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  • India-Vietnam ties, from strong to stronger

    Context

    India and Vietnam are celebrating the 50th anniversary of their diplomatic relations.

    India-Vietnam relations background

    • Commonalities: India’s relations with Vietnam — some of which is based on a set of historical commonalities — predate any conflict between India and China as well as that between China and Vietnam.
    • Political and security engagement: As India pursues its ‘Act East Policy’, Vietnam has become a valuable partner in India’s political and security engagements in the Indo-Pacific region.

    Growing convergence between India and Vietnam

    • Convergence of strategic and economic interests: Bolstering friendship between the two countries is a natural outcome of a growing convergence of their strategic and economic interests, and also their common vision for peace, prosperity and their people.
    • Shared strategic concerns: The two countries are working to address shared strategic concerns (such as energy security and open and secure sea lines of communication), and make policy choices without undue external interference.
    • Given India’s broadening economic and strategic interests in the region and Vietnam’s desire for strategic autonomy, both countries will benefit from a stronger bilateral relationship.
    • Shared apprehension about China: India and Vietnam face territorial disputes with and shared apprehensions about their common neighbour, China.
    • Vietnam is of great strategic importance because its position enables it to control ‘the South China Sea — a true Mediterranean of the Pacific’.
    • The maritime domain, therefore, has become an essential element of India and Vietnam cooperation.
    • More importantly, India sees an open and stable maritime commons being essential to international trade and prosperity; therefore, it has an interest in protecting the sea lanes.
    • There are some other potential areas for New Delhi and Hanoi to further deepen collaboration, such as meaningful academic and cultural collaborations, shipbuilding, maritime connectivity, maritime education and research, coastal engineering, the blue economy, marine habitat conservation, and advance collaboration between maritime security agencies.

    Four factors responsible for growing maritime engagement with Vietnam

    • 1] Countering China: India’s aspiration to counter an assertive China by strengthening Vietnam’s military power.
    • 2] Security sea lines: With India’s increasing trade with East and Southeast Asia, India has begun to recognise the importance of its sea lines of communication beyond its geographical proximity; the South China Sea occupies a significant geostrategic and geo-economic position, resulting in India’s renewed interests in the South China Sea.
    • 3] Development in maritime domain: India desires to intensify its presence to track potential developments in the maritime domain that could affect its national interests.
    • 4] Naval partnership: The Indian Navy underlines the importance of a forward maritime presence and naval partnership that would be critical to deter potential adversaries.
    • India’s maritime strategic interests in the region are well established, including the fact that almost 55% of India’s trade with the Indo-Pacific region passes through the South China Sea.

    Strategic and defence cooperation

    • Ever since the formal declaration of a strategic partnership in 2007 and Comprehensive Strategic Partnership in 2016, the scope and scale of the India-Vietnam strategic and defence cooperation, particularly in the maritime domain, is deepening with a clear vision, institutional mechanisms.
    • The signing of ‘Joint Vision for Defence Cooperation’ and a memorandum of understanding on mutual logistics support in June 2022 has further strengthened mutual defence cooperation.
    • Enhancing Vietnam’s defence capabilities: While a U.S.$100 million Defence Line of Credit has been implemented, India has also announced early finalisation of another U.S.$500 million Defence Line of Credit to enhance Vietnam’s defence capability.
    • New Delhi has also agreed to expand military training and assist the Vietnam Navy’s strike capabilities.

    Cooperation in Indo-Pacific region

    •  India is willing to take a principled stand on territorial disputes in the hope that it contributes to the stabilisation of the Indo-Pacific.
    • Such positions align closely with Vietnam’s stance on the management of the South China Sea disputes.
    • The two countries are also engaging in wide-ranging practical cooperation in the maritime domain through a maritime security dialogue, naval exercises, ship visits, Coast Guard cooperation, and training and capacity building.
    • Working in various frameworks: Both countries have found mutual convergences on cooperation in the Indo-Pacific region and are synergising their efforts to work in bilateral as well as other sub-regional and multilateral frameworks, such as the Indian Ocean Rim Association (IORA), the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), the Mekong-Ganga Cooperation, ADMM-Plus or the ASEAN Defence Ministers Meeting-Plus.
    • Both countries are also looking at collaboration around the seven pillars of the Indo-Pacific Oceans Initiative (IPOI).

    Conclusion

    The road map agreed upon by the leaders will be helpful in addressing common challenges and decisively navigating towards making an India-Vietnam partnership that helps in stability in the Indo-Pacific.

