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  • Finance Commission – Issues related to devolution of resources

    15th Finance Commission submits report to President

    | Polity | Mains Paper 2: Federalism

    The 15th Finance Commission, chaired by NK Singh, on Monday submitted its final report for 2021-22 to 2025-26 to the President.

    Try this PYQ:

    With reference to the Finance Commission of India, which of the following statements is correct?

    (a) It encourages the inflow of foreign capital for infrastructure development

    (b) It facilitates the proper distribution of finances among the Public Sector Undertakings

    (c) It ensures transparency in financial administration

    (d) None of the statements (a), (b) and (c) given above is correct in this context

    Key recommendations that would feature in its final report:

    • A separate defence and national security: The viability of creating a separate defence and national security fund as suggested by the Centre.
      • States would keenly await these recommendations as it may translate into a lower share of funds for them.
    • GST compensation dues to States: The panel is also expected to factor in unpaid GST compensation dues to States for this year, while working out State’s revenue flow calculations for the years beyond 2022.

    Formula that decides a State’s share:

    Weight in 15th FC Parameters Weight in 14th FC
    15 (2011 Census) Population 27.5 (17.5 – 1972, 10 – 2011 Census)
    15 Area 15
    10 Forest and Ecology 7.5
    45 Income Distance 50
    12.5 Demographic Performance –
    2.5 Tax Effort

    What is the Finance Commission?

    • The Finance Commission (FC) was established by the President of India in 1951 under Article 280 of the Indian Constitution.
    • It was formed to define the financial relations between the central government of India and the individual state governments.
    • The Finance Commission (Miscellaneous Provisions) Act, 1951 additionally defines the terms of qualification, appointment and disqualification, the term, eligibility and powers of the Finance Commission.
    • As per the Constitution, the FC is appointed every five years and consists of a chairman and four other members.
    • Since the institution of the First FC, stark changes in the macroeconomic situation of the Indian economy have led to major changes in the FC’s recommendations over the years.

    Constitutional Provisions

    Several provisions to bridge the fiscal gap between the Centre and the States were already enshrined in the Constitution of India, including Article 268, which facilitates levy of duties by the Centre but equips the States to collect and retain the same.

    Article 280 of the Indian Constitution defines the scope of the commission:

    1. The President will constitute a finance commission within two years from the commencement of the Constitution and thereafter at the end of every fifth year or earlier, as the deemed necessary by him/her, which shall include a chairman and four other members.
    2. Parliament may by law determine the requisite qualifications for appointment as members of the commission and the procedure of selection.
    3. The commission is constituted to make recommendations to the president about the distribution of the net proceeds of taxes between the Union and States and also the allocation of the same among the States themselves. It is also under the ambit of the finance commission to define the financial relations between the Union and the States. They also deal with the devolution of unplanned revenue resources.

    Why need the Finance Commission?

    • As a federal nation, India suffers from both vertical and horizontal fiscal imbalances.
    • Vertical imbalances between the central and state governments result from states incurring expenditures disproportionate to their sources of revenue, in the process of fulfilling their responsibilities.
    • However, states are better able to gauge the needs and concerns of their inhabitants and therefore more efficient at addressing them.
    • Horizontal imbalances among state governments result from differing historical backgrounds or resource endowments and can widen over time.
    • The first FC was established in 1951 by Dr B.R. Ambedkar, the then-incumbent law minister, to address these imbalances.

    Important functions

    • Distribution of net proceeds of taxes between Center and the States, to be divided as per their respective contributions to the taxes.
    • Determine factors governing Grants-in-Aid to the states and the magnitude of the same.
    • To make recommendations to the president as to the measures needed to augment the Fund of a State to supplement the resources of the panchayats and municipalities in the state on the basis of the recommendations made by the finance commission of the state.
    • Any other matter related to it by the president in the interest of sound finance.

    Members of the Finance Commission

    • The Finance Commission (Miscellaneous Provisions) Act, 1951 was passed to give a structured format to the finance commission and to bring it to par with world standards.
    • It laid down rules for the qualification and disqualification of members of the commission, and for their appointment, term, eligibility and powers.
    • The Chairman of a finance commission is selected from people with experience of public affairs. The other four members are selected from people who:
    1. Are, or have been, or are qualified, as judges of a high court,
    2. Have knowledge of government finances or accounts, or
    3. Have had experience in administration and financial expertise; or
    4. Have special knowledge of economics

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  • Foreign Policy Watch: India-United States

    How a Biden’s Presidency may affect India?

    | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    Donald Trump’s rise to the White House as well as his exit has led to a wide reactionary response in India.

