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

Foreign Trade Policy

| Economics | Mains Paper 3: Indian Economy
The government has extended the launch of new Foreign Trade Policy (FTP) (2022-27) by six more months and would continue with the existing one.

Why such delay in Foreign Trade Policy?
- Geopolitical uncertainty: The geo-political situation is not suitable for long-term foreign trade policy, said Union Commerce Minister.
- Global recession: Currently, fears of a recession in major economies like the US and Europe have escalated a panic among investors.
- Decline in USD inflows: Foreign investors have begun to pull back their money from equities.
- Rupee depreciation: The US Dollar is at a 22-year high, while the Rupee hit a new all-time low of $81.6.
- Huge trade deficit: The trade deficit widened by more than 2-folds to $125.22 billion (April – August 2022) compared to $53.78 billion in the same period last year.
What is a Foreign Trade Policy?
- India’s Foreign Trade Policy (FTP) is a set of guidelines for goods and services imported and exported.
- These are developed by the Directorate General of Foreign Trade (DGFT), the Ministry of Commerce and Industry’s regulating body for the promotion and facilitation of exports and imports.
- FTPs are enforceable under the Foreign Trade Development and Regulation Act 1992.
What is India’s Foreign Trade Policy?
- In line with the ‘Make in India,’ ‘Digital India,’ ‘Skill India,’ ‘Startup India,’ and ‘Ease of Doing Business initiatives, the Foreign Trade Policy (2015-20) was launched on April 1, 2015.
- It provides a framework for increasing exports of goods and services, creating jobs, and increasing value addition in the country.
- The FTP statement outlines the market and product strategy as well as the steps needed to promote trade, expand infrastructure, and improve the entire trade ecosystem.
- It aims to help India respond to external problems while staying on top of fast-changing international trading infrastructure and to make trade a major contributor to the country’s economic growth and development.
Issues with FTP (2015-2020)
- Acting on Washington’s protest, a WTO dispute settlement panel ruled in 2019 that India’s export subsidy measures are in violation of WTO norms and must be repealed.
- Tax incentives under the popular Merchandise Exports from India Scheme (MEIS) (now renamed as RODTEP Scheme)and Service Exports from India Scheme (SEIS) programmes were among them.
- The panel found that because India’s per capita gross national product exceeds $1,000 per year, it may no longer grant subsidies based on export performance.
Way forward
- WTO-compliance: With incentives under MEIS and SEIS in the cloud, WTO-compliant tax benefits are a must.
- Access to credit: Credit availability has long been a need of exporters, particularly MSMEs.
- Infrastructure upgrade: China’s network of ports, motorways, and high-speed trains, which are among the greatest in the world, is one of the reasons it is a manufacturing and export powerhouse.
- Digitization and e-commerce boost: India requires innovative trading procedures as a result of Covid-19 breaking old supply channels.
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Foreign Policy Watch: India-SCO

PM Modi pitches for ‘Full Transit Right’ among SCO members

IOCR | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India
With Pakistan PM listening, Prime Minister Modi urged Shanghai Cooperation Organisation member states to “give each other full right to transit”.

Why in news?
- PM Modi framed the right to transit in the context of connectivity and how it could help establish reliable and resilient supply chains in the region.
Why did PM pitch this?
- Lack of transit across Pakistan’s territory has been a challenge for India to access Central Asian markets.
- Iran’s President also said that despite the impressive potential, infrastructural connections in the field of transit between members of the SCO are not so extensive.
- Iran already provides special priority to the development of the North-South Corridor and has made huge investments.
What is International North-South Transport Corridor (INSTC)?
- The INSTC is a 7,200 km-long multimodal transportation network encompassing sea, road, and rail routes to offer the shortest route of connectivity.
- It was established on 12th September 2000 in St. Petersburg, by Iran, Russia and India for the purpose of promoting transportation cooperation among the Member States.
- It links the Indian Ocean to the Caspian Sea via the Persian Gulf onwards into Russia and Northern Europe.
- It will move freight between India, Iran, Afghanistan, Armenia, Azerbaijan, Russia, Central Asia and Europe.
Significance of INSTC
- Trade facilitation: INSTC is aimed at reducing the carriage cost between India and Russia by about 30 percent and bringing down the transit time by more than half.
- New corridor in making: It has the potential to transform the economies of countries along the corridor into specialized manufacturing, logistics, and transit hubs by facilitating access to newer markets.
- Multimodal transit: The recent Suez Canal blockade, which cost the global economy hefty damage amounting to US$9 billion, has amplified the optimistic outlook towards the INSTC as a cheaper and faster alternative multimodal transit corridor.
Benefits offered to India
- Export promotion: The INSTC connects India with Central Asia, and Russia, and has the potential to expand up to the Baltic, Nordic, and Arctic regions, increasing the scope of trade multifold.
- Ease of trade: For India, it provides a shorter trade route with Iran, Russia, and beyond to Europe, creating scope for increased economic engagement.
- Alternative Route to Central Asia: It opens up a permanent alternative route for India to trade with Afghanistan and Central Asia, given the hurdles in the direct route through Pakistan.
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In news: Rotterdam Convention

