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  • Foreign Policy Watch: India-ASEAN

    India’s ASEAN Engagement and Upcoming Summits

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

    asean

    Central Idea

    • Prime Minister departed for Indonesia to participate in the 20th ASEAN-India summit and the 18th East Asia Summit (EAS) in Jakarta.
    • During the visit, he will meet with leaders from the ten ASEAN countries and attend the EAS, including leaders from ASEAN nations, Australia, China, India, Japan, New Zealand, South Korea, Russia, and the U.S.

    Why discuss this?

    • India-ASEAN relations have evolved significantly over the years, moving from a distant past to a robust partnership.

    Association of Southeast Asian Nations (ASEAN)
    Established August 8, 1967
    Member Countries Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam
    Objective To promote political and economic cooperation and regional stability among member countries.
    Key Areas of Cooperation – Economic Integration

    – Political and Security Cooperation

    – Social and Cultural Cooperation
    Significance Promotes economic growth, stability, and peace in the Southeast Asian region. It is also a forum for diplomatic dialogue and conflict resolution.
    ASEAN Secretariat Jakarta, Indonesia (The ASEAN Secretariat is the organization responsible for coordinating ASEAN activities.)

     

    Evolution of India-ASEAN Relations

    • 1950s and Early 1960s: During this period, India played a significant role in supporting the decolonization efforts of Southeast Asian countries.
    • 1960s to 1980s: India maintained some distance from the region due to internal issues and viewed ASEAN as a product of the Cold War.
    • 1990s to 2010s: India adopted the ‘Look East Policy,’ leading to a full dialogue partnership with ASEAN in 1995 and becoming a full member of the ASEAN Regional Forum (ARF) in 1996.
    • 2010s to Present: India-ASEAN cooperation intensified with the ‘Act East Policy,’ resulting in the elevation to a Strategic Partnership in 2012 and a Comprehensive Strategic Partnership in 2022.

    Key Areas of Cooperation

    • Trade Relations: The India-ASEAN Free Trade Agreement (AIFTA) and substantial trade volumes have strengthened economic ties, with commodity trade reaching $98.39 billion in the period April 2021-February 2022.
    • Business & Investment: ASEAN is a major source of Foreign Direct Investment (FDI) for India, with cumulative FDIs from ASEAN to India totaling $117.88 billion between 2000-2021. The ASEAN India-Business Council (AIBC) promotes collaboration between private sector players from India and ASEAN.
    • Socio-Cultural Cooperation: Cultural affinities between ASEAN and India foster people-to-people interactions through initiatives like student exchange programs.
    • ASEAN-India Projects: Collaboration in agriculture, science & technology, environment, renewable energy, and defense promotes mutual growth. The ASEAN-India S&T Development Fund (AISTDF) contributes $1 million to support joint collaborative R&D research projects.
    • Strategic Cooperation: Platforms like the ASEAN Post Ministerial Conference (ASEAN PMC) and ADMM-Plus facilitate dialogue on security issues.
    • Defense Cooperation: India is enhancing arms sales and defense ties with ASEAN countries to promote regional security, such as the recent approval by the Philippines for a USD 374 million purchase of the BrahMos shore-based anti-ship missile system in January 2022.
    • Technological Cooperation: ISRO’s collaboration supports ASEAN countries in space science and technology.
    • Connectivity: Projects like the India-Myanmar-Thailand Trilateral Highway and Kaladan Multimodal Project enhance regional connectivity.

    Why India Needs ASEAN?

    • Significant Trade & Commercial Relations: ASEAN is a major destination for India’s service sectors and a vital source of foreign investments.
    • Development of North East India: ASEAN provides an alternate route for India’s access to North Eastern India, facilitating development and strategic interests.
    • Countering Chinese Expansion: Strengthening ties with ASEAN countries helps India counter Chinese influence in the Indo-Pacific region.
    • Maritime Freedom: Collaboration with ASEAN ensures a free and peaceful Indo-Pacific region based on a rules-based order.
    • Facing Politico-security Challenges: Cooperation in addressing security threats like climate change, terrorism, and refugee crises benefits both sides.
    • Support for Indian Initiatives: ASEAN’s support is crucial for India’s success in regional policies and initiatives.
    • Emerging Market: India benefits from ASEAN’s agricultural and industrial products, while ASEAN relies on India’s demographic dividend.
    • Global Reforms: ASEAN’s global influence aligns with India’s vision for reforms in international forums.
    • Diaspora: Southeast Asia’s significant Indian diaspora fosters cultural ties and people-to-people relations.
    • Elevating India’s Global Status: Partnership with ASEAN enhances India’s geopolitical standing.

