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  • India’s Semiconductor Dreams: A Strategic Shift in Focus and Incentives

    India’s Semiconductor

    Central Idea

     

    • India’s semiconductor policy should shift focus from attracting global giants like Intel to leveraging existing facilities and developing domestic solutions for electronics markets.

     

    Background

    • The US Department of Commerce and India’s Ministry of Commerce and Industry recently signed a memorandum of understanding to ensure subsidies do not hinder India’s semiconductor ambitions.
    • However, the likelihood of Intel investing in a greenfield 300mm wafer fabrication plant in India remains low due to its focus on fabs in the US.

     

    Facts for prelims: Semiconductors

    • Semiconductors are materials that have properties that are in between those of conductors (such as copper) and insulators (such as rubber).
    • They have the ability to conduct electricity under certain conditions, but not under others.
    • The conductivity of semiconductors can be manipulated through the introduction of impurities or doping with other materials. This process alters the electronic properties of the material and creates regions of excess or deficit of electrons, called p-type and n-type regions respectively. The interface between these regions is known as a p-n junction, which is a fundamental building block of many semiconductor devices.

     

    Applications

    • Semiconductors are a fundamental component of modern technology and have significant importance in many areas of our daily lives.
    • Electronics industry: Semiconductors are a crucial component in the electronics industry, which is one of the fastest-growing industries in the world. Semiconductors are used in a wide range of electronic devices, from smartphones and computers to medical equipment and home appliances.
    • Miniaturization: The ability to miniaturize electronic components using semiconductors has led to the development of smaller, more powerful, and more energy-efficient devices. This has enabled the development of portable devices, such as smartphones and laptops, which have become an essential part of our daily lives.
    • Energy efficiency: Semiconductors have enabled the development of energy-efficient devices, which are crucial in the context of climate change and global warming. Energy-efficient lighting, for example, uses semiconductor materials such as LEDs, which consume far less energy than traditional incandescent bulbs.
    • Renewable energy: Semiconductors are also essential in the development of renewable energy technologies such as solar cells and wind turbines. Solar cells, for example, use semiconductor materials to convert sunlight into electrical energy.
    • Medical applications: Semiconductors are also used in a wide range of medical applications, from imaging devices to implantable medical devices. In particular, semiconductor-based biosensors are becoming increasingly important for disease diagnosis and monitoring.

     

    All you need to know about India’s semiconductor policy

     

    • India has launched a new semiconductor policy called the National Policy on Electronics (NPE) in 2019, with the aim of creating a globally competitive electronics manufacturing industry in the country.
    • The policy aims to attract investment in semiconductor fabrication units, also known as fabs, and encourage the development of a domestic ecosystem for semiconductor design and manufacturing.

     

    The key objectives of the policy

     

    • Attracting investment: The policy aims to attract global semiconductor companies to set up manufacturing units in India by providing them with incentives such as financial support, tax incentives, and land at subsidized rates.
    • Promoting domestic manufacturing: The policy aims to promote domestic manufacturing of semiconductor components by providing incentives such as production-linked incentives, subsidies, and preferential market access to products made in India.
    • Developing human resources: The policy aims to develop a skilled workforce in the semiconductor sector by providing training and education programs in collaboration with leading academic institutions.
    • Encouraging research and development: The policy aims to encourage research and development in the semiconductor sector by providing financial support to research institutions and startups.

     

    India’s semiconductor policy: What it needs?

    1. India’s Semiconductor History
    • The Semi-Conductor Laboratory (SCL) was established in Mohali in 1983 to create an electronics ecosystem.
    • Market liberalization in 1991 and a fire in 1989 derailed these plans, but the facility still has the potential to support India’s semiconductor ecosystem.
    1. Shifting Focus:
    • The Ministry of Electronics and Information Technology (MeITy) has been trying to attract Intel to India, but their efforts may not be fruitful.
    • A better approach would be to leverage SCL’s existing assets and focus on the More than Moore segment of semiconductors (>180 nm node) for automotive electronics, PV-Inverters, 5G infrastructure, and railway electronics.
    1. Incentives and Subsidies:
    • Subsidies should target fabless design houses with proven designs willing to fabricate at the SCL in the 180nm+ node.
    • Incentives should also be provided to global design companies with products aimed at India-specific markets.
    • The existing DLI/PLI schemes do not provide such incentives, and a course correction is needed.
    1. Leveraging Existing Infrastructure:
    • Efforts to open up subsidies to global small and medium-sized enterprises in the upstream supply chain are welcome.
    • However, coupling these efforts with the defined incentives and targeted upgrades is essential for success.
    1. Leadership and Execution: To achieve this vision in the next five years, the SCL needs a full-time director with prior “More than Moore” foundry experience, as opposed to a career scientist from the Department of Space.

