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  • Factors driving FDI in India

    The article explains the four factors that explain the FDI inflows in India.

    India’s economic decade

    • Almost every major global company is either contemplating or operating on the assumption that India is a key part of their growth story.
    • Google, Facebook, Walmart, Samsung, Foxconn, and Silver Lake have been just a handful of the firms that made huge investments in Inda.
    • As a result, India saw the fastest growth in Foreign Direct Investment (FDI) inflows among all the major economies last year.
    • Meanwhile, India’s latest FDI totals still lags behind the highest tallies in other markets such as China and Brazil.

    Issues faced by investors and factors driving investment

    • Frequent shifts in the policy landscape and persistent market access barriers are standard complaints levied against India by the business community.
    • The government’s push to build a “self-reliant” India has also rattled skittish investors and smaller companies that lack the resources to navigate on-the-ground hurdles.
    • Still, investors recognise that doing business in India — or any emerging market  — comes with inherent risks but that adaptation in approach is critical to success.
    • Four core dynamics drive this calculus and explain why multinational companies are making India an essential part of their growth story.

    4 Factors driving FDI in India

    1) India’s population

    • What India offers through its nearly 1.4 billion people and their growing purchasing power is uniquely valuable for multinationals with global ambitions.
    • No other country outside of China has a market that houses nearly one in six people on the planet and a rising middle class of 600 million.

    2) Shifting geopolitics

    •  Rising U.S.-China competition is forcing multinationals to rethink their footprints and production hubs.
    • Savvy countries such as Vietnam have capitalised on this opportunity to great effect, but India is finally getting serious about attracting large-scale production and exports.

    3) Digital connectivity

    • Cheap mobile data have powered a revolution across India’s digital economy and connected an estimated 700 million Indians to the Internet.
    • More than 500 million Indians still remain offline, this is a key reason why leading global tech companies are investing in India and weathering acute policy pressure.
    • Domestic Indian companies have also demonstrated their ability to innovate and deliver high quality services at scale.
    • The partnerships and FDI flows linking multinationals and Indian tech firms will continue to unlock shared market opportunities for years to come.

    4) National resilience

    • Despite facing the scourge of the novel coronavirus head on, India has managed the pandemic better than many of its western peers and restored economic activity even before implementing a mass vaccination programme.
    • These are remarkable developments, and yet they speak to India’s underlying resilience even in the face of historic challenges.

    Shared value creation

    • Unlocking opportunities in the Indian market cannot take the form of a one-way wealth transfer.
    • Companies need to demonstrate their commitment to India.
    • Successful companies do this by placing shared value creation at the heart of their business strategy.
    • They tie corporate success to India’s growth and development.
    • They forge enduring partnerships and lasting relationships, elevate and invest in Indian talent, align products with Indian tastes, and ultimately tackle the hardest problems facing India today.

    Consider the question “Despite the issues faced by the investors, India witnessed the fastest growth in the FDI inflows among all the major economies amid pandemic. In light of this, examine the factors driving the FDI in India.”

    Conclusion

    For leading companies with global ambitions and a willingness to make big bets, the rewards of investing in the Indian market are substantial and well worth pursuing.

  • Myanmar Refugees Issue

    India has sealed all entry points along the border with the southeast Asian neighbour and is closely monitoring to prevent any Myanmar nationals from entering the country.

    Issue: Problem with refugees

    • At least 1,000 people from the adjoining Chin State of Myanmar are said to have crossed over to Mizoram, fearing a military crackdown.
    • The Mizoram government favours providing refuge to the Chins that are ethnically related to the majority Mizos in the State.
    • However, the Ministry of Home Affairs has made it clear that “India is not a signatory to the 1951 UN Convention relating to the Status of Refugees and the 1967 Protocol theron”.

    When did the refugees start arriving?