    Challenges to Stronger Cooperation

    • Large Trade Deficit: Trade imbalance and issues with the Free Trade Agreement (FTA) have impacted India’s economic relations with ASEAN, with the trade deficit rising from around $5 billion in FY11 to USD 21.8 billion in FY19.
    • Balancing China: ASEAN countries’ engagement with China and concerns over military capabilities impact the depth of cooperation with India.
    • Delays in Connectivity Projects: Long gestation periods for connectivity projects hinder progress.
    • Issues within ASEAN: Different political systems and human rights issues pose challenges to stronger cooperation.

    Way Forward

    • Enhance Trade Relations: Focus on the blue economy and sustainable development to boost economic ties.
    • Accelerate Connectivity Projects: Expedite the completion of infrastructure projects and build new trade and transport linkages.
    • Strengthen Regional Role: India must play a more prominent role in the region to address geopolitical challenges.
    • Establish Dedicated Departments: Dedicated departments under central ministries can facilitate better cooperation with ASEAN.

    Conclusion

    • India’s commitment to ASEAN signifies its strategic engagement with the Indo-Pacific region.
    • Despite challenges, enhancing cooperation in trade, connectivity, defence, and socio-cultural aspects can pave the way for mutual growth and regional peace.

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  • ISRO Missions and Discoveries

    Chandrayaan 3 success: India’s role in democratising space

    op-ed snap | Science Tech | Mains Paper 3: Achievements Of Indians In S&T

    What’s the news?

    • Chandrayaan 3’s landing on August 23 is a significant development in India’s space exploration efforts. This event prompts reflection on recent developments in outer space activities and their implications for peaceful purposes.

    Central idea

    • The year 2023 has seen India make significant strides in the realm of outer space activities. From becoming a signatory to the US Artemis Accords, which focus on the responsible use of outer space, to deepening engagements with the United States through initiatives like the US-India Civil Space and Commercial Space Working Groups, India has emerged as a key player in the global space arena.

    Evolution of Outer Space Governance

    • Historical Initiatives: The journey of outer space governance began with the historic launch of Sputnik in 1957. This event spurred the adoption of UN General Assembly Resolutions 1721 A and B in 1961. These resolutions marked the early acknowledgment of the need for international collaboration in space exploration.
    • Consolidation of Principles: Over the years, space-faring nations consistently upheld the principles enshrined in the Outer Space Treaty of 1967. These principles have gradually evolved into customary international laws. This evolution signifies the transformation of outer space into an inclusive and democratized domain.
    • Widespread Participation: Presently, outer space is accessible to more than 80 countries, each deriving various advantages from space-based satellite services. This widespread participation reflects the successful international cooperation that has expanded access to space resources.

    Outer Space as a Global Common

    • The concept of a global common traditionally applies to areas beyond the sovereignty of any single nation, inspired by ideas like Grotius’s Mare Liberum (free sea).
    • In the United Nations framework, outer space is recognized as one of the global commons alongside the high seas, the atmosphere, and Antarctica.

    Two Perspectives on Global Commons

    • Enabling Perspective:
    • From a geopolitical and military standpoint, considering outer space as a global common facilitates international cooperation and security.
    • Nations worldwide recognize that areas beyond their jurisdiction, such as outer space, are vital for maintaining international order and regional security.
    • Rejecting the idea of outer space as a global common could undermine the freedom of navigation, a fundamental principle upheld by initiatives like the QUAD.
    • Constraining Perspective:
    • Alternatively, viewing outer space as a global common can limit the economic and commercial exploitation of its resources.
    • It implies shared ownership, public governance, and restrictions on usage, aligning with the concept of the common heritage of mankind concept as expressed in the Moon Agreement of 1979.
    • This concept extends beyond outer space, applying to the high seas and deep-sea beds, emphasizing the need for responsible resource management.

    Challenges and Complexity in Outer Space Governance

    • Commercial Planetary Resource Extraction: Private companies and nations are exploring the potential for mining resources from celestial bodies such as the moon and asteroids. This raises complex questions about property rights, resource allocation, and environmental concerns in outer space.
    • Resource Management: As commercial interests grow, the management of outer space resources becomes increasingly intricate. Determining how to allocate resources fairly and sustainably while avoiding overuse or exploitation poses a significant challenge. Balancing the interests of different nations and entities in resource-rich areas like the Moon adds to the complexity.
    • Environmental Concerns: Space debris and orbital congestion pose environmental risks to space activities. With an increasing number of satellites and space missions, managing space debris and ensuring the long-term sustainability of space activities have become pressing challenges.
    • Security and Militarization: The militarization of outer space and concerns about security in space have grown. Nations are developing space-based capabilities for defense and surveillance, raising questions about the potential weaponization of space and the need for arms control measures.
    • International Collaboration: Ensuring effective international collaboration in space governance can be challenging due to differing national interests, technological disparities, and political tensions.
    • Technological Advancements: Rapid technological advancements in space exploration, including the development of reusable rockets and miniaturized satellites, change the landscape of space activities. Keeping regulatory frameworks up-to-date with these advancements is a constant challenge.

