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  • Financial Inclusion in India and Its Challenges

    Old Pension Scheme vs New Pension Scheme

    Schemes | Governance | Mains Paper 2: Government Scheme/Policies

    Many states are trying to restore Old Pension Scheme and discontinue the National Pension System (NPS).

    What is the Defined Pension Benefit Scheme (old)?

    • The scheme assures life-long income, post-retirement.
    • Usually the assured amount is equivalent to 50% of the last drawn salary.
    • The Government bears the expenditure incurred on the pension.
    • The scheme was discontinued in 2004.

    What is the National Pension System (NPS)?

    • The Union government under PM Vajpayee took a decision in 2003 to discontinue the old pension scheme and introduced the NPS.
    • The scheme is applicable to all new recruits joining the Central Government service (except armed forces) from April 1, 2004.
    • On the introduction of NPS, the Central Civil Services (Pension) Rules, 1972 was amended.

    Features of NPS

    • It is a scheme, where employees contribute to their pension corpus from their salaries, with matching contributions from the government.
    • The funds are invested in earmarked investment schemes through Pension Fund Managers.
    • At retirement, they can withdraw 60% of the corpus, which is tax-free and the remaining 40% is invested in annuities, which is taxed.
    • It can have two components — Tier I and II.
    • Tier-II is a voluntary savings account that offers flexibility in terms of withdrawal, and one can withdraw at any point of time, unlike Tier I account.
    • Private individuals can opt for the scheme.

    What were the changes introduced in 2019?

    • In 2019, the Finance Ministry said that Central government employees have the option of selecting the Pension Funds (PFs) and Investment Pattern in their Tier-I account.
    • The default pension fund managers are the LIC Pension Fund Limited, SBI Pension Funds Pvt. Limited and UTI Retirement Solutions Limited in a predefined proportion.

    Who is the regulatory authority?

    • The Pension Fund Regulatory and Development Authority (PFRDA) is the regulator for NPS.
    • PFRDA was set up through the PFRDA Act in 2013 to promote old age income security by developing pension funds to protect the interest of subscribers to schemes of pension funds.

    What is the subscriber base?

    • As on February 28, there were 22.74 lakh Central government employees and 55.44 lakh State government employees enrolled under the NPS.

    Why in news now?

    • In Feb, Rajasthan CM announced restoration of the old pension scheme for the government employees, who joined the service on or after January 1, 2004.
    • The announcement meant that the National Pension System (NPS) would be discontinued in the State.
    • The center had maintained that restoration of the old system would cause an unnecessary financial burden on the government.

    Cons of NPS

    • Forfeiture of pension: The NPS scheme was created by the Government of India, in order to stop all the defined pension related benefits that it gave to its employees.
    • Withdrawal restrictions: NPS restricts all kinds of withdrawals, before the subscriber reaches the age of 60 years.
    • No tax benefits: The NPS corpus, which the subscriber can use for buying annuity or for drawing pensions, is taxable, when the schemes matures.
    • Limit on investment: The subscriber cannot invest more than 50% of his or her total investment in the NPS account, towards the equities.
    • No guarantee: While NPS is a government scheme, the corpus is created according to the returns, which are generated under the corporate bonds, government securities, and equity.

    Try this PYQ:

    Q.Who among the following can join the National Pension System (NPS)?

    (a) Resident Indian citizens only

    (b) Persons of age from 21 to 55 only

    (c) All-State Government employees joining the services after the date of notification by the respective State Governments

    (d) All Central Governments Employees including those of Armed Forces joining the services on or after 1st April 2004

     

    Post your answers here.

     

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  • Judicial Reforms

    FASTER digital platform for Judiciary

    | Polity | Mains Paper 2: Executive & Judiciary

    ‘FASTER’, an abbreviation of ‘Fast and Secured Transmission of Electronic Records’, a digital platform was formally launched by Chief Justice of India (CJI) N.V. Ramana.

    What is FASTER?

    • The FASTER system proposes transmission of e-authenticated copies of the interim orders, stay orders, bail orders and record of proceedings to the duty-holders for compliance and due execution, through a secured electronic communication channel.
    • These orders may vary from stay of execution of a person to freeze on the demolition of a slum to bail orders for undertrial prisoners.
    • The idea stemmed from a case reported about several prisoners in the Agra Jail forced to remain behind bars for three days after the hard copies of the order had not reached the prison officials.