    India’s Semiconductor

    Conclusion

    • India’s semiconductor policy should shift focus from attracting global giants like Intel to leveraging existing facilities and developing domestic solutions for electronics markets. This will require a strategic shift in focus, targeted incentives, and strong leadership. Failure to act may result in India missing out on the semiconductor fabrication bus once again.

    Mains Question

    Q. Semiconductors are a fundamental component of modern technology. In this light analyze India’s semiconductor policy.

  • Foreign Trade Policy 2023: Aiming for $2 Trillion in Exports and Streamlining Processes

    Central Idea

     

    • Foreign Trade Policy 2023 focuses on shifting from an incentive to a tax remission-based regime, improving the ease of doing business, promoting exports through collaborations, and targeting emerging areas. It aims to achieve $2 trillion in export of goods and services by 2030, up from the previous $900 billion target.

     

    Foreign Trade Policy 2023

     

    1. Reducing Friction Points:
    • Automatic approvals for various permissions will streamline processes and reduce bureaucratic hurdles for businesses.
    • Reduced processing times for revalidation of authorizations (expected to be brought down to one day), extension of export obligation periods, advance authorizations, and EPCG issuances will expedite export activities.
    • Lowered application fees for MSMEs will provide financial relief and encourage more small businesses to participate in global trade.
    1. Supporting Export Growth:
    • Facilitating e-commerce exports will enable Indian businesses to tap into the growing global e-commerce market, estimated to reach $6.07 trillion by 2024.
    • Widening the basket covered under RODTEP will ensure more exporters benefit from tax remission, increasing competitiveness.
    • Boosting manufacturing, particularly in labor-intensive sectors, will create more jobs and enhance the export potential.
    • Rationalizing thresholds for exporter recognition will make it easier for businesses to be acknowledged and incentivized for their export performance.
    • Merchanting trade reform will promote services exports and reduce transaction costs.
    • Promoting the use of the rupee in international trade can help reduce exchange rate risks and increase trade with countries facing currency restrictions.
    1. One-time Amnesty Scheme: The amnesty scheme aims at faster resolution of trade disputes, clearing pending cases, and improving the overall trade environment.

     

    Supplemental Measures

     

    • Boost to domestic manufacturing: Lowering import tariffs will make raw materials and intermediate goods more affordable, boosting domestic manufacturing and export competitiveness.
    • Competitive Indian goods and services: Ensuring a competitive exchange rate will enhance the affordability of Indian goods and services in global markets.
    • FTA’s: Signing broader and deeper free trade agreements can open new markets for Indian exporters and attract foreign investments.

     

    Conclusion

     

    • The Foreign Trade Policy 2023 comes at a time of global uncertainty, but with India’s small share in global trade (around 1.8% in merchandise exports and roughly 4% in services), there is significant room for improvement. The new policy, along with additional measures, can enhance the country’s trade performance and achieve the ambitious $2 trillion export target by 2030. However, it is crucial to monitor the policy’s implementation and address potential challenges for businesses to fully reap the benefits.

  • Taiwan- China: India in the Event of a Cross-Strait Conflict

    Conflict

    Central Idea

     

    • India needs to proactively consider its military, diplomatic, and economic responses to a potential cross-strait conflict between China and Taiwan.

     

    Background

     

    • PLA’s frequent military exercises near Taiwan: The People’s Liberation Army (PLA) is conducting frequent military exercises near Taiwan, increasing the risk of escalation in the Taiwan Strait.
    • Forceful reunification: Some analysts believe that China, under President Xi Jinping, is preparing for a forceful reunification campaign by 2027.