    India’s Crucial Role in Space Resource Management

    • Involvement in International Agreements: India is both a signatory to the Moon Agreement of 1979 and the Artemis Accords. This dual commitment places India in a unique position to influence and contribute to the development of international frameworks for space governance.
    • Complex Decision-Making: The complexity arises from the fact that while India has signed the Artemis Accords, it has not yet ratified the Moon Agreement. This highlights India’s need to carefully evaluate its stance on these agreements and the implications for its future space activities and resource management.
    • Global Impact: India’s decisions and actions in the realm of space resource management have global implications. As one of the major space-faring nations, India’s approach will significantly influence the international framework for managing space resources, including lunar and celestial bodies.
    • International Cooperation: India’s robust international cooperation in space programs, including multilateral and bilateral engagements, positions it as a key collaborator with advanced space powers and emerging space nations.
    • Balancing Competing Objectives: India’s role is vital in striking a balance between competing objectives in the use of outer space for peaceful purposes. This involves ensuring responsible resource utilization, promoting equitable access, and upholding international law and principles.

    Conclusion

    • India’s growing prominence in the field of outer space activities requires a thoughtful approach to its role in shaping the future of space resource management. Balancing competing objectives, promoting peaceful use of outer space, and contributing to the development of an international framework are essential steps to ensure the responsible and equitable exploration and utilization of space resources for the benefit of all humankind.

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  • Air Pollution

    For an expanse of blue, with air so clean

    op-ed snap | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia

    What’s the news?

    • According to UN Secretary-General António Guterres, the Earth has entered an era of global boiling, marked by scorching heatwaves, devastating floods, and erratic weather patterns.

    Central idea

    • With scorching heatwaves, devastating floods, and erratic weather patterns becoming the new normal, the urgency to address the triple-planetary crisis of biodiversity loss, climate change, and pollution has never been more apparent. Amidst this global turmoil, it’s crucial to recognize that one silent but deadly adversary is among us: air pollution.

    The Silent Killer: Air Pollution

    • Global health statistics are grim, with lung cancer claiming 10 million lives worldwide in 2020, a number projected to rise by another 3.2 million by 2050, according to a report by the Indian National Institute of Health.
    • South Asia, home to two billion people, is a grim example, hosting nine of the world’s ten most polluted cities, with Delhi topping the list.
    • Despite some progress in terms of Air Quality Index (AQI) improvements, Delhi remains in the grip of perilous air pollution, especially during the winter months.

    The Looming Threat of Air Pollution

    • Lung cancer, cardiovascular disorders, respiratory ailments, and mental health issues continue to devastate lives.
    • Delhi’s air, laden with sulfur dioxide, nitrogen oxides, high particulate matter, carbon monoxide, and ozone, deprives over 30 million residents of their basic human right to breathe clean air.
    • Vulnerable groups like immunocompromised individuals, pregnant women, children, and the elderly suffer disproportionately.
    • In 2019, a Lancet report attributed 1.67 million deaths in India to air pollution, accounting for a staggering 17.8% of total deaths in the country.

    Efforts in Progress to Combat Air Pollution

    • PUSA Decomposer: The Indian Agricultural Research Institute (IARI) has developed the PUSA Decomposer, which employs biotechnology to tackle agricultural pollution. This innovative solution addresses the burning of crop residues, a significant contributor to air pollution.
    • State-level Policies: Many state governments have implemented policies like GRAP 3 (Graded Rapid Action Plan) to monitor air quality in pollution hotspots. The establishment of Green War Rooms represents a proactive approach to managing and mitigating air pollution in these regions.
    • Startups and Innovation: Numerous startups, often led by young entrepreneurs, are actively engaged in finding sustainable solutions to air pollution. These initiatives include the conversion of agricultural waste into valuable products, reducing the environmental impact of farming practices.