    Benefits offered

    • FASTER would aid the cause of quick and effortless justice.
    • The timely delivery of the court’s orders to the authorities would also prevent unnecessary arrests and custody of people who have already been granted anticipatory bail.
    • For smooth transmission of court’s orders and effective implementation of Article 21, Right to Life, such a system was the need of the hour.

     

    Also read:

    [RSTV Archive] Judiciary & Artificial Intelligence

     

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  • The Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Bill, 2021

    | Economics | Mains Paper 3: Indian Economy

    Context

    The Lok Sabha has approved a Bill to amend the Chartered Accountants Act, 1949, the law that governs the Institute of Chartered Accountants of India (ICAI).

    What are the changes proposed in the Bill?

    • Introduced in the Lok Sabha on December 17, 2021, and titled the Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Bill, 2021.
    • The key changes it proposes are in the area of discipline and governance and administration.
    • 1] Discipline: The ICAI’s disciplinary committee and board of discipline will be chaired by non-chartered accountants (CA),
    • Its elected council members will no longer be in a majority in them.
    • 2] Governance and administration: The term of the ICAI’s Council will be raised from three to four years, the maximum number of consecutive terms for its elected members will be reduced to two from the current three;
    • The ICAI’s Secretary will replace the ICAI’s president as its chief executive and perform the functions to be specified;
    • The ICAI will appoint its auditor from the Comptroller and Auditor-General of India’s panel of CA firms;
    • The Government will form a coordination committee for the ICAI and the Institutes of Cost Accountants and Company Secretaries of India.
    • The Parliamentary Standing Committee on Finance has endorsed these changes and has further recommended an end to the ICAI’s monopoly in certification.

    Challenges facing Chartered Accountancy and ICAI

    1] Lacking critical thinking and analytical ability

    • Senior industry managers say that many CAs do not have what it takes to succeed in the corporate world, i.e., analytical ability, critical thinking, appreciation of the business context, grasp of technology, and communication and presentation skills.
    • CA students do not have in-class interaction.
    • Also, the coaching is focused on cracking examinations rather than facilitating understanding and application.

    2] Poor record in disciplining members

    • The ICAI’s record in disciplining its members is even more problematic.
    • There have been persistent complaints that the ICAI is lax in acting against errant members.
    •  In 2018, the Government had set up the National Financial Reporting Authority as India’s first independent regulator of accounting and audit.
    • The proposed changes in the composition of the ICAI’s disciplinary arms will further limit its role.
    • As a result, the ICAI will be effectively reduced to an examination board.

    3] ICAI failed to keep pace with changes

    • The ICAI was set up in 1949, largely as the Indian version of the U.K. institute
    •  Much of the work that CAs do and clamour for is a remnant of the licence raj.
    • Many businesses and professions have changed beyond recognition as a result of the economic reforms initiated in 1991.
    •  The demutualised and technology-driven National Stock Exchange of India has transformed stock-broking.
    • Indian IT and pharma companies now compete successfully with the best in the world.
    • In contrast, CA has not kept pace with the changes in India’s dynamic economy and changing society.
    • Overseas accountancy qualifications such as the Association of Chartered Certified Accountants (ACCA) and Chartered Institute of Management Accountants (CIMA) are gaining popularity in India, perhaps because they are recognised worldwide, are more relevant to current and future needs, and are accepted even in India by global companies and global accounting firms.

    4] Challenges posed by technology such as AI/ML

    • Accounting and auditing are more amenable to the replacement of humans by technology.
    • AI, robotics, and other technological advances are likely to reduce the need for human intervention in accounting.
    • Also, recent administrative reforms aimed at enabling ease of doing business and ease of living, such as faceless tax assessment, easy filing of tax returns, prompt refunds, rising threshold for tax audit, and abolition of Goods and Services Tax audit have greatly reduced the availability of captive, government-mandated, make-work business for CAs.

    Way forward

    • Setting IIAs: The Parliamentary Committee’s suggestion to set up a string of Indian Institutes of Accounting (IIAs) on the lines of the Indian Institutes of Technology (IIT) and the Indian Institutes of Management (IIM) is innovative.
    • At one level, they will end the ICAI’s statutory monopoly over certification.
    • More competition should result in better quality and higher standards of conduct.