Prelims Only | Science Tech | Mains Paper 3: Awareness in various sc and tech fields
International trade of two new hazardous pesticides — Iprodione and Terbufos — has been recommended for “prior informed consent” (PIC) procedure under the Rotterdam convention.

Why in news?
- In India, the use of these chemicals was permitted by the 2015 Anupam Verma committee report. The country is among the largest exporters of Terbufos.
- The chemicals are dangerous for humans and aquatic animals.
Rotterdam Convention
- The Rotterdam Convention is formally known as the Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade.
- It is a multilateral treaty to promote shared responsibilities in relation to importation of hazardous chemicals.
- The convention promotes open exchange of information and calls on exporters of hazardous chemicals to use proper labelling, include directions on safe handling, and inform purchasers of any known restrictions or bans.
- Signatory nations can decide whether to allow or ban the importation of chemicals listed in the treaty, and exporting countries are obliged to make sure that producers within their jurisdiction comply.
- India is a party to the convention, with 161 other parties.
What is the Prior Informed Consent (PIC) procedure?
- The PIC procedure is a mechanism for formally obtaining and disseminating the decisions of importing parties on their willingness to receive future shipments of hazardous chemicals.
- The PIC procedure is a mechanism for formally obtaining and disseminating the decisions of importing Parties as to whether they wish to receive future shipments of those chemicals listed in the Convention.
- For each of the chemicals listed in Annex III and subject to the PIC procedure a decision guidance document (DGD) is prepared and sent to all Parties.
- All Parties are required to take a decision as to whether or not they will allow future import of each of the chemicals in Annex III of the Convention.
- These decisions are known as import responses.
Which are the new chemicals listed?
- Iprodione, a fungicide used on vines, fruits, trees and vegetables, has been classified as carcinogenic and toxic for reproduction.
- Terbufos is a soil insecticide used commonly on sorghum, maize, beet and potatoes. It has also been found to pose risk to aquatic organisms due to its toxicity.
- Both pesticides, which are used in agriculture, are known for their harmful impacts on human health and the environment.
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Sports as soft power

op-ed snap | International Relations | Mains Paper 2: Effect Of Policies & Politics Of World On India’S Interests
Context
- Increased interest, especially by smaller nations in the world, in investing more and doing well in elite sports in international sporting events boosts a nation’s chances of attaining soft power.
- India’s medal tally at recent International sports events demonstrate the country’s soft power on the global stage and encourage working towards the status of a great “geopolitical actor”.
What is soft power?
- Origin:
  - As far back as the 4^th century BC, Kautilya (chankyaniti) had propounded the concept of Saam(advice or cajole),daam(pay or bribe),dand(punish),bhed(exploit secrets) which acquired western touch and can be understood by Soft power, smart power, hard power, and sharp power respectively.
  - Joseph Nye introduced the concept of “soft power” in the late 1980s. For Nye, power is the ability to influence the behavior of others to get the outcomes you want.
- Meaning:
- Soft power is the ability of a country to persuade others to do what it wants without force or coercion.
- Soft power is the ability to influence the behavior of others to get the outcomes you want.
Why Soft power is so significant?

Use of ‘Soft Power’ includes the number of cultural missions such as language schools, Olympic Medals and the quality of a country’s overall growth. Soft power produces following things:
- Familiarity: If people know more about your country, culture, sports, and its talents, businesses, and resources, then soft power is enhanced.
- Reputation: For a nation to be attractive and a role model for others, its overall reputation must be strong and positive.
- Influence: A direct measure of the perceived presence and impact that your country has in other countries
- Business/Innovation/Sports: The attractiveness of a country’s economic model, its digital engagement with the world, performance in sports etc.
- Government: Showcases the ability of country’s political leadership and what it delivers to its people in different arenas.
- Multi-Alignment: As a country rises up the ‘Soft Power’ list, more and more outside parties align themselves with the common goals of that country.
Why the Sports being used as a tool of soft power in modern international relations?