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  • India’s Tenfold Path to manage Exchange Rate Volatility

    The RBI is prepared to sell a sixth of its foreign exchange reserves to defend the rupee against a rapid depreciation after it plumbed record lows in recent weeks.

    Must read:

    [Burning Issue] Global Trade in Rupees

    Is there a forex crisis underway?

    • And the way in which India has tackled foreign exchange crises over the years has been quite profound.
    • A forex crisis can be loosely defined as one where the rupee starts depreciating rapidly or when forex reserves slide precipitously.
    • Ever since India’s reforms of 1991-92, the external sector has been liberalized, with even full capital account convertibility being considered at one point.

    In the rupee’s context, let’s look at options that have been used in the last three decades or so:

    (1) Selling dollars

    • The first course of action has been selling dollars in the spot forex market.
    • This is fairly straightforward, but has limits as all crises are associated with declining reserves.
    • While this money is meant for a rainy day, they may just be less than adequate.
    • The idea of RBI selling dollars works well in the currency market, which is kept guessing how much the central bank is willing to sell at any point of time.

    (2) NRI deposits

    • The second tool used is aimed at garnering non-resident Indian (NRI) deposits.
    • It was done in 1998 and 2000 through Resurgent India bonds and India Millennium Deposits, when banks reached out asking NRIs to put in money with attractive interest rates.
    • The forex risk was borne by Indian banks.
    • This is always a useful way for the country to mobilize a good sum of forex, though the challenge is when the debt has to be redeemed.
    • At the time of deposits, the rates tend to be attractive, but once the crisis ends, the same rate cannot be offered on deposit renewals.
    • Therefore, the idea has limitations.

    (3) Let oil importers buy dollars themselves

    • The third option exercised often involves getting oil importing companies to buy dollars directly through a facility extended by a public sector bank.
    • Its advantage is that these deals are not in the open and so the market does not witness a large demand for dollars on this account.
    • It is more of a sentiment cooling exercise.

    (4) Let exporters trade in dollars

    • Another tool involves a directive issued for all exporters to mandatorily bring in their dollars on receipt that are needed for future imports.
    • This acts against an artificial dollar supply reduction due to exporter hold-backs for profit.

    (5) Liberalized Exchange Rate

    • The other weapon, once used earlier, is to curb the amount of dollars one can take under the Liberalized Exchange Rate Management System.
    • This can be for current account purposes like travel, education, healthcare, etc.
    • The amounts are not large, but it sends out a strong signal.

    (6) Forward-trade marketing

    • Another route used by RBI is to deal in the forward-trade market.
    • Its advantage is that a strong signal is sent while controlling volatility, as RBI conducts transactions where only the net amount gets transacted finally.
    • It has the same power as spot transactions, but without any significant withdrawal of forex from the system.

    (7) Currency swaps

    • The other tool in India’s armoury is the concept of swaps.
    • This became popular post 2013, when banks collected foreign currency non-resident deposits with a simultaneous swap with RBI, which in effect took on the foreign exchange risk.
    • Hence, it was different from earlier bond and deposit schemes.

    Most preferred options by the RBI

    • Above discussed instruments have been largely direct in nature, with the underlying factors behind demand-supply being managed by the central bank.
    • Of late, RBI has gone in for more policy-oriented approaches and the last three measures announced are in this realm.

    (8) Allowing banks to work in the NDF market

    • First was allowing banks to work in the non-deliverable forwards (NDF) market.
    • This is a largely overseas speculative market that has a high potential to influence domestic sentiment on our currency.
    • Here, forward transactions take place without real inflows or outflows, with only price differences settled in dollars.
    • This was a major pain point in the past, as banks did not have access to this segment.
    • By permitting Indian banks to operate here, the rates in this market and in domestic markets have gotten equalized.

    (9) Capital account for NRI deposits

    • More recently, RBI opened up the capital account on NRI deposits (interest rates than can be offered), external commercial borrowings (amounts that can be raised) and foreign portfolio investments (allowed in lower tenure securities), which has the potential to draw in forex over time.
    • Interest in these expanded contours may be limited, but the idea is compelling.

    (10) Settlement in Rupees

    • RBI’s permission for foreign trade deals to be settled in rupees is quite novel; as India is a net importer, gains can be made if we pay in rupees for imports.
    • The conditions placed on the use of surpluses could be a dampener for potential transactions.
    • But the idea is innovative and could also be a step towards taking the rupee international in such a delicate situation.
    • Clearly, RBI has constantly been exploring ways to address our forex troubles and even newer measures shouldn’t surprise us.

