GS-1 Factors responsible for the location of primary, secondary, and tertiary sector industries in various parts of the world (including India).
GS-2 Development processes and the development industry —the role of NGOs, SHGs, various groups and associations, donors, charities, institutional and other stakeholders.
GS-3 Conservation, environmental pollution and degradation, environmental impact assessment.
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The CACP recommendations on Minimum Support Prices (MSP) for the mandated six Rabi crops wheat, barley, gram, lentil, rapeseed and mustard, and safflower are arrived by considering several factors.
What is MSP?
MSP is a part of India’s Agriculture Price Policy. The MSP for various crops is announced by the central government at the beginning of every crop season on the recommendation of CACP.
MSP is price at which the government purchases crops from the farmers. It is the guaranteed ‘minimum floor price’ that farmer must get from the government in case the market price of the crops falls below the MSP.
The Rationale behind MSP is to support the farmer from excess fall in the crop prices, it is like an insurance policy for the farmers to save them from price falls.
The most important aim of the MSP policy is to save the Indian farmer from making distress sales. In the event of glut and bumper harvest, when market prices fall below the announced MSP, the government through its agencies buys the entire stock offered by the farmers at the MSP.
What are the factors included in MSP calculation?
Factors taken into consideration are as follows:
Cost of production,
Supply and demand situation of various crops in domestic and global markets,
Domestic and world prices along with trade opportunities,
Terms of trade between agriculture and non-agriculture sector,
Optimal utilization of land, water and other production resources,
A minimum of 50 per cent mark-up over the cost of production.
Though on the surface the list looks comprehensive, there are two missing concerns given the present-day challenges, necessitating a change in the MSP formula.
Acreage
Water usage
Rising MSP leads to water conflict: There is ample data-based evidence to show the causal relation between acreage and MSP movements. Rising MSPs of water-intensive crops has resulted in some of the water conflicts over river basins as shown by recent studies in the Cauvery and the Teesta River basins.
MSP for rice and wheat: This is also because MSP for rice and wheat, where government agencies like Food Corporation of India play a role in procurement, has created a reference for market prices. Ever since the MSP was introduced in the late 1970s, it became the “floor” price-setter for rice and wheat.
Higher MSP for water consuming cereals: Between 1980 and 2000, the MSPs of rice and wheat increased at a much faster rate than those of the “coarse” cereals (like jowar, bajra and ragi) which eventually led to movement of the terms-of-trade (defined as ratio of prices of competing crops, e.g., rice and millets) in Favour of the water-consuming cereals.
Shifting of High acreage to High MSP crop: This led to acreages moving largely in Favour of water consuming staples, whose crop-water requirements are many times of that of the drier millets. In the case of Cauvery and Teesta, the introduction of dry season paddy and its expansion created reliance on irrigation thereby Fuelling demand for water.
Non promotion of rabi millets: Though the MSP formula claims to take into account land and water use, it needs to be noted here that there is a need for Rabi millets (e.g., ragi) to be promoted through MSPs. This is because the millets are less water-consuming as compared to many other alternatives including wheat. However, there does not seem to be any MSP announced for Rabi millets.
Higher MSP for less water consuming crop is needed: In the process, it will be crucial to take into consideration the estimates of irrigation water need for specific crops, redefine the Rabi basket by including millets, and declare a higher MSP for less water-consuming crops vis-à-vis the high-water consuming crops.
Nutritional security in MSP calculation
Nutritional security is not included in MSP calculation: The other consideration that is missing from the MSP formula is the consideration of the nutritional security. Ideally, the MSP regime should remunerate those crops that have a higher nutritional value per unit of resource use.
Rabi crops are more water efficient: Ragi is the most efficient water user in producing calories. Bajra followed by wheat and ragi are the better performers in terms of water efficiency in producing iron. For the case of fiber, ragi is the most water efficient crop followed by barley and maize demonstrating the same water efficiency.
Rabi crops are nutrition rich: Maize is the most efficient water user in producing carbohydrates with ragi being second and wheat third. With reference to fat production, bajra takes the first position followed by ragi and wheat. Ragi is the best performer in the case of calcium production. Wheat and ragi do equally well with phosphorus production per unit of water at the margin.
Missing MSP estimate: However, so far, the MSP formula has not taken into consideration the health and the nutritional aspect. Irrespective of the season, the nutritional aspect needs to be figured into the MSP recommendations, and more nutritional crops should command higher support prices.
Conclusion
Present MSP regime is biased in Favor of rice and wheat. MSP can be utilized as great tool to achieve crop diversification by incentivizing cultivation of water efficient and nutrition rich millets. India can achieve the regional as well as financial balance in distribution of MSP by proper estimation of MSP and promotion accordingly.
Mains Question
How is MSP calculated? Analyse the linkages of MSP and water conflict and suggest the solution to overcome the water inefficiency by MSP.
Last month, Finance Minister asked captains of industry what was holding them back from investing in manufacturing. She likened industry to Lord Hanuman from the Ramayana by stating that industry did not realize its own strength and that it should forge ahead with confidence. She said, “This is the time for India, we cannot miss the bus”.
What is present situation of private investment?
Tax cut rate of domestic companies: In the hope of revitalizing private investment, the government had in September 2019 cut the tax rate for domestic companies from 30% to 22% if they stopped availing of any other tax SOP (standard operating procedure).
Weak private investment: Expert says that Indian private sector investment has been weak for almost a decade now. If we look at drivers of economic growth right now, there are amber lights flashing. The export story will be under threat because of the global slowdown, the government’s ability to support domestic demand would also be limited as the fiscal deficit comes down.