    • Mizoram began feeling the heat a month after the military coup when three police personnel crossed over to Lungkawlh village in Serchhip district.
    • The influx of Myanmar nationals was reported from Hnahthial, Champhai, Saitual and Serchhip districts.
    • Most of the refugees waded across the Tiau River that runs along much of Mizoram’s 510-km border with Myanmar.

    Try answering this:

    The cross-border movement of insurgents is only one of the several security challenges facing the policing of the border in North-East India. Examine the various challenges currently emanating across the India-Myanmar border. Also, discuss the steps to counter the challenges. (15 Marks)

    Is this the first time this has happened?

    • Extremism, counter-insurgency and sectarian violence have driven people out of Myanmar into India in the past as well.
    • More than 1,200 Buddhists and Christians from Myanmar’s Arakan State had taken refuge in Mizoram’s Lawngtlai district in 2017.
    • They fled their homes after the Myanmar Army clashed with the extremist Arakan Army.
    • The refugees stayed back for more than a year. Thousands of Chins are said to be living in Mizoram for more than 40 years now.

    How porous is the border?

    Unlike India’s border with Pakistan and Bangladesh, much of the border with Myanmar is without any fence.

    • The Assam Rifles personnel guard the border but a tough terrain comes in the way of maintaining airtight vigil.
    • There have been calls to fence the border. Fencing the border would also help in checking the movement of extremist groups to and from Myanmar.
    • Some are against the idea, insisting that a fence would make the “free movement” of border residents into each other’s country difficult.
    • The two countries had in 2018 agreed to streamline the movement of people within 16 km of the border on either side.

    Note: Myanmar has indefinitely stalled the agreement to streamline the free movement of people within 16 km along the border citing domestic issues.

    Mizoram welcomes the refugees

    • As a humanitarian gesture, the Mizoram government has issued a standard operating procedure (SOP) to Deputy Commissioners of border districts to facilitate the entry of refugees and migrants.
    • The SOP stated that all Myanmar nationals entering Mizoram in connection with the political developments in the country shall be properly identified.
    • The government said those facing a threat to their lives should be treated as refugees, given medical care, relief and rehabilitation and security.

    Where do the Centre and Mizoram stand now?

    • The SOP was revoked on March 6 after the Centre conveyed its displeasure to the State over the development.
    • The State governments have no powers to grant “refugee status to any foreigner”.

  • Emerging crisis of obtaining Helium in India

    India imports helium for its needs and with the U.S. appearing set to cut off exports of helium since 2021, the Indian industry stands to lose out heavily.

    Helium is not just for balloons but it is the key ingredient for India’s high technology and the most sophisticated medical diagnosis.

    Helium on Earth

    • Helium is a chemical element with the symbol He and atomic number 2.
    • It is a colourless, odourless, tasteless, non-toxic, inert, monatomic gas, the first in the noble gas group in the periodic table. Its boiling point is the lowest among all the elements.

    Its discovery

    • In 1906 a young Englishman by the name of Moris Travers arrived in Bangalore, to take up the position of the Director of Indian Institute of Science.
    • Travers extracted helium in small quantity by heating up monazite sand abundantly available in Kerala beach, in a pioneering effort.
    • Dutch physicist Kamerlingh Onnes liquefied Helium by cooling the gas to -270 degrees Celsius.
    • It is known that Onnes collected helium gas from the springs of Bath in Baden Baden, Germany for his liquefaction experiment.

    Helium in India

    • India’s Rajmahal volcanic basin is the storehouse of helium trapped for billions of years, since the very birth of our Earth from the Sun.
    • At present, researchers are mapping the Rajmahal basin extensively for future exploration and harnessing of helium.

    Why India needs Helium?

    • Every year, India imports helium worth Rs 55,000 crores from the U.S. to meet its needs.
    • Helium is used in medicine, scientific research, for blimp inflation, party balloons as well as having welding applications.
    • It finds many applications, mainly in magnetic resonance imaging (MRI) scans, in rockets and in nuclear reactors.