    Conclusion

    The Bill and the Parliamentary Committee’s report can be seen as efforts to drag the ICAI to the contemporary world. It would be wise to read the proposed changes as a warning and respond maturely.

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  • Foreign Policy Watch: India-Australia

    Significance of India-Australia Economic Cooperation and Trade Agreement

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

    Context

    Prime Ministers of India and Australis will preside virtually over the signing of a bilateral Free Trade Agreement(ECTA) negotiated in torturous detail over the last decade.

    Background

    • Negotiations for a bilateral Comprehensive Economic Cooperation Agreement began in May 2011.
    • But the negotiations continued in fits and starts, without significant progress or indeed real political direction.
    • In June 2020, as part of the Joint Statement after establishing a Comprehensive Strategic Partnership, it was decided to re-engage on a CECA.
    • Consequently, at the 17th India-Australia Joint Ministerial Commission meeting in September 2021, CECA negotiations were re-launched.
    • During virtual summit in 2022, India-Australia fleshed out areas of cooperation ranging from science and technology to climate change and defence to people-to-people ties, and included possibilities of joint surveillance and real-time intelligence sharing.
    • On the eve of the summit, the Morrison government invested over USD 280 million to give a fillip to cooperation with India; to further grow its economic relationship and support jobs and businesses in both countries; as well as to empower the Indian diaspora.

    About INDAUS-ECTA

    • The INDAUS ECTA (India-Australia Economic Cooperation and Trade Agreement), reflects vision of the essential unity of the two countries.
    • The ECTA deal is apparently fully in compliance with WTO rules and Article 24 of GATT.
    • Article 24 of GATT allows countries to grant special treatment to one another by establishing a free-trade association, provided that “(1) duties and other trade restrictions would be eliminated on substantially all the trade among the participants, (2) the elimination of internal barriers occurred within a reasonable length of time….”
    • The ECTA should give a boost to India’s labour-intensive manufacturing sector, with a considerable leg-up to the pharma, textile, gemstone and jewellery sectors.
    •  Indian students in Australia will find an easier pathway to employment, and there will be greater ease of visa for a range of skilled human capital from India in demand in Australia, including chefs and yoga instructors.
    • Most of the farming and dairy sector seems to have been kept away from the present agreement.
    • Australian coal will probably get relatively unfettered access to India.

    Significance of the ECTA for India-Australia relations

    • The ECTA represents a watershed moment in bilateral relations.
    • ECTA is also a significant turning point for India’s foreign policy — both in terms of geo-strategy as well as geo-economics.
    • Partnership with the convergence of interests: India and Australia today represent a partnership with a near complete convergence of interests and values.
    • Shared concerns over China: Two multicultural, federal democracies that share concerns about stability in the Indo Pacific, are apprehensive about Chinese hegemonic designs, and are increasingly coordinating their policies, are natural partners of the future.

    Conclusion

    The ECTA signals that India’s relations with Australia — two central pivots of the Quad — are as strong and resilient as ever.

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  • North-East India – Security and Developmental Issues

    Assam-Meghalaya Boundary Dispute Resolution

    | Polity | Mains Paper 2: Federalism

    Assam and Meghalaya partially resolved a 50-year-old dispute along their 884.9 km boundary.

    What is the news?

    • An agreement was signed between Assam CM and his Meghalaya counterpart in the presence of Home Minister Amit Shah in New Delhi.
    • According to the partial boundary deal, Assam will get 18.51 sq. km of the 36.79 sq. km disputed area while Meghalaya will get the remaining 18.28 sq. km.
    • The agreement is expected to pave the way for resolving disputes in the boundary and similar areas of difference between Assam and three other NE States.

    What is the Assam-Meghalaya Boundary Dispute?