Impact of k-shaped recovery: Because of the K-shaped recovery, private consumption is only concentrated in some parts of the income pyramid.
Investment to GDP ratio: As in the June edition of the Ministry of Finance’s Monthly Economic Review, the fixed investment to GDP ratio was 32% in 2021-22. However, there is need for caution in reading the most recent data, as they are subject to revision.
The National Accounts Statistics: It provides disaggregation of gross capital formation (GCF) by sectors, type of assets and modes of financing; over 90% of GCF consists of fixed investments.
No change in investment distribution: The investment distribution has hardly changed over the last decade, with the public sector’s share remaining 20%.
Fall in share of agriculture and industry: Between 2014-15 and 2019-20, the shares of agriculture and industry in fixed capital formation/GDP fell from 7.7% and 33.7% to 6.4% and 32.5%, respectively.
Rise in service sectors: Services’ share rose to 52.3% in 2019-20 compared to 49% in 2014-15.The rise in the services sector is almost entirely on transport and communications. The share of transport has doubled from 6.1% to 12.9% during the same period. Within transportation, it is mostly roads.
Decline in the share of investment: Its share in the investment ratio (column 2.1) fell from 19.2% in 2011-12 to 16.5% in 2019-20. This indicates that ‘Make in India’ failed to take off, import dependence went up, and India became deindustrialised. Import dependence on China is alarming for critical materials such as fertilizers, bulk drugs (active pharmaceutical ingredients or APIs) and capital goods. Instead of boosting investment and domestic technological capabilities, the ‘Make in India’ campaign frittered away time and resources to raise India’s rank in the World Bank’s Ease of Doing Business Index.
Decline in foreign capital in GFC: The contribution of foreign capital to financing GCF fell to 2.5% in 2019-20 from 3.8% in 2014-15 (or 11.1% in 2011-12). With declining investment share, industrial output growth rate fell from 13.1% in 2015-16 to a negative 2.4% in 2019-20, as per the National Accounts Statistics.
What is Consumer’s demand situation?
Average Consumer sentiment index: Private companies invest when they are able to estimate profits, and that comes from demand. The Centre for Monitoring Indian Economy’s (CMIE) consumer sentiment index is still below pre-pandemic levels but is far higher than what was seen 12-18 months ago.
Buoyant Aggregate demand: RBI’s Monetary policy report dated September 30 says, Data for Q2 (ended Sept) indicate that aggregate demand remained buoyant, supported by the ongoing recovery in private consumption and investment demand. It shows that seasonally adjusted capacity utilization rose to 74.3% in Q1 the highest in the last three years.
High household savings: Along with household savings intentions remaining high, might hold the key to the investment cycle kicking in.
Conclusion
Both public and private investment is necessary for sustainable growth trajectory of any economy. Global uncertainty, Ukraine war, oil prices have added to the skepticism of private investors. However, India’s macroeconomic performance is much better than those of developed and developing economies. Private investors must take these into account before holding back their investment.
Mains Question
Q. What role private investment plays in Indian economy? Analyse the post-pandemic private investment situation in India?
On October 21, the Financial Action Task Force (FATF), the global money laundering and terrorist financing watchdog, announced the removal of Pakistan from its Grey List. The announcement was expected.
What is FATF?
Inter-governmental organization: The FATF, a 39-member inter-governmental organization with its headquarters in Paris, was set up in 1989 by the Group of Seven (G7) countries with the aim of setting global standards for countering the menace of money laundering.
Terror financing included under FATF mandate: Following the terror attacks on September 11, 2001, the objective of countering the financing of terrorism was added to the FATF’s mandate. Later, its objectives were further expanded to counter the financing of proliferation of weapons of mass destruction.
How FATF functions?
Three level mandate: The FATF seeks to fulfil its three-pronged mandate by drawing up a list of guidelines. Known as the FATF Recommendations or FATF Standards, these are meant to ensure a coordinated global response to prevent.
organized crime,
corruption and
Terrorism
Domestic plus international regulatory measures: They encompass a range of domestic legislative, regulatory and enforcement actions, as well as international cooperation measures, that states are expected to adopt and implement.
Consensus based decision: The FATF and its associate, or regional, members such as the Asia Pacific Group on Money Laundering (APG) take their decisions on the basis of consensus. More than 200 countries and jurisdictions are committed to implementing the FATF’s recommendations.
Monitoring the adherence to recommendations: The FATF monitors adherence to its recommendations by periodic evaluations of the anti-money laundering (AML), combating financing of terrorism (CFT) and proliferation financing (PF) regimes of member countries and jurisdictions which voluntarily submit to its monitoring.
Strategic deficiencies by countries: Countries which exhibit strategic deficiencies in their AML/CFT/PF regimes are placed under a scheme of “increased monitoring” informally known as Grey Listing.
Action plan to address the deficiencies: States placed under the Grey List are expected to swiftly put in place the requisite measures to address their deficiencies on the basis of Action Plans drawn up and evaluated through a process of consultation with the FATF.
Serious strategic deficiency: States that exhibit serious strategic deficiencies in their AML/CFT/ PF regimes are placed under a Black List formally known as High-Risk Jurisdictions subject to a Call for Action.
Serious economic consequences may follow: While Grey Listing amounts to a warning, Black Listing entails serious economic consequences by making it incumbent on governments, international lenders and commercial entities to conduct enhanced due diligence checks while transacting business with the designated countries and, in extreme cases, apply “counter-measures” against offenders.
Present status of listing by FATF?
Grey listing: Following the removal of Pakistan, there are 23 countries on the FATF’s Grey List.