     

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  • Cheetahs likely to arrive in Kuno before August 15

     

    India came one step closer to bringing back the world’s fastest animal, the Cheetah to the country with an agreement signed in New Delhi with Namibia.

    Asiatic Cheetah

    • Cheetah, the world’s fastest land animal was declared extinct in India in 1952.
    • The Asiatic cheetah is classified as a “critically endangered” species by the IUCN Red List, and is believed to survive only in Iran.
    • It was expected to be re-introduced into the country after the Supreme Court lifted curbs for its re-introduction.

    Distribution of cheetahs in India

    • Historically, Asiatic cheetahs had a very wide distribution in India.
    • There are authentic reports of their occurrence from as far north as Punjab to Tirunelveli district in southern Tamil Nadu, from Gujarat and Rajasthan in the west to Bengal in the east.
    • Most of the records are from a belt extending from Gujarat passing through Maharashtra, Madhya Pradesh, Uttar Pradesh, Chhattisgarh, Jharkhand and Odisha.
    • There is also a cluster of reports from southern Maharashtra extending to parts of Karnataka, Telangana, Kerala and Tamil Nadu.
    • The distribution range of the cheetah was wide and spread all over the subcontinent. They occurred in substantial numbers.
    • The cheetah’s habitat was also diverse, favouring the more open habitats: scrub forests, dry grasslands, savannahs and other arid and semi-arid open habitats.

    What caused the extinction of cheetahs in India?

    • The major reasons for the extinction of the Asiatic cheetah in India:
    1. Reduced fecundity and high infant mortality in the wild
    2. Inability to breed in captivity
    3. Sport hunting and
    4. Bounty killings
    • It is reported that the Mughal Emperor Akbar had kept 1,000 cheetahs in his menagerie and collected as many as 9,000 cats during his half-century reign from 1556 to 1605.
    • The cheetah numbers were fast depleting by the end of the 18th century even though their prey base and habitat survived till much later.
    • It is recorded that the last cheetahs were shot in India in 1947, but there are credible reports of sightings of the cat till about 1967.

    Conservation objectives for their re-introduction

    • Based on the available evidence it is difficult to conclude that the decision to introduce the African cheetah in India is based on science.
    • Science is being used as a legitimising tool for what seems to be a politically influenced conservation goal.
    • This also in turn sidelines conservation priorities, an order of the Supreme Court, socio-economic constraints and academic rigour.
    • The issue calls for an open and informed debate.

    Issues in re-introduction

    • Experts find it difficult whether the African cheetahs would find the sanctuary a favorable climate as far as the abundance of prey is concerned.
    • The habitat of cheetahs is needed to support a genetically viable population.

     

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  • Heat Waves across the Europe

    The UK posted its highest temperature ever recorded — crossing 40°C.  Parts of France, Spain and Portugal recorded temperatures between 42 and 46 degrees.

    Why in news?

    • Dozens of towns and regions across Europe reeled under what has been described as a “heat apocalypse”, which has caused widespread devastation this year.
    • Wildfires caused by a combination of extreme heat and dry weather have destroyed 19,000 hectares of forest in southwestern France.

    What is a Heatwave and when is it declared?

    • Heatwaves occur over India between March and June.
    • IMD declares a heatwave event when the maximum (day) temperature for a location in the plains crosses 40 degrees Celsius.
    • Over the hills, the threshold temperature is 30 degrees Celsius.

    How are they formed?

    • Heatwaves form when high pressure aloft (3,000–7,600 metres) strengthens and remains over a region for several days up to several weeks.
    • This is common in summer (in both Northern and Southern Hemispheres) as the jet stream ‘follows the sun’.
    • On the equator side of the jet stream, in the upper layers of the atmosphere, is the high pressure area.
    • Summertime weather patterns are generally slower to change than in winter. As a result, this upper level high pressure also moves slowly.
    • Under high pressure, the air subsides (sinks) toward the surface, warming and drying adiabatically, inhibiting convection and preventing the formation of clouds.
    • Reduction of clouds increases shortwave radiation reaching the surface.
    • A low pressure at the surface leads to surface wind from lower latitudes that brings warm air, enhancing the warming.
    • Alternatively, the surface winds could blow from the hot continental interior towards the coastal zone, leading to heat waves.

    Following criteria are used to declare a heatwave:

    To declare heatwave, the below criteria should be met at least in 2 stations in a Meteorological subdivision for at least two consecutive days and it will be declared on the second day.

    a) Based on Departure from Normal

    • Heat Wave: Departure from normal is 4.5°C to 6.4°C
    • Severe Heat Wave: Departure from normal is >6.4°C

    b) Based on Actual Maximum Temperature (for plains only)

    • Heat Wave: When actual maximum temperature ≥ 45°C
    • Severe Heat Wave: When actual maximum temperature ≥47°C

    How long can a heatwave spell last?

