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  • Charting a trade route after the MC12

    Context

    The World Trade Organization (WTO)’s 12th Ministerial Conference (MC12) is being convened in Geneva, Switzerland at the end of this month.

    Ministerial Conferences

    • The topmost decision-making body of the WTO is the Ministerial Conference, which usually meets every two years. It brings together all members of the WTO, all of which are countries or customs unions.
    • The Ministerial Conference can take decisions on all matters under any of the multilateral trade agreements

    The task ahead for MC12

    • Recent WTO estimates show that global trade volumes could expand by almost 11% in 2021, and by nearly 5% in 2022, and could stabilise at a level higher than the pre-COVID-19 trend.
    • The MC12 needs to consider how in these good times for trade, the economically weaker countries “can secure a share in the growth in international trade commensurate with the needs of their economic development’, an objective that is mandated by the Marrakesh Agreement Establishing the World Trade Organization.
    • Some of the areas are currently witnessing intense negotiations, these include adoption of WTO rules on electronic commerce, investment facilitation, and fisheries subsidies.

    Following issues will form the basis of MC12 discussions

    1) IPR waiver for Covid-19 related technologies

    • Pharmaceutical companies have used monopoly rights granted by their IPRs to deny developing countries access to technologies and know-how, thus undermining the possibility of production of vaccines in these countries.
    • To remedy this situation, India and South Africa had tabled a proposal in the WTO in October 2020, for waiving enforcement of several forms of IPRs on “health products and technologies including diagnostics, therapeutics, vaccines, medical devices.
    •  This proposal, supported by nearly two-thirds of the organisation’s membership, was opposed by the developed countries batting for their corporates.
    • The unfortunate reality of the current discussions is that an outcome supporting affordable access to COVID-19 vaccines and medicines looks distant.

    2) Fisheries subsidies

    • Discussions on fisheries subsidies have been hanging fire for a long time, there is considerable push for an early conclusion of an agreement to rein in these subsidies.
    • The current drafts on this issue do not provide the wherewithal to rein in large-scale commercial fishing.
    • Large scale commercial fishing is depleting fish stocks the world over, and at the same time, are threatening the livelihoods of small fishermen in countries such as India.

    3) E-commerce

    • Discussions on e-commerce are being held in the WTO since 1998, wherein WTO members agreed to “continue their practice of not imposing customs duties on electronic transmissions”.
    • The more substantive outcome was the decision to “establish a comprehensive work programme” taking into “account the economic, financial, and development needs of developing countries”.
    • However, in 2021, a key focus of the 1998 e-commerce work programme, namely “development needs of developing countries”, is entirely missing from the text document that is the basis for the current negotiations.
    • On the negotiating table are issues relating to the liberalisation of the goods and services trade, and of course guarantee for free flow of data across international boundaries, all aimed at facilitating expansion of businesses of e-commerce firms.
    • In fact, the decision on a moratorium on the imposition of import duties agreed to in 1998 has become the basis for a push towards comprehensive trade liberalisation — a perfectly logical way forward, given that the sole objective of the negotiations on e-commerce is to facilitate expansion of e-commerce firms.

    4) Investment facilitation

    • Inclusion of substantive provisions on investment in the WTO has been one of the more divisive issues.
    • In 2001, the Doha Ministerial Declaration had included a work programme on investment, but developing countries were opposed to its continuation because the discussions were geared to expanding the rights of foreign investors through a multilateral agreement on investment.
    • An investment facilitation has reintroduced the old agenda of concluding such an investment agreement.

    Issues with the negotiations

    • The negotiations on e-commerce and investment facilitation are being conducted not by a mandate given by the entire membership of the WTO in a transparent manner.
    • Instead, these negotiations owe their origins to the so-called “Joint Statement Initiatives” (JSI) in which a section of the membership has developed the agenda with a view to producing agreements in the WTO.
    •  This entire process is “detrimental to the very existence of a rule-based multilateral trading system under the WTO”, as India and South Africa have forcefully argued in a submission against the JSIs early this year.