Sport can be used as tool of soft power both internationally and domestically.
- International platform: Sports provide a platform for countries to showcase their culture, values and tradition.
- Puts a Better image of a country: Sports as a tool to achieve social, political, and financial goals, and improve the image of the country.
- International exposure: The focus on culture and peaceful values in sports make it a useful tool for countries to use soft power to achieve international goals and improve their public diplomacy.
- Reducing differences: Sports provides a platform for trust-building; and reconciliation, integration and anti-racism.
- Learning from China’s Case:
- Dongfeng Liu (International Professor of Sport Management) in his survey on China’s performance in the Olympics he found that a country’s Olympic achievement has a positive effect on its national soft power.
- As china is a communist country and reputation about human rights is not good, so China uses its superiority in elite sports to build “people-to-people” relations with other countries. For example, athletes from African countries such as Madagascar are trained in swimming, badminton, table tennis, etc. in China, which helps Beijing create a positive impact on a wider population and result in better formal relations as well.
- There is also China’s memorandum of understanding with countries such as Kenya so that Chinese runners can train with Kenyan athletes, as they are among the best in the world when it comes to long-distance running.
Introspection on India’s performance at recent International Sports events
- It is being said that the golden period of Indian sports may have begun as at the Tokyo Olympics and then the Birmingham 2022 Commonwealth Games (CWG) are examples of a good performance.
- India’s medal tally in the Tokyo Olympics Games — seven — was its most decorated Olympic Games in Indian history.
- At the Commonwealth games (CWG) 2022, Indian athletes won 61 medals, including 22 gold.
- India has one of the world’s poorest population-to-medal ratios when it comes to the Olympics.
- Ensuring competent coaches, and having adequate funding and more sports academics still remain major issues even decades later
- India spends only three paise per day per capita on sports. In contrast China spends 1 per day per capita.
What can be done to increase the country’s sporting performance and soft power?
- Train Indian players overseas:
- India should concentrate on forging MoUs with nations that excel in specific sports and train Indian players overseas.
- For example, Australia and the United Kingdom can assist us in swimming given their standing here.
- When it comes to running, negotiating collaborative training agreements with African countries such as Kenya would be ideal.
- No Politics over assistance:
- There should be no politics in seeking or even offering assistance.
- For example China has requested Indian assistance in improving cricket development in China (Chongqing city).
- Private Investment:
- Private investment needs to be harnessed to develop infrastructure. The better a country performs in sporting events the greater a sports person’s interest in their sports atmosphere. This also creates a huge market for private players to invest in.
- For example, leading corporate houses in India have already shown how their active participation and investment can improve sporting performance as a result of unique corporate sports programmes.
- Public –private partnership at grass root :
- The Government should also work on a public-private partnership (PPP) model to create basic sporting infrastructure.
- As recommended by NITI Aayog, at the district level too so that talent can be captured at an early stage.
Conclusion
- Sports as a tool of soft power had always been a key element of leadership from the ancient times. Sports provide an international platform to develop an attitude of unity in a divided multi-polar modern world.
Mains Question

Q. Sports provide an international platform to develop an attitude of unity and influence others in a divided multi-polar modern world. Discuss in this context that soft power is not an end but a means to an end.
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Human Rights Issues

Why India Inc. needs a neurodiverse workplace ?