    • A heatwave spell generally lasts for a minimum of four days.
    • On some occasions, it can extend up to seven or ten days.

    Impact of Heat Waves

    • Heat Strokes: The very high temperatures or humid conditions pose an elevated risk of heat stroke or heat exhaustion.
    • Healthcare crisis: Effects from extreme heat are also associated with increased hospitalisations and emergency room visits, increased deaths from cardio-respiratory and other diseases, mental health issues, adverse pregnancy and birth outcomes, etc.
    • Productivity loss: Extreme heat also lessens worker productivity, especially among the more than 1 billion workers who are exposed to high heat on a regular basis.
    • Risk of Wildfires: The heat domes act as fuel to wildfires, which destroys a lot of land area every year in countries like the US.
    • Prevents Cloud Formation: The condition also prevents clouds from forming, allowing for more radiation from the sun to hit the ground.
    • Effect on Vegetation: The trapping of heat can also damage crops, dry out vegetation and result in
    • Increased Energy Demands: The sweltering heat wave also leads to rise in energy demand, especially electricity, leading to pushing up rates.
    • Power Related Issues: Heat waves are often high mortality disasters.
    • Infrastructure failure: Avoiding heat-related disasters depends on the resilience of the electrical grid, which can fail if electricity demand due to air conditioning use exceeds supply.

    What is behind the extreme heat waves in Europe?

    Ans. Climate change, but exactly how

    • Scientists are near-unanimous that the heat waves are a result of climate change caused by human activity.
    • Global temperatures have already risen by more than 1°C , and studies in the UK had shown that a one degree rise in temperature raises the probability of the country witnessing 40°C by ten times.
    • The rising global temperature, which this year led to deviations above the normal by as much as 15 degrees in Antarctica, and by more than 3 degrees in the north pole.

    Major factor: Changes in old wind patterns

    • In the case of the US, the record temperatures are being linked to changes in the jet stream — a narrow band of westerly air currents that circulate several km above the earth’s surface.
    • While a conventionally strong jet stream would bring cooler air from the northern Atlantic, in recent years the jet stream has weakened and split into two.
    • This has led to intense and more frequent heat waves over parts of the American continent.

     

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  • Micronesia: the remote Pacific Islands

    The Federated States of Micronesia is one of the latest places on Earth to experience an outbreak of Covid-19, after two and a half years of successfully protecting itself from the virus.

    Where is Micronesia?

    • FSM is located in the Western Pacific, in the Micronesia sub-region of Oceania.
    • It consists of four island states, Yap, Chuuk, Kosrae and Pohnpei (where the capital Palikir is located), all in the Caroline Islands.
    • Also known as the Carolines, it is a scattered archipelago of small islands that are divided between Micronesia and the Republic of Palau.
    • FSM is composed of 607 islands and islets with a total land area of 702 square km.

    Its geography

    • While this area is rather small, the islands stretch across an estimated 2,900 sq. km of sea, giving the nation the 14th largest Exclusive Economic Zone (EEZ) in the world.
    • EEZs grant countries special right over marine resources up to 370 km from their coasts.
    • The Federated States of Micronesia shares its sea borders with other small island nations and territories in the Micronesia region like Guam, the Republic of Marshall Islands, Palau, Kiribati, and the Mariana Islands.
    • Its larger neighbouring states — separated by large swathes of the Pacific Ocean — including the Philippines in the west, Hawaii in the east, Papua New Guinea and Australia to the south, and Japan to the north.

     

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  • What are Tetrapods?

    In Mumbai, the unusual vibrations (like earthquakes), coinciding with high-tide times, were the result of the relocation of tetrapods as part of the ongoing Coastal Road Project (MCRP).

    What are tetrapods?

    • Tetra pod in Greek means four-legged.
    • These are four-legged concrete structures that are placed along coastlines to prevent erosion and water damage.
    • Tetrapods were first used in France in the late 1940s to protect the shore from the sea.
    • They are typically placed together to form an interlocking but porous barrier that dissipates the power of waves and currents.
    • These are large structures, sometimes weighing up to 10 tonnes, and interlocked tetra pods act as a barrier that remains stable against the rocks when buffeted by waves.
    • Tetrapods, each weighing about 2 tonnes, were placed along Marine Drive in the late 1990s to break and dissipate waves and maintain the reclaimed shoreline in South Mumbai.