     

    Conflict

    The impact of a cross-strait conflict between China and Taiwan on India

     

    • Disruption of trade: India’s trade through the South China Sea (SCS) accounts for nearly 55% of its total trade with the Indo-Pacific region. A conflict in the Taiwan Strait could severely disrupt this trade, affecting India’s economy. Additionally, trade with Taiwan, China (India’s second-largest trading partner), East Asia, and some Southeast Asian countries would also be severely impacted.
    • Strategic implications: As a member of the Quad, India would face serious strategic consequences in the event of a cross-strait conflict. New Delhi would be expected to respond in support of its partners, particularly the United States, which may lead to a significant shift in the regional balance of power and India’s international commitments.
    • Escalation along the Line of Actual Control (LAC): India’s involvement in a conflict over Taiwan may prompt China to escalate tensions along the LAC, leading to an increased risk of military confrontation between India and China. This would put additional pressure on India’s military and resources, as it would have to prepare for a potential two-front conflict.
    • Diplomatic challenges: India’s involvement in a conflict over Taiwan would strain its diplomatic relations with China and complicate its foreign policy priorities in the region. New Delhi would have to balance its commitments to its allies and partners with the need to maintain a stable relationship with Beijing.
    • Economic costs: The economic fallout from a cross-strait conflict could be considerable for India, with potential disruptions to supply chains, investment flows, and regional economic integration efforts. This could hinder India’s economic growth and development objectives in the short to medium term.
    • Security concerns: A cross-strait conflict could lead to increased military deployments, escalations, and proxy conflicts in the region, raising security concerns for India. This would necessitate greater vigilance and preparedness from the Indian military and intelligence agencies to address potential threats.
    • Humanitarian consequences: In the event of a large-scale conflict, India may face the challenge of responding to humanitarian crises resulting from displaced populations, refugees, and the disruption of essential services in the region. This could put additional strain on India’s resources and infrastructure.

     

    India’s likely responses

     

    • Military response: India could assist partner countries, including the US, by sharing experience and intelligence on dealing with the PLA. It could also offer its mainland for refuelling aircraft and access to its Andaman and Nicobar Island bases.
    • Diplomatic response: India could participate in a United Nations General Assembly resolution condemning Chinese aggression.
    • Economic response: India is unlikely to impose targeted sanctions on China due to the negative trade balance between the two countries.

     

    Conflict

    India’s proactive measures

     

    • Information sharing: India can establish a secure communication channel with Taiwan to exchange vital intelligence and real-time information on Chinese military movements and strategies. This would help Taiwan to better anticipate potential threats and improve its defensive capabilities.
    • Training Taiwanese armed forces personnel: India can secretly collaborate with Taiwan to train its armed forces personnel in specific operations and tactics. This may include joint exercises and training programs in areas like counterinsurgency, mountain warfare, and special operations, which could enhance Taiwan’s military preparedness.
    • Consultative mechanisms: India can set up consultative mechanisms with Taipei, Tokyo, and Washington to discuss and coordinate their strategic approaches towards deterring a Chinese attack on Taiwan. This collaboration can lead to the development of joint strategies, contingency plans, and a coordinated response in case of a conflict.
    • Strengthening defense ties: India can explore options to strengthen defense ties with Taiwan by providing it with military equipment, technology, and logistical support. This could help Taiwan build a more robust defense system and deter potential Chinese aggression.
    • Economic diversification for Taiwan: India can play a significant role in helping Taiwan diversify its trade and economic dependencies away from China. By increasing bilateral trade, investment, and technological cooperation, India can provide Taiwan with the scale it needs to reduce its overdependence on Beijing.
    • Soft power diplomacy: India can leverage its soft power and cultural ties to build stronger relationships with Taiwan, promoting people-to-people exchanges, educational collaborations, and cultural events. This would not only strengthen the bond between the two countries but also raise awareness and support for Taiwan’s cause on the international stage.
    • Encouraging international support: India can work with its allies and partners in the Quad, as well as other regional and global forums, to build a broader coalition supporting Taiwan’s sovereignty and security. By advocating for Taiwan’s inclusion in international organizations and platforms, India can help raise its global profile and encourage other countries to support Taiwan in the event of a conflict.

     

    Conclusion

     

    • While India would face challenges in the event of a cross-strait conflict, it is crucial for New Delhi to plan for the inevitable and proactively consider its military, diplomatic, and economic responses to such a crisis.

    Mains Question

    Q. There are signs of potential cross-strait conflict between China and Taiwan. In this backdrop discuss its impact on India

  • [Burning Issue] Rajasthan’s Right to Health Bill

    health

    Context

    • The Right to Health Bill was recently approved by the Rajasthan legislative assembly. Rajasthan would become the first state in India to guarantee its citizens’ right to healthcare once the bill is announced.
    • Being a torch-bearing step in providing better healthcare, this edition of the burning issue will elaborate on this new law and its criticalities. The topic is relevant for the GS-2 mains paper.