    Conclusion

    Current favourable tidings provide an ideal setting for the Trade Ministers from the WTO member-states to revisit trade rules and to agree on a work programme for the organisation, which can help maintain the momentum in trade growth.

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  • Life, work and legend of Adi Shankaracharya

    PM has unveiled a 12-foot statue of Adi Shankaracharya at Kedarnath, where the acharya is believed to have attained samadhi at the age of 32 in the ninth century.

    Adi Shankaracharya (788-820 AD)

    • Adi Shankaracharya was an Indian philosopher and theologian whose works had a strong impact on the doctrine of Advaita Vedanta.
    • He founded mathas, which are believed to have helped in the historical development, revival and propagation of his philosophy.
    • The story recounted today has been reconstructed from multiple Shankaravijayas (Conquests of Shankara) written over the centuries.

    Birth and death

    • He is said to have been born in Kaladi village on the bank of the Periyar, the largest river in Kerala.
    • He is believed to have attained samadhi at Kedarnath; however, Kanchi and Thrissur are also talked about as places where Adi Shankara spent his last days.

    His literary works

    • Adi Shankara is generally identified as the author of 116 works.
    • Among them the celebrated commentaries (bhashyas) on 10 Upanishads, the Brahmasutra and the Gita, and poetic works including Vivekachudamani, Maneesha Panchakam, and Saundaryalahiri.
    • He composed the Kanakadhara Stotram, following which there was a rain of golden amlas, which brought prosperity to the household.
    • It has also been claimed that Adi Shankara composed texts like Shankarasmrithi, which seeks to establish the social supremacy of Nambuthiri Brahmins.
    • His great standing is derived from his commentaries of the prasthanatrayi (Upanishads, Brahmasutra and Gita), where he explains his understanding of Advaita Vedanta.

    His philosophy: Advaita Vedanta

    • Advaita Vedanta articulates a philosophical position of radical nondualism, a revisionary worldview which it derives from the ancient Upanishadic texts.
    • According to this, the Upanishads reveal a fundamental principle of nonduality termed ‘brahman’, which is the reality of all things.
    • Advaitins understand brahman as transcending individuality and empirical plurality.
    • They seek to establish that the essential core of one’s self (atman) is brahman. It is pure non-intentional consciousness.
    • It is one without a second, nondual, infinite existence, and numerically identical with brahman.
    • This effort entails tying a metaphysics of brahman to a philosophy of consciousness.

    Do you know?

    There are six major schools of Vedic philosophy—Nyaya, Vaisheshika, Samkhya, Yoga, Mīmāṃsā and Vedanta, and five major heterodox (sramanic) schools—Jain, Buddhist, Ajivika, Ajñana, and Charvaka.

    Shankara’s contested legacy

    • Custodians of the caste system cite from Shankara’s commentaries to justify the unequal and unjust social order.
    • It is argued that the Advaita Vedanta borrowed the categories of Buddhist thinkers and called him the Prachhanna Buddha (Buddha in disguise).
    • Sri Narayana Guru offered a radical reading of Advaita Vedanta to dismantle the theory and praxis of caste.

    His political appropriation

    • His works transcends the political boundaries of his time.
    • The mathas are believed to have established in Sringeri, Dwaraka, Puri, and Joshimath for the spread of Advaita Vedanta.
    • They are seen as custodians of Hinduism, and Shankara’s digvijaya (conquest) often interpreted as a near nationalistic project where faith, philosophy and geography are yoked together to imagine a Hindu India.

    Try this PYQ:

    Q. Which one of the following pairs does not form part of the six systems of Indian Philosophy?

    (a) Mimamsa and Vedanta

    (b) Nyaya and Vaisheshika

    (c) Lokayata and Kapalika

    (d) Sankhya and Yoga

     

    [wpdiscuz-feedback id=”3mjk4sylx4″ question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

     

     

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  • Infrastructure Investment Trusts (InvITs)

    The National Highway Authority of India’s first infrastructure investment trust has raised more than Rs 5,000 crore, informed the Ministry of Road Transport and Highways of India.