    How do we know that the removal of the tetrapods was responsible?

    • The BMC has provided vibration monitoring instruments at the site to study the impact of the phenomenon.
    • While the corporation has not officially stated that the removal of the tetrapods caused the vibrations, it has agreed to re-install the structures.
    • They would be put back over the next two-three days during low tide.

     

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  • Why there is no reason to panic over the rupee

    Context

    Rupee hits the all-time low of 80 against US dollar recently. The enormity of the challenges can be gauged by these numbers: Since the beginning of war, foreign exchange reserves have declined by $51-billion, total portfolio outflows have been $23 billion, and the current account deficit is now certain to breach $100 billion.

    Is depreciation of rupee sign of weak domestic fundamentals?

    • In case of strong domestic fundamentals: In an ideal world, if domestic economic fundamentals are strong, the depreciation of the rupee should be accompanied by an appreciation of the Dollar Index (DXY) along similar lines.
    • In case of weak fundamentals: Between January 2008 and February 2012 and October 2012 and May 2014, on a cumulative basis, the rupee had lost a whopping 48.7 per cent against the USD, even as the DXY had appreciated by a modest 5.2 per cent.
    • This indicates that much of the decline in rupee value then was purely because of weak domestic macro fundamentals.
    • Current scenario:  The rupee has depreciated by a modest 5.6 per cent since the Russian invasion of Ukraine, though the DXY has appreciated by 11.3 per cent.
    •  Thus, the recent decline in the rupee has been more because of the strengthening of the dollar and not because of weak fundamentals at home.

    Reasons for the dominance of dollar

    • In principle, Bretton Woods ensured that the dollar would be a “trust” currency.
    • The US sits at the centre of an international financial system where its assets have been in high demand.
    • For instance, frantically growing Asian economies whose penchant for US government securities have also made them susceptible to sudden changes in expectations and economic sentiments sweeping the globe.
    • The recent disturbances in the global supply chain and volatile commodity prices have only made the job more difficult.

    What explains the recent strengthening of dollar

    • High interest rates in the US: The recent gains in the dollar have come along expectations of aggressive monetary policy by the US Fed compared to other major jurisdictions, particularly, the Eurozone and Japan.
    • Markets expect the Fed to continue on its path of interest rate normalisation with multiple rate hikes.
    • Low interest rates in the Eurozone: The European Central Bank (ECB) appears behind the curve, its communication with markets is as uncertain as the political and climatic hot winds criss-crossing the Eurozone.
    • Low interest rates in Japan: The Bank of Japan has taken a completely divergent path, continuing its accommodative monetary policy despite the hammering of the yen.
    • This has augured well for the dollar, obscuring the question of how the Fed failed to anticipate the surge in inflation.

    Measures by the RBI and the government

    • As currencies reel under the weight of an unrelenting dollar, questions on the rupee’s performance and future are a natural corollary, more so in the wake of hitting the psychological mark of Rs 80/dollar.
    • In 2013, when the rupee was in a free fall, stability was finally restored but it came at a cost — a debt buildup of $34.5 FCNR(B).
    • This time, the RBI and government have taken a long-term view of bolstering dollar inflows, which is perfectly justified.
    • The RBI, in close tandem with the government, has been supportive of the rupee, and is also now embarking on an unprecedented journey to internationalise the currency. 

    Conclusion

    A direct casualty of the Ukraine war is that the Indian rupee has now depreciated by 5.6 per cent against the dollar. In terms of relative performance, however, the rupee has done quite well compared to most of its counterparts.

    Back2Basics: US Dollar Index

    • The U.S. dollar index (USDX) is a measure of the value of the U.S. dollar relative to a basket of foreign currencies.
    • The USDX was established by the U.S. Federal Reserve in 1973 after the dissolution of the Bretton Woods Agreement.
    • It is now maintained by ICE Data Indices, a subsidiary of the Intercontinental Exchange (ICE).
    • The six currencies included in the USDX are often referred to as America’s most significant trading partners, but the index has only been updated once: in 1999 when the euro replaced the German mark, French franc, Italian lira, Dutch guilder, and Belgian franc.
    • Consequently, the index does not accurately reflect present-day U.S. trade.

    Bretton Woods Agreement and Systems

    • The Bretton Woods Agreement was negotiated in July 1944 by delegates from 44 countries at the United Nations Monetary and Financial Conference held in Bretton Woods, New Hampshire.
    • Thus, the name “Bretton Woods Agreement.
    • Under the Bretton Woods System, gold was the basis for the U.S. dollar and other currencies were pegged to the U.S. dollar’s value.
    • The Bretton Woods System effectively came to an end in the early 1970s when President Richard M. Nixon announced that the U.S. would no longer exchange gold for U.S. currency.