    The Right to Health

    • The World Health Organization (WHO) says that everyone has the right to health, which means they should be able to get the health care they need, when and where they need them, without having to worry about money. No one should get sick and die because they can’t get the health care they need or because they don’t have enough money.
    • RTH is a fundamental human right that guarantees everyone the right to enjoy the highest attainable standard of physical and mental health.
    • It is recognized as a crucial element of the right to an adequate standard of living and is enshrined in international human rights law.
    • Other fundamental human rights, such as having access to clean water and sanitation, nutritious food, adequate housing, education, and safe working conditions, clearly determine good health.

    Scope of RTH

    RTH covers various health-related issues, including-

    • Access to healthcare services, clean water and sanitation, adequate nutrition, healthy living and working conditions, health education, and disease prevention.
    • Accessible, affordable, and quality healthcare services,
    • Eliminating barriers to healthcare access
    • Informed consent to medical treatment and accessing information about their health.

    Right to Health relating to India

    Provisions of the Constitution:

    • The Constitution of India doesn’t explicitly ensure a basic right to well-being. However, the Constitution makes numerous mentions of public health and the state’s role in providing healthcare to citizens.

    Under Directive Principles of State Policy:

    • DPSPs: To a limited extent IV of the Indian Constitution gives a premise to one side of wellbeing.
    • The State is obligated by Article 39 to ensure the health of workers.
    • Article 47 imposes a responsibility on the state to raise people’s nutrition levels, the standard of living, and public health. Article 42 requires the state to provide maternity relief and just and humane working conditions.

    Under Fundamental rights:

    • Article 21 The Supreme Court of India in Bandhua Mukti Morcha v. Union of India & Ors. found that the Constitution of India did not explicitly recognize the right to health care. interpreted Article 21’s guarantee of the right to life, which covers the right to health.
    • In Territory of Punjab and Ors. In the case of Mohinder Singh Chawla, the Supreme Court reiterated that the right to health is essential to the right to life and that the government was obligated by the Constitution to provide health services.

    Article 243G: The Role of Panchayats and Municipalities

    • The Constitution does not just oblige the State to upgrade general well-being, yet additionally blesses the Panchayats and Districts to fortify general well-being under Article 243G.

    15th Commission on Finances:

    • The 15th Finance Commission’s High-Level Group on the Health Sector recommended declaring the right to health a fundamental right in September 2019.
    • Additionally, it proposed putting health on the Concurrent List rather than the State List.

    Genesis of Right to Health

    • In 1996, the Supreme Court held that the right to life (Article 21) included the right to health within its fold, and also pointed out the obligation of state governments to provide health services.
    • Under the Constitution, public health and sanitation, including hospitals and dispensaries, come under the State List.
    • In 2018, the National Commission on Human Rights (NHRC) drafted the Charter of Patient Rights to be implemented by state governments.
    • Rajasthan runs certain schemes to ensure health coverage, including the Mukhyamantri Chiranjeevi Swasthya Bima Yojana, under which health coverage is provided in over 1,550 private and public hospitals across the state. Under the yojana, insurance coverage is also provided for certain types of treatment.

    Features of the Rajasthan Right to Health Bill

    • Free treatment: RTH gives every resident of the state the right to avail of free Out Patient Department (OPD) services and In-Patient Department (IPD) services at all public health facilities and select private facilities.
    • Wider scope of healthcare: Free healthcare services will include consultation, drugs, diagnostics, emergency transport, procedures, and emergency care. However, there are conditions specified in the rules that will be formulated.
    • Free emergency treatment: Residents are entitled to emergency treatment and care without prepayment of fees or charges.
    • No delay in treatment: Hospitals cannot delay treatment on grounds of police clearance in medico-legal cases.
    • State reimbursement of charges: After emergency care and stabilization, if patients do not pay requisite charges, healthcare providers can receive proper reimbursement from the state government.

    Significance of the Bill

    Frees from Unnecessary obligations:

    • The Bill empowers patients to choose the source of obtaining medicines or tests at all healthcare establishments, which means that hospitals cannot insist on in-house medicines or tests.