    What are InvITs?

    • InvITs are like a mutual fund, which enables direct investment of small amounts of money from possible individual/institutional investors in infrastructure to earn a small portion of the income as return.
    • They work like mutual funds or real estate investment trusts (REITs) in features.
    • They can be treated as the modified version of REITs designed to suit the specific circumstances of the infrastructure sector.

    How are they notified in India?

    • SEBI notified the Sebi (Infrastructure Investment Trusts) Regulations, 2014 on September 26, 2014, providing for registration and regulation of InvITs in India.
    • The objective of InvITs is to facilitate investment in the infrastructure sector.

    Their structure

    • InvITS are like mutual funds in structure. InvITs can be established as a trust and registered with Sebi.
    • An InvIT consists of four elements:
    1. Trustee: He inspects the performance of an InvIT is certified by Sebi and he cannot be an associate of the sponsor or manager.
    2. Sponsor(s): They are people who promote and refer to any organisation or a corporate entity with a capital of Rs 100 crore, which establishes the InvIT and is designated as such at the time of the application made to SEBI, and in case of PPP projects, base developer.
    3. Investment Manager: It is an entity or limited liability partnership (LLP) or organisation that supervises assets and investments of the InvIT and guarantees activities of the InvIT.
    4. Project Manager: It is the person who acts as the project manager and whose duty is to attain the execution of the project and in case of PPP projects.

     

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  • Iran has enriched over 210 kg of Uranium to 20%

    Iran’s atomic agency has said that its stockpile of 20% enriched uranium has reached over 210 kilograms, the latest defiant move ahead of upcoming nuclear talks with the West.

    What is Uranium Enrichment?

    • It is a process that is necessary to create an effective nuclear fuel out of mined uranium.
    • It involves increasing the percentage of uranium-235 which undergoes fission with thermal neutrons.
    • Nuclear fuel is mined from naturally occurring uranium ore deposits and then isolated through chemical reactions and separation processes.
    • These chemical processes used to separate the uranium from the ore are not to be confused with the physical and chemical processes used to enrich the uranium.

    Why is enrichment carried out?

    • Uranium found in nature consists largely of two isotopes, U-235 and U-238.
    • Natural uranium contains 0.7% of the U-235 isotope.
    • The remaining 99.3% is mostly the U-238 isotope which does not contribute directly to the fission process (though it does so indirectly by the formation of fissile isotopes of plutonium).
    • The production of energy in nuclear reactors is from the ‘fission’ or splitting of the U-235 atoms since it is the main fissile isotope of uranium.
    • Naturally occurring uranium does not have a high enough concentration of Uranium-235 at only about 0.72% with the remainder being Uranium-238.

     

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  • All India Judicial Service (AIJS): The centralised recruitment debate

    The central government is preparing to give a fresh push to the establishment of an All India Judicial Service (AIJS) on the lines of the central civil services.

    All India Judicial Service (AIJS)

    • The AIJS is a reform push to centralize the recruitment of judges.
    • It would work at the level of additional district judges and district judges for all states.
    • In the same way that the UPSC conducts a central recruitment process and assigns successful candidates to cadres, judges of the lower judiciary are proposed to be recruited centrally and assigned to states.
    • This idea has been debated in legal circles for decades, and remains contentious.

    How are district judges currently recruited?

    • Articles 233 and 234 of the Constitution of India deal with the appointment of district judges, and place it in the domain of the states.
    • The selection process is conducted by the State Public Service Commissions and the concerned High Court since High Courts exercise jurisdiction over the subordinate judiciary in the state.
    • Panels of High Court judges interview candidates after the exam and select them for an appointment.
    • All judges of the lower judiciary up to the level of district judge are selected through the Provincial Civil Services (Judicial) exam.

    Why has the AIJS been proposed?