    FCNR(B)

    • An FCNR ( Foreign Currency Non-resident) account is a type of term deposit that NRIs can hold in India in a foreign currency.
    • FCNR (A) was introduced in 1975 to encourage NRI deposits.
    • The Reserve Bank of India (RBI) guaranteed the exchange rate prevalent at the time of a deposit to eliminate risk to depositors.
    • In 1993, the apex bank introduced FCNR (B), without exchange rate guarantee, to replace FCNR (A).

  • A five-point plan to boost renewable energy

    Context

    As the fallout of Russia’s invasion of Ukraine ripples across the globe, the response of some nations to the growing energy crisis has been to double down on fossil fuels, pouring billions more dollars into the coal, oil and gas that are deepening the climate emergency.

    Need for transition to renewable energy

    • Fossil fuels are the cause of the climate crisis.
    • Renewable energy can limit climate disruption and boost energy security. Renewables are the peace plan of the 21st century.
    • But the battle for a rapid and just energy transition is not being fought on a level field.
    • Investors are still backing fossil fuels, and governments still hand out billions in subsidies for coal, oil and gas — about $11 million every minute.
    • The only true path to energy security, stable power prices, prosperity and a livable planet lies in abandoning polluting fossil fuels and accelerating the renewables-based energy transition.
    • We must reduce emissions by 45 per cent by 2030 and reach net-zero emissions by mid-century.
    • But current national commitments will lead to an increase of almost 14 per cent this decade.
    • Reducing cost:  The cost of solar energy and batteries has plummeted 85 per cent over the past decade.
    • The cost of wind power fell by 55 per cent. And investment in renewables creates three times more jobs than fossil fuels.
    • Nature-based solutions: Of course, renewables are not the only answer to the climate crisis.
    • Nature-based solutions, such as reversing deforestation and land degradation, are essential.
    • So too are efforts to promote energy efficiency.
    • But a rapid renewable energy transition must be our ambition.

    Five point plan to boost renewable

    • 1] Renewable energy technology as global good: We must make renewable energy technology a global public good, including removing intellectual property barriers to technology transfer.
    • 2] Improve global access: We must improve global access to supply chains for renewable energy technologies, components and raw materials.
    • In 2020, the world installed five gigawatts of battery storage.
    • We need 600 gigawatts of storage capacity by 2030.
    • Shipping bottlenecks and supply-chain constraints, as well as higher costs for lithium and other battery metals, are hurting the deployment of such technologies and materials.
    • 3] Fast-tracking : We must cut the red tape that holds up solar and wind projects.
    • We need fast-track approvals and more effort to modernise electricity grids.
    • 4] Shifting energy subsidies: The world must shift energy subsidies from fossil fuels to protect vulnerable people from energy shocks and invest in a just transition to a sustainable future.
    • Increase investment in renewables: We need to triple investments in renewables.
    • This includes multilateral development banks and development finance institutions, as well as commercial banks.

    Conclusion

    When energy prices rise, so do the costs of food and all the goods we rely on. So, let us all agree that a rapid renewables revolution is necessary and stop fiddling while our future burns.

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  • No inner-party democracy

    Context

    The ousting of Boris Johnson as leader of the British Conservative Party is the latest in a series of coups periodically mounted by the party’s MPs. What is instructive about this whole process, however, is how much power ordinary MPs have over the Prime Minister.

    Lack of inner-party democracy in India

    • A Prime Minister in UK has to be able to maintain the confidence of his own backbencher MPs at all times or risk political oblivion.
    • If there is a sense that the leader is no longer acceptable to the country, then a well-oiled machine springs into action to protect the party’s electoral gains by providing fresh leadership.
    • In India, PM exercises absolute authority over party MPs, whose ability to even diverge slightly from the official government line on routine policy matters is almost non-existent.
    • Impact of anti-defection law: The Prime Minister’s power is strengthened by India’s unique anti-defection set-up, where recalcitrant MPs who do not manage to carry two-thirds of their colleagues with them can always be disqualified.
    • Lack of autonomy: In effect, MPs do not enjoy any autonomy at all to question and challenge their party leadership.
    • Prime Ministers or Chief Ministers at the State level are chosen by party high command, and then submitted to MPs/MLAs to be rubber stamped.