    Eliminates discriminatory healthcare structures:

    • Article 15’s right to equality upholds non-discrimination based on religion, race, caste, gender, place of birth, and other factors. However, healthcare has become a privilege for a select few due to decades of inadequate investment in public health.
    • To end discriminatory structures that will otherwise continue to perpetuate inequality in all spheres of life, including education, opportunity, wealth, and social mobility, the constitutional right to health is essential.

    Enhance the health ecosystem as a whole:

    • By passing a law that makes healthcare a right for everyone, the government would make it easier for people to demand better care and hold the government and healthcare workers accountable if they don’t get it.

    Unique regulation and different instruments to fortify medical services:

    • Special legislation, capable institutions, increased budgets, medical training and research, wellness and prevention, and service outreach will all be made possible by the Constitution’s right to health; thereby enhancing the health ecosystem as a whole.
    • For instance, before the constitutional amendment that made it a fundamental right in and of itself, the right to education had also been held to be implicit to the right to life. 15 years ago, the primary school enrollment rate was thought to be impossible; today, it is over 95%.

    Reduce expenses incurred out of pocket:

    • The Economic Survey for 2022–23 reveals that patients continue to directly pay for almost half of all healthcare costs in India. The Right to Health aims to increase public spending while decreasing individual healthcare costs.

    Challenges with the Right to Health ‘Pill’

    • Insufficient infrastructure: India’s healthcare system lacks the fundamental infrastructure necessary to meet the needs of a large population. India, for instance, has only 8.5 beds for every 10,000 people. Also, the doctor-to-patient and nurse-to-patient ratios are significantly lower than WHO standards, which are 1/1000 for doctors and 3/1000 for nurses, respectively (1 per 1456 patients).
    • The existing burden of schemes: Doctors are protesting against the RTH because they question the need for it when there are already schemes like Chiranjeevi that cover most of the population.
    • Specialization concerns: They are also objecting to certain clauses, such as defining “emergency” and being compelled to treat patients outside their specialty as part of an emergency.
    • Saving money on health care: India has the lowest public health spending as a percentage of GDP (1.6 percent). Among the BRICS nations, India has the lowest public health spending. Brazil has 3.96 percent, Russia has 3.16 percent, South Africa has 4.46 percent, and China has 3.02 percent.
    • No detailing of the process: To the charge that there is no detailing of the process, health rights activists have pointed out that it would be a function of the Rules, not the law itself.
    • Concerns pertaining to compensation: Healthcare providers have a problem with reimbursement delays. Additionally, there are complaints that the predetermined package rates for various medical procedures and treatments are not sufficiently profitable or do not cover the actual cost.
    • A high rate of disease: Both communicable and non-communicable diseases like malaria, diabetes, and tuberculosis are prevalent in India. Healthcare infrastructure and resources require significant investment to combat these diseases.
    health

    Way Forward

    • A fundamental shift in approach is required: We must fundamentally alter our healthcare approach. We must view it as a high-yield investment that can significantly reduce future out-of-pocket costs and also increase output rather than spending.
    • Coordination among states and the centre: Without hindering cooperative federalism, which is an essential component of the Indian Constitution, there must be coordination between the center and the states on a crucial subject like health.
    • More authority and assistance for states: The COVID-19 response by the Center and states reveals that health must remain on the State List, despite the importance of seamless coordination between the centers and states. Therefore, it is necessary to devolve authority and resources to states to improve their respective public health systems.
    • Boost public spending: By 2025, India must increase its investment in healthcare resources and infrastructure to at least 2.5% of GDP.
    • Improve transparency and accountability: Additionally, greater efforts could be made to improve transparency and accountability in the healthcare system, with a focus on educating patients about their rights.

    Conclusion:

    • Given the contentious nature of the Bill, all stakeholders need to come to the table and engage in constructive dialogue to resolve the issues at hand. It should involve liaisons between the government, doctors, patient advocacy groups, and other relevant stakeholders to discuss the concerns raised by all parties and identify potential solutions.
    • This could be followed by a revision of the Bill, incorporating feedback and suggestions from all stakeholders, and a renewed effort to build consensus and support for the legislation.
    • “The enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being without distinction of race, religion, political belief, economic condition, or social status,” as stated in the WHO constitution.

  • Key highlights of the Foreign Trade Policy, 2023

    foreign trade policy

    Union Minister of Commerce and Industry has launched the Foreign Trade Policy 2023.