    • Meghalaya, carved out of Assam as an autonomous State in 1970, became a full-fledged State in 1972.
    • The creation of the new State was based on the Assam Reorganisation (Meghalaya) Act of 1969, which the Meghalaya government refused to accept.
    • This was because the Act followed the recommendations of a 1951 committee to define the boundary of Meghalaya.
    • On that panel’s recommendations, areas of the present-day East Jaintia Hills, Ri-Bhoi and West Khasi Hills districts of Meghalaya were transferred to the Karbi Anglong, Kamrup (metro) and Kamrup districts of Assam.
    • Meghalaya contested these transfers after statehood, claiming that they belonged to its tribal chieftains.
    • Assam said the Meghalaya government could neither provide documents nor archival materials to prove its claim over these areas.
    • After claims and counter-claims, the dispute was narrowed down to 12 sectors on the basis of an official claim by Meghalaya in 2011.

    Other boundary disputes in North-East

    The states of the Northeast were largely carved out of Assam, which has border disputes with several states.

    During British rule, Assam included present-day Nagaland, Arunachal Pradesh and Meghalaya besides Mizoram, which became separate state one by one. Today, Assam has boundary problems with each of them.

    • Nagaland shares a 500-km boundary with Assam.
    • In two major incidents of violence in 1979 and 1985, at least 100 persons were killed. The boundary dispute is now in the Supreme Court
    • On the Assam-Arunachal Pradesh boundary (over 800 km), clashes were first reported in 1992, according to the same research paper.
    • Since then, there have been several accusations of illegal encroachment from both sides, and intermittent clashes. This boundary issue is being heard by the Supreme Court.
    • The 884-km Assam-Meghalaya boundary, too, witnesses flare-ups frequently. As per Meghalaya government statements, today there are 12 areas of dispute between the two states.

     How did the two governments go about handling the issue?

    • The two States had initially tried resolving the border dispute through negotiations but the first serious attempt was in May 1983 when they formed a joint official committee to address the issue.
    • In its report submitted in November 1983, the committee suggested that the Survey of India should re-delineate the boundary with the cooperation of both the States towards settling the dispute.
    • There was no follow-up action. As more areas began to be disputed, the two States agreed to the constitution of an independent panel in 1985.
    • Headed by Justice Y.V. Chandrachud, the committee submitted its report in 1987.
    • Meghalaya rejected the report as it was allegedly pro-Assam.
    • In 2019, the Meghalaya government petitioned the Supreme Court to direct the Centre to settle the dispute. The petition was dismissed.

    How was the ice broken?

    • In January 2021, Home Minister urged all the north-eastern States to resolve their boundary disputes by August 15, 2022, when the country celebrates 75 years of Independence.
    • It was felt that the effort could be fast-tracked since the region’s sister-States either had a common ruling party.
    • In June 2021, the two States decided to resume talks at the CM level and adopt a “give-and-take” policy to settle the disputes once and for all.
    • Of the 12 disputed sectors, six “less complicated” areas — Tarabari, Gizang, Hahim, Boklapara, Khanapara-Pilingkata and Ratacherra — were chosen for resolving in the first phase.
    • Both States formed three regional committees, one each for a district affected by the disputed sectors.

    What were the principles followed?

    • These committees, each headed by a cabinet minister, were given “five principles” for approaching the issue.
    • These principles are historical facts of a disputed sector, ethnicity, and administrative convenience, willingness of people and contiguity of land preferably with natural boundaries such as rivers, streams and rocks.
    • The committee members conducted surveys of the disputed sectors and held several meetings with the local stakeholders.
    • This paved the way for the March 29 closure of the six disputed sectors.

    Issues with this settlement

    • Officials in Assam said it was better to let go of areas where they did not have any administrative control rather than “live with an irritant forever”.
    • However, residents in the other six disputed sectors feel the “give-and-take” template could spell disaster for them.
    • The fear is more among non-tribal people who could end up living in a “tribal Meghalaya with no rights”.

     

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  • Electric and Hybrid Cars – FAME, National Electric Mobility Mission, etc.

    India’s Lithium Dependency Worries

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

    Lithium has been among the most sought-after mineral during the past few years, largely on the back of its usage in battery manufacturing.

    India is at odds with a major import source for the mineral, China.