op-ed snap | Governance | Mains Paper 2: Laws, Institutions & Bodies Constituted For The Vulnerable Sections
Context
- Discrimination in employment is a worldwide phenomenon. Gender, ethnic, racist discrimination are well known but discrimination towards neurodiverse persons are hardly debated in public forums. Despite having special abilities companies are not using their potentials.
What is neurodiversity?
- Harvard Health Publishing defines, neurodiversity as a notion that every person interacts and experiences their surroundings differently; there is no right way of thinking, learning, or/and behaving. These differences should not be construed as defects or disorders.
What is a neuro-diverse workplace?
- Neurodiversity in the workplace refers to including people with neuro-divergent conditions such as attention-deﬁcit/hyperactivity disorder, autism spectrum disorders, dyslexia, dyspraxia, dyscalculia and Asperger’s Syndrome.
What are those Conditions that make them different from normal humans?
- Autism: A mental condition in which a person finds it difficult to communicate or form relationships with other people. Signs of autism include not responding to their name, avoiding eye contact, not smiling when you smile at them.
- Dyslexia: a difficulty that some people have with reading and spelling signs include confusion over letters that look similar and putting letters the wrong way round , confusing the order of letters in words, reading slowly or making errors when reading aloud
- Asperger’s syndrome: A developmental disorder related to autism and characterized by awkwardness in social interaction, pedantry in speech, and preoccupation with very narrow interests. Less severe symptoms than Autism syndrome.
- Dyscalculia: A brain disorder in which a wide range of difficulties with math, including weaknesses in understanding the meaning of numbers, and difficulty applying mathematical principles to solve problems.
How they can be naturally efficient and creative?
- More efficient: Studies have shown that teams with both neurodivergent and neurotypical members are far more efficient than teams that comprise neurotypical employees alone.
- Ability to focus: Neurodivergent individuals possess excellent attention to detail and an uncanny ability to focus on complex and repetitive tasks over a more extended period than their neurotypical peers.
- Ability to work at faster speed: A study by the University of Montreal found that in a test involving completing a visual pattern, people on the autism spectrum could finish their task 40% faster than those who were not on the spectrum.
- Robust spatial reasoning: People with dyslexia can think about objects in three dimensions and analyses such objects even with limited information.
- Out of box thinking: They have problem-solving capabilities which allow them to see multiple solutions to a problem. They are often out-of-the-box thinkers with average or above-average intelligence.
Current Status of people living with neurodivergent conditions
- People suffer with the Condition: According to a recent report, nearly 2 million people in India suffer from this neurological and developmental disorder and are therefore identified as autistic. Another study by Deloitte estimates that nearly 20% of the world is neurodiverse. In the U.S., it is estimated that 85% of people on the autism spectrum are unemployed compared with 4.2% of the overall population
- Discrimination at employment: Even with all the necessary skill sets and degrees, these persons are denied a job because they may react to situations differently from non-neurodiverse persons.
- Lack of awareness: Lack of awareness about neurodivergent conditions, and how the people with condition may react and lack of and accommodating environment. Hence, there is an urgency to create a work environment that welcomes neurodiverse individuals.
Current work profile of companies and workplaces
- A 2019 McKinsey study revealed that companies with gender diversity were 25% more likely to have above-average profitability while those with ethnic diversity out-rival their competitors by 36%.
- Another report titled ‘India’s Best Workplaces in Diversity, Equity & Inclusion 2021’ states that diverse teams perform better, boost leadership integrity, heighten trust in the organization’s management and multiply revenue growth.
Few Examples show that things are changing
- Competitive environment: Organisations embracing neurodiversity enjoy a competitive edge in several areas such as efficiency, creativity, and culture.
- Various MNC’s hiring program: Companies such as Deloitte, Microsoft, SAP, JPMorgan Chase, and E&Y have introduced neurodiversity hiring programs.
- Indian company: Indian-origin companies Hatti Kaapi and Lemon Tree Hotels have also included a neurodiverse workforce.
What can be done to create more inclusive workplaces?
- Creating neurodivergent friendly offices: .Many employees with neurodiversity may find the hustle and bustle of a traditional office disturbing. Therefore, neurodivergent friendly offices catering to the employees’ diverse sensory responses can help ensure that these employees are comfortable in office spaces.
- Openness: Creating the right environment is an ever-evolving exercise that requires openness and a will to change on the employer’s part. This flexibility can result in exceptional benefit with minimal or no additional costs.
- Wider Inclusivity: To ensure higher profitability and be respected as a responsible employer globally, companies need to widen their definition of inclusivity by providing higher participation of a neurodiverse workforce.
Conclusion
- Organizations must not only remove barriers that obstruct the progress of such individuals but also create conducive conditions for them to achieve their true potential and providing proper infrastructure so that they can perform at their optimal levels.
Mains Question

Q. People with neurodiversity are discriminated not only socially but also economically, Comment. What measures could be taken to bridge this gap within the society?
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Trade Sector Updates – Falling Exports, TIES, MEIS, Foreign Trade Policy, etc.

Asian Palm Oil Alliance (APOA) formed by 5 South Asian Countries

IOCR | International Relations | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.
Edible oil trade associations from five palm oil importing countries in South Asia – India, Pakistan, Sri Lanka, Bangladesh and Nepal – on Thursday announced the setting up of Asian Palm Oil Alliance (APOA).