    Also read:

    [Burning Issue] India US relations in the backdrop of recent hiccups

    (1) Economic Impact

    Trade

    • There are several ways in which the US economy, its health and the policy choices of its government affect India.
    • For one, the US is one of those rare big countries with which India enjoys a trade surplus. In other words, we export more goods to the US than what we import from it.
    • The trade surplus has widened from $5.2 billion in 2001-02 to $17.3 billion in 2019-20.
    • Under a Biden administration, India’s trade with the US could recover from the dip since 2017-18.

    FDI and FPI

    • The US is the fifth-biggest source for Foreign Direct Investment (FDI) into India. Of the total $476 billion FDI that has come in since April 2000, the US accounted for $30.4 billion — roughly 6.5 per cent — directly.
    • Only Mauritius, Singapore, Netherlands, and Japan have invested more FDI since 2000.
    • Apart from FDI the US also accounts for one-third of all Foreign Portfolio Investments (that is, investment in financial assets) into India.

    Ending protectionism

    • A Biden presidency may also see a renewed push towards a rules-based trading system across the world.
    • Instead of outright ad-hocism as was the case under Trump — as well as a move away from the protectionist approach that has been getting strong across the world.

    (2) Visa

    • For instance, how a US President looks at the H1-B visa issue, affects the prospects of Indian youth far more than the youth of any other country.
    • Under Trump, who severely curtailed the visa regime, thanks to his policy of “America First”, India had suffered the most.
    • That could change under Biden, who is unlikely to view immigrants and workers from India with Trump-like suspicion.

    (3) Technology

    • Other points of contention between India and the US are the tricky issue of data localisation or capping prices of medicines and medical devices.
    • These have a better chance of getting towards a resolution as we move away from the radical approach of President Trump to the pragmatism of a Biden presidency.

    (4) Diplomacy

    • Further, under the Trump administration, the US sanctions on Iran severely limited India’s sourcing of cheap crude oil.
    • For an economy such as India, which needs a regular supply of cheap oil to grow fast, a normalization of US-Iran relationship (and lifting of sanctions) would be more than useful.
    • On China, too, while the US apprehensions are unlikely to be fewer. It is more likely that a Biden administration will help India against China, instead of clubbing the two together.

    (5) Climate Action

    • Biden has promised to rejoin the Paris Climate Accord, and this may help countries such as India in dealing with the massive challenges — both technical and financial — on this front.

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  • International Space Agencies – Missions and Discoveries

    GRACE-FO Mission

    Prelims Only | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

    The GRACE-FO mission has mapped deviation in Earth’s surface mass and spatial variations in the rate of sea-level rise between 1993 and 2018 using altimetric and gravimetric analysis.

    Try this MCQ:

    Q.NASA’s VIPER mission sometimes seen in news is related to the study of-

    a)Moon

    b)Venus

    c)Sun

    d)None of these

    GRACE-FO Mission

    • The Gravity Recovery and Climate Experiment Follow-On (GRACE-FO) mission launched in 2018 is a partnership between NASA and the German Research Centre for Geosciences (GFZ).
    • It is a successor to the original GRACE mission, which orbited Earth from 2002-2017.
    • It carries on the extremely successful work of its predecessor while testing a new technology designed to dramatically improve the already remarkable precision of its measurement system.

    How did NASA measure this?

    (1) Altimetric Study

    • Altimetry missions are used to know the ocean surface topography — the shape and height of the ocean’s peaks and valleys.
    • Radar altimeters continually send out pulses of radio waves (microwaves) that bounce off the surface of the ocean and reflect back toward the satellite.
    • The instrument calculates the time it takes for the signal to return, while also tracking the precise location of the satellite in space. From this, scientists can derive the height of the sea surface directly underneath the satellite.

    (2) Gravimetric Study

    • Gravimetry is a process of using ice’s gravitational pull on a pair of satellites. It helps estimate ice loss and its contribution to sea-level rise.
    • The twin satellites in each mission detect subtle shifts in Earth’s gravity field.
    • The strength of gravitational forces is determined by mass, so changes in Earth’s gravity field indicate a change or redistribution in mass.