    International Initiatives and Collaborations to Combat Air Pollution

    • UNESCO Initiatives: UNESCO has undertaken various initiatives to address air pollution. One notable initiative is the implementation of an internal carbon tax on all flight tickets. This tax aims to reduce carbon emissions from air travel, a significant contributor to global air pollution.
    • World Air Quality Project: The World Air Quality Project provides real-time air quality data, allowing residents to make informed decisions about their activities and travel based on current air quality conditions. This empowers individuals to protect their health by avoiding areas with poor air quality.
    • Collaboration with UNEP: UNESCO collaborates with the United Nations Environment Programme (UNEP) on environmentally conscious practices. For example, the ‘Virtual Meetings’ project promotes digital working to reduce the need for travel and its associated carbon emissions.
    • Clean-Air-For-Schools: UNESCO’s Clean-Air-For-Schools program focuses on spreading education and awareness about clean air among students and the wider community. This initiative aims to engage future generations in the fight against air pollution.
    • Promotion of Sustainable Practices: International initiatives also promote sustainable practices in various sectors. This includes the adoption of electric vehicles, the replacement of traditional lighting systems with energy-efficient LED arrangements, and the implementation of solar-powered offices to reduce carbon emissions.
    • Protection of Historical Sites: Efforts are underway to protect historical and cultural sites from the harmful effects of air pollution. Developing strategies to curb air pollution in the vicinity of these sites is essential for their preservation.
    • Green Solutions: UNESCO encourages the development of green solutions, such as urban forests, parks, and green corridors, to mitigate air pollution in urban areas.

    Viable solutions to combat air pollution

    • Urban Planning and Design: Cities worldwide are adopting innovative urban planning and design strategies to prioritize human health and environmental sustainability. Car-free zones, green spaces, and smart urban layouts can significantly reduce air pollution by promoting alternative transportation methods and reducing traffic congestion.
    • Public Transportation: Electrified public transportation systems, including electric buses and trains, offer a sustainable and low-pollution alternative to traditional fossil-fuel-powered vehicles. These initiatives reduce emissions and contribute to cleaner air in urban areas.
    • Nature-Based Solutions: Integrating nature-based solutions, such as urban forests, parks, and green corridors, into urban landscapes can help absorb pollutants and improve air quality. These green spaces also provide additional benefits for public health and well-being.
    • Biotechnology: Innovative biotechnology, like the PUSA decomposer mentioned earlier, can play a crucial role in reducing agricultural pollution, a significant contributor to poor air quality.
    • Renewable Energy: Transitioning to clean and renewable energy sources can significantly reduce the air pollution associated with fossil fuel combustion. China’s shift to clean energy and electrified mobility serves as a prime example of this transition’s positive impact.
    • Sustainable Farming Practices: Initiatives like Indonesia’s Carbon Efficient Farming Project and efforts in Thailand and Vietnam to reduce open straw burning demonstrate the importance of adopting sustainable agricultural practices to minimize air pollution.
    • International Collaboration: Global initiatives, such as those by UNESCO and the World Air Quality Project, facilitate international cooperation to combat air pollution. These efforts include measures like implementing carbon taxes on flight tickets and promoting environmentally conscious practices.
    • Youth-Led Advocacy: Young activists worldwide are actively raising awareness about air pollution and advocating for cleaner air. Their efforts, including real-time air quality data monitoring and environmental education, play a vital role in inspiring change.

    Conclusion

    • The time for action is now. The problem of air pollution was created by people, and it is people who must find and implement solutions, supported by effective air quality policies and action plans. The choice is ours, and it is one that demands urgency, resolve, and a collective commitment to securing a cleaner, healthier world for all.

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  • G20 : Economic Cooperation ahead

    Sustainable agriculture, climate change and nutrition: a complex challenge

    op-ed snap | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia

    What’s the news?

    • The interconnected challenges of food security, climate change, and sustainable agriculture emphasize the need for a comprehensive approach. The G20 Indian Presidency can play a pivotal role in fostering international cooperation to address these issues.

    Central idea

    • The intricate link between food security, climate variability, and sustainable agriculture has far-reaching consequences for the Earth and its inhabitants. Climate change threatens food security through erratic weather and extreme events, while agricultural practices exacerbate climate change, creating a damaging feedback loop.

    Climate Variability and Food Insecurity

    • Climate variability, characterized by erratic weather patterns such as droughts and floods, directly impacts agriculture. It can lead to crop failures, reduced agricultural productivity, and increased food insecurity.
    • Erratic weather patterns disrupt traditional farming practices and make it challenging to predict and plan for successful harvests.
    • Vulnerable populations are disproportionately affected by extreme weather events like droughts and floods.

    How does land use play a significant role in both climate change and food security? 

    • Unsustainable land use practices, such as deforestation and the expansion of agriculture, release carbon into the atmosphere, contributing to global warming.
    • On the other hand, practices like reforestation, agroforestry, and land conservation can sequester carbon and improve soil health, benefiting both agriculture and climate change mitigation.