What is Oil Palm?
- Palm oil is an edible vegetable oil derived from the mesocarp of the fruit of the oil palms.
- The oil is used in food manufacturing, in beauty products, and as biofuel.
What is APOA?
- Through APOA, the countries aim at safeguarding the economic and business interests of the palm oil consuming countries and will work towards increasing the consumption of palm oil in member countries.
- The idea is to gain collecting bargaining power and make imports sustainable.
- APOA held its first general body meeting on the side-lines of the Globoil Summit.
- The industry associations of Asian palm oil importing countries, unlike their counterparts in Europe, are not involved in shaping the global discourse on sustainable palm oil in a collective way.
- The alliance would work towards ensuring that palm oil is recognised as a high-quality, economical, and healthy vegetable oil and to change the negative image of palm oil.
Why such move?
- India’s annual imports of edible oil is around 13-14 million tonne (MT).
- Around 8 MT of palm oil is imported from Indonesia and Malaysia, while other oils, such as soya and sunflower, come from Argentina, Brazil, Ukraine and Russia.
- Asia accounts for around 40% of the global palm oil consumption while Europe accounts for 12% of palm oil trade.
- Indonesia and Malaysia are the biggest palm oil exporters in the world.
- India is the largest importer of palm oil in Asia, accounting for 15% of global imports, followed by China (9%), Pakistan (4%) and Bangladesh (2%).
Try this PYQ:

Q.Among the agricultural commodities imported by India, which one of the following accounts for the highest imports in terms of value in the last five years?

(a) Spices

(b) Fresh fruits

(c) Pulses

(d) Vegetable oils

Post your answers here.

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Women empowerment issues – Jobs,Reservation and education

Gender pay gap in India

op-ed snap | Governance | Mains Paper 1: Role Of Women & Women Organization
Context
- Despite notable progress in closing the gender pay gap over time in India, the gap remains high by international standards. Asymmetries still abound in the country’s labor market stopping women empowerment .
- Time to reassess the progress made in to close the Gender pay gap.
Background
- The third International Equal Pay Day is observed globally on September 18, 2022.
- It is a United Nations-recognized event to highlight the issue of gender pay gap.
- International Labor Organization’s “Global Wage Report 2020–21” which suggests the crisis inflicted massive downward pressure on wages and disproportionately affected women’s total wages compared to
- This greater wage reduction for women means that the pre-existing gender pay gap has widened.
Covid-19 Impact
- While it is difficult to tell exactly what the economic damage from the global covid-19 pandemic has been, it is clear that its impact has been uneven, with women being among the worst affected in terms of their income security.
- Many women reverted to full-time care of children and the elderly during the pandemic, foregoing their livelihoods to do so.
What is gender pay gap?
- The gender pay gap or gender wage gap measures the difference between the average earnings of women and men in the workforce.
- In simple term it is a measure of what women are paid relative to men.
- Women are generally found to be paid less than men.
Why is the gender pay gap?
- Education: low investment o girl education, Girl children are kept out of schools, or made drop out of school at early age, girl is considered as burden on family in many societies.
- workforce : even if they are educated they are not allowed to work by their families, very limited or no decision making power, lack of women friendly work environment, discriminatory practices at workplaces.
- Household: early marriage , responsibilities of the household at early age , spending more times on domestic chores,
- Healthcare: malnutrition, anemia, Maternity, child care, looking after health of the elderly family members etc.
These are some of the reasons which affect education, skills, experience and the career prospectus of women as compared to men and contribute to widen the gender wage gap.