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  • Tax Reforms

    [pib] Income Tax Appellate Tribunal

    PIB | Governance | Mains Paper 2: Statutory, Regulatory & Various Quasi-Judicial Bodies

    PM will inaugurate the office cum residential complex of Income Tax Appellate Tribunal (ITAT) at Cuttack in Odisha.

    Income Tax Appellate Tribunal

    • Income Tax Appellate Tribunal, also known as ITAT, is an important statutory body in the field of direct taxes and its orders are accepted as final, on findings of fact.
    • ITAT was the first Tribunal to be created on 25th January, 1941 and is also known as ‘Mother Tribunal’.
    • Starting with three benches, at Delhi, Bombay and Calcutta it has now grown to 63 Benches and two circuit benches spread across thirty cities of India.
    • With a view to ensuring highest degree of independence of the ITAT, it functions under the Department of Legal Affairs in the Ministry of Law and Justice and is kept away from any kind of control by the Ministry of Finance.

    Did you notice this?

    ITAT was the very first tribunal constituted in India! And it functions under the Ministry of Law and Justice and not the obvious looking Ministry of Finance.

    It’s Functioning

    • It is the second appellate authority under the direct taxes and first independent forum in its appellate hierarchy.
    • The orders passed by the ITAT can be subjected to appellate challenge, on substantial questions of law, before the respective High Court.
    • Monetary limit for deciding an appeal by a single member Bench of ITAT enhanced from ₹15 lakh to ₹50 lakh in 2016 Union Budget.

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  • Foreign Policy Watch: India-Maldives

    India-Maldives relations

    op-ed snap | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    The Soleh government’s ‘India First Policy’ provides respite to India when contrasted with the approach of the predecessors.

    India-Maldives relations

    • India and the Maldives have had bilateral relations for centuries.
    • Maldivian students attend educational institutions in India.
    • Patients from the Maldives come here for super speciality healthcare.
    •  A liberal visa-free regime extended by India has aided the patients.
    • The Maldives is now a major tourist destination for some Indians and a job destination for others.
    • Given the geographical limitations imposed on the Maldives, India has exempted the nation from export curbs on essential commodities.

    Assistance to the Maldives

    • In 1988, under Operation Cactus when a coup was attempted against President, India sent paratroopers and Navy vessels and restored the legitimate leadership.
    • The 2004 tsunami and the drinking water crisis in Male a decade later were other occasions when India rushed assistance.
    • In COVID-19 disruption, India rushed $250 million aid in quick time and also rushed medical supplies to the Maldives, started a new cargo ferry and also opened an air travel bubble, the first such in South Asia.

    Strategic comfort to India

    • Abdulla Yameen was President when the water crisis occurred.
    • Now, the Yameen camp has launched an ‘India Out’ campaign against New Delhi’s massive developmental funding.
    • Maldivian protesters recently demanded the Solih administration to ‘stop selling national assets to foreigners’, implying India.
    • Mr. Yameen’s tilt towards China and bias against India when in power was evident.
    • It is against this background that the Solih administration’s no-nonsense approach towards trilateral equations provide ‘strategic comfort’ to India.

    Concerns for India

    • India should be concerned about the protests as well as the occasional protest within the ruling Maldivian Democratic Party (MDP) of Mr. Solih.
    • There are apparent strains between Mohamed Nasheed, who was the nation’s first President elected under a multiparty democracy and Mr. Yameen.
    • This strain could affect the MDP during the run-up to the 2023 presidential polls.
    • Also, Mr. Nasheed’s on-again-off-again call for a changeover to a ‘parliamentary form of government’ can polarise the overpoliticised nation even more.

    Conclusion

    Given this background and India’s increasing geostrategic concerns in the shared seas, taking forward the multifaceted cooperation to the next stage quickly could also be at the focus of relations of the two countries.

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  • Electoral Reforms In India

    Comparing the mandates of election commissions of India and the U.S.

    op-ed snap | Polity | Mains Paper 2: Comparison Of The Indian Constitutional Scheme With That Of Other Countries

    In the recently concluded presidential election in the U.S., the delay in announcing the result and issue of denial of the election results by the incumbent has brought into focus the role played by flaws in the Americal democratic system in the conduct of the election. This article compares the powers of the elections bodies in the U.S. and India.