    About Lithium

    • Lithium is a chemical element with the symbol Li and atomic number 3.
    • It is a soft, silvery-white alkali metal. Under standard conditions, it is the lightest metal and the lightest solid element.
    • Like all alkali metals, lithium is highly reactive and flammable and must be stored in mineral oil.
    • When cut, it exhibits a metallic lustre, but moist air corrodes it quickly to a dull silvery grey, then black tarnish.
    • Lithium metal is isolated electrolytically from a mixture of lithium chloride and potassium chloride.
    • It is a crucial building block of the lithium-ion rechargeable batteries that power electric vehicles (EVs), laptops and mobile phones.

    Lithium-ion batteries

    • A lithium-ion battery or Li-ion battery is a type of rechargeable battery.
    • They are commonly used for portable electronics and electric vehicles and are growing in popularity for military and aerospace applications.
    • A prototype Li-ion battery was developed by Akira Yoshino in 1985, based on earlier research by John Goodenough, M. Stanley Whittingham, Rachid Yazami and Koichi Mizushima during the 1970s–1980s.
    • In 2019, the Nobel Prize in Chemistry was given to this trio “for the development of lithium-ion batteries”.

    Global producers of lithium

    • Australia and Chile have swapped positions as the world’s leading lithium-producing country over the past decade. In 2019, the world’s Top 5 lithium producers were:
    1. Australia – 52.9% of global production
    2. Chile – 21.5%
    3. China – 9.7%
    4. Argentina – 8.3%
    5. Zimbabwe – 2.1%
    • The U.S. ranked 7th with 1.2% of the world’s lithium production.
    • In 2019, the world’s Top 5 lithium reserves by country were:
    1. Chile – 55.5% of the world’s total
    2. Australia – 18.1%
    3. Argentina – 11.0%
    4. China – 6.5%
    5. U.S. – 4.1%

    Why is India looking for lithium?

    • India has been scouting for lithium reserves since the Centre’s push to boost the adoption of electric vehicles (EVs) in the country.
    • The ₹18,000 crore production-linked incentive scheme for advanced chemistry cell (ACC) battery storage, a flagship incentive scheme for the industry has kicked off.
    • However, the supply of lithium, which is largely an imported product, has declined.
    • With India being in a diplomatic tussle with China, the supplies from the neighbouring country have declined and India too is looking for other import avenues.

    Why has the supply of lithium declined?

    • The supply of lithium has not been in line with the surge in demand from electric vehicle makers across the world.
    • China also is witnessing a mismatch between demand and supply, which has led to a rise in prices.

     

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  • Social Media: Prospect and Challenges

    Social media platforms must be held accountable for subjugating rights: Centre to HC

    | Polity | Mains Paper 2: Indian Constitution – historical underpinnings, evolution, features, amendments, significant provisions and basic structure

    The Centre told the Delhi High Court that social media platforms must be held accountable for “subjugating and supplanting fundamental rights like the right to freedom of speech and expression, otherwise the same would have dire consequences for any democratic nation”.

    What is the news?

    • The Ministry’s submission came in response to a petition filed by a Twitter user whose account was suspended by the microblogging site for alleged violations of platform guidelines.
    • The Twitter user said his account was suspended for the reason of “ban evasion” (creating an account when a similar account was earlier banned).
    • The complainant said Twitter suspended his accounts without giving him an opportunity for a hearing.

    Centre’s argument

    • The Centre said when a Significant Social Media Intermediary (SSMI) such as Twitter takes a decision to suspend the whole or part of a user’s account on its own due to its policy violation, it should afford a reasonable opportunity to the user to defend his side.
    • The exception, the Centre said, where the SSMIs could take such a decision include certain scenarios such as rape, sexually explicit material or child sexual abuse material, bot activity or malware, terrorism-related content etc.
    • If an SSMI fails to comply with the above, then it may amount to a violation of IT Rules 2021, the Centre clarified.
    • No platform or intermediary will be allowed to infringe upon the citizens’ rights, including but not limited to Articles 14, 19 and 21 guaranteed under the Constitution of India under the guise of violation of the platform’s policies unless it constitutes a violation of extant law in force.

    What are the IT Rules 2021?

    Why is this a matter of concern?

    • Social media platforms must respect the fundamental rights of the citizens and should not take down the account itself or completely suspend the user account in all cases.
    • Taking down the whole information or the user account should be a last resort.
    • Only in cases where the majority of the contents/posts/tweets on an account are unlawful, the platform may take the extreme step of taking down the whole information or suspending the whole account.

