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  • Being petroleum independent

    The article discusses the steps taken by the government to improve fuel efficiency standards and the for the transition to clean sources of energy.

    Reducing energy import dependence

    • Speaking on the increase in petrol and diesel prices, Prime Minister emphasised the need for clean sources of energy.
    • Expanding and diversifying energy supply is good, but if India is to reduce its energy import dependence, it must look towards first managing the demand for petroleum products.
    • It is worthwhile to reflect on measures taken by the previous governments as well as this government in this context.

    Steps taken

    National Electric Mobility Mission Plan

    • The UPA-2 administration formulated fuel efficiency standards for passenger vehicles that are now in effect.
    • It also constituted the National Electric Mobility Mission Plan (NEMMP).
    • While well-intended, both these actions fell short in terms of ambition.
    • India’s 2022 fuel efficiency standards for passenger cars are nearly 20% less stringent than the European Union’s standards.
    • The NEMMP primarily focused on hybrid electric vehicles.
    • Most of the incentives under the NEMMP went towards subsidising mild hybrids instead of electric vehicles.

    Multiple fuel pathways

    • Recently, the government has encouraged multiple fuel pathways in the transport sector including natural gas.
    • The Faster Adoption and Manufacturing of Electric Vehicles (FAME-II) scheme now focuses largely on electric vehicles.
    • The government has also provided several additional fiscal and non-fiscal incentives to encourage a transition to electric vehicles.

    Steps need to be taken

    • There are many things that the government can and should do to
    • First, the government should formulate a zero-emissions vehicle (ZEV) programme that would require vehicle manufacturers to produce a certain number of electric vehicles.
    • At present, the electric mobility initiative in India is driven largely by new entrants in the two- and three-wheeler space.
    • A ZEV programme would require all manufacturers to start producing electric vehicles across all market segments.
    • The government should also strengthen fuel efficiency requirements for new passenger cars and commercial vehicles.
    • Two-wheelers, which consume nearly two-third of the petrol used in India, are not subject to any fuel efficiency standards.
    •  Adopting stringent fuel efficiency standards and a ZEV programme by 2024 can result in India’s petroleum demand peaking by 2030.
    • The FAME should be extended not only to all passenger cars and commercial vehicles but also to agricultural tractors.

    Conclusion

    As the economy recovers from the pandemic, the demand for petroleum products will rise, as will prices. But the government can save money for the consumer while enhancing long-term energy security by wielding the regulatory tools at its disposal.

     

  • A changing fiscal framework

    The article examines the changes in government’s fiscal policy stance which supports the debt-financing and apparent contradiction displayed by increased excise duty.

    Increase in excise duty

    • Well before India began to globalise there was a time when each Union Budget announced sales tax increases on tobacco products.
    • The rise in tax was expected to be a shot in the arm for the revenue-starved government of our poor country.
    • India is less poor now, having risen to the rank of an emerging market economy.
    • Yet, COVID-19 has wreaked havoc.
    • As opposed to a Budget estimate of 3.5% for fiscal deficit, the revised estimates show a 2.7 times larger deficit of 9.5% for FY 2020-21. 
    • A comparison of the government’s revised Budget estimates with the original Budget estimates reveals a fall in receipts from every source of taxation except excise.
    • The revised Budget shows a rise of ₹94,000 crore on account of excise duties alone.
    • Presumably, the increase comes from the much-debated excise duty increases on petroleum and diesel.
    • The excise duty rise will hardly compensate for the huge falls in other tax revenues.
    • The larger excise duty collection is not large enough to have significantly reduced the inflated fiscal deficit figure.

    Implications of hike in excise duty

    • Given the nature of the products on which the excise duty has gone up, prices of commodities will rise in general.
    • With annual output shrinking by an estimated 7.7%, it is straightforward to conclude that unemployment has risen significantly.
    • The accompanying price rise will be the unemployed persons’ worst nightmare.
    • The result will be severe inequality.