Black listing: There are only three countries on the Black List, North Korea, Iran and Myanmar. These listing processes of the FATF are driven predominantly by the pulls and pressures of international power politics and not merely by technical parameters.
How Pakistan has been grilled by FATF for Terror financing?
In 2008 Pakistan removed from listing: Pakistan has been placed in and removed from the Grey List in the past too. The first time was from February, 2008 to June, 2010, when it was removed from the list after it supposedly demonstrated progress in improving its AML/AFT regime.
Mumbai terror attack and grey list: The terrorist attacks in Mumbai on November 26, 2008 took place while Pakistan was on the Grey List for the first time. The second time was from February, 2012 to February, 2015, by the end of which period it had supposedly made significant progress in improving its AML/CFT regime.
Osama bin laden killing: The elimination of Osama bin Laden in the American raid on Abbottabad on May 2, 2011 took place after Pakistan’s exit from the Grey List for the first time and before its placement on the list for the second time.
From 2018-2022: Pakistan was placed in the Grey List for the third time in June, 2018 and remained there till October, 2022. During this period, it was compelled to put in place several legislative, administrative and regulatory measures to improve its compliance with international AML/CFT standards.
Action against individual and organisations: In recent years, there has been increasing realisation among FATF members that it is the effectiveness of action taken against individuals and entities of concern rather than pro-forma technical compliance” that should form the basis of judging the extent of adherence to FATF standards.
Conviction of hafiz Saeed: It is this more realistic approach coupled with the implicit threat of being moved from the Grey List to the Black List that finally compelled Pakistan to prosecute, convict, fine and jail, on terrorism financing charges, Lashkar-e-Tayyaba (LeT) Amir, Hafiz Muhammad Saeed, LeT’s chief operational commander, Zakiur Rehman Lakhvi and Sajid Majeed aka Sajid Mir, “operational manager” of the 26/11 Mumbai attacks, after having pronounced him missing and dead.
Jaish-e-Mohammed: A disingenuous attempt by Pakistan to persuade a visiting FATF verification team in August-September 2022 that Jaish-e-Mohammed (JeM) Amir, Maulana Masood Azhar, had escaped to Afghanistan was strongly countered by a spokesman of the Afghan Taliban.
How Pakistan manages pressure form FATF?
with the support of USA: It is well known that much of the diplomatic heavy lifting to place Pakistan in the Grey List in June 2018 and keep it on the list for an extended period of time was done by the US. There had been a feeling among those following developments at the FATF that American pressure on Pakistan would continue till such time as the US needed Pakistan to bring the Afghan Taliban to the negotiating table and once the US withdrawal from Afghanistan was completed, the pressure on Pakistan would ease. Subsequent developments have validated this assessment.
Help of China and turkey: Although the threat of being moved from the Grey List to the Blacklist remained hanging over Pakistan’s head, this was never a realistic possibility, considering the likely opposition to any such move by Pakistan’s staunch friends in the FATF, such as China, Malaysia, Turkey and Saudi Arabia
Conclusion
India will have to continue mustering all available instruments and options to deny Pakistan operating space to wield the jihadi weapon, till such time as there is convincing evidence of a consensus among the generals in Rawalpindi that the weapon has outlived its utility and needs to be renounced once and for all.
Mains Question
How FATF is useful international forum for fight against terrorism? How was Pakistan forced by FATF to take actions against mastermind of 26/11 attack?
As External Affairs Minister Dr S Jaishankar has just completed a visit to Australia after attending the annual Foreign Ministers’ Framework Dialogue. In this article we take a deep dive into India’s relationship with Australia.
India-Australia Relations: A Backgrounder
The India-Australia bilateral relationship has undergone evolution in recent years, developing along a positive track, into a friendly partnership.
The two nations have much in common, underpinned by shared values of a pluralistic, Westminster-style democracy, Commonwealth traditions, expanding economic engagement etc.
Several commonalities include strong, vibrant, secular and multicultural democracies, free press, independent judicial system and English language.
Historical Perspective
The historical ties between India and Australia started immediately following European settlement in Australia from 1788.
All trade, to and fro from the penal colony of New South Wales was controlled by the British East India Company through Kolkata.
India and Australia established diplomatic relations in the pre-Independence period, with the establishment of India Trade Office in Sydney in 1941.
The end of the Cold War and simultaneously, India’s decision to launch major economic reforms in 1991 provided the first positive move towards development of bilateral ties.
Various dimensions of ties
[A] Political partnership
Both the countries are members of G-20, ASEAN Regional Forum (ARF), IORA (Indian Ocean Rim Association), Asia Pacific Partnership on Climate and Clean Development, East Asia Summit and the Commonwealth.
Australia has been extremely supportive of India’s quest for membership of the APEC (Asia Pacific Economic Cooperation).
Australia whole-heartedly welcomed India’s joining of the MTCR (Missile Technology Control Regime).
[B] Trade and Economy
India is the 5th largest trade partner of Australia with trade in goods and services.
Two-way trade between India and Australia was worth A$24.3 billion ($18.3 billion) in 2020, up from just $13.6 billion in 2007, according to the Australian government.
After a series of attempts, in 2016, Australia opened the door for uranium exports to India.
An Australia-India Strategic Research Fund (AISRF) which was established in 2006, supports collaboration between scientists in India and Australia on cutting-edge research.
[C] Cultural ties
There is a longstanding people-to-people ties, ever increasing Indian students coming to Australia for higher education.
Growing tourism and sporting links, especially Cricket and Hockey, have played a significant role in further strengthening bilateral relations between the two countries.
India is one of the top sources of skilled immigrants to Australia.
The number of Indian students continue to grow with approximately 105,000 students presently studying in Australian universities.