Discrimination as factor
- A part of gender pay gap attributed to education, skills or experience, a large part of the gender pay gap can still purely because of discrimination based on one’s gender or sex.
- Gender-based discriminatory practices include: lower wages paid to women for work of equal value; undervaluation of women’s work in highly feminized occupations and enterprises, and motherhood pay gap lower wages for mothers compared to non-mother.
Status in India
- The gender pay gap in India is among the widest in the world.
- Indian women earned, on an average, 48% less compared to their male counterparts in 1993-94
- According to labor force survey data of the National Sample Survey Office (NSSO) gap declined to 28% in 2018-19.
- Periodic Labor Force Survey (PLFS) 2020-21 show an increase in the gap by 7% between 2018-19 and 2020-21.
- Recently, the World Economic Forum (WEF) ranked India at 135 out of 146 countries in its Global Gender Gap (GGG) Index for 2022.
- According to the estimates of the World Inequality Report 2022, in India, men earn 82 per cent of the labor income whereas women earn 18 per cent of it.
Steps taken by India
- Minimum Wages Act in 1948: It is an act of parliament, aimed at statutory fixation of minimum wages that must be paid to skilled and unskilled labours. Payment of wages below the minimum wage rate amounts to forced labour.
- Equal Remuneration Act in 1976: This act of parliament provides for the payment of equal remuneration to men and women workers for the prevention of discrimination. It helps in bridging the gap between unequal remuneration faced by the women of our country.
- Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005: MGNREGA contributed to the rapid rise in overall rural and agricultural wages in the country. It benefited rural women workers and helped reduce the gender pay gap, both directly and indirectly. Directly, by raising the pay levels of women workers and indirectly to women involved in agricultural occupations through higher earnings.
- The Maternity Benefit (Amendment) Act 2017: has increased the duration of paid maternity leave available for women employees to 26 weeks from 12 weeks for all women working in establishments employing 10 or more workers. This is expected to reduce the motherhood pay gap among mothers in the median and high end wage earners working in the formal economy also it will help in women empowerment.
- Skill India Mission: To equip women with market-relevant skills to bridge the learning to-livelihood gap and the gender pay gap.
- In 2019, India carried out comprehensive reforms in both the legislation and enacted the Code on Wages.
Way ahead
- While the gender pay gap is slowly narrowing, acceleration and bold actions to prevent the widening of gender pay gap is the need of the hour.
- Equal pay for work of equal value is necessary to close the gender pay gap.
- Closing the gender pay gap is key to achieving social justice for working women, as well as economic growth for the nation as a whole
- Without social justice women empowerment is a futile exercise.
Mains Question

Q. Define gender equality .Equal pay for equal work is necessary to bridge the gender pay gap India .Comment.

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Foreign Policy Watch: India-ASEAN

Geopolitics follows the geoeconomics and not vice-versa

op-ed snap | International Relations | Mains Paper 2: India & Its Neighborhood – Relations,International Institutions
Context
- Over the recent years India’s manoeuvres in indo-pacific have highlighted the India’s geopolitical and ambitions. Pandemic and Chinese incursion in Ladakh forced India to move fast to achieve its geopolitical ends. However missing link in India’s endeavour is geoeconomics.
What is mean by geopolitics and geo-economics?
- Geopolitics: is defined as the struggle over the control of geographical entities with an international and global dimension, and the use of such geographical entities for political advantage.
- Geo-economics: is defined as the combination of economic and geographic factors relating to international trade and a governmental policy guided by geoeconomics.
- Geopolitics and geoeconomics are sometimes used interchangeably.
What is the strategy to pursue geopolitical goals in indo-pacific?
- India has managed to emerge as a major pivot of the global Indo-Paciﬁc grand strategic imagination.
- Avoided the temptations to militarise/securitise the Quad (Australia, Japan, India and the United States).
- Which has ensured that the Association of Southeast Asian Nations (ASEAN) states do not feel uneasy by the ever-increasing balance of power articulations in the Indo-Pacific
What is the missing link in India’s geopolitical strategy?
- The missing link in geoeconomics is India’s decision to take to the Indo-Paciﬁc and Quad in a big way.
- While unwilling to join two of the region’s key multilateral trading agreements goes to show that geoeconomics and geopolitics are imagined and pursued parallelly in New Delhi, not as complimenting each other.
- The most recent example is India’s refusal to join the trade pillar of the Indo-Paciﬁc Economic Framework (IPEF) while deciding to join the three other pillars of the IPEF supply chains, tax and anti-corruption, and clean energy.
India also withdrew from ASEAN led RCEP.