    The Role of Sustainable Agriculture

    • Mitigating Environmental Impact: Sustainable agriculture focuses on practices that aim to minimize the environmental degradation associated with conventional farming. This includes reducing the use of synthetic pesticides and fertilizers, which can harm ecosystems and water quality.
    • Maintaining or Improving Productivity: Sustainable agricultural practices are designed to maintain or even improve agricultural productivity while reducing environmental harm. This is essential to ensuring a stable and sufficient food supply, particularly in the face of climate change-related disruptions.
    • Enhancing Climate Resilience: Sustainable agricultural practices, such as crop rotation, organic farming, and reduced pesticide use, can enhance the resilience of farming systems. These practices make agriculture less susceptible to disruptions caused by climate variability, such as extreme weather events.
    • Carbon Sequestration: The article suggests that sustainable land use practices, such as reforestation, agroforestry, and land conservation, can sequester carbon from the atmosphere. This not only helps mitigate climate change but also improves soil health, benefiting both agriculture and the environment.

    How can agriculture be made more sustainable and resilient in communities in developing countries?

    • Increasing Crop Diversity: Encouraging farmers to diversify their crop choices can improve resilience. Growing a variety of crops can increase the risk of crop failure due to unpredictable weather patterns and pests. Crop diversity also enhances nutrient cycling in the soil, improving overall soil health.
    • Diversifying Farming Systems: Promoting mixed farming systems that include livestock and aquaculture alongside traditional crops can enhance resilience. These integrated systems can optimize resource use, provide multiple sources of income, and improve nutrient cycling.
    • Efficient Irrigation Systems: Investing in efficient irrigation systems can help farmers cope with changing rainfall patterns and water scarcity. These systems can improve soil health and water conservation, reducing vulnerability to climate-related challenges.
    • Promoting Organic Farming Practices: Encouraging organic farming practices, which minimize the use of synthetic pesticides and fertilizers, can reduce environmental harm and improve the resilience of agricultural systems. Organic practices often focus on building healthy soils, which can better withstand climate variability.
    • Cultivating Climate-Resistant Crops: Promoting the cultivation of climate-resistant crop varieties and drought-resistant seeds, such as millets, can help farmers adapt to changing climate conditions. These crops are often better suited to withstand droughts and extreme temperatures.
    • Strengthening Market Links: Facilitating connections between farmers and markets can help ensure that farmers receive fair prices for their produce. This can improve the economic resilience of farming communities and incentivize sustainable practices.
    • Microfinance Opportunities: Providing access to microfinance opportunities can assist farmers in investing in sustainable agricultural practices. Financial support can help farmers acquire the resources they need to adopt more resilient and sustainable farming methods.
    • Policy Support: Implementing policies that emphasize sustainable agriculture and provide incentives for sustainable practices can create an enabling environment for farmers. These policies can include subsidies for sustainable practices, access to credit, and support for climate adaptation.

    Global Prospects through the G20 Indian Presidency

    • International Cooperation: The G20 Indian Presidency offers a platform for international cooperation. G20 countries can collaborate and coordinate efforts to address pressing global challenges, including climate change and food security.
    • Knowledge Sharing: The G20 provides a forum for knowledge sharing among member nations. Countries can exchange best practices, share research findings, and pool resources to tackle common issues more effectively.
    • Policy Advocacy: G20 member countries can use their collective influence to advocate for policies that promote sustainability, resilience, and equity in global food systems. This can include advocating for climate-resilient agricultural practices and sustainable land use.
    • Resource Mobilization: The G20 can facilitate resource mobilization to support initiatives aimed at creating a more sustainable and resilient global food system. This includes financial support for sustainable agriculture projects and climate adaptation efforts.
    • Innovation and Research: G20 countries can promote international cooperation in agriculture research and innovation. By working together, they can accelerate the development of sustainable crop varieties, pest-resistant crops, and advanced farming technologies.
    • Global Food Security: The G20 can play a pivotal role in enhancing global food security. This involves coordinating efforts to improve food distribution systems, reduce food losses and waste, and promote sustainable agriculture to ensure a stable food supply for vulnerable populations worldwide.
    • Agricultural and Rural Development: G20 member nations can leverage their resources and expertise to support agricultural and rural development in developing countries. Investments in infrastructure, capacity development, and financial assistance to smallholder farmers can alleviate poverty and promote sustainable farming practices.

    Conclusion

    • Fostering international cooperation is essential to addressing the complex nexus of food security, climate variability, and sustainable agriculture for a resilient and sustainable future. The G20, with its potential to drive global strategies, should play a pivotal role in coordinating efforts to mitigate climate change, adapt agricultural practices, and ensure food security on a global scale.

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  • Festivals, Dances, Theatre, Literature, Art in News

    Reviving the Seethakali Folk Art

    Prelims Only | History | Mains Paper 1: Arts & Culture

    seethakali

    Central Idea

    • Seethakali folk dance of Kerala has been fading from the public domain, and around three decades ago, it was on the verge of extinction.

    Seethakali Folk Art

    • Seethakali is a traditional folk dance that originates from the rich cultural heritage of Kerala.
    • It is performed primarily by Dalit artists from the Veda and Pulaya communities.