    The idea was to ensure:

    • Efficient subordinate judiciary
    • Address structural issues such as varying pay and remuneration across states
    • Fill vacancies faster
    • Ensure standard training across states

    Beginning of the debate

    • The idea of a centralized judicial service was first proposed in the Law Commission 1958 ‘Report on Reforms on Judicial Administration’.
    • It was proposed again in the Law Commission Report of 1978, which discussed delays and arrears of cases in the lower courts.
    • In 2006, the Parliamentary Standing Committee backed the idea of a pan-Indian judicial service, and also prepared a draft Bill.

    What is the judiciary’s view on the AIJS?

    • 1992: the Supreme Court directed the Centre to set up an AIJS in All India Judges’ Assn. vs Union of India
    • 1993: In review of the judgment, the court left the Centre at liberty to take the initiative on the issue.
    • 2017: The Supreme Court took suo motu cognizance of the issue of appointment of district judges, and mooted a “Central Selection Mechanism”.

    What is the opposition to the AIJS?

    • Blow to federalism: AJIS is seen as an affront to federalism and an encroachment on the powers of states granted by the Constitution.
    • Language of Business: Language and representation, for example, are key concerns highlighted by states. Judicial business is conducted in regional languages, whi ch could be affected by central recruitment.
    • Quotas: Also, reservations based on caste, and even for rural candidates or linguistic minorities in the state, could be diluted in a central test, it has been argued.
    • Separation of power: The opposition is also based on the constitutional concept of the separation of powers.
    • Not a complete remedy: Additionally, legal experts have argued that the creation of AIJS will not address the structural issues plaguing the lower judiciary.

    Why is the government seeking to revive the idea of AIJS?

    • The government has targeted the reform of the lower judiciary in its effort to improve India’s Ease of Doing Business ranking.
    • It will act as efficient dispute resolution is one of the key indices in determining the rank.
    • AIJS is a step in the direction of ensuring an efficient lower judiciary.

    Centre’s argument for AJIS

    • The government has cited IAS officers’ examples.
    • It has argued that if a central mechanism can work for administrative services — IAS officers learn the language required for their cadre — it can work for judicial services too.

     

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  • Centre cuts Excise Duty on Petrol and Diesel

    The Government has finally reduced fuel prices by slashing excise duties on petrol and diesel by ₹5 and ₹10 per litre respectively.

    What is Excise Duty?

    • Excise duty is a form of tax imposed on goods for their production, licensing and sale.
    • It is the opposite of Customs duty in sense that it applies to goods manufactured domestically in the country, while Customs is levied on those coming from outside of the country.
    • At the central level, excise duty earlier used to be levied as Central Excise Duty, Additional Excise Duty, etc.
    • Excise duty was levied on manufactured goods and levied at the time of removal of goods, while GST is levied on the supply of goods and services.

    Purview of excise duty

    • The GST introduction in July 2017 subsumed many types of excise duty.
    • Today, excise duty applies only on petroleum and liquor.
    • Alcohol does not come under the purview of GST as exclusion mandated by constitutional provision.
    • States levy taxes on alcohol according to the same practice as was prevalent before the rollout of GST.
    • After GST was introduced, excise duty was replaced by central GST because excise was levied by the central government.
    • The revenue generated from CGST goes to the central government.

    Types of excise duty in India

    Before GST, there were three kinds of excise duties in India.

    (1) Basic Excise Duty

    • Basic excise duty is also known as the Central Value Added Tax (CENVAT).
    • This category of excise duty was levied on goods that were classified under the first schedule of the Central Excise Tariff Act, 1985.
    • This duty applied on all goods except salt.

    (2) Additional Excise Duty

    • Additional excise duty was levied on goods of high importance, under the Additional Excise under Additional Duties of Excise (Goods of Special Importance) Act, 1957.
    • This duty was levied on some special category of goods.