    Powers of ECI

    • Indian Constitution has given the ECI enormous power to be exercised during the course of elections, and strictly on other election-related matters.
    • By virtue of being the custodian of the electoral roll, all matters related to keeping the roll updated, fall under the ECI’s domain.
    • Even the higher judiciary does not interfere during the course of the election process.
    • Our Constitution’s fathers decided to limit the role of the judiciary in India to the post-election period, when election petitions may be filed.
    • This was done to avoid the impeding of the election process and delay election results interminably.

    Comparing the powers

    • The U.S. Federal Election Commission has a much narrower mandate than its Indian equivalent-Election Commission of India.
    • The Federal Election Commission was established comparatively recently — 1975, with the special mandate to regulate campaign finance issues.
    • As a watchdog, it is meant to disclose campaign finance information, to enforce the law regarding campaign contributions, and oversee public funding of the presidential election.
    • The Federal Election Commission is led by six Commissioners.
    • These six posts are supposed to be equally shared by Democrats and Republicans, and too have to be confirmed by the Senate.
    • This leads to decision making divided on partisan lines.

    What India can learn From the election process in the U.S.

    • In the 2016 U.S. election, almost a quarter of the votes counted arose from postal and early balloting.
    • In India we have confined postal ballots to only a few categories, of largely government staff (for example those on election duty) as well as the police or armed forces.
    • In these difficult times of the novel coronavirus pandemic, we need to widen this base to include all senior citizens and anyone else who may find it convenient to cast their vote early.

    Consider the question “Powers of the Election Commission of India are wider when compared with its counterpart in the U.S. In light of this, compare the powers of the two bodies and how these wide powers have enabled smooth power transfers in India.” 

    Conclusion

    In its functioning, Election Commission of India has broad powers as compared to its counterpart in the U.S. which has helped India see a smooth power transfer from the first election in India in 1951-52 and every single election since.

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  • Women Safety Issues – Marital Rape, Domestic Violence, Swadhar, Nirbhaya Fund, etc.

    Interfaith marriages and religious conversions

    | | Mains Paper 1: Communalism, Secularism, Regionalism

    Forced religious conversions for interfaith marriages cases are widely seen in news these days. And many states are attempting to ban religious conversion for the sole purpose of marriage.

    Try answering this:

    Q. The recent withdrawal of a TV commercial advertisement showing an interfaith marriage has led to an astonishing blowback. In light of this, discuss the various ethical and rights issues involved in interfaith marriages.

    Context

    • Though the Special Marriage Act, 1954 (SMA) was enacted to facilitate the marriage of couples professing different faiths, and preferring a civil wedding.
    • However, some practical problems arise in registering such marriages.
    • The law’s features on prior public notice being given and objections for the safety and privacy of those intending to marry across religions.
    • To overcome this, many settle for marriage under the personal law of one of them, with the other opting for religious conversion (accusingly termed as Love-Jihad).

    What are the features of the SMA?

    • Age: The marriage of any two persons may be solemnized under the SMA, subject to the man having completed 21 years of age and the woman 18.
    • Consent: Neither should have a spouse living; both should be capable of giving valid consent, should not suffer from any mental disorder of a kind that renders them unfit for marriage and procreation.
    • Liability: They should not be within the degrees of prohibited relationship — that is, they should not be related in such a way that their religion does not permit such marriages.
    • Registration: Parties to an intended marriage should give notice to the ‘marriage officer’ of the district in which one of them had resided for at least 30 days.
    • Objections: Any person can object to the marriage within 30 days of the publication of the notice on the ground that it contravenes one of the conditions for a valid marriage.
    • Publication: The notice will have to be entered in a ‘Marriage Notice Book’ and a copy of it displayed at a conspicuous place in the office. The Notice Book is open for inspection at all reasonable times without a fee.
    • Inquiry and approval: The marriage officer has to inquire into the objection and give a decision within 30 days. If he refuses permission for the marriage, an appeal can be made to the district court. The court’s decision will be final.
    • Severance from family: Also, the Act says that when a member of a Hindu undivided family, gets married under SMA, it results in his or her “severance” from the family.

    Threats after such marriages

    • The provisions relating to notice, publication and objection have rendered it difficult for many people intending to solemnize inter-faith marriages.
    • Publicity in the local registration office may mean that family members objecting to the union may seek to stop it by coercion.
    • In many cases, there may be a threat to the lives of the applicants.
    • There have been reports of right-wing groups opposed to inter-faith marriages for communal propaganda.