    Change in economic policy framework

    • The Economic Survey 2020-21 considers Olivier Blanchard’s prescription that a fiscal deficit automatically transformed to government debt.
    • Such debts along with their servicing liabilities have a tendency to magnify over the years where present borrowings keep increasing to repay past borrowings and service charges.
    • This leaves little room for growth-enhancing expenditure and reduces a government’s creditworthiness in the eyes of lenders.
    • Debt-financed fiscal spending could well be a driver of growth.
    • It can improve the standard of living of the entire population, without necessarily removing inequality.
    • A government’s fiscal expenditure, Professor Blanchard points out, has stronger multiplier effects during recessions than during booms
    • The inequality, however, could well be benignant, for even though the rich will grow richer, the poor will escape out of poverty.

    Condition for debt-financed fiscal spending

    • Debt or the fiscal deficit constitutes the government’s spendable resources.
    • What will prevent the government from sinking into a debt trap?
    • Professor Blanchard shows that the debt-to-GDP ratio can be prevented from exploding if the rate of growth of GDP happens to be higher than the sovereign rate of interest.
    • This is the case in developed economies.
    • In such economies, debt financed government expenditure will create a positive primary surplus out of which interest payments can be made to keep the debt-GDP ratio under control.
    • There will, of course, be a maximum value that this ratio can attain, a value that is higher the larger is the excess of the growth rate over the interest rate.

    Contradiction in fiscal policy and fiscal regime

    • According to the Economic Survey, India’s average interest rate and growth rate over the last 25 years (leaving out FY 2020-21) have been 8.8% and 12.8% respectively.
    • Hence, Professor Blanchard’s condition is satisfied.
    • This, of course, is not to support excise duty increases, for it goes against the very principle of the Blanchard argument.
    • Therefore, there appears to be a contradiction between the government’s announced fiscal policy stance and the fiscal regime it is actually running.

    Consider the question”The Economic Survey 2020-2021 calls for the debt-financed fiscal spending. Do you think that this view is suitable for India economy? What are the risks involved?”

    Conclusion

    The government must consider the implications of increased excise on the economy and should focus on removing the contradiction in its fiscal policy and fiscal regime.

  • Pakistan- Sri Lanka Relations

    Pakistani PM is in Colombo on a two-day visit for ways and means to enhance trade and connectivity with Sri Lanka.

    What is the news?

    • Pakistan PM’s visit has attracted a fair amount of controversy because of a cancelled invitation to address the Sri Lankan parliament.
    • India too granted permission for using its airspace for the Pakistani PM’s aircraft.

    Try this question:

    Q.The triangulation in the ties between Sri Lanka, China and Pakistan is an emerging threat in the Indian Ocean Region. Discuss.

    Sri Lanka- Pakistan Relations

    • For Colombo, the visit holds much value. It comes at a fraught time for the government on the international stage.
    • Imminently, it is bracing to be hauled over the coals at the UN Human Rights Commission for withdrawing from resolution 30/1 of September 2015, under which it committed to carrying out war crime investigations.
    • To make matters worse, the Islamic world is appalled by Sri Lanka’s tight rules for the cremation and not burials of Muslims who have died of COVID-19.
    • The rule created a storm in Sri Lanka, with community leaders convinced that this is nothing but an extension of the state’s persecution of Muslims.

    Why Pakistan?

    (1) Trade ties

    • Pakistan is Sri Lanka’s second-largest trading partner in South Asia after India.
    • Sri Lanka and Pakistan have a free trade agreement dating back to 2005.
    • Pakistan’s top exports to Sri Lanka are textiles and cement.
    • Sri Lanka’s top exports to Pakistan are tea, rubber and readymade garments.

    (2) Cultural ties

    • In addition to trade cooperation, Pakistan invokes cricket and Buddhism, topics that most Sri Lankans share a deep connection with.
    • Over the last decade, Pakistan has also been projecting its ancient Buddhist sites to promote cultural ties with Sri Lanka.

    (3) Defence ties

    Defence ties are a strong pillar of Sri Lanka- Pakistan bilateral relationship.