    Conclusion

    • Hence it can be argued that undue discontinuance of social media accounts of any person is violative of fundamental rights guaranteed under Articles 14, 19 and 21.

     

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  • ISRO Missions and Discoveries

    What is Project NETRA?

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

    The Indian Space Research Organisation (ISRO) is building up its orbital debris tracking capability by deploying new radars and optical telescopes under the Network for Space Objects Tracking and Analysis (NETRA) project.

    Project NETRA

    • The project will give India its own capability in space situational awareness (SSA) like the other space powers — which is used to ‘predict’ threats from debris to Indian satellites.
    • NETRA’s eventual goal is to capture the GEO, or geostationary orbit, scene at 36,000 km where communication satellites operate.
    • The initial SSA will first be for low-earth orbits or LEO which have remote-sensing spacecraft.
    • Under NETRA the ISRO plans to put up many observational facilities: connected radars, telescopes; data processing units and a control centre.
    • They can, among others, spot, track and catalogue objects as small as 10 cm, up to a range of 3,400 km and equal to a space orbit of around 2,000 km.
    • The NETRA effort would make India a part of international efforts towards tracking, warning about and mitigating space debris.

    What NETRA consists of?

    • In the plans are a high-precision, long range telescope in Leh and a radar in the North East.
    • Along with them, we will also use the Multi-Object Tracking Radar (MOTR) that we have put up at the Satish Dhawan Space Centre in Sriharikota, and the telescopes at Ponmudi and Mount Abu to get a broad SSA picture.
    • NORAD, or the North American Aerospace Defense Command, is an initiative of the U.S. and Canada that shares selective debris data with many countries.
    • The new SSA centre would consolidate debris tracking activities that are now spread across ISRO centres.
    • Currently there are 15 functional Indian communication satellites in the geostationary orbit of 36,000 km; 13 remote sensing satellites in LEO of up to 2,000 km; and eight navigation satellites in medium earth orbits.

    Why Space debris matters?

    • Space junk or debris consists of spent rocket stages, dead satellites, fragments of space objects and debris resulting from ASAT.
    • Hurtling at an average speed of 27,000 kmph in LEO, these objects pose a very real threat as collisions involving even centimetre-sized fragments can be lethal to satellites.
    • Last year, ISRO monitored 4,382 events in LEO and 3,148 events in the geostationary orbit where space objects closely approached Indian assets.
    • Fragments from the Fengyun-1C satellite (part of the anti-satellite test (ASAT) by China in 2007) and the Cosmos 2251-Iridium satellite collision in 2009 accounted for the maximum number of these threats.
    • The observations also covered 84 “close approaches of less than one km” between Starlink satellites and Indian assets.

    Enhancing Space situational awareness (SSA)

    • India, as a responsible space power, should have SSA as a part of a national capability, as in the U.S. This is a vital requirement for protecting our space assets and a force multiplier.
    • The SSA has a military quotient to it and adds a new ring to the country’s overall security.
    • It uses satellites, ground and air radars to secure its two countries against attacks from air, space or sea.
    • With long-range tracking radars, the SSA also provides us the capability of an early warning system against ballistic missiles coming in at a height.
    • Apart from radars and telescopes, he said India should also think of deploying satellites that track other satellites — as the U.S. and other space powers had done.
    • Combined with other elements of military intelligence SSA would help us to understand motives behind any suspicious orbit changes of other satellites and to know if they were spying on or harming our spacecraft.

     

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  • For deeper, richer India-Mexico ties

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

    Context

    In 2021, Mexico and India commemorated 71 years of the establishment of diplomatic relations. This article is written by the Foreign Minister of Mexico, who has been on his official visit to India.

    Areas of cooperation between two countries

    • Mexico and India are members of the G-20, which brings together 20 of the largest economies in the world and whose presidency in 2023 will be assumed by India.
    • Non-permanent members of the security council: Both countries are non-permanent members of the United Nations Security Council this year.
    • At both forums, India and Mexico will contribute decisively to world peace and security, and will put poverty reduction at the centre of the multilateral debate.
    • The health sector is another cornerstone of our exchanges.
    • Mexico will strengthen its cooperation with India as one of the leading global producers of medicines and will also seek joint pharmaceutical manufacturing.
    • Another key focus area of cooperation will be aerospace.
    • Although it was started less than a decade ago, this has enormous potential for the Mexican Space Agency and for regional initiatives such as the recently established Latin American and Caribbean Space Agency (ALCE) of which Mexico is the founder.
    • In the economic sphere, Mexico’s links with India, the sixth-largest economy in the world and our tenth-largest trading partner, undoubtedly offers a wide range of prospects for Mexico’s productive sectors.