    US monopoly in Helium

    • The U.S. became the most important exporter of helium across the world.
    • It was soon realized that the U.S. was also the biggest storehouse of helium.
    • The US is now planning to switch off the export of helium from 2021.
    • Qatar is a possible exporter but acute political and diplomatic wrangles have made Qatar unreliable.

  • Indian monsoon 25 million years ago resembled present day Australia’s

    Using leaf fossils, researchers have found that the Indian monsoon 25 million years ago resembled present-day Australia’s.

    Try this PYQ:

    Q.Which one of the following is the appropriate reason for considering the Gondwana rocks as the most important rock systems of India?

    (a) More than 90% of limestone reserves of India are found in them

    (b) More than 90% of India’s coal reserves are found in them

    (c) More than 90% of fertile black cotton soils are spread over them

    (d) None of the reasons given above is appropriate in this context

    India’s drift

    • About 180 million years ago, India separated from the ancient supercontinent Gondwana and took a long northward journey of about 9,000 km to join Eurasia.
    • During this journey, the subcontinent moved from the southern hemisphere, crossed the Equator to reach its current position in the northern hemisphere.
    • Due to these changing latitudes, it experienced different climatic conditions, and a new study has now tried to map these climatic variations using leaf fossils.

    Clueless over the evolution of monsoon

    • The evolution of the monsoonal climate in India is still debatable and not fully understood.
    • Though recent data indicates that the monsoon system we experience now dates back to about 25 million years, it is still unclear how the climate was during its long voyage.

    Indian research

    • The researchers analysed the morphological characters of fossil leaves collected from Deccan Volcanic Province, East Garo Hills of Meghalaya, Gurha mine in Rajasthan and Makum Coalfield in Assam.
    • The four fossil assemblages were found to be from four different geological ages.
    • It has been observed from across the globe that plant leaf morphological characters such as apex, base and shape are ecologically tuned with the prevailing climatic conditions.
    • The research applied this model to characterize the past monsoon from fossil leaves.

    It’s finding

    • The results indicated that the fossil leaves from India were adapted to an Australian type of monsoon and not the current Indian monsoon system during its voyage.
    • The reconstructed temperature data show that the climate was warm (tropical to subtropical) at all the studied fossil sites with temperatures varying from 16.3–21.3 degrees C.
    • All the fossil sites experienced high rainfall, which varied from 191.6 cm to 232 cm.

  • Who was Lachit Borphukan?

    The Prime Minister (in an election campaign) has called 17th-century Ahom General Lachit Borphukan a symbol of India’s “atmanirbhar” military might.

    Try this PYQ:

    Q.What was the immediate cause for Ahmad Shah Abdali to invade and fight the Third Battle of Panipat:

    (a) He wanted to avenge the expulsion by Marathas of his viceroy Timur Shah from Lahore

    (b) The frustrated governor of Jullundhar Adina Beg khan invited him to invade Punjab

    (c) He wanted to punish Mughal administration for non-payment of the revenues of the Chahar Mahal (Gujrat Aurangabad, Sialkot and Pasrur)

    (d) He wanted to annex all the fertile plains of Punjab upto borders of Delhi to his kingdom

    Who was Lachit Borphukan?

    • The year was 1671 and the decisive Battle of Saraighat was fought on the raging waters of the Brahmaputra.
    • On one side was Mughal Emperor Aurangzeb’s army headed by Ram Singh of Amer (Jaipur) and on the other was the Ahom General Lachit Borphukan.
    • He was a commander in the Ahom kingdom, located in present-day Assam.
    • Ram Singh failed to make any advance against the Assamese army during the first phase of the war.
    • Lachit Borphukan emerged victorious in the war and the Mughals were forced to retreat from Guwahati.