    • During the 1971 war, Pakistan Air Force jets refuelled in Sri Lanka.
    • India pulled back the peacekeeping forces in 1990, it provided no active defence support to the Sri Lankan military.
    • Sri Lanka turned to Pakistan for arms, ammunition as well as training for its fighter pilots.
    • Gotabaya, who was defence secretary at the time, visited Pakistan in 2008 to make a request for emergency assistance with military supplies.
    • Earlier this month, Sri Lanka participated in Pakistan’s multi-nation naval exercise Aman.

    India’s observations and concerns

    • As Sri Lanka’s closest neighbour with strong, all-encompassing ties, even if these are sometimes problematic, India has not perceived Pakistan as a serious rival in Sri Lanka so far.
    • Sporadically, the Indian security establishment has voiced concerns about Pakistan’s role in the radicalization of people, especially in Eastern Sri Lanka.
    • Funds have poured in for new mosques from some West Asian countries, and the effect that this could have in India.

    Emerging threats from the ‘Triad’

    • There is now a new wariness about triangulation in the ties between Sri Lanka, China and Pakistan in defence co-operation, though it has not been publicly expressed.
    • In 2016, India put pressure on Sri Lanka to drop a plan to buy the Chinese JF-17 Thunder aircraft made in Pakistan and co-produced by the Chinese Chengdu Aircraft Corporation.
    • The most recent threat was from excluding India from the Colombo Terminal Project.

  • NITI Aayog’s Draft National Policy on Migrant Workers

    Spurred by the exodus of 10 million migrants from big cities during the Covid-19 lockdown, the NITI Aayog has prepared a draft national migrant labour policy.

    Highlights of the Policy

    • The draft describes two approaches to policy design:
    1. To focus on cash transfers, special quotas, and reservations
    2. To enhance the agency and capability of the community and thereby remove aspects that come in the way of an individual’s own natural ability to thrive

    A rights-based approach

    • The policy rejects a handout approach, opting instead for a rights-based framework.
    • It seeks to remove restrictions on the true agency and potential of the migrant workers.
    • The goal a/c to the document should not be to provide temporary or permanent economic or social aids”, which is “a rather limited approach”.
    • Migration, the draft says, should be acknowledged as an integral part of the development and government policies should not hinder but…seek to facilitate internal migration.

    Issues with existing law

    • The 2017 report argued that specific protection legislation for migrant workers was unnecessary.
    • Migrant workers aren’t yet integrated with all workers as part of an overarching framework that covers regular and contractual work.
    • The report discussed the limitations of The Inter-State Migrant Workers Act, 1979, which was designed to protect labourers from exploitation by contractors by safeguarding their right to non-discriminatory wages.
    • It mentions that the Ministry of Labour and Employment should amend the 1979 Act for “effective utilization to protect migrants”.

    Restructuring the institutions

    The NITI draft lays down institutional mechanisms to coordinate between Ministries, states, and local departments to implement programmes for migrants.

    • Nodal agency: It identifies the Ministry of Labour and Employment as the nodal Ministry for implementation of policies, and asks it to create a special unit to help to converge the activities of other Ministries.
    • Resources centre: This unit would manage migration resource centres in high migration zones, a national labour Helpline, links of worker households to government schemes, and inter-state migration management bodies.
    • Migration corridors: On the inter-state migration management bodies, it says that labour departments of source and destination states along major migration corridors, should work together through the migrant worker cells.
    • Labour officers from source states can be deputed to destinations – e.g., Bihar’s experiment to have a joint labour commissioner at Bihar Bhavan in New Delhi.
    • Role for Panchayats: Alongside the long-term goal, policies should promote the role of panchayats to aid migrant workers and integrate urban and rural policies to improve the conditions of migration.
    • Migration management: Panchayats should maintain a database of migrant workers, issue identity cards and passbooks, and provide “migration management and governance” through training, placement, and social-security benefit assurance, the draft says.