    Foreign Trade Policy, 2023

    • The policy is dynamic and open-ended to accommodate the emerging needs of the time.
    • It aims to promote India’s overall exports, which has already crossed US$ 750 Billion.
    • The key approach to the policy is based on these 4 pillars:
    1. Incentive to Remission,
    2. Export promotion through collaboration – Exporters, States, Districts, Indian Missions,
    3. Ease of doing business, reduction in transaction cost and e-initiatives and
    4. Emerging Areas – E-Commerce Developing Districts as Export Hubs and streamlining SCOMET (Special Chemicals, Organisms, Materials, Equipment, and Technologies) Policy

    Overview of the FTP, 2023

    • FTP to provide the policy continuity and a responsive framework
    • Approach of FTP: From Incentive to Remission
    • Introduces scheme for remission of duties, taxes and govt levies on export goods
    • Digitisation of applications pertaining to FTP
    • Automatic system-based approval of FTP applications
    • Pilot introduced for cutting processing of applications related to advance authorisation to 1 day
    • Norms for recognition as Star Trading Houses eased
    • Promotes trade in Indian Rupee
    • Introduces provisions for merchanting trade
    • Dairy sector to be exempted from maintaining average export obligation * Battery electric vehicles; vertical farming equipment & green hydrogen eligible for reduced obligation under Export Promotion Capital Goods (EPCG) scheme
    • Special advance authorization scheme extended for apparel & clothing sector
    • Extends all FTP benefits to e-commerce exports
    • Value limit for exports through courier service increased from Rs 5 lakh to Rs 10 lakh per consignment
    • Focus on engaging with states & districts through Districts as Export Hubs initiative
    • Aims at streamlining export of dual use items under SCOMET policy
    • Introduces amnesty scheme for one-time settlement of default in export obligation by advance authorisation and EPCG authorisation holders
    • FTP to be dynamic and responsive to the emerging trade scenario
    • Restructuring of Department of Commerce on the anvil to make it future-ready

     

    Key highlights

    (1) Process Re-Engineering and Automation

    • The policy emphasizes export promotion and development, moving away from an incentive regime to a regime which is facilitating, based on technology interface and principles of collaboration.
    • Reduction in fee structures and IT-based schemes will make it easier for MSMEs and others to access export benefits.
    • Duty exemption schemes for export production will now be implemented through Regional Offices in a rule-based IT system environment, eliminating the need for manual interface.

    (2) Towns of Export Excellence

    • Four new towns have been designated as Towns of Export Excellence (TEE) in addition to the existing 39 towns.
    • The TEEs will have priority access to export promotion funds under the Market Access Initiative (MAI) Scheme.
    • It will be able to avail Common Service Provider (CSP) benefits for export fulfilment under the EPCG Scheme.

    (3) Recognition of Exporters

    • Exporter firms recognized with ‘status’ based on export performance will now be partners in capacity-building initiatives on a best-endeavour basis.
    • 2-star and above status holders would be encouraged to provide trade-related training based on a model curriculum to interested individuals.

    (4) Promoting Export from the Districts

    • The FTP aims at building partnerships with State governments and taking forward the Districts as Export Hubs (DEH) initiative.
    • This would promote exports at the district level and accelerate the development of grassroots trade ecosystem.

    (5) Streamlining SCOMET Policy

    • India is placing more emphasis on the “export control” regime.
    • A robust export control system in India would provide access of dual-use High end goods and technologies to Indian exporters while facilitating exports of controlled items/technologies under SCOMET from India.

     

    (6) Facilitating E-Commerce Exports

    • Various estimates suggest e-commerce export potential in the range of $200 to $300 billion by 2030.
    • FTP 2023 outlines the intent and roadmap for establishing e-commerce hubs and related elements such as payment reconciliation, book-keeping, returns policy, and export entitlements.
    • As a starting point, the consignment wise cap on E-Commerce exports through courier has been raised from ₹5Lakh to ₹10 Lakh in the FTP 2023.

    (7) Facilitation under Export Promotion of Capital Goods (EPCG) Scheme

    The government has made several changes to the Foreign Trade Policy, including:

    • Adding PM MITRA scheme for textile and apparel parks to EPCG’s Common Service Provider Scheme
    • Exempting dairy sector from maintaining Average Export Obligation
    • Adding green technologies such as BEVs, vertical farming equipment, and rainwater harvesting to EPCG’s reduced Export Obligation requirement.