    Conclusion

    Links between India and Mexico have evolved positively in recent years, demonstrating the complementarities between two ancient countries, rich in history and diversity. In this spirit, we will take a firm step towards a tangible alliance to showcase this evolution, which could result in mutual benefits.

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  • Foreign Policy Watch: India-SAARC Nations

    Bridging the bay in quest of a stronger BIMSTEC

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

    Context

    Sri Lanka is gearing up to host the Fifth Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) Summit, now in its silver jubilee year. The summit is being held in virtual/hybrid mode and Sri Lanka is the current BIMSTEC chair.

    Why BIMSTEC matters for India and the region

    • The unique ecology of BIMSTEC is witnessing enriched political support and commitment from India.
    • India has made the Bay of Bengal integral to India’s ‘Neighbourhood First’ and ‘Act East’ policies which can accelerate the process of regional integration.
    • Significance in economic and strategic space: Finalising the BIMSTEC Charter; BIMSTEC Master Plan for Transport Connectivity; BIMSTEC Convention on Mutual Legal Assistance in Criminal Matters; BIMSTEC Technology Transfer Facility (TTF); cooperation between diplomatic academies/training institutions; and a template of Memorandum of Association for the future establishment of BIMSTEC centres/entities present signs of optimism.
    • BIMSTEC as a centre of Indo-Pacific: With a re-emergence of the idea of the ‘Indo-Pacific’ region, the growing economic, geopolitical and security connections between the Western Pacific and the Indian Ocean regions are creating a shared strategic space.
    • The Bay of Bengal is evolving as the centre of the Indo-Pacific region again.
    • The renewed focus has given a new lease of life to the developmental efforts in the region, in particular BIMSTEC.

    Way forward for BIMSTEC

    1] Political support and strong commitment from all member countries

    • With a changed narrative and approach, the Bay of Bengal has the potential to become the epicentre of the Indo-Pacific idea — a place where the strategic interests of the major powers of East and South Asia intersect.
    • Potential of BIMSTEC: There is a greater appreciation of BIMSTEC’s potential due to geographical contiguity, abundant natural and human resources, and rich historical linkages and a cultural heritage for promoting deeper cooperation in the region.
    • Political support and strong commitment from all member countries are crucial in making BIMSTEC a dynamic and effective regional organisation.

    2] Boost connectivity

    • Connectivity is essential to develop a peaceful, prosperous and sustainable Bay of Bengal region.
    • The BIMSTEC Master Plan for Transport Connectivity will provide the necessary boost to connectivity.
    •  Therefore, BIMSTEC needs to address two dimensions of connectivity – one, upgrading and dovetailing national connectivity into a regional road map; and two, development of both hard and soft infrastructures.

    3] Enhance cooperation in different areas

    • There is growing involvement of educational institutions, industries and business chambers through various forums and conclaves which are helping to enhance cooperation in the areas of education, trade and investments, information technology and communication among others.
    • India has implemented its promise to set up a Centre for Bay of Bengal Studies (CBS) at Nalanda University, Bihar for research on art, culture and other subjects related to the Bay of Bengal.

    4] Strengthen the institutional capacity of the BIMSTEC Secretariat

    • The BIMSTEC Secretariat coordinates, monitors and facilitates the implementation of BIMSTEC activities and programmes. The leaders must agree to strengthen the institutional capacity of the BIMSTEC Secretariat.
    • Charter for BIMSTEC: Approval of a charter for BIMSTEC during the summit will further augment its visibility and stature in international fora.

    Conclusion

    The quest for economic growth and the development of the BIMSTEC region can be achieved with single-minded focus and cooperation among the member counties. In this endeavour, India has a key role in accelerating regional cooperation under the BIMSTEC framework and in making it vibrant, stronger and result-oriented.

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