    Ways to stem migration

    • Even as it underlines the key role of migration in development, the draft recommends steps to stem migration.
    • The draft asks source states to raise minimum wages to bring a major shift in the local livelihood of tribal that may result in stemming migration to some extent.
    • The absence of community building organisations (CBO) and administrative staff in the source states have hindered access to development programmes, pushing tribals towards migration, the draft says.
    • The “long term plan” for CBOs and panchayats should be to “alleviate distress migration policy initiatives” by aiming “for a more pro-poor development strategy in the sending areas.

    The importance of data

    • The draft calls for a central database to help employers “fill the gap between demand and supply” and ensures “maximum benefit of social welfare schemes”.
    • It asks the Ministries and the Census office to be consistent with the definitions of migrants and subpopulations, capture seasonal and circular migrants, and incorporate migrant-specific variables in existing surveys.
    • Both documents see limited merit in Census data that comes only once a decade.
    • It asked the National Sample Survey Office to include questions related to migration in the periodic labour force survey and to carry out a separate survey on migration.

    Preventing exploitation

    • The policy draft describes a lack of administrative capacity to handle issues of exploitation.
    • State labour departments have little engagement with migration issues, and are in “halting human trafficking mode”, the draft says.
    • The local administration, given the usual constraints of manpower, is not in a position to monitor.
    • This has become the breeding ground for middlemen to thrive on the situation and entrap migrants which leads to potential exploitation and trafficking.

    Specific recommendations

    • The draft asks the various ministries to use Tribal Affairs migration data to help create migration resource centres in high migration zones.
    • It asks the Ministry of Skill Development and Entrepreneurship to focus on skill-building at these centres.
    • The Ministry of Education should take measures under the Right to Education Act to mainstream migrant children’s education, to map migrant children, and to provide local-language teachers in migrant destinations.
    • The Ministry of Housing and Urban Affairs should address issues of night shelters, short-stay homes, and seasonal accommodation for migrants in cities.
    • The National Legal Services Authority (NALSA) and Ministry of Labour should set up grievance handling cells and fast track legal responses for trafficking, minimum wage violations, and workplace abuses etc.

  • Pagri Sambhaal Movement of 1907

    As a part of the ongoing farmers’ protest, groups across the country have celebrated February 23 as ‘Pagri Sambhal Diwas’.

    Try this PYQ:

    Q.What was the immediate cause for the launch of the Swadeshi movement?

    (a) The partition of Bengal done by Lord Curzon.

    (b) A sentence of 18 months rigorous imprisonment imposed on Lokmanya Tilak.

    (c) The arrest and deportation of Lala Lajpat Rai and Ajit Singh; and passing of the Punjab Colonization Bill.

    (d) Death sentence pronounced on the Chapekar brothers.

    Pagri Sambhaal Movement

    • Pagrhi Sambhaal Jatta was a successful farm agitation that forced the British government to repeal three laws related to agriculture back in 1907.
    • Bhagat Singh’s uncle Ajit Singh was the force behind this agitation, and he wanted to channel people’s anger over the farm laws to topple the colonial government.

    What were the ‘three laws’?

    • The three farm-related acts at the centre of the storm in 1907 were the Punjab Land Alienation Act 1900, the Punjab Land Colonization Act 1906 and the Doab Bari Act.
    • These acts would reduce farmers from owners to contractors of land, and gave the British government the right to take back the allotted land if the farmer even touched a tree in his field without permission.
    • Amid resentment against the laws, Bhagat Singh’s father Kishan Singh and uncle Ajit Singh, with their revolutionary friend Ghasita Ram, formed the Bharat Mata Society.
    • It worked to mobilise this unrest into a revolt against the British government.

    Repeal of the laws

    • Ajit Singh persuaded Congress leader Lala Lajpat Rai to come on the stage during a rally in Lyallpur on March 3, 1907, to protest against the laws.
    • On sensing the popular resentment, the British made a minor amendment to the laws.
    • The agitation couldn’t remain non-violent. Ajit Singh was booked for sedition after his speech at a public meeting in Rawalpindi on April 21, 1921.
    • Violence erupted soon afterwards and the British government repealed the three controversial laws in May 1907.