    (3) Special Excise Duty

    • This type of excise duty was levied on special goods classified under the Second Schedule to the Central Excise Tariff Act, 1985.
    • Presently the central excise duty comprises of a Basic Excise Duty, Special Additional Excise Duty and Additional Excise Duty (Road and Infrastructure Cess) on auto fuels.

    Present taxation of Fuels

    • Currently, taxes on petroleum products are levied by both the Centre and the states.
    • While the Centre levies excise duty, states levy value-added tax (VAT).
    • For instance, VAT on petroleum products is as high as 40% in Maharashtra, contributing over ₹25,000 crores annually.
    • By being able to levy VAT on these products, the state governments have control over their revenues.
    • 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.

     

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  • Global Methane Pledge

    The Global Methane Pledge was launched at the ongoing UN COP26 climate conference in Glasgow.

    What is the Global Methane Pledge?

    • Global Methane Pledge is an agreement to reduce global methane emissions.
    • One of the central aims of this agreement is to cut down methane emissions by up to 30 per cent from 2020 levels by the year 2030.
    • The pledge was first announced in September by the United States and the European Union.
    • So far, over 90 countries have signed this pledge.

    Why methane?

    • According to the UN, 25 % of the warming that the world is experiencing today is because of methane.
    • Methane is the second-most abundant greenhouse gas in the atmosphere, after carbon dioxide.
    • According to IPCC, methane accounts for about half of the 1.0 degrees Celsius net rise in global average temperature since the pre-industrial era.

    About Methane

    • Methane is a greenhouse gas, which is also a component of natural gas.
    • There are various sources of methane including human and natural sources.
    • The anthropogenic sources are responsible for 60 per cent of global methane emissions.
    • It includes landfills, oil and natural gas systems, agricultural activities, coal mining, wastewater treatment, and certain industrial processes.
    • The oil and gas sectors are among the largest contributors to human sources of methane.
    • These emissions come primarily from the burning of fossil fuels, decomposition in landfills and the agriculture sector.

    What is Coal-based Methane?

    • CBM, like shale gas, is extracted from unconventional gas reservoirs — where gas is extracted directly from the rock that is the source of the gas (shale in case of shale gas and coal in case of CBM).
    • The methane is held underground within the coal and is extracted by drilling into the coal seam and removing the groundwater.
    • The resulting drop in pressure causes the methane to be released from the coal.

    Try this PYQ:

    Q. With reference to two non-conventional energy sources called ‘coalbed methane’ and ‘shale gas’, consider the following ‘statements:

    1. Coalbed methane is the pure methane gas extracted from coal seams, while shale gas is a mixture of propane and butane only that can be extracted from fi ne-grained sedimentary rocks.
    2. In India abundant coalbed methane sources exist, but so far no shale gas sources have been found.

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

     

    [wpdiscuz-feedback id=”crtvj8gxcp” question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

    Why is dealing with methane important for climate change?

    • Methane has a much shorter atmospheric lifetime (12 years as compared to centuries for CO2).
    • However, it is a much more potent greenhouse gas simply because it absorbs more energy while it is in the atmosphere.
    • The UN notes that methane is a powerful pollutant and has a global warming potential that is 80 times greater than carbon dioxide, about 20 years after it has been released into the atmosphere.

    Back2Basics: CO2 Equivalents

    • Each greenhouse gas (GHG) has a different global warming potential (GWP) and persists for a different length of time in the atmosphere.
    • The three main greenhouse gases (along with water vapour) and their 100-year global warming potential (GWP) compared to carbon dioxide are:

    1 x – carbon dioxide (CO2)

    25 x – methane (CH4) – I.e. Releasing 1 kg of CH4into the atmosphere is about equivalent to releasing 25 kg of CO2

    298 x – nitrous oxide (N2O)

    • Water vapour is not considered to be a cause of man-made global warming because it does not persist in the atmosphere for more than a few days.
    • There are other greenhouse gases which have far greater global warming potential (GWP) but are much less prevalent. These are sulphur hexafluoride (SF6), hydrofluorocarbons (HFCs), and perfluorocarbons (PFCs).
    • There are a wide variety of uses for SF6, HFCs, and PFCs but they have been most commonly used as refrigerants and for fire suppression.
    • Many of these compounds also have a depleting effect on ozone in the upper atmosphere.