    Way forward

    • Strengthening local constituency party:  It is time for India to seriously consider empowering its elected representatives, to ensure accountability for party leadership.
    • MPs in the U.K. are able to act boldly because they do not owe their nomination to the party leader, but are selected by the local constituency party.
    • In India, however, it is the party leadership that decides candidates, with an informal consultation with the local party.
    • Amending anti-defection law: Neither do MPs in the U.K. stand a risk of disqualification if they speak out against the leader, a threat perpetuated in India through the anti-defection law.
    • These factors are the biggest stumbling blocks towards ensuring inner-party democracy in India.
    • System on the lines of 1922 Committee in UK: In U.K. where individual Conservative MPs write to the 1922 Committee (which comprises backbench MPs, and looks out for their interests) expressing that they have “no confidence” in their leader.
    • If a numerical or percentage threshold (15% of the party’s MPs in the U.K.) is breached, an automatic leadership vote is triggered, with the party leader forced to seek a fresh mandate from the parliamentary party.
    •  Of course, the only way such a model would work is if an exception is made to the anti-defection law.

    Conclusion

    Inner-party democracy is a essential for keeping the spirit of democracy alive. Westminster model dictates that control over candidates must shift from central party leaders to local party members.

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  • Explained: Weapons of Mass Destruction and their Delivery Systems Amendment Bill, 2022

    External Affairs Minister S Jaishankar has introduced The Weapons of Mass Destruction (WMD) and their Delivery Systems (Prohibition of Unlawful Activities) Amendment Bill, 2022, which will amend the 2005 Act.

    What is the WMD Bill?

    • The Bill amends the WMD and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005 which prohibits the unlawful manufacture, transport, or transfer of WMD (chemical, biological and nuclear weapons) and their means of delivery.
    • It is popularly referred to as the WMD Act.
    • The recent amendment extends the scope of banned activities to include financing of already prohibited activities.
    • The WMD and their Delivery Systems (Prohibition of Unlawful Activities) Act came into being in July 2005.

    India’s 2005 WMD Act defines-

    1. “Biological Weapons” as “microbial or other biological agents, or toxins…of types and in quantities that have no justification for prophylactic, protective or other peaceful purposes; and weapons, equipment or delivery systems specially designed to use such agents or toxins for hostile purposes or in armed conflict”; and
    2. “Chemical Weapons” as “toxic chemicals and their precursors” except where used for peaceful, protective, and certain specified military and law enforcement purposes; “munitions and devices specifically designed to cause death or other harm through the toxic properties of those toxic chemicals”; and any equipment specifically designed for use in connection with the employment of these munitions and devices.

    What was the purpose of the original WMD Act?

    • Its primary objective was to provide integrated and overarching legislation on prohibiting unlawful activities in relation to all three types of WMD, their delivery systems, and related materials, equipment, and technologies.
    • It instituted penalties for contravention of these provisions such as imprisonment for a term not less than five years (extendable for life) as well as fines.
    • The Act was passed to meet an international obligation enforced by the UN Security Council Resolution (UNSCR) 1540 of 2004.

    What is the UNSCR 1540?

    • In April 2004 the UN Security Council adopted resolution 1540 to address the growing threat of non-state actors gaining access to WMD material, equipment or technology to undertake acts of terrorism.
    • In order to address this challenge to international peace and security, UNSCR 1540 established binding obligations on all UN member states under Chapter VII of the UN Charter.
    • Nations were mandated to take and enforce effective measures against proliferation of WMD, their means of delivery and related materials to non-state actors.
    • It was to punish the unlawful and unauthorised manufacture, acquisition, possession, development and transport of WMD became necessary.

    UNSCR 1540 enforced three primary obligations upon nation states —

    1. To not provide any form of support to non-state actors seeking to acquire WMD, related materials, or their means of delivery;

    2. To adopt and enforce laws criminalising the possession and acquisition of such items by non-state actors;

    3. To adopt and enforce domestic controls over relevant materials, in order to prevent their proliferation.

    What has the Amendment added to the existing Act?

    • The Amendment expands the scope to include prohibition of financing of any activity related to WMD and their delivery systems.
    • To prevent such financing, the Central government shall have the power to freeze, seize or attach funds, financial assets, or economic resources of suspected individuals (whether owned, held, or controlled directly or indirectly).
    • It also prohibits persons from making finances or related services available for other persons indulging in such activity.

    Why was this Amendment necessary?