    Key Features

    • Seethakali is a unique form of folk art that combines elements of storytelling dance, drama, and song.
    • The central narrative revolves around the epic Ramayana, particularly focusing on the characters of Sita, Ram, and Laxman.
    • Artists adorn themselves with eye-catching makeup, traditional ornaments, and elaborate costumes, enhancing the visual appeal of the performance.

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  • Capital Markets: Challenges and Developments

    SEBI to introduce One-Hour Trade Settlement

    Prelims Only | Economics | Mains Paper 3: Investment Models

    Central Idea

    • SEBI aims to implement a One-Hour trade Settlement by March 2024.
    • Additionally, an Application Supported by Blocked Amount (ASBA)-like facility for secondary market trading is anticipated to launch in January 2024.

    Do you know?

    India is the first jurisdiction in the globe that has moved to T+1 settlement (trade plus one day).  We are now talking about one-hour settlement and that will be a stepping-stone to instantaneous settlement.

    Understanding Trade Settlement

    • Trade settlement involves the exchange of funds and securities on the settlement date.
    • It is considered complete when purchased securities are delivered to the buyer, and the seller receives the funds.
    • India transitioned to a T+1 settlement cycle earlier this year, facilitating faster fund transfers, share deliveries, and operational efficiency.

    SEBI’s Stance

    • SEBI believes that achieving instantaneous trade settlement will take additional time due to necessary technology development.
    • Therefore, SEBI plans to implement a one-hour trade settlement before the instantaneous settlement.
    • SEBI expects instantaneous trade settlement to be launched by the end of 2024.

    Benefits of One-Hour Trade Settlement

    • In the current T+1 settlement cycle, the seller receives funds in their account the day after a trade.
    • With one-hour settlement, the seller would receive funds within an hour of selling shares, and the buyer would have shares in their demat account within an hour.

    Back2Basics: T+1 Settlement Cycle

    • The T+1 settlement cycle means that trade-related settlements must be done within a day, or 24 hours, of the completion of a transaction.
    • For example, under T+1, if a customer bought shares on Wednesday, they would be credited to the customer’s demat account on Thursday.
    • This is different from T+2, where they will be settled on Friday.
    • As many as 256 large-cap and top mid-cap stocks, including Nifty and Sensex stocks, come under the T+1 settlement.
    • Until 2001, stock markets had a weekly settlement system.
    • The markets then moved to a rolling settlement system of T+3, and then to T+2 in 2003.
    • In 2020, Sebi deferred the plan to halve the trade settlement cycle to one day (T+1) following opposition from foreign investors.

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  • Trade Sector Updates – Falling Exports, TIES, MEIS, Foreign Trade Policy, etc.

    Strengthening export control measures for Dual-Use Items

    Prelims Only | Economics | Mains Paper 3: Indian Economy

    dual-use items

    Central Idea

    • The government has recently announced its commitment to enhancing the control of dual-use items to prevent their misuse by non-state actors and terrorists.
    • Dual-use items refer to goods that can be utilized for both civilian and military purposes.

    Understanding Dual-Use Items

    • Dual-use items are commodities with the potential for application in both civilian and military contexts.
    • They are heavily regulated due to their capacity to be initially intended for civilian use and later repurposed for military or even terrorist activities.
    • Some examples include global positioning satellites, missiles, nuclear technology, chemical and biological weapons, night vision technology, thermal imaging equipment, specific models of drones, precision-engineered aluminium pipes, and certain types of ball bearings.

    Control Mechanisms for Dual-Use Items

    • International Cooperation: Most industrialized nations have established export controls on specific categories of designated dual-use technologies.
    • Multilateral Agreements: Various international treaties and agreements govern the export of these items.
    • India’s Participation: India is a signatory to major multilateral export control regimes like the Missile Technology Control Regime (MTCR), Wassenaar Arrangement (WA), Australia Group (AG), and Nuclear Suppliers Group (NSG). It is also party to key conventions such as the Chemical Weapons Convention (CWC) and Biological and Toxic Weapons Convention (BWC).
    • DGFT’s Role: In India, the Director General of Foreign Trade (DGFT) plays a pivotal role as a facilitator of exports and imports. The DGFT maintains a specialized list known as SCOMET (Specialty Chemicals, Organisms, Materials, Equipment, and Technologies) to regulate dual-use items.

    What is the SCOMET List?

    • SCOMET item is an acronym for Special Chemicals, Organisms, Materials, Equipment, and Technologies.
    • These are dual-use items that can be used for both civilian and military applications. India’s Foreign Trade Policy regulates the export of items on the SCOMET List.
    • Exporting these items and technologies falls under strict regulations. It can either be prohibited or permitted only under a license.
    • The SCOMET control list aligns with the control lists of various multilateral export control regimes and conventions.

