not just on the cost of production but also on the excise duty charged by the Centre on such output.

Why were they left out of GST?

  • When a national GST subsumed central taxes such as excise duty and state levies like VAT on July 1, 2017, five petroleum goods – petrol, diesel, ATF, natural gas and crude oil – were kept out of its purview.
  • This is because both central and state government finances relied heavily on taxes on these products.
  • Since GST is a consumption-based tax, bringing petroleum under the regime would have mean states where these products are sold get the revenue and not the producer ones.
  • Simply put, Uttar Pradesh and Bihar with their huge population and a resultant high consumption would get more revenues at the cost of states like Gujarat.

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Goods and Services Tax (GST)

What is Input Tax Credit?


From UPSC perspective, the following things are important :

Prelims level : Input Tax Credit

Mains level : Not Much

The Supreme Court has confirmed a Madras High Court judgment which upheld a fiscal formula included in the Central Goods and Service Tax Rules to execute refund of unutilized Input Tax Credit (ITC) accumulated on account of input services.

What is Input Tax Credit?

  • Input credit means at the time of paying tax on output, you can reduce the tax you have already paid on inputs.
  • Say, you are a manufacturer – tax payable on output (FINAL PRODUCT) is Rs 450 tax paid on input (PURCHASES) is Rs 300 You can claim INPUT CREDIT of Rs 300 and you only need to deposit Rs 150 in taxes. See here:


The case in discussion

  • The apex court Bench led, by Justice D.Y. Chandrachud, passed the judgment in the face of two contradicting judgments of Gujarat and Madras High Courts on the validity of Rule 89(5) of the Central GST Rules, 2017.
  • Rule 89(5) provides a formula for the refund of ITC, in “a case of refund on account of inverted duty structure”.
  • The Gujarat High Court had held that by prescribing a formula in sub-Rule (5) of Rule 89 to execute refund of unutilized ITC accumulated on account of input services.
  • The Madras High Court, while delivering its judgment declined to follow the view of the Gujarat High Court.

Answer this PYQ in the comment box:

Consider the following items:

  1. Cereal grains hulled
  2. Chicken eggs cooked
  3. Fish processed and canned
  4. Newspapers containing advertising material

Which of the above items is/are exempt under GST (Goods and Services Tax)?

(a) 1 only

(b) 2 and 3 only

(c) 1, 2 and 4 only

(d) 1, 2, 3 and 4


Post your answers here

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North-East India – Security and Developmental Issues

50th anniversary of Meghalaya’s Statehood


From UPSC perspective, the following things are important :

Prelims level : States reorganization

Mains level : Not Much

The Meghalaya Assembly has given an indigenous touch to the National Anthem ahead of the 50th anniversary of Meghalaya’s Statehood in 2022.

About Meghalaya

  • Meghalaya meaning “abode of clouds” was formed by carving out two districts from the state of Assam: the United Khasi Hills and Jaintia Hills, and the Garo Hills on 21 January 1972.
  • It was previously part of Assam, but on 21 January 1972, the districts of Khasi, Garo and Jaintia hills became the new state of Meghalaya.
  • It is the wettest region of India, with the wettest areas in the southern Khasi Hills recording an average of 12,000 mm (470 in) of rain a year.
  • About 70 percent of the state is forested.
  • The Meghalaya subtropical forests ecoregion encompasses the state; its mountain forests are distinct from the lowland tropical forests to the north and south.

Note the chronology of reorganization states in India

State Formation Year Status prior to the formation
Andhra 1953 Part of the state of Madras
Gujarat 1960 Part of the state of Bombay
Maharashtra 1960 Part of the state of Bombay
Kerala 1956 State of Travancore and Cochin
Nagaland 1963 Union territory
Haryana 1966 Part of Punjab
Karnataka 1956 State of Mysore was formed in 1953, enlarged Mysore in 1956 which was renamed in 1973.
Himachal Pradesh 1971 Union Territory
Manipur, Tripura 1972 Union Territories
Meghalaya 1972 Autonomous state within state of Assam
Sikkim 1975 Associate state since 1974 and a protectorate of India before that.
Mizoram 1987 District of Assam till 1972 and Union Territory from 1972 to 1987.
Arunachal Pradesh 1987 Union Territory
Goa 1987 Union Territory
Uttarakhand 2000 Part of Uttar Pradesh
Chhattisgarh 2000 Part of Madhya Pradesh
Jharkhand 2000 Part of Bihar
Telangana 2014 Part of Andhra Pradesh


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Tiger Conservation Efforts – Project Tiger, etc.

Places in news: Pilibhit Tiger Reserve


From UPSC perspective, the following things are important :

Prelims level : Pilibhit Tiger Reserve

Mains level : Not Much

A herd of around 25 elephants from Nepal’s Shuklaphanta National Park reached the tiger reserve in Uttar Pradesh almost a month back.

Pilibhit Tiger Reserve

  • Pilibhit Tiger Reserve is located in Pilibhit district of Uttar Pradesh and was notified as a tiger reserve in 2014.
  • It is one of the few well-forested districts in Uttar Pradesh.
  • It forms part of the Terai Arc Landscape in the upper Gangetic Plain along the India-Nepal border.
  • The habitat is characterized by sal forests, tall grasslands and swamp maintained by periodic flooding from rivers.
  • The Sharda Sagar Dam extending up to a length of 22 km is on the boundary of the reserve.
  • The tiger reserve got the first international award TX2 for doubling the tiger population in a stipulated time.

Try answering this PYQ:

Q.Consider the following protected areas:

  1. Bandipur
  2. Bhitarkanika
  3. Manas
  4. Sunderbans

Which of the above are declared Tiger Reserves?

(a) 1 and 2 only

(b) 1, 3 and 4 only

(c) 2, 3 and 4 only

(d) 1, 2, 3 and 4


Post your answers here.

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