After England, India is the second largest migrant group in Australia in 2020.
[D] Strategic Partnership
In 2009, India and Australia established a ‘Strategic Partnership’, including a Joint Declaration on Security Cooperation which has been further elevated to Comprehensive Strategic Partnership in 2020.
The Mutual Logistics Support Agreement has been signed during the summit that should enhance defence cooperation and ease the conduct of large-scale joint military exercises.
There is a technical Agreement on White Shipping Information Exchange.
Both nations conduct bilateral maritime exercise AUSINDEX. In 2018, Indian Air Force participated for the first time in the Exercise Pitch Black in Australia.
Foreign and Defence Ministers of both countries agreed to meet in a ‘2+2’ format biennially.
The first-ever Quad Leaders’ Virtual Summit held on 12 March 2021 saw the participation of Prime Ministers of India, Australia, Japan and President of USA.
A Civil Nuclear Cooperation Agreement between the two countries was signed in September 2014 during the visit of then-PM Tony Abbott to India.
Significance of the ties
COVID Management: Australia is one of the few countries that has managed to combat COVID-19 so far through “controlled adaptation” by which the coronavirus has been suppressed to very low levels.
STEM: From farming practices through food processing, supply and distribution to consumers, the Australian agribusiness sector has the desired R&D capacity, experience and technical knowledge.
Natural resources: Australia is rich in natural resources that India’s growing economy needs. It also has huge reservoirs of strength in higher education, scientific and technological research.
Alliance with US: The two countries also have increasingly common military platforms as India’s defence purchases from the US continue to grow.
Affinity with ASEAN: Australia has deep economic, political and security connections with the ASEAN and a strategic partnership with one of the leading non-aligned nations, Indonesia.
Containing China: The Indo-Pacific region has the potential to facilitate connectivity and trade between India and Australia. Both nations can leverage their equation in QUAD to contain China.
International cooperation
Support at UNSC: Australia supports India’s candidature in an expanded UN Security Council.
APEC: Australia is an important player in APEC and supports India’s membership in the organization. In 2008, Australia became an Observer in SAARC.
Some irritants in ties
Trade imbalance: India’s trade deficit with Australia has been increasing since 2001-02 due to India-Australia Free Trade Agreement. It is also a contentious issue in the ongoing RCEP negotiations which India left.
High tariff on agri products in India: India has a high tariff for agriculture and dairy products which makes it difficult for Australian exporters to export these items to India.
Non-tariff barriers in Australia: At the same time, India facesnon-tariff barriers and its skilled professionals in the Australian labour market face discrimination.
Visa Policy: India wants greater free movement and relaxed visa norms for its IT professionals, on which Australia is reluctant.
Future of QUAD: Australian lobby has sparked speculation over the fate of the Quadrilateral Consultative Dialogue (the ‘Quad) involving India, Australia, Japan and the United States.
Nuclear reluctance: Building consensus on non-nuclear proliferation and disarmament has been a major hurdle given India’s status as a nuclear power.
Racism against Indians: Increasing Racist attacks on Indians in Australia has been a major issue.
Way forward
Upgradation of 2+2 format: It is prudent too for New Delhi and Canberra to elevate the ‘two plus two’ format for talks from the Secretary level to the level of Foreign and Defence Ministers.
Removal of trade barriers: Both nations need to resolve disputes at the WTO with regard to the Australian sector can act as a serious impediment.
Balancing China: An ‘engage and balance’ China strategy is the best alternative to the dead end of containment.
Conclusion
Given the changing geopolitics, both Canberra and New Delhi are keen to move beyond mere rhetoric and build a robust partnership
The key is to keep the Australia story thriving in India, and India story thriving in Australia on a consistent basis in public memory.
This involves a holistic multi-stakeholder strategy and approach which deepens understanding and appreciation of each other.
Battery Swapping could only be leveraged up to a certain limit and was not a complete solution to push electric vehicle (EV) adoption says some auto industry.
What is Battery Swapping?
Battery swapping is a mechanism that involves exchanging discharged batteries for charged ones.
This provides the flexibility to charge these batteries separately by de-linking charging and battery usage, and keeps the vehicle in operational mode with negligible downtime.
Battery swapping is generally used for smaller vehicles such as two-wheelers and three-wheelers with smaller batteries that are easier to swap, compared to four-wheelers and e-buses, although solutions are emerging for these larger segments as well.
What is BaaS?
Battery-as-a-service (BaaS) is seen as a viable charging alternative.
Manufacturers can sell EVs in two forms: Vehicles with fixed or removable batteries and vehicles with batteries on lease.
If you buy an electric scooter with battery leasing, you do not pay for the cost of the battery—that makes the initial acquisition almost 40% cheaper.
Users can swap drained batteries for a fully charged one at a swap station. The depleted batteries are then charged on or off-site.
The advantages of swapping include low downtimes for commercial fleets, reduced space requirements, and lower upfront costs.
It is also a viable solution for those who don’t have parking spots at home.
Draft Battery Swapping Policy 2021: Key Proposals
Rationalizing taxes on battery: The draft policy has suggested that the GST Council consider reducing the differential across the tax rates on Lithium-ion batteries and electric vehicle supply equipment. Currently, the tax rate on the former is 18 per cent, and 5 per cent on the latter.
Incentivization for swapping enabled vehicles: The policy also proposes to offer the same incentives available to electric vehicles that come pre-equipped with a fixed battery to electric vehicles with swappable batteries. The size of the incentive could be determined based on the kWh (kilowatt hour) rating of the battery and compatible EV.