    Necessity of Controlling Dual-Use Items

    • India’s Commitment: India is firmly committed to non-proliferation efforts related to dual-use items.
    • Integral Component: Export control over these items forms an integral part of India’s broader export control system.
    • Compliance: It ensures that sensitive and dual-use goods, including those covered by the Missile Technology Control Regime (MTCR), are traded in full compliance with India’s obligations under various international regimes.

    Conclusion

    • The government’s commitment to enhancing export control measures for dual-use items reflects its dedication to global non-proliferation efforts and the responsible trade of sensitive technologies.
    • Collaborative efforts among governments, industries, and stakeholders remain crucial in achieving effective export control of these items.

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  • Forest Conservation Efforts – NFP, Western Ghats, etc.

    Laws governing forests of Northeast India

    Prelims Only | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia

    forest

    Central Idea

    Why discuss this?

    • The amendment permits the diversion of forest land for certain projects near international borders without forest clearance under the Forest (Conservation) Act (FCA) 1980.
    • Other Northeastern states, including Nagaland, Tripura, Mizoram, and Sikkim, governed by the ruling govt at centre or its allies, have also objected to the 100-km exemption clause.

    Forest (Conservation) Amendment Bill, 2023
    Objective Clarify and enhance the Forest (Conservation) Act, 1980
    Scope Applicability to land designated as forest since 1980
    Exemptions Land within 100 km of borders for national security, roadside amenities, and public roads
    Assignment of Forest Land Prior approval required from central government for all entities
    Permitted Activities Expanded to include check posts, fencing, bridges, zoos, safaris, and eco-tourism facilities

     

    Is FCA Applicable to the Northeast?

    • Constitutional protections like Article 371A for Nagaland and 371G for Mizoram prohibit the application of certain laws enacted by Parliament in these states.
    • In 1986, Nagaland extended the FCA’s application to specific forests, but its status remains uncertain due to conflicting ministry statements.
    • Mizoram, since becoming a state in 1986, has the FCA in force, covering a significant portion of its forest areas.

    FCA Application in the Rest of the Northeast

    • The FCA is applicable in the rest of the Northeast, including Meghalaya, Tripura, Assam, Manipur, Sikkim, and Arunachal Pradesh.
    • The FCA clearance process differs among these states.

    Conclusion

    • Protecting Northeastern forests requires a balance between legal frameworks like the FCA and FRA.
    • Clear guidelines and proactive measures can safeguard both forest rights and the environment in the region.

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  • Banking Sector Reforms

    Urban Cooperative Banks (UCBs): Concerns and Considerations

    Prelims Only | Economics | Mains Paper 3: Inclusive Growth & Issues

    Central Idea

    • The Reserve Bank of India (RBI) Governor recently addressed the issues and vulnerabilities surrounding Urban Cooperative Banks (UCBs), highlighting the importance of addressing these concerns.

    What are Urban Cooperative Banks (UCBs)?

    • UCBs are primary cooperative banks primarily situated in urban and semi-urban areas, catering to the financial needs of small borrowers and businesses.
    • They are governed by the Banking Regulations Act, 1949, the Banking Laws (Cooperative Societies) Act, 1955, and registered under the Cooperative Societies Act of the respective State.
    • Initially, UCBs were permitted to lend exclusively for non-agricultural purposes; however, they have diversified their size and operations since 1996.
    • Approximately 79% of UCBs are concentrated in five states: Andhra Pradesh, Gujarat, Karnataka, Maharashtra, and Tamil Nadu.

    Types of UCBs

    UCBs are categorized into different tiers by the RBI based on their deposit size:

    • Tier 1: Deposits up to Rs 100 crore.
    • Tier 2: Deposits ranging from Rs 100 to 1,000 crore.
    • Tier 3: Deposits between Rs 1,000 to Rs 10,000 crore.
    • Tier 4: Deposits exceeding Rs 10,000 crore.

    Key concerns/addresses raised by RBI

    (1) Operational Stability

    • UCBs must enhance their financial and operational resilience to contribute to the overall stability of the financial and banking sector.
    • The quality of governance within UCBs plays a pivotal role in ensuring the stability of these individual banks.

    (2) Setting up right priorities

    • Boards and directors of UCBs must prioritize integrity and transparency in financial reporting, refraining from innovative accounting practices that obscure the actual financial position.
    • Proactive management of Asset Liability is essential to manage liquidity risk systematically.
    • Establishing robust IT and cybersecurity infrastructure, along with the availability of necessary skills at the bank level, is crucial.
    • Governance practices, especially those related to Compliance, Risk Management, and Internal Audit, need strengthening.

    (3) Functioning of Boards

    • Ensuring directors possess adequate skills and expertise.
    • Constituting a professional board of management.
    • Considering the diversity and tenure of board members.
    • Promoting transparent and participatory board discussions.
    • Ensuring the effective functioning of board-level Committees.