     

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  • Gujarat grants Parole to Prisoners as Diwali gift

    The Gujarat government has decided to grant 15-day parole to prisoners above 60 years of age and women prisoners, except those booked in serious offences, as a ‘Diwali gift’.

    What is Parole?

    • Furlough and parole envisage a short-term release from custody, both aimed as reformative steps towards prisoners.
    • Parole is granted to meet a “specific exigency” and cannot be claimed as a matter of right.
    • Both provisions are subject to the circumstances of the prisoner, such as jail behaviour, the gravity of offences, sentence period and public interest.

    How is it different from Furlough?

    • Furlough may be granted without any specific reason after a convict spends a stipulated number of years.
    • It is a matter of right although cannot be claimed as an ‘absolute legal right’.

    Is ‘parole as Diwali gift’ an extraordinary move?

    • The state governments often take a compassionate view on applications for parole during festivals of Diwali, Rakshabandhan, etc.
    • The legislature/politicians do not have direct powers to grant parole on suo-motu cognizance.
    • The announcement only indicates that prisoners will have to make applications to the authorities concerned, which in turn will be considered with leniency and expeditiously.
    • The applications will, however, be subject to scrutiny and the prisoners’ conduct and gravity of their offence.

    Who can opt for parole and how?

    • The provision of parole is available to convicts found guilty by a court and such a prisoner.
    • The prisoner’s relative/legal aid may submit an application to the prison superintendent.
    • He/she in turn forwards the application to the ‘competent authority’, often under the jurisdiction of district magistrate concerned and comprising prison and police authorities, to sanction release.
    • After due verification of reasons and prisoner’s conduct by the competent authority, an order for grant of release on parole will be issued.
    • In case of rejection of the said application, a convict may approach the High Court.

    Duration of Parole

    • The Prison rules state that parole period may be granted for not more than 30 days.
    • The competent authority may exercise its discretion in case of serious illnesses or death of “nearest relative such as mother, father, sister, brother, children, spouse of the prisoner, or in case of natural calamity.”
    • Parole or extension of parole cannot be granted without a report of the police
    • Apart from the remedy to approach a high court for parole in case of a rejected application, a prison can also approach the high court directly in case of an extraordinary emergency.

     

    Try this PYQ from CSP 2021:

    Q. With reference to India, consider the following statements:

    1. When a prisoner makes a sufficient case, parole cannot be out denied to such prisoner because it becomes a matter of his/her right.
    2. State Governments have their own Prisoners Release on Parole Rules.

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

     

    [wpdiscuz-feedback id=”jzwsmaz3ng” question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

     

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  • Ensuring that policy outcome matches the intent

    Context

    Policy differences between parties and coalitions arouse heated debates in legislatures and at political rallies. But relatively scant attention is paid to whether the stated policy or enacted law — of any persuasion — delivered the intended outcomes/results.

    Issues with annual budget modalities

    • There are limitations in the structural design of the Union and the state governments of India, which either cause or enable inefficient translation of policy intent to semi-realised outcomes.
    • Nowhere is this more obvious than in the annual budget modalities followed by the Union and state governments.
    • The final accounts (FA) for a financial year are generally presented to the legislative body between 18 and 24 months after that year’s budget is approved, most often as a minor artefact along with the main attraction of the budget for the upcoming year and the minor attraction of the Revised Estimate (RE) for the year in progress.
    • In effect, a small fraction of the attention paid to intent (budget) is paid to the outcome (FA) which is only known many months after the year is over.
    • Governments in India adhere to the archaic cash accounting as opposed to accrual accounting, which is the norm for most companies and governments which introduces some strange incentives and behaviours, especially towards the end of the year.
    • As a result, even the final account is not what it seems, with the possibility that significant funds which have been presented to the legislature as spent are still held in off-balance-sheet accounts not visible to the government’s finance department.