    Lachit Diwas

    • On 24 November each year, Lachit Divas is celebrated statewide in Assam to commemorate the heroism of Lachit Borphukan.
    • On this day, Borphukan has defeated the Mughal army on the banks of the Brahmaputra in the Battle of Saraighat in 1671.
    • The best passing out cadet of National Defence Academy has conferred the Lachit gold medal every year since 1999 commemorating his valour.

  • Tomar king Anangpal II and his connection with Delhi

    The Union government has recently formed a committee to popularize the legacy of 11th-century Tomar king, Anangpal II.

    Revision: Delhi Sultanate and their contemporaries

    Who was Anangpal II?

    • Anangpal II, popularly known as Anangpal Tomar, belonged to the Tomar dynasty that ruled parts of present-day Delhi and Haryana between the 8th and 12th centuries.
    • The capital of Tomars changed many times from being initially at Anangpur (near Faridabad) during the reign of Anangpal I (who founded the Tomar dynasty in the 8th century), to Dhillikapuri (Delhi) during the reign of Anangpal II.
    • The Tomar rule over the region is attested by multiple inscriptions and coins, and their ancestry can be traced to the Pandavas (of the Mahabharata).
    • Anangpal Tomar II was succeeded by his grandson Prithviraj Chauhan, who was defeated by the Ghurid forces in the Battle of Tarain (present-day Haryana) after which the Delhi Sultanate was established in 1192.

    His connection with Delhi

    • Anangpal II is credited to have established and populated Delhi during his reign in the 11th century.
    • He was instrumental in populating Indraprastha and giving it its present name, Delhi.
    • The region was in ruins when he ascended the throne in the 11th century, it was he who built Lal Kot fort and Anangtal Baoli.
    • He was the founder of Dhillikapuri, which eventually became Delhi.

  • Jaapi, Xorai and Gamosa in Assam

    As the polling date draws closer, decorative jaapis (field hats), hand-woven gamosas and bell-metal xorais are making frequent appearances in Assam.

    Primarily used to felicitate important people and guests, these important symbols of Assamese identity and culture are abundantly seen in political campaigns across the state.

    Jaapi

    • The jaapi is a conical hat made of bamboo and covered with dried tokou (a palm tree found in rainforests of Upper Assam) leaves.
    • It is most often used in official functions to felicitate guests.
    • The landscape of rural Assam features a more utilitarian version, which farmers wear to protect themselves from the harsh weather, both sun and rain, while working in the fields.
    • The first possible recorded use of jaapi dates back to the Ahom-era buranjis, or chronicles. Kings and ministers would wear them then.

    Gamosa

    • The Gamosa, which literally translates to a cloth to wipe one’s body, is omnipresent in Assam, with wide-ranging uses.
    • It can be used at home as a towel (uka gamosa) or in public functions (phulam/floral gamosa) to felicitate dignitaries or celebrities.
    • The popularity of the gamosa has now traveled beyond Assam and is often used by a number of public figures.
    • It was during the anti-foreigner Assam Agitation of the early 1980s, when Assamese nationalism reached its crescendo, that the gamosa assumed a new role.

    Xorai

    • Made of bell-metal, the xorai — essentially a tray with a stand at the bottom, with or without a cover — can be found in every Assamese household.
    • While it is primarily used as an offering tray during prayers, or to serve tamale-paan (betel-nut) to guests, a xorai is also presented along with the jaapi and gamosa while felicitating someone.
    • The bulk of xorais in Assam are made in the state’s bell metal hub Sarthebari in Bajali district.

  • Vehicle scrapping policy will help Indian steel reduce GHG emissions

    The article explains the advantages of the vehicle scrapping policy announced in the Budget FY22.

    Greenhouse gas contribution  steel industry

    • Steel industry uses carbon as the main reducing agent as also as a fuel for steel production.
    • GHG emissions of the Indian steel industry is 2.0-2.8 tonnes of CO2 per tonne of crude steel, against global average of 1.8 tonne of CO2.