    (4) Credit Risk Management

    • Upholding risk management through robust underwriting standards.
    • Implementing effective post-sanction monitoring.
    • Timely recognition and mitigation of emerging stress.
    • Pursuing follow-ups with large Non-Performing Asset (NPA) borrowers to facilitate recovery and maintain adequate provisioning.

    Conclusion

    • Addressing the concerns and vulnerabilities in Urban Cooperative Banks is vital for the overall stability and resilience of the banking sector.
    • The RBI’s recommendations highlight the importance of governance, risk management, and transparency in ensuring the health of UCBs.

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  • Russian Invasion of Ukraine: Global Implications

    Black Sea Grain Initiative to resume soon: Turkey

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

    black sea

    Central Idea

    • The Black Sea grain deal lapsed on July 17. Turkey now seeks to resume the treaty.
    • Russia though had not agreed to renew the deal, citing unmet promises and difficulties in its own agricultural exports due to Western sanctions.

    Black Sea Grain Initiative

    • The Initiative eased Russia’s naval blockade and saw the reopening of three key Ukrainian ports.
    • The UN and Turkey brokered the deal in July 2022, allowing cargo ships to travel between Ukrainian ports and undergo inspections to ensure they were not carrying arms.
    • The deal has been extended twice but is set to expire on July 17, 2023.
    • The agreement created procedures to safely export grain from certain ports to attempt to address the 2022 food crisis.
    • It provides a safe maritime humanitarian corridor for Ukrainian exports (particularly for food grains) from three of its key ports: Chornomorsk, Odesa and Yuzhny/Pivdennyi in the Black Sea.

    Outcomes of this deal

    • Approximately 9.8 million tonnes of grains have been shipped so far since the deal was brokered as per International Grains Council (IGC) Projections.
      • The IGC is an intergovernmental organization established in 1949. Its primary purpose is to promote cooperation and consultation on grains trade and related aspects globally.
      • India is an exporting member of the IGC.
    • The initiative has also been credited for having made a huge difference in the global cost of living crisis.

    Why was this deal launched?

    • Ukraine’s Role: Ukraine is a significant exporter of food grains, including wheat and corn, and contributes to the UN’s food aid programs.
    • Impact of Russian Invasion: Russia’s invasion and blockade of Ukrainian ports raised concerns about food security and soaring prices globally.

    Russia’s Opposition and Reasons

    • Claims of Unmet Promises: Russia argues that promises made under the deal have not been fulfilled, affecting its own agricultural exports and fertilizers due to Western sanctions.
    • Obstacles to Agricultural Exports: Russia faces challenges with payment platforms, insurance, shipping, and logistics, even though there are no direct restrictions on its agricultural products.
    • Frustration and Goodwill: Russian President expressed frustration and stated that Russia has shown goodwill in extending the deal but feels enough is enough.
    • Shift in Grain Destinations: Russia claims the deal was meant to ensure global food security, but Ukraine has mainly exported to high- and middle-income countries, while the UN notes that food prices have cooled down, benefiting poorer nations.

    Impact on Grain Exports and Production

    • Russian Wheat Export Dominance: Russia remains the world’s top wheat exporter, primarily targeting the Middle East, North Africa, and Central Asia.
    • Ukraine’s Declining Shipments: Ukraine’s grain shipments are projected to more than halve, with production at an 11-year low.
    • Shifting Markets: Ukraine’s grain markets have shifted from Asia and North Africa to Europe, driven by ease of shipment, causing a glut of Ukrainian grain and protests from farmers in Eastern European countries.

    International Grains Council

    • The International Grains Council (IGC) is an intergovernmental organization that oversees the Grains Trade Convention and aims to promote cooperation in the global grain trade. Established in 1949 as the International Wheat Council, it was renamed in 1995 to reflect its expanded scope.
    • India is a member of the International Grains Council (IGC), which is the intergovernmental organization that oversees the global grains trade.

    Back2Basics: Black Sea

    • Black Sea is bound by Ukraine to the north and northwest, Russia and Georgia to the east, Turkey to the south, and Bulgaria and Romania to the west.
    • It links to the Sea of Marmara through the Bosphorus and then to the Aegean through the Dardanelles.

    Significance of Black Sea for Russia

    • Black Sea has traditionally been Russia’s warm water gateway to Europe.
    • For Russia, the Black Sea is both a stepping stone to the Mediterranean.
    • It acts as a strategic buffer between NATO and itself.
    • It showcases the Russian power in the Mediterranean and to secure the economic gateway to key markets in southern Europe.
    • Russia has been making efforts to gain complete control over the Black Sea since the Crimean crisis of 2014.

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