    Way forward: Lessons from Tamil Nadu government

    • This structural limitation was the basis for the initiative to identify and retrieve unutilised funds that the Tamil Nadu government.
    • New procedures and systems will ensure that such moving/parking of funds (especially as the year ends) cannot happen outside of the finance department’s oversight.
    • On another front, the data-integrity project undertaken to support (among other reasons) the crop and jewel loan waiver poll promise has also produced remarkable results.
    • Many instances of ghost pension recipients and free-rice-entitled category of ration card holders and malfeasance in crop and jewel loan sanctioning have come to light.
    • The rectification of such anomalies will save the government a significant amount of funds, but, more importantly, enable fairer societal outcomes.
    • Tamil Nadu is diligently following the five-step approach: Collect and analyse data to develop a deeper understanding, disseminate results into the public domain and generate a public debate, receive feedback from the debate and inputs from experts, use these inputs to design policies and put into execution, constantly seek feedback and course correct when needed.

    Conclusion

    We need the thoughtful design of policies and schemes, and their execution, which are vital to achieving our intended goal of benefiting all citizens in a fair and inclusive manner.

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  • Trade and climate, the pivot for India-U.S. ties

    Context

    The fate of the grand strategic ambitions of the Indo-US relationship may depend substantially on how well they collaborate in two areas to which their joint attention is only belatedly turning — climate and trade.

    Importance of climate change and trade to India-US partnership

    • Strategic partnerships capable of re-shaping the international global order cannot be based simply on a negative agenda.
    • Shared concerns about China provide the U.S.-India partnership a much-needed impetus to overcome the awkward efforts for deeper collaboration that have characterised the past few decades.
    • What risks being lost is a reckoning with how interrelated climate and trade are to securing U.S.-India leadership globally, and how their strategic efforts can flounder without sincere commitment to a robust bilateral agenda on both fronts.

    India-US collaboration on climate change and challenges

    • India and the U.S. are collaborating under the Climate and Clean Energy Agenda Partnership.
    • In parallel, there are hopeful signs that they are now prioritising the bilateral trade relationship by rechartering the Trade Policy Forum. 
    • At COP26 in Glasgow India announced a net zero goal for 2070, it has called for western countries to commit to negative emissions targets.
    • Challenges: India’s rhetoric of climate justice is likely to be received poorly by U.S. negotiators, particularly if it aligns with China’s messaging and obstructs efforts to reach concrete results.

    Collaboration on trade

    • The failure of the U.S. and India to articulate a shared vision for a comprehensive trade relationship raises doubts about how serious they are when each spends more time and effort negotiating with other trading partners.
    • Protectionist tendencies infect the politics of both countries these days, and, with a contentious U.S. mid-term election a year away, the political window for achieving problem-solving outcomes and setting a vision on trade for the future is closing fast.

    Climate-trade inter-relationship

    • Climate and trade are interrelated in many ways.
    • If governments, such as India and the U.S., coordinate policies to incentivise sharing of climate-related technologies and align approaches for reducing emissions associated with trade, the climate-trade inter-relationship can be a net positive one.
    • India and the U.S. could find opportunities to align their climate and trade approaches better, starting with a resolution of their disputes in the World Trade Organization (WTO) on solar panels.
    • The two countries could also chart a path that allows trade to flow for transitional energy sources, such as fuel ethanol.
    • Shared strategic interests will be undermined if India and the U.S. cannot jointly map coordinated policies on climate and trade.
    • The most immediate threat could be the possibility of new climate and trade tensions were India to insist that technology is transferred in ways that undermine incentives for innovation in both countries or if the U.S. decides that imports from India be subject to increased tariffs in the form of carbon border adjustment mechanisms or “CBAMs”.

    Conclusion

    Concerted action on both the climate and trade fronts is mutually beneficial and will lend additional strength to the foundation of a true partnership for the coming century.

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