    Scrapping policy

    • Two seminal announcements have been made in Budget FY22, viz. introduction of vehicle scrapping policy and doubling ship-breaking capacity to 9 million tonnes per year.
    • This will minimise dependence on import of scrap and cause a reduction of the GHG footprint of iron & steel.

    Producing steel using scrap

    • Most steel-producing countries are trying to bring down emissions by shifting from iron-ore-based production to scrap-based production.
    • This route can bring CO2 emissions down to below 0.5 tonne of CO2 per tonne of steel.
    • Although most steel-producing countries are using Electric Arc Furnaces (EAF) for scrap-based production, in India, both EAF and Induction Furnaces (IF) are used.
    • The main CO2 load in EAF-based steel production doesn’t come from the off-gas but from producing the electricity used in melting of the scrap.
    • Thus, this can be further reduced if renewable power is used as a source of electricity.

    Saving in forex spending

    • Availability of ferrous scrap in India is very limited—around 25 million tonnes annually from domestic sources.
    • In 2018-19 and 2019-20, the country imported nearly 6.5 million tonnes of scrap each year and thus large forex spending was incurrred.
    • With the announcement of vehicle scrapping policy, steel industry can expect enhanced indigenous availability of ferrous scrap.

    Strengthening the resource efficiency and circular economy

    • The quality of the steel produced is dependent upon the quality of input material and hence any improvement made in ensuring quality of scrap will have marked influence on the steel produced.
    • This shall strengthen the process of resource efficiency & circular economy as considerable natural resources shall be conserved with significant reduction in emission and it will help in moving towards a sustainable steel industry.

    Consider the question “Discuss the advantages of vehicle scrapping policy announced by the government in Budget FY 22.”

    Conclusion

    The announcement of the vehicle scrapping policy couldn’t have come at a better time for steel industry in India, as well since the country lacks desired quality of coking coal and natural gas is also imported.

  • Mounting counter challenge to China through Quad

    The article discusses the outcomes of the recently concluded first Quad Summit in the context of India.

    Message to China after Quad summit

    • The first Learders’ Summit of the Quadrilateral Framework was held on March 12.
    • This Summit conveyed a three-pronged message to China:
    • 1) Under the new U.S. President, “America is back” in terms of its desire to play a leading role in other regions.
    • 2) It views China as its primary challenger for that leadership.
    • 3) The Quad partnership is ready to mount a counter-challenge, albeit in “soft-power” terms at present, in order to do so.
    • For both Japan and Australia the outcomes of the summit, both in terms of the “3C’s”working groups established on COVID-19 vaccines, Climate Change and Critical Technology and in terms of this messaging to the “4th C” (China) are very welcome.

    4 Outcomes of Quad Summit for India

    • For India the outcomes of the Quad Summit need more nuanced analysis.

    1) COVID-19 Vaccine

    • India is not only the world’s largest manufacturer of vaccines (by number of doses produced, it has already exported 58 million doses to nearly 71 countries.
    • It is also manufacturing a billion doses for South East Asia (under the Quad), over and above its current international commitments.
    • India has also planned to vaccinate 300 million people as originally planned by September.
    • All this comes down to total 1.8 billion doses which will require a major ramp up in capacity and funding, and will bear testimony to the power of Quad cooperation, if realised.
    • However, the effort could have been made much easier had India’s Quad partners also announced dropping their opposition to India’s plea at the World Trade Organization.
    • India had filed the plea along with South Africa in October 2020, seeking waiver from certain provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights for the prevention, containment and treatment of COVID-19.

    2) Climate change

    • On climate change, India has welcomed the return of the U.S. to the Paris accord.
    • Mr. Biden has promised to restart the U.S.’s funding of the global Green Climate Fund, which Mr. Trump ended.
    • India still awaits a large part of the $1.4 billion commitment by the U.S. to finance solar technology in 2016.
    • Mr. Biden might also consider joining the International Solar Alliance, which the other Quad members are a part of, but the U.S.