    • India echoes these developments for having made the Amendment necessary.
    • Two specific gaps are being addressed-
    1. As the relevant organisations at the international level, such as the Financial Action Task Force have expanded the scope of targeted financial sanctions and India’s own legislation has been harmonised to align with international benchmarks.
    2. With advancements in technologies, new kinds of threats have emerged that were not sufficiently catered for in the existing legislation.
    • These notably include developments in the field of drones or unauthorised work in biomedical labs that could maliciously be used for terrorist activity.
    • Therefore, the Amendment keeps pace with evolving threats.

    What more should India do?

    • India’s responsible behaviour and actions on non-proliferation are well recognised.
    • It has a strong statutory national export control system and is committed to preventing proliferation of WMD.
    • This includes transit and trans-shipment controls, retransfer control, technology transfer controls, brokering controls and end-use based controls.
    • Every time India takes additional steps to fulfil new obligations, it must showcase its legislative, regulatory and enforcement frameworks to the international community.
    • It is also necessary that India keeps WMD security in international focus.

    Setting up a precedence

    • There is no room for complacency.
    • Even countries which do not have WMD technology have to be sensitised to their role in the control framework to prevent weak links in the global control system.
    • India can offer help to other countries on developing national legislation, institutions and regulatory framework through the IAEA (International Atomic Energy Agency) or on bilateral basis.

    Could the Amendment become troublesome to people on account of mistaken identity?

    • In the discussion on the Bill in Parliament, some members expressed concern on whether the new legislation could make existing business entities or people in the specific sector susceptible to a case of mistaken identity.
    • The External Affairs Minister, however, assured the House that such chances were minimal since identification of concerned individuals/entities would be based on a long list of specifics.

    What is the international significance of these legislation?

    • Preventing acts of terrorism that involve WMD or their delivery systems requires building a network of national and international measures in which all nation states are equally invested.
    • Such actions are necessary to strengthen global enforcement of standards relating to the export of sensitive items and to prohibit even the financing of such activities.

    Way forward

    • Sharing of best practices on legislations and their implementation can enable harmonization of global WMD controls.
    • India initially had reservations on enacting laws mandated by the UNSCR.
    • This is not seen by India as an appropriate body for making such a demand.
    • However, given the danger of WMD terrorism that India faces in view of the difficult neighbourhood that it inhabits, the country supported the Resolution and has fulfilled its requirements.

    Conclusion

    • It is in India’s interest to facilitate highest controls at the international level and adopt them at the domestic level.
    • Having now updated its own legislation, India can demand the same of others, especially from those in its neighbourhood that have a history of proliferation and of supporting terrorist organisations.

    Back2Basics:

    Nuclear Security Contact Group

    • The NSCG was established in 2016.
    • The NSCG or “Contact Group” has been established with the aim of facilitating cooperation and sustaining engagement on nuclear security after the conclusion of the Nuclear Security Summit process.
    • The Contact Group is tasked with:
    1. Convening annually on the margins of the General Conference of the International Atomic Energy Agency (IAEA), and, as may be useful, in connection with other related meetings
    2. Discussing a broad range of nuclear security-related issues, including identifying emerging trends that may require more focused attention

    Nuclear Suppliers Group

    • NSG is a group of nuclear supplier countries that seeks to contribute to the non-proliferation of nuclear weapons through the implementation of guidelines for nuclear exports and nuclear-related exports.
    • The NSG was set up as a response to India’s nuclear tests conducted in 1974.
    • The aim of the NSG is to ensure that nuclear trade for peaceful purposes does not contribute to the proliferation of nuclear weapons.

    Comprehensive Nuclear-Test-Ban Treaty

    • CTBT was negotiated at the Conference on Disarmament in Geneva and adopted by the United Nations General Assembly in 1996.
    • The Treaty intends to ban all nuclear explosions – everywhere, by everyone.
    • It was opened for signature in 1996 and since then 182 countries have signed the Treaty, most recently Ghana has ratified the treaty in 2011.

    Fissile material cut-off treaty

    • FMCT is a proposed international agreement that would prohibit the production of the two main components of nuclear weapons: highly-enriched uranium (HEU) and plutonium.
    • Discussions on this subject have taken place at the UN Conference on Disarmament (CD), a body of 65 member nations established as the sole multilateral negotiating forum on disarmament.
    • The CD operates by consensus and is often stagnant, impeding progress on an FMCT.
    • Those nations that joined the nuclear NPT as non-weapon states are already prohibited from producing or acquiring fissile material for weapons.
    • An FMCT would provide new restrictions for the five recognized nuclear weapon states (NWS—United States, Russia, United Kingdom, France, and China), and for the four nations that are not NPT members (Israel, India, Pakistan, and North Korea).

     

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