    (8) Facilitation under Advance authorization Scheme

    • DTA (Domestic Tariff Area) units can access the Advance Authorization Scheme for duty-free import of raw materials for manufacturing export items, and it can be used for domestic and export production.
    • The Special Advance Authorization Scheme has been extended to the Apparel and Clothing sector to facilitate prompt execution of export orders.
    • The Self-Ratification Scheme for fixation of Input-Output Norms has been extended to 2-star and above status holders.

    (9) Merchanting trade

    • The FTP 2023 has introduced provisions for merchanting trade, which allows the shipment of goods from one foreign country to another foreign country without touching Indian ports, involving an Indian intermediary.
    • This will be subject to compliance with RBI guidelines, and it won’t be applicable for goods/items classified in the CITES and SCOMET list.
    • This is expected to allow Indian entrepreneurs to convert certain places into major merchanting hubs.

    (10) Amnesty Scheme

    • The government is introducing a special one-time Amnesty Scheme under the FTP 2023 to address default on Export Obligations and provide relief to exporters who have been unable to meet their obligations under EPCG and Advance Authorizations.
    • All pending cases of default in meeting Export Obligation (EO) of authorizations can be regularized on payment of all customs duties that were exempted in proportion to unfulfilled Export Obligation.
    • The interest payable is capped at 100% of these exempted duties under this scheme, and no interest is payable on the portion of Additional Customs Duty and Special Additional Customs Duty.

     

  • UK to join Asia-Pacific Trade Treaty

    trade

    UK has agreed to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a trade pact based around the Pacific Rim, as it seeks to build ties around the world after leaving the European Union.

    Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

    • CPTPP is a free trade agreement (FTA) that was agreed in 2018 between 11 countries – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
    • Britain will become the 12th member, and the first to join since the partnership since its inception.
    • The agreement was originally proposed as the Trans-Pacific Partnership (TPP) in 2005, with the goal of creating a free trade area that would cover 12 countries, including the US.
    • However, the US withdrew from the agreement in 2017, prompting the remaining 11 countries to renegotiate the deal and create the CPTPP.

    Economic prospects

    • CPTPP countries approximately has a combined GDP of 11 trillion pounds ($13.6 trillion) once Britain joins, or 15% of global GDP with UK membership.
    • It does not have a single market for goods or services, and so regulatory harmonisation is not required, unlike the European Union, whose trading orbit Britain left at the end of 2020.

    Key trade objectives of CPTPP

    • The CPTPP is designed to reduce tariffs and promote economic integration among its members.
    • It aims to eliminate tariffs on more than 95% of goods traded between member countries, and to provide greater market access for services and investment.
    • The agreement also includes provisions on intellectual property, labor, and environmental standards.

    How much does Britain trade with CPTPP?

    • British exports to CPTPP countries were worth 60.5 billion pounds in the twelve months to end-Sept. 2022.
    • Membership of the grouping will add another 1.8 billion pounds each year in the long run, and possibly more if other countries join.

    Key benefits to be reaped by UK

    • Exporters could benefit from CPTPP membership even when trading with countries where there is a bilateral FTA.
    • To benefit from preferential tariffs, exporters must demonstrate a product as a sufficient proportion of “locally” sourced parts.
    • Rules of origin under rolled-over post-Brexit free trade agreements with Japan, Mexico and Canada, for instance, allow exporters to count EU inputs as “local”.
    • However, under CPTPP, inputs from CPTPP members can usually be considered local, giving exporters another option if it is beneficial.

    Geopolitical considerations: China Factor

    • While the long-term benefit for Britain’s economy is set to be modest, Britain has other reasons for joining the bloc.
    • UK will get a veto on whether China joins the treaty. Beijing had applied to become a member of the bloc in September 2021.

     

  • In news: Formation story of Rajasthan

    rajasthan

    Rajasthan Day is celebrated on March 30, marking the day the state was created by unifying 22 princely states and chiefships. Rajasthan’s story of foundation is intriguing.

    Formation of Rajasthan

    • At the time of Independence, Rajasthan was almost wholly contained in the Rajputana Agency, a political office of the British Indian Empire.
    • The Rajputana Agency consisted of 22 princely states and estates.
    • Less than 22 months after Independence, all 22 had assimilated to form what would become India’s largest state.
    • However, modifications were made to the boundaries after the State Reorganisation Act (1956), giving Rajasthan its present shape.