Terms of contracts for battery providers: The government will specify a minimum contract duration for a contract to be signed between EV users and battery providers to ensure they continue to provide battery swapping services after receiving the subsidy.
Public battery charging stations: The policy also requires state governments to ensure public battery charging stations are eligible for EV power connections with concessional tariffs. It also proposes to install battery swapping stations at several locations like retail fuel outlets, public parking areas, malls, kirana shops and general stores etc.
Tariff rationalization: It also proposes to bring such stations under existing or future time-of-day (ToD) tariff regimes, so that the swappable batteries can be charged during off-peak periods when electricity tariffs are low.
Registration ease: Transport Departments and State Transport Authorities will be responsible for easing registration processes for vehicles sold without batteries or for vehicles with battery swapping functionality.
Unique identification number (UIN): The policy also proposes to assign a UIN to swappable batteries at the manufacturing stage to help track and monitor them. Similarly, a UIN number will be assigned to each battery swapping station.
Locations: The NITI Aayog has proposed that all metropolitan cities with a population of more than 40 lakh will be prioritized for the development of battery swapping networks under the first phase, which is within 1-2 years of the draft policy getting finalized.
Why hasn’t BaaS taken off yet?
Hefty taxes: There are economic and operational constraints. Energy service providers offering swapping solutions have to charge 18% goods and services tax (GST) for swapping, compared to 5% GST on the purchase of an EV.
No incentives yet: Additionally, the government’s FAME-II incentives are not offered to vehicles sold with BaaS or swap station operators.
Lack of interoperability infrastructure: While these are economic disadvantages compared to direct charging solutions, the lack of a dense and interoperable battery swap infrastructure has also hindered the roll-out.
Issues highlighted by industry
Swapping will require a great deal of battery standardisation which may reduce innovation and would curb investments.
Other concerns include accountability for a sub-optimal battery brought in to a swapping station or if it caught fire.
Battery swapping has reduced initial investments by EV owners.
Issues with BaaS
Standardization of specifications: There is a need for standardization of safety specifications as well as the battery.
Safety hazard: Swapping in the various permutations and combinations of batteries at a station where they have not been tested for compatibility could lead to safety hazards.
Non-competitive nature: Also, mandating only one type of battery to be eligible for concessions would be disadvantageous to many players.
Significance of battery swapping
High Cost of EVs: An EV, by industry standards, is 1.5-2x costlier than IC Engine counterpart and at least half the cost is from the battery pack.
Cost reduction: Many manufacturers are offering batteries separately from a vehicle, reducing the cost. In that case, a fleet owner can buy vehicles without battery and utilize battery swapping.
Range Anxiety: Another major reason stopping people from buying EVs is range anxiety, or in simple terms, the fear of battery getting empty without finding a charging station.
Inadequate charging infrastructure: Unlike petrol pumps, EV charging stations are rare to spot and that further increases the range anxiety exponentially, especially while going on a road trip.
Hazard management: In case of a Swapping Station, one can simply locate a station, go and replace the empty battery with a new one.
The India-Africa Defence Dialogue (IADD) was recently held on the sidelines of Defence Expo 2022 and successfully brought fifty African countries and India together on a single stage.
The IADD adopted a ‘Gandhinagar declaration’ as an outcome document. It proposes to enhance cooperation in the field of training in all areas of mutual interest.
In this context, in this edition of Burning issue, we will be analyzing the India-Africa relationship, its challenges to it and then the way forward.
Importance of Africa
[A] Geostrategic
Africa is critical to India’s security, especially the Horn of Africa region, because of its proximity to India. The threat of radicalism, piracy, and organized crime emerges from this region
[B] Economic
Africa can help us in diversifying our energy sources, which is one of the stated objectives of our Integrated Energy Policy
Africa also contains a rich reservoir of valuable minerals, metals including gold and diamond
Africa provides a space for Indian investment
Africa has ample agricultural land which cab address India’s food security. India is looking at leasing land in Africa to overcome the land deficit that we face in terms of arable land
[C] Geopolitical
Support of African countries is important for India’s aim of gaining a permanent seat in the UNSC
Africa provides a space for displaying both India’s soft and hard power
India has been actively involved in the peace and stability of African countries through UN Peacekeeping operations. India is involved in the capacity building of African countries. Africa is also the largest beneficiary of India’s ITEC programme
History of India-Africa relations
[A] Ancient Period
During the ancient period, Indian merchants were constant look out beyond the Arabian Sea towards the west for lucrative markets. Slowly, the increasing people-to-people contacts made them a part of the ‘Indian Ocean circuit of trade’.
They sailed regularly to the Zenj coast (Zanzibar) for palm oil, gold, copper, spices, ivory, rhino horn etc.
Trade developed through the knowledge of favourable sea winds and the development of a suitable marine technology
Periplus of Erythrean Sea, a first-century AD merchants’ sailor guide throws light on the thriving trade between India and the Western Indian Ocean region
It also stated that India’s trading contacts were spread from Egypt to the coast of northern Somalia, the ancient land of Punt, the kingdom of Kush (Sudan) and Axum.
[B] Medieval Era
Venetian traveller Marco Polo mentioned explicitly the Gujarati and Saurashtrian merchants on Africa’s east coast
The use of the Indian system of weights and measures and Cowries as currency pointed to the fact that Indians were playing a key role in this area
Not only economic benefits, the trade also contributed to the development of internal links in the African continent even before the advent of Europeans
By the seventeenth century, the nature of Indian Ocean trade underwent a radical change due to demand for captives who could be sold as slaves.