Is the lack of geoeconomic bad for foreign policy?
- The absence of the world’s fifth largest economy from various regional trading platforms will invariably boost China’s geo-economic hegemony in Asia.
- Staying out of IPEF is a bad idea is because for India, it would be hard to integrate itself into the regional and global supply chains without being a part of important regional multilateral trading agreements.
- We have no option but to address some of the deeper challenges plaguing the investment and business environment in India.
- If India is indeed serious about its maritime grand strategy, which cannot be solely military in nature, it needs to get the states in the region to create economic stakes in India (something China has done cleverly and consistently) and vice-versa.
- Another impact of India’s hesitation about joining regional multilateral trading arrangements is its potential regional economic isolation. The less India engages with the region economically, and the more China does so, and given the Sino-Indian rivalry, India might risk getting economically isolated in the broader region.
What can be done?
- New Delhi should: rethink its geoeconomic choices if it is serious about enhancing its geopolitical inﬂuence in the region. Given that India has not closed the door on the trade pillar of the IPEF, we have an opportunity to rethink our position.
- India should: also rethink its decision not to join the RECP and seek to join the Comprehensive and Progressive Agreement for Trans-Paciﬁc Partnership (CPTPP) from which the U.S. walked out and China is seeking to join.
- India should: also proactively lobby to become a part of the Minerals Security Partnership, the U.S.-led 11-member grouping to secure supply chains of critical minerals.
Conclusion
- In the words of external affairs minister Dr. Jaishankar,” geopolitics follows the geoeconomics and not vice-versa”. Geoeconomics is inclusive of geoeconomics. India should integrate itself in multilateral trading platforms and leverage its big market to bargain the best deal for itself.
Mains question

Q. Indias pursuit of geopolitics is futile without inclusion of geoeconomics. Comment.

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Policy Wise: India’s Power Sector

Electricity Amendment Bill 2022 – Addressing the transition and equity

op-ed snap | Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.
Context
- Concerns of states on some provisions of the new Electricity Bill are justified. But the legislation proposes welcome correctives to longstanding problems of the power sector.
Important provisions of the bill
- Payment security: The Bill provides that electricity will not be scheduled or despatched if adequate payment security is not provided by the discom. The central government may prescribe rules regarding payment security.
- Contract enforcement: The Bill empowers the CERC and SERCs to adjudicate disputes related to the performance of contracts. These refer to contracts related to the sale, purchase, or transmission of electricity. Further, the Commissions will have powers of a Civil Court.
- Renewable purchase obligation: The Act empowers SERCs to specify renewable purchase obligations (RPO) for discoms. RPO refers to the mandate to procure a certain percentage of electricity from renewable sources. The Bill adds that RPO should not be below a minimum percentage prescribed by the central government. Failure to meet RPO will be punishable with a penalty between 25 paise and 50 paise per kilowatt of the shortfall.
- Selection committee for SERCs: Under the Act, the Chairperson of the Central Electricity Authority or the Chairperson of the CERC is one of the members of the selection committee to recommend appointments to the SERCs. Under the Bill, instead of this person, the central government will nominate a member to the selection committee. The nominee should not be below the rank of Additional Secretary to the central government.
- Composition of Commissions and APTEL: The Bill increases the number of members (including the chairperson) in SERCs from three to four. Further, at least one member in both the CERC and SERCs must be from law background. Under the Act, Appellate Tribunal for Electricity (APTEL) consists of a chairperson and three other members. The Bill instead provides that the APTEL will have three or more members, as may be prescribed by the central government.
State apprehensions of the bill
- Multi state license: The clause pertaining to applicants seeking a distribution licence in more than one state. It states that the Central Electricity Regulatory Commission (CERC), and not the SERC, will grant the licence. This is problematic because a SERC is likely to be more aware of the field-level conditions in a state than its central counterpart.
- Centre can bypass state: The Bill has a provision empowering the Centre to give directions directly to the SERCs. Till now, the CERC received instructions from the Centre and the SERCs were under the state. The new Bill enables the Centre to bypass state governments. It’s not surprising that this is a matter of concern for the states.
- Direct appointment by centre: The Bill states that the SERC chairperson will now be a nominee of the central government and will be an additional secretary-level official. This gives the impression that the Centre is trying to control the appointments to the SERCs.
Why the bill is important?
- Compensation clause: The Bill states that if power purchase agreement PPAs are renegotiated, the affected party has to be compensated within 90 days from the date of submission of the petition.
- Uniformity in tariffs revision: New tariffs have to be made applicable from the beginning of the financial year. New tariffs often come into force in the middle of the financial year (due to delays in the issuing of orders by SERCs). This means that discoms do not earn their full revenues leading to cash flow problems.
- Easy tariff petition processing now: The Bill has proposed a reduction in the time for processing tariff petitions from 120 days to 90 days.
- Suo moto jurisdiction: Regulatory commissions have been given suo motu jurisdiction if tariff petitions are not filed within 30 days of the stipulated time. This too is a step in the right direction.
- More teeth to load dispatcher: the Bill proposes to give more teeth to the national load dispatcher. We need to strengthen the load dispatcher for the smooth functioning of the grid, especially with a huge renewable capacity where intermittency of generation is a major issue in the offing.
Conclusion
- The rollout of the proposed amendments through a consensus-based approach would go a long way in overhauling the weakest link in the nation’s power supply chain.
Mains question

Q. Electricity Bill 2022 is a remedy worse than the disease afflicting India’s power sector. Critically analyse.

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Modern Indian History-Events and Personalities

How India adopted its military flags and badges based on Lord Mountbatten’s suggestions?