    3) Critical technology

    • India will welcome any assistance in reducing its dependence on Chinese telecommunication equipment and in finding new sources of rare-earth minerals.
    • India would oppose Quad partners weighing in on international rule-making on the digital economy, or data localisation.
    • Such a move had led New Delhi to walk out of the Japan-led “Osaka track declaration” at the G-20 in 2019.

    4) Dealing with China

    • On this issue, it is still unclear how India can go on the Quad’s intended outcomes.
    • While India shares the deep concerns and the tough messaging set out by the Quad on China, especially after the year-long stand-off at the Line of Actual Control (LAC) and the killings at Galwan that India has faced, it has demurred from any non-bilateral statement on it.
    • India is the only Quad member not a part of the military alliance that binds the other members.
    • India is also the only Quad country with a land boundary with China.
    • And it is the only Quad country which lives in a neighbourhood where China has made deep inroads.
    • Indian officials are still engaged in LAC disengagement talks and have a long way to go to de-escalation or status quo ante.

    3 long term impacts on strategic planning

    • The violence at the LAC has also left three long-term impacts on Indian strategic planning:
    • First, the government must now expend more resources, troops, infrastructure funds to the LAC and ensure no recurrence of the People’s Liberation Army April 2020 incursions.
    • Second, India’s most potent territorial threat will not be from either China or Pakistan, but from both i.e. “two-front situation”.
    • Third, that India’s continental threat perception will need to be prioritised against any maritime commitments the Quad may claim, especially further afield in the Pacific Ocean.

    Consider the question “The Quad’s ideology of a “diamond of democracies” can only succeed if it does not insist on exclusivity in India’s strategic calculations given that India shares a special place among the Quad members when it comes to its relationship with China. Comment”

    Conclusion

    Despite last week’s Quad Summit, India’s choices for its Quad strategy will continue to be guided as much by its location on land as it is by its close friendships with fellow democracies.

  • Agri Ministry questions Global Hunger reports’ methodology

    Union Minister of State for Agriculture has questioned the methodology and data accuracy of the Global Hunger Index (GHI) report, which has placed India at 94th (out of 107 countries) rank in 2020.

    About GHI

    • GHI is a peer-reviewed annual report, jointly published by Concern Worldwide, an Ireland-based humanitarian group, and Welthungerhilfe, a Germany-based NGO.
    • It is designed to comprehensively measure and track hunger at the global, regional, and country levels.
    • It says the aim of publishing the report is to trigger action to reduce hunger around the world.
    • According to the GHI website, the data for the indicators come from the United Nations and other multilateral agencies, including the World Health Organisation and the World Bank.

    Various indicators used

    1. UNDERNOURISHMENT: the share of the population that is undernourished (that is, whose caloric intake is insufficient);
    2. CHILD WASTING: the share of children under the age of five who are wasted (that is, who have low weight for their height, reflecting acute undernutrition);
    3. CHILD STUNTING: the share of children under the age of five who are stunted (that is, who have low height for their age, reflecting chronic undernutrition); and
    4. CHILD MORTALITY: the mortality rate of children under the age of five (in part, a reflection of the fatal mix of inadequate nutrition and unhealthy environments).

    What is the concern?

    • India was ranked below countries such as Nepal, Bangladesh and Myanmar when it was among the top 10 food-producing countries in the world.

    Actual scenario

    • The Comprehensive National Nutrition Survey (CNNS) compiled in 2017-18 showed an improvement of 4%, 3.7% and 2.3% in wasted, stunted and malnourished children respectively.
    • The first-ever CNNS was commissioned by the government in 2016 and was conducted from 2016-18, led by the Union Health Ministry, in collaboration with the UNICEF.
    • The findings were published in 2019. CNNS includes only nutrition data, whereas NFHS encompasses overall health indicators.