    Challenges of Princely States

    (1) Rajputana Agency

    • The Rajputana Agency spanned roughly 330,330 sq. km, with an agent under the Governor-General in charge, residing at Mount Abu.
    • All the princely states and estates in the agency (22 in total) were ruled by Hindu rulers with the exception of Tonk (which had a Muslim ruler).

    (2) The Matsya Union

    • The States Ministry believed that four princely states – Alwar, Bharatpur, Dholpur, and Karauli – at the eastern edge of the erstwhile Rajputana Agency had “natural, racial and economic affinities” with each other.
    • Thus, the Matsya Union was inaugurated on March 18, 1948.

    (3) Rajasthan Union in South-East Rajputana

    • Ten princely states, with Udaipur (also known as Mewar) being the largest, wanted to form a union.
    • An idea to merge these into Madhya Bharat was also floated but did not go through.
    • Another idea to merge these states into the much larger Udaipur was proposed by the Maharana of Udaipur, Bhupal Singh Bahadur.
    • However, this was not agreeable to the other princely states. Hence, on March 25, 1948, the nine other states came together to form the Rajasthan Union.
    • Within three days after its formation, Udaipur decided to join this union.

    (4) Greater Rajasthan

    • The four largest princely states – Jaipur, Jodhpur, Bikaner, and Jaisalmer – still remained independent.
    • The alternative, backed by Patel, was to merge all four states into the newly formed Rajasthan Union.
    • Greater Rajasthan was officially inaugurated by Patel on March 30, 1949 – the date still celebrated as Rajasthan Day.

    Modifications by the State Reorganisation Commission

    • The State Reorganisation Commission (SRC) was formed in 1953 to recommend new state boundaries to the government, in response to demands for states based on linguistic lines.
    • The SRC’s recommendations, with some modifications, were implemented in the State Reorganisation Act of November 1, 1956.
    • For Rajasthan, this brought some minor changes, including the integration of Ajmer as a district within Rajasthan, given its linguistic, cultural, and geographical links to the state.
    • Abu Road Taluk, a taluk of the Sirohi district of southern Rajasthan, was also integrated into Rajasthan after being sliced and included in the Bombay State.
    • The enclave of Sunel in Rajasthan’s southeastern edge was received from Madhya Pradesh in exchange for the enclave of Sironj, due to administrative reasons.

    Conclusion

    • Overall, the state of Rajasthan was created through a complex process of merger and integration of various princely states and chiefships.
    • Today, Rajasthan is the largest state in India in terms of land area, covering 342,239 square kilometers, and is known for its rich cultural heritage, majestic forts and palaces, vibrant festivals, and diverse cuisine that attract visitors from all over the world.

     

  • Competition (Amendment) Bill passed in Lok Sabha

    The Lok Sabha passed the Competition (Amendment) Bill, 2023, which could pose new challenges for global technology companies.

    About Competition Act, 2022

    • The Competition Act, 2002 was passed by the Parliament in the year 2002, to which the President accorded assent in January, 2003.
    • It was subsequently amended by the Competition (Amendment) Act, 2007.
    • In accordance with the provisions of the Amendment Act, the Competition Commission of India (CCI) and the Competition Appellate Tribunal (COMPAT) have been established.
    • The CCI is now fully functional with a Chairperson and six members.

    Changes brought by the Amendment

    (1) Penal powers to CCI

    • It grants the CCI the authority to penalize entities found engaging in anti-competitive behavior based on their global turnover, rather than just their annual domestic turnover, which was the case previously.

    (2) Turnover Definition

    • The definition of “turnover” has been a widely debated subject in the competition law landscape.
    • The Supreme Court had previously fixed the criteria for determining turnover in competition law contraventions, holding that it should be the “relevant turnover,” i.e., turnover derived from the sales of goods or services.

    (3) Mergers and acquisition

    • The CCI will have greater authority in mergers and acquisitions worth more than Rs 2,000 crore.
    • Additionally, the time limit for approval of mergers and acquisitions has been reduced from 210 days to 150 days.

    Impact on Tech Companies

    • While the provision on global turnover will not be exclusively applicable to tech companies, they are likely to be the most affected by it, given the nature of their