  • Intensified Mission Indradhanush (IMI) 3.0

    States and UTs have started the implementation of the Intensified Mission Indradhanush 3.0, a campaign aimed to reach those children and pregnant women who have been missed out or been left out of the routine immunisation.

    Do not get confused with the Mission Indradhanush for Public Sector Banks launched in 2015. It aims at revamping the functioning of the Public Sector Banks to enable them to compete with the Private Sector Banks.

    Intensified Mission Indradhanush (IMI) 3.0

    • IMI 3.0 is aimed to accelerate the full immunization of children and pregnant women through a mission mode intervention.
    • The campaign is scheduled to have two rounds of immunisation lasting 15 days (excluding routine immunisation and holidays).
    • It is being conducted in pre-identified 250 districts/urban areas across 29 States/UTs in the country.
    • Beneficiaries from migration areas and hard to reach areas will be targeted as they may have missed their vaccine doses during the pandemic.

    About the Mission Indradhanush

    • Mission Indradhanush seeks to drive towards 90% full immunisation coverage of India and sustain the same by the year 2020. It was launched in December 2014.

    Aims and objectives

    • It aims to immunize all children under the age of 2 years, as well as all pregnant women, against eight vaccine-preventable diseases.
    • The diseases being targeted are diphtheria, whooping cough, tetanus, poliomyelitis, tuberculosis, measles, meningitis and Hepatitis B.
    • In 2016, four new additions have been made namely Rubella, Japanese Encephalitis, Injectable Polio Vaccine Bivalent and Rotavirus.
    • In 2017, Pneumonia was added to the Mission by incorporating the Pneumococcal conjugate vaccine under Universal Immunisation Programme

    Try this question from CSP 2016:

    Q.‘Mission Indradhanush’ launched by the Government of India pertains to:

    (a) Immunization of children and pregnant women

    (b) Construction of smart cities across the country

    (c) India’s own search for the Earth-like planets in outer space

    (d) New Educational Policy

  • [pib] PM-KISAN Scheme Completes Two Years

    The PM-Kisan scheme, launched with an aim to ensure a life of dignity and prosperity for farmers has completed two years of successful implementation.

    PM-KISAN

    • Under this programme, vulnerable landholding farmer families, having cultivable land upto 2 hectares, will be provided direct income support at the rate of Rs. 6,000 per year.
    • This income support will be transferred directly into the bank accounts of beneficiary farmers, in three equal instalments of Rs. 2,000 each.
    • This programme will be entirely funded by the Government of India.

    Note: Aadhaar was made optional for availing the first instalment (December 2018 – March 2019). But now it is mandatory.

    Exclusion categories

    The following categories of beneficiaries of higher economic status shall not be eligible for benefit under the scheme.

    1. All Institutional Landholders
    2. Farmer families in which one or more of its members belong to the following categories
    • Former and present holders of constitutional posts
    • Former and present Ministers/ MP/MLAs/Mayors /Chairpersons of District Panchayats
    • All serving or retired officers and employees of Central/ State Government Ministries (Excluding Multi Tasking Staff /Class IV/Group D employees)
    • All superannuated/retired pensioners whose monthly pension is ₹10,000/-or more (Excluding Multi Tasking Staff / Class IV/Group D employees) of the above category
    • All Persons who paid Income Tax in the last assessment year
    • Professionals like Doctors, Engineers, Lawyers, Chartered Accountants, and Architects registered with Professional bodies and carrying out the profession by undertaking practices.

    Do you know?

    West Bengal is yet to implement the PM-KISAN scheme while the farmers have completed their registrations!

  • Places in news: Lake Chad

    One of Africa’s largest freshwater bodies, Lake Chad, has shrunk by 90 per cent.

    Try this PYQ from CSP 2018:

    Q.Which of the following has/have shrunk immensely/dried up in the recent past due to human activities?