    Issues with the publication of notices

    • In July, the Kerala Registration department decided to discontinue the practice of uploading marriage notices on its websites following complaints that these were being misused.
    • However, the notices will be displayed on the notice boards of the offices concerned.
    • These provisions have been challenged in the Supreme Court recently on the grounds that they violate the privacy of the couples, their dignity and right to marry.
    • In the case of Hindu and Muslim marriage laws, there is no requirement of prior notice and, therefore, such a requirement in the SMA violates the right to equality of those opting for marriage under it.

    States against conversion for the sake of marriage

    • Even though Uttar Pradesh (U.P.) and Karnataka have spoken about a separate enactment, at least two States have legal provisions to the effect.
    • The Himachal Pradesh Freedom of Religion Act, 2019, and the Uttarakhand Freedom of Religion Act, 2018, both prohibit conversion by misrepresentation, force, fraud, undue influence, inducement, allurement and ‘by marriage’.
    • There is a separate section in both laws under which, not conversion for the purpose of marriage, but marriage has done solely for the purpose of conversion, may be declared null and void by a family court based on a suit by either party.
    • The U.P. State Law Commission has recommended a similar Freedom of Religion law in the State and favours a provision under which marriages solemnized solely for the conversion of one of the parties may be nullified by a family court.

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  • Women Safety Issues – Marital Rape, Domestic Violence, Swadhar, Nirbhaya Fund, etc.

    Himachal Pradesh’s law against religious conversion

    | | Mains Paper 1: Communalism, Secularism, Regionalism

    Haryana government is considering a law against forced religious conversions and has sought information about such a law already in force in Himachal Pradesh.

    Try this question

    Q. How forced or misguided religious conversions pose a grave threat to the secular fabric of the Indian Society? Discuss.

    The Himachal anti-conversion law

    • The state had already enacted a law in 2007 which prohibited conversion from one religion to another by force or fraud. Last year it introduced a more stringent version of the legislation.
    • There was a rise in conversions by fraudulent means and unless checked well in time.
    • Such practice may erode the confidence and mutual trust between the different ethnic and religious groups in the state.

    What does the law say?

    • According to the Act, “no person shall convert or attempt to convert, either directly or otherwise, any other person from one religion to another by use of misrepresentation, force, undue influence, coercion, inducement or by any fraudulent means or by marriage; nor shall any person abet or conspire such conversion”.
    • The Act does not cover a person re-converting to his “parent religion”.
    • It further says that any marriage done for the sole purpose of religion conversion may be declared null and void by a court on a petition by either party.

    What happens if anyone wants to convert to any other religion?

    • As per the Act, anyone who wishes to convert to any other religion will give a declaration to the district authorities at least one month in advance, specifying that one is doing so as per his/her “own volition or free consent”.
    • In fact, even the religious priest who performs the conversion ceremony has to inform the authorities at least one month in advance.
    • The district magistrate will then conduct an inquiry regarding the “intention, purpose and cause of proposed conversion”.
    • The conversion will be rendered illegal if the authorities are not informed in advance.

    The burden of proof

    • The Act says that the burden of proof as to whether a religious conversion was not effected through force or fraud lies on the person so converted, or the person who has facilitated the conversion.

    Penal provisions

    • All offences under the Act are cognizable and non-bailable. The violator can be punished with a prison term ranging from one to five years, along with a fine.
    • In case the victim is a minor, woman or member of a Scheduled Caste or Tribe, the imprisonment may extend upto seven years.
    • Failure to declare the conversion in advance can also result in imprisonment of upto two years.

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  • Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

    Regulation of Other Service Providers (OSP)

    Prelims Only | Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth

    The Department of Telecom (DoT) has eased the rules for registration, submission of bank guarantee and other norms for other service providers (OSP) in the business process outsourcing (BPO) and information technology-enabled services (ITes).

    Recall your basics from NCERT books… Sectors of the Economy … More precisely, the Tertiary, Quaternary and Quinary Sectors.

    What are Other Service Providers (OSP)?

    • OSPs or other service providers are companies or firms which provide secondary or tertiary services such as telemarketing, telebanking or telemedicine for various companies, banks or hospital chains, respectively.
    • As computers made their foray into the Indian information technology space, a number of such OSPs, which were either voice or non-voice based, came into the market.
    • The sector required minimal investment but gave great returns in business, which prompted a large number of individuals and companies to float other service providing firms.