A good example could be of ‘Malik Amber’ and the ‘Siddis’ who are still a part of the Indian population and are settled in parts of Gujarat, Karnataka and Hyderabad
[C] Colonial period
With the advent of European colonial powers in India and Africa, the trade pattern underwent a significant change as Indo–African relations entered a new era of ‘colonialism’.
The Indians who went to Africa as slaves and post abolition of slavery, as indentured labourers, and the merchant class of Gujarat slowly settled down there
India’s link with the African continent dates back to the anti-apartheid struggle of Mahatma Gandhi with the colonial rulers in South Africa
India has been aggressively putting forward the issue of apartheid on multilateral forums such as UN, NAM And Commonwealth
[D] Post-Colonial Period
The foundations were laid by Mahatma Gandhi. According to him, there will be a “commerce of ideas and services and not of raw materials and goods like imperialist powers”. All the governments continue to take this approach as the foundation of India’s Africa Policy.
According to Vice President Hamid Ansari,“India shares Africa’s dreams and India-Africa cooperation is a genuine 2-way street partnership”
1st phase (till 1960)
Nehru talked about Afro-Asian solidarity. African countries provided strength to Nehru’s NAM. The policy in this phase is described as “ideational” and “pragmatic”
2nd phase (1970s – 1990s):
There was neglect of Africa because of India’s attention on South Asia and India’s attention on inward-looking foreign policy. Though India in this phase continued to support Africa against Apartheid.
3rd phase (1990s onwards):
This is the phase of re-engagement with Africa. However, the lead was taken by the private sector, rather than the government. The private sector of India should be given credit to push the attention of GoI towards the region of strategic and economic importance.
Present status of Ties
The institutionalisation of relations: Since 2008, India and Africa’s relations have been institutionalized. The India-Africa Forum Summit constitutes the basic framework for the relations under the South-South Cooperation platform. So far 3 summits have been organized.
Opening of embassies: In July 2019, Finance Minister Nirmala Sitharaman announced that India would open embassies in 18 African countries. This would result in Indian embassies being located in 47 of 54 African countries.
Economic engagement: India’s economic engagement with Africa began intensifying in the early 2000s. India’s total trade with Africa grew from US$ 6.8 billion in 2003 to US$ 76.9 billion in 2018, and India is now Africa’s third-largest trade partner.
Investments: Indian investments in Africa have also grown rapidly in the last decade and the country is currently the seventh-largest investor in Africa. The scale of India’s development cooperation with Africa has also grown rapidly.
The flow of LoC: From 2003 onwards, India began to use concessional lines of credit (LoC) as one of its key development partnership instruments to fund the construction of railway lines, electrification and irrigation projects, farm mechanisation projects, among others. India has sanctioned 182 LoC projects in Africa of about US$ 10.5 billion
Bilateral cooperation: includes solar energy development, climate change talks, information technology, cyber security, maritime security, disaster relief, counter-terrorism and military training.
Soft power projection: India provides about 50,000 scholarships to African students each year under its ITEC programme. Also, the huge Indian diaspora is a major asset.
10 guiding principles for India-Africa engagement
In July 2018, Prime Minister Narendra Modi addressed the Ugandan Parliament during his state visit and outlined a vision for not just a bilateral partnership with Africa, but also a partnership in multilateral forums by espousing the ‘10 guiding principles for India-Africa engagement’
Africa will be at the top of our priorities. We will continue to intensify and deepen our engagement with Africa. As we have shown, it will be sustained and regular.
Our development partnership will be guided by your priorities. We will build as much local capacity and create local opportunities as possible. It will be on terms that are comfortable to you, that will liberate your potential and not constrain your future.
We will keep our markets open and make it easier and more attractive to trade with India. We will support our industry to invest in Africa.
We will harness India’s experience with the digital revolution to support Africa’s development; improve the delivery of public services; extend education and health; spread digital literacy; expand financial inclusion; and mainstream the marginalised.
Africa has 60 per cent of the world’s arable land, but produces just 10 percent of the global output. We will work with you to improve Africa’s agriculture.
Our partnership will address the challenges of climate change.
We will strengthen our cooperation and mutual capabilities in combating terrorism and extremism; keeping our cyberspace safe and secure; and, supporting the UN in advancing and keeping the peace.
We will work with African nations to keep the oceans open and free for the benefit of all nations. The world needs cooperation and competition in the eastern shores of Africa and the eastern Indian Ocean.
As global engagement in Africa increases, we must all work together to ensure that Africa does not once again turn into a theatre of rival ambitions, but becomes a nursery for the aspirations of Africa’s youth.
Just as India and Africa fought colonialism together, we will work together for a just, representative and democratic global order that has a voice for one-third of humanity that lives in Africa and India.
Challenges
Declining trade: Bilateral trade was valued at $55.9 billion in 2020-21, fell by $10.8 billion compared to 2019-20, and $15.5 billion compared to the peak year of 2014-15.
Decline in investment: India’s investments in Africa too saw a decrease from $3.2 billion in 2019-20 to $2.9 billion in 2020-21.
Short-term focused: Indian LoCs have not been designed to achieve a larger development goal such as food security, health security, clean energy or education for all. LoCs are typically used by recipient countries to fund small development projects such as roads, bridges, railway lines, power transmission and water supply systems.
Competing powers in Africa: India is not the only external power engaging Africa, developed countries and other emerging powers like China, Brazil and Russia have also been involved in various activities across the continent.
Lack of synchronisation: there is no synchronisation between different development instruments. LoCs, grants and capacity-building initiatives operate as standalone instruments of development cooperation, with almost no links with each other.
Racial attacks: Despite frequent references to Afro-Asian solidarity between the two nations, instances of violence against African students are common in India.