    1. Aral Sea
    2. Black Sea
    3. Lake Baikal

    Select the correct answer using the code given below:

    (a) 1 only

    (b) 2 and 3

    (c) 2 only

    (d) 1 and 3

    Lake Chad

    • Lake Chad in the Sahel spans the countries of Nigeria, Niger, Chad and Cameroon and is home to 17.4 million people.
    • It is blessed with rich aquatic and terrestrial biodiversity.
    • The Chari River, fed by its tributary the Logone, provides over 90% of the lake’s water, with a small amount coming from the Yobe River in Nigeria/Niger.
    • Despite high levels of evaporation, the lake is freshwater.
    • The Lake Chad basin comprises biosphere reserves, World Heritage and Ramsar sites as well as wetlands of international conservation importance.

    Why it is significant?

    • For years, the lake has been supporting drinking water, irrigation, fishing, livestock and economic activity for over 30 million people in the region.
    • It is vital for indigenous, pastoral and farming communities in one of the world’s poorest countries.
    • However, climate change has fuelled a massive environmental and humanitarian crisis.
    • The United Nations has termed the Lake Chad crisis as “one of the worst in the world”.

    A looming peril

    • The lake has shrunk 90 per cent over the last 60 years since the chronic droughts surged at the beginning of the 1970s.
    • The surface area of the lake was 26,000 square kilometres in 1963; it has now reduced to less than 1,500 square kilometres.
    • Its population is exploding and the region has been ripped apart from conflict at an unprecedented scale.

    Behind all crises

    • The ever-changing climate has dramatically worsened the situation, amplifying food and nutritional insecurity in the region.
    • Temperature is rising one-and-a-half times faster than the global average. The seasonal and inter-rainfall patterns have been drastically changing each year.
    • This has triggered food insecurity, ultimately pushing communities into the arms of terrorist groups.
    • Boko Haram is one of the top insurgent groups with a strong foothold in the region.

  • Animal Husbandry Infrastructure Development Fund (AHIDF)

    Importance of animal husbandary and dairy sector

    • As an allied industry of agriculture, the animal husbandry and dairy sector collectively employs more than 100 million people.
    • Since the bulk of establishments in this sector is concentrated in rural India, the socio-economic relevance of this sector cannot be overstated.
    • the Central government unveiled a string of measures to cushion the economy, as a part of which the Animal Husbandry Infrastructure Development Fund (AHIDF) was announced.

    More about AHIDF

    • The AHIDF has been set up with an outlay of ₹15,000 crore.
    • As per the provisions of AHIDF, a project will be eligible for a loan amount that covers up to 90% of the estimated cost –
    • There will be interest subvention of 3% for all eligible entities.
    • Applicants can submit the proposal with a complete Detailed Project Report through the Udyami Mitra Portal.
    • The fund includes a diverse set of stakeholders such as FPOs, private dairy players, individual entrepreneurs, and non-profits within its ambit.

    Strengthening dairy value chain

    • There is a pressing need to enhance chilling infrastructure at collection centres by setting up bulk milk coolers.
    • If the infrastructure needs for milk processing and distribution are included, then the overall potential investment opportunity is to the tune of ₹1,40,000 crore across the dairy value chain.
    • There is also considerable potential to increase the productivity of cattle, especially by enhancing the quality of animal feed.
    • With this in mind, the AHIDF has been designed to support the establishment of animal feed plants of varying capacities.
    • The infrastructure gap of 10-18 MMT in the production and supply of affordable compound cattle feed translates into an investment potential of around ₹5,000 crore.

    Boosting the poultry industry

    • There are not only economic but nutritional benefits to boosting the poultry segment’s output, efficiency and quality.
    • India is the fourth largest chicken meat producer and the second largest egg producer in the world.
    • India is well-positioned to help mitigate rampant malnutrition given that chicken meat provides the cheapest source of protein per unit.
    • With eggs being introduced as part of the mid-day meal within several anganwadis in the country, an upgradation in poultry infrastructure would be closely intertwined with social justice outcomes too.
    • Macro benefits regarding climate change and employment are linked to this sector.
    • Enhanced infrastructure can make processing units more energy-efficient and help mitigate their carbon footprint.