Prelims Only | | Mains Paper 1: Modern Indian History
The new Naval Ensign (flag), which will be unveiled by PM in Kochi, has brought into focus the flags and ranks adopted by the Indian military after Independence.

Do you know?

The octagonal shape with twin golden borders draws inspiration from the seal of the great Indian emperor, Chhatrapati Shivaji Maharaj, whose visionary maritime outlook established a credible naval fleet

Why in news?
- Documents accessed from National Archives of India show that Lord Mountbatten, former Viceroy and Governor General of India, played a major role in suggesting new flags and rank badges.
- This was when India was about to become a Republic on January 26, 1950.
When did India switch from British-era flags and ranks?
- The switch from British-era flags and ranks took place when India became a Republic (26^th Jan, 1950).
- Prior to that the flags and badges of ranks of the military were of the British pattern.
- The new, Indian pattern of flags of Army, Navy and Air Force, and also the Regimental Flags of the Army and badges of ranks of all three services were adopted on January 26, 1950.
- The ‘Kings Commission’ granted to Indian military officers was also changed to ‘Indian Commission’ on the same date.
- And at a subsequent date the King’s Colours of the various Regiments were laid to rest in Indian Military Academy (IMA), Dehradun.
When did Lord Mountbatten come into the picture?
- The national archives have files, dated 1949, that include a detailed note from Lord Mountbatten regarding names, flags and ranks of the armed forces, and then PM Nehru’s letter to the then Defence Minister Baldev Singh regarding Mountbatten’s suggestions.
- The note, archives reveal, was given to Nehru by Lord Mountbatten when the two met in London.
- The note was forwarded from the PM’s office to the office of then Governor General C Rajagopalachari on May 24, 1949, stating that it is on the issue of ‘Names and Insignia of Indian Armed Forces’ after India becomes a Republic.
- The letter also stated that the note should be placed before the Governor General.
What did Lord Mountbatten say in the note?
- The note begins by saying that consequent to becoming a Republic the word ‘Royal’ shall be dropped from India’s Army, Navy and Air Force.
- Mountbatten strongly recommended that no other word like ‘State’ of ‘Republican’ should replace the word ‘Royal’.
- This was because it would have the effect of separating the forces of India psychologically from the other services in the Commonwealth.
- He further suggested in the letter that the Crown should be replaced from the insignias and replaced by the “three lions of Ashoka”.
- Regarding the Naval Ensign, he said that all Commonwealth navies fly the same flag which consists of a large white flag with a red-cross and Union Jack in the upper corner nearer the staff and is known as the ‘White Ensign’.
- The new Ensign, the note suggested, should continue to have the red-cross but the Indian national flag should replace the Union Jack.
- He suggested this to maintain commonality with the Commonwealth flags.
What changes did Mountbatten suggest for uniforms?
- He strongly urged that existing uniforms should be changed as little as possible.
- He added that the Crown worn on badges of ranks of Majors and above should be replaced by the “three lions of Ashoka”.
- The Star of the Order of the Bath should be replaced by Star of India or another form of star.
- He also suggested that the crossed sword and baton on the badges of ranks of Generals should be retained.
- The former Viceroy advocated retaining the stripes of rank in Navy and Air Force saying these were internationally almost the same.
How did the Indian government react to Mountbatten’s suggestions?
- Nehru wrote to the then defence minister in September 1949 saying that he agreed with the suggestions made by the former Governor General that there should be as little change as possible.
- The then PM particularly mentioned the changes suggested by Mountbatten for the Navy.
- Then Governor General C Rajagopalachari also wrote back to Nehru in May 1949 itself agreeing to Mountbatten’s suggestions.
- In the end, Mountbatten’s suggestions were virtually all accepted and implemented with effect from January 26, 1950.
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