Chinese challenge in Africa
China has been investing heavily across the African continent throughout the last decade.
China’s interests are related to four major areas: infrastructural projects, financial assistance, natural resources and maritime interests.
While access to Africa’s natural resources, its untapped markets and support for the ‘One China Policy’ are primary drivers of Chinese engagement with the region, there are other factors at play.
What India should do?
A clear strategy for African development: India should prepare a focused Africa strategy for the next decade and identify a few areas for closer cooperation.
Continue the current focus on capacity building: A simple focus on building physical infrastructure and economic growth will not contribute to a stable and prosperous Africa. Investment in human capital is the key to development in Africa.
Harness Indian civil society organizations, NGOs, and Indian diaspora: The Government should explore greater collaboration with them to implement development projects in Africa at low costs. Some Indian organizations like Pratham and Barefoot College are already playing an important role in Africa.
Timely completion of projects: Efforts must be made to expedite the LoC projects. Lessons should be drawn from other countries that have a much better record in implementation.
Steps taken so far
The ITEC programme: In 1964, India launched the Indian Technical and Economic Cooperation (ITEC) programme to provide technical assistance through human resource development to other developing countries. Africa is a key beneficiary of the programme with nearly 50 percent of the ITEC slots reserved for countries from the region.
Asia-Africa growth corridor: The Asia-Africa Growth Corridor or AAGC is an economic cooperation agreement between the governments of India, Japan and multiple African countries. India on 25 May 2017 launched a vision document for Asia-Africa Growth Corridor or AAGC at the African Development Bank meeting.
Pan African e-Network : The late Indian President APJ Abdul Kalam initiated the Pan African e-Network (PAeN) in 2004. Over the years, PAeN has significantly contributed to the advancement of tele-education and telemedicine in Africa.
Maritime cooperation: India’s maritime cooperation with African nations, particularly those in the East & Southern African region, is also growing. The Indian Navy took part in Exercise IBSAMAR-VI in South Africa in 2018 alongside the navies of Brazil and South Africa.
Peacekeeping operations: India participated in almost all UN peacekeeping operations (PKOs) in Africa. With 200,000 soldiers and police officers joining the blue helmets since independence, India is today Africa’s fourth-largest contributor of troops to PKO
Duty-free tariff preferential scheme: Launched in 2008, India’s duty-free tariff preferential scheme for Least Developed Nations has benefited 33 African states. The India–Africa Forum Summit- the official platform for African-Indian relations, is also contributing immensely to this building-up process.
India Africa Defence Ministers conclave: India has also launched several initiatives to develop closer relations, including the first-ever India Africa Defence Ministers conclave in February this year on the margins of the Defence Expo 2020.
Way forward
For mutual benefit, Africa and India should remain optimally engaged. The third India-Africa Forum Summit was held in 2015. The fourth summit, pending since last year, should be held as soon as possible.
Fresh financial resources for grants and concessional loans to Africa must be allocated, as previous allocations stand almost fully exhausted. The promotion of economic relations demands a higher priority.
To impart a 21st-century complexion to the partnership, developing and deepening collaborations in health, space and digital technologies are essential.
India should continue its role in peacekeeping in Africa, in lending support to African counter-terrorism operations, and contributing to African institutions through training and capacity-enhancing assistance.
Improve the experiences of Africans in India. Indian government should ensure that Africans studying or working in India are safe and enjoy their stay in the country. Efforts should also be made to educate Indians about Africa so that people-to-people connections between India and Africa flourish.
Promote development-friendly private investments. The presence of Indian companies in Africa has grown rapidly in the last two decades. Given the emphasis on mutual benefit in its strategy, India’s development cooperation should be aligned with its commercial interests in Africa. Therefore, India should try to support Indian companies making the investment in development-friendly projects for mutual benefit.
To overcome the China challenge in Africa, increased cooperation between India and its international allies, rates a priority. The recent India-EU Summit has identified Africa as a region where a partnership-based approach will be followed.
Conclusion
Africa is a continent on the move, characterised by rapid economic growth, rising educational and health standards, increasing gender parity, and expanding infrastructure and connectivity.
India has an intrinsic interest in helping Africa achieve progress. The spirit of “developing together as equals” defines this bilateral partnership. A resurging Africa and a rising India can give a strong impetus to South-South Cooperation.
Foreign ministers from member countries of the Association of Southeast Asian Nations (ASEAN) are meeting to discuss an intensifying crisis in Myanmar, 18 months after agreeing a peace plan with its military rulers.
What is ASEAN?
ASEAN is a political and economic union of 10 member states in Southeast Asia.
It brings together ten Southeast Asian states – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam – into one organisation.
It was established on 8th August 1967 in Bangkok, Thailand with the signing of the Bangkok Declaration by the founding fathers of the countries of Indonesia, Malaysia, Thailand, Singapore, and the Philippines.
The preceding organisation was the Association of Southeast Asia (ASA) comprising of Thailand, the Philippines, and Malaysia.
Five other nations joined the ASEAN in subsequent years making the current membership to ten countries.
Why is the meeting happening?
ASEAN’s peace effort is the only official diplomatic process in play.
There has been a failure with the junta unwilling to implement a so-called “five-point consensus” that it agreed to with ASEAN in April 2021.
The United Nations has backed the ASEAN plan, but with suspicion the generals are paying lip service and buying time to consolidate power and crush opponents before a 2023 election.
For ASEAN to remain credible as a mediator, it may need to present a new strategy before the summit.
What is the consensus?
The agreement includes-
Immediate end of hostilities
All parties engaging in constructive dialogue
Allowing an ASEAN envoy to mediate and meet all stakeholders, and
ASEAN to provide humanitarian assistance.