    Consider the question ” As an allied industry of agriculture, the animal husbandry and dairy sector are important for rural area and the socio-economic relevance of this sector cannot be overstated. In light of this, examine the role Animal Husbandry Infrastructure Development Fund (AHIDF) could play in transforming rural economy.”

    Conclusion

    The AHIDF also has the potential to create over 30 lakh jobs, even as it overhauls domestic infrastructure towards giving greater prominence to India’s dairy and livestock products in the global value chain.

     

  • China-Taiwan conflict

    The article underscores the centrality of Taiwan in the realms of semiconductor production and how that dominant spills over in geopolitics.

    Silicon shield of Taiwan

    • Taiwan’s security situation has been worsening amidst mounting economic, political and military pressure from China.
    • Any Chinese attack on Taiwan that disrupts the flow of semiconductors would produce significant challenges not only for the US but also China that relies on semiconductor supplies from Taiwan.
    • That factor appears to be preventing the crisis from boiling over into a full-scale war that could draw the US and Japan into it.
    •  It is Taiwan’s so-called “silicon shield”.

    Taiwan’s dominance in semiconductor industry

    • Taiwan is the world’s leading producer of semiconductors and other electronic components.
    • The Taiwan Semiconductor Manufacturing Company (TSMC) has more than 55 per cent of the global market share in the production of high-end custom-made chips.
    • Of the two rival companies that have survived, US-based Intel is in trouble and Korea’s Samsung has challenges of its own.
    •  There will be no generation of data without the semiconductors.
    • It might be more accurate to say that “semiconductors are the new oil” and their production is increasingly dominated by Taiwan and the TMSC.

    Geopolitics over Taiwan

    • As its economic heft and political salience rose in the 21st century, China has ratcheted up pressure on countries that have diplomatic relations with Taiwan.
    • China has also compelled international organisations to push Taiwan out of their activities, even when Taiwan had much to contribute.
    • Amidst the deterioration of US-China relations in recent years, President Donald Trump was far more supportive of Taiwan than his recent predecessors.
    • The Biden team has also signalled continuity with Trump’s Taiwan policies.
    • All indications are that Washington will continue to seek some technological decoupling and diversification of sensitive supplies away from China.
    • Taiwan will inevitably be the key element in the American quest for resilient supply chains in the digital domain.

    Opportunity for India

    • Taiwan’s position as a semiconductor superpower opens the door for more intensive strategic-economic cooperation between Delhi and Taipei.
    • Part of the problem is that India’s strategic community continues to view Taiwan as an adjunct to India’s “One-China policy”.
    • India’s policy oscillates between keeping needless distance with Taipei when ties with Beijing are warm and remembering it when Sino-Indian ties enter a freeze.
    • This changed in the early 1990s, when it began to engage with Taiwan, but the policy remained a restricted one.
    • In the last few years, though, there has been a steady expansion of bilateral engagement.
    • Trade has increased from about $1 billion in 2001 to about $7 billion in 2018.
    • India has made a special effort to woo Taiwanese companies that are moving some of their production away from China.
    • India is yet to tap into the full range of commercial and technological opportunities possibilities with Taiwan.
    • This is particularly true of semiconductor production.

    Way forward

    • Delhi must begin to deal with Taiwan as a weighty entity in its own right that offers so much to advance India’s prosperity.
    • Delhi does not have to discard its “One-China policy” to recognise that Taiwan is once again becoming the lightning rod in US-China tensions.

    Consider the question “India needs to explore the opportunities in relationship with Taiwan even as it pursues and sticks to its One China policy. Comment.

    Conclusion

    As Taiwan becomes the world’s most dangerous flashpoint, the geopolitical consequences for Asia are real. Although Delhi has embraced the Indo-Pacific maritime construct, it is yet to come to terms with Taiwan’s critical role in shaping the strategic future of Asia’s waters.