    Registration of OSPs

    • The new telecom policy of 1999 suggested that all OSPs register themselves so that the government could keep a check on the usage of its resources.
    • Since most of these firms used leased telephone lines, this in turn used the telecom spectrum auctioned by the DoT, hence facing the regulation.
    • Further, the registration was also made mandatory to ensure that firms did not establish fake OSPs which swindled customers under the garb of providing telebanking and other such sensitive services.

    What were the various registration norms for OSPs?

    • To start services in India, OSPs had to register themselves with the DoT and declare to the government as to how many employees were working in the firm as well as the area of service it was engaged in.
    • For example, if a firm wished to provide telebanking services, it had to tell the government the number of people working with the BPO and the state that firms catered to.
    • Further, the OSPs also have to declare whether they were providing services to domestic firms or international firms, and the nature of services being offered.

    Significance of the new guidelines

    • The guidelines will make it easier for BPOs and ITes firms in many ways, such as cutting down on the cost of location, rent for premises and other ancillary costs such as electricity and internet bills.
    • The doing away of registration norms will also mean that there will be no renewal of such licenses and therefore will invite foreign companies to set up or expand their other service providing units in India.
    • This change, in line with the norms of countries in the West can also allow employees to opt for freelancing for more than one company while working from home, thereby attracting more workers in the sector.

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  • Iran’s Nuclear Program & Western Sanctions

    Chabahar Rail Project

    | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    An Iranian diplomat in an interview has said that Tehran now hopes that New Delhi will help facilitate equipment for the Chabahar-Zahedan railway line under a line of credit promised to it in 2018.

    Try this question

    Q. Discuss the strategic and economic significance of Chabahar Port and Rail Project for India.

    Recent controversy

    • The Iranian government in July had decided to proceed with the construction of this project on its own, citing delays from the Indian side in funding and starting the project.

    The Chabahar Rail Project

    • It is a 628 km Chabahar-Zahedan line, which will be extended to Zaranj across the border in Afghanistan.
    • The entire project would be completed by March 2022.
    • It was meant to be part of India’s commitment to the trilateral agreement between India, Iran and Afghanistan to build an alternate trade route to Afghanistan and Central Asia.

    Why did Iran omit India from the project?

    • Despite several site visits by engineers, and preparations by Iranian railways, India never began the work, ostensibly due to worries that these could attract U.S. sanctions.
    • The U.S. had provided a sanctions waiver for the Chabahar port and the rail line to Zahedan, but it has been difficult to find equipment suppliers and partners due to worries they could be targeted by the U.S.
    • India has already “zeroed out” its oil imports from Iran due to U.S. sanctions.

    India’s reluctance with Iran

    • Looking at the whole aspects of relations, when it comes to politics, there has been a great common understanding and shared interests.
    • But when it comes to economic and trade relations, it has been subject to some limits and restrictions, which are hampered by the various sanctions imposed.
    • The US had put pressure directly or indirectly on the relations, although that has not been the will of both sides.

    The contentious partnership with China

    • Iran and China are close to finalising a 25-year Strategic Partnership which will include Chinese involvement in Chabahar’s duty-free zone, an oil refinery nearby, and possibly a larger role in Chabahar port as well.
    • The cooperation will extend from investments in infrastructure, manufacturing and upgrading energy and transport facilities, to refurbishing ports, refineries and other installations.
    • It is also rumoured that the Chabahar port will be leased to China surpassing India.
    • Iran had proposed a tie-up between the port at Gwadar and Chabahar last year and has offered interests to China in the Bandar-e-Jask port 350km away from Chabahar, as well as in the Chabahar duty-free zone.

    Back2Basics: India-Iran Partnership over Chabahar Port

    • In 2016, India signed a deal with Iran entailing $8 billion investment in Chabahar port and industries in Chabahar Special Economic Zone.
    • The port is being developed as a transit route to Afghanistan and Central Asia.
    • India has already built a 240-km road connecting Afghanistan with Iran.
    • All this were expected to bring cargo to Bandar Abbas port and Chabahar port, and free Kabul from its dependence on Pakistan to reach the outer world.
    • Completion of this project would give India access to Afghanistan and beyond to Turkmenistan, Uzbekistan, Tajikistan, Kyrgyzstan, Kazakhstan, Russia and Europe via 7,200-km-long multi-modal North-South Transport Corridor (INSTC).

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