So far, the only success cited by ASEAN chair Cambodia has been allowing some humanitarian access, but that has been limited and conditional.
How has the Junta (Military govt. in Myanmar) responded?
The military government has accused critical ASEAN members of meddling and warned them not to engage.
It has accused its opponents of trying to sabotage the ASEAN plan and has justified military offensives as necessary to secure the country and enable political talks.
Instead of advocating for the five-point ASEAN plan, the generals have instead been pushing a five-step roadmap of their own towards a new election, with few similarities.
The Genetic Engineering Appraisal Committee (GEAC) has yet again cleared the proposal for commercial cultivation of genetically modified (GM) mustard.
What exactly is GM (Hybridized) Mustard?
Hybridization involves crossing two genetically dissimilar plant varieties that can even be from the same species.
The first-generation (F1) offspring from such crosses tend to have higher yields than what either parent can individually give.
Such hybridization isn’t easy in mustard, as its flowers have both female (pistil) and male (stamen) reproductive organs, making the plants largely self-pollinating.
Since the eggs of one plant cannot be fertilised by the pollen grains from another, it limits the scope for developing hybrids.
How has hybridisation been achieved in mustard?
This has been done by genetic modification (GM).
Scientists at Delhi University’s Centre for Genetic Manipulation of Crop Plants (CGMCP) have developed the hybrid mustard DMH-11.
It contains two alien genes isolated from a soil bacterium called Bacillus amyloliquefaciens.
The first gene (‘barnase’) codes for a protein that impairs pollen production and renders the plant into which it is incorporated male-sterile.
This plant is then crossed with a fertile parental line containing, in turn, the second ‘barstar’ gene that blocks the action of the barnase gene.
The resultant F1 progeny is both high-yielding and also capable of producing seed/ grain, thanks to the barstar gene in the second fertile line.
How did researchers achieve this?
The CGMCP scientists have deployed the barnase-barstar GM technology to create what they say is a robust and viable hybridisation system in mustard.
This system was used to develop DMH-11 by crossing a popular Indian mustard variety ‘Varuna’ (the barnase line) with an East European ‘Early Heera-2’ mutant (barstar).
DMH-11 is claimed to have shown an average 28% yield increase over Varuna in contained field trials carried out by the Indian Council of Agricultural Research (ICAR).
What has GEAC now done?
GEAC has recommended the environmental release of DMH-11 for its seed production and testing prior to commercial release.
In other words, it has given the green signal for commercial cultivation by farmers, with production of seed material being the first step.
This move was earlier vetoed in 2016 by Environment Ministry.
Why did it take so long for GEAC to clear?
There has been opposition to GM crops in general, from assorted green groups.
Major concern is the presence of a third ‘bar’ gene, which makes GM mustard plants tolerant to the spraying of glufosinate ammonium, a chemical used for killing weeds.
This, the opponents allege will cause displacement of manual labour engaged in weeding by promoting use of chemical herbicides.
Another concern is over GM mustard threatening or undermining the population of honey bees.
Mustard flowers are a source of nectar for honey bees and many other pollinator insects.
Try this PYQ:
Q.With reference to the Genetically Modified mustard (GM mustard) developed in India, consider the following statements:
GM mustard has the genes of a soil bacterium that give the plant the property of pest-resistance to a wide variety of pests.
GM mustard has the genes that allow the plant cross-pollination and hybridization.
GM mustard has been developed jointly by the IARI and Punjab Agricultural University.
Which of the statements given above is/are correct?
(a) 1 and 3 only
(b) 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
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The GEAC is a statutory body notified under the Environment (Protection) Act, 1986.
It was formed as the Genetic Engineering Approval Committee and was renamed to its current name in 2010.
It functions under the Ministry of Environment, Forests & Climate Change.
The body regulates the use, manufacture, storage, import, and export of hazardous microorganisms or genetically-engineered organisms and cells in India.
Ahead of PM Modi’s visit to Mangarh Dham in Banswara district, Rajasthan CM has sought the declaration of the memorial for tribals as a monument of national importance.
About Mangarh Massacre
Mangarh Dham is known for the massacre of tribals by the British Indian Army in 1913.
This place is widely referred to as Adivasi Jallianwala.
About 1,500 Bhil tribals and forest dwellers were killed at Mangarh on November 17, 1913, when the British Indian Army opened fire on the protesters.
The people were gathered to demand abolition of bonded labour system and relaxation in heavy agricultural taxes imposed by the rulers of princely states.
The tribals in the southern Rajasthan region were led by social reformer Govind Guru.
Course of events
Govind Guru started his movement among Bhils in the early 1890s.
The movement had, as its religious centrepiece, the concept of a fire god, which required his followers to raise sacred hearths in front of which Bhils pray while performing the purifying havan called dhuni.
In 1903, the guru set up his main dhuni on Mangadh Hill.
Mobilised by him, the Bhils placed a charter of 33 demands before the British by 1910 primarily relating to forced labour, high tax imposed on Bhils and harassment of the guru’s followers by the princely states.
The Bhil struggle for justice under Govind Guru took a serious turn after the British and local rulers refused to accept the demands and tried to break the Bhagat movement in 1913.
Try this PYQ:
Q. Which amongst the following provided a common factor for tribal insurrection in India in the 19th century?
(a) Introduction of a new system of land revenue and taxation of tribal products.
(b) Influence of foreign religious missionaries in tribal areas.
(c) Rise of a large number of money lenders, traders and revenue farmers as middlemen in tribal areas.
(d) The complete disruption of the old agrarian order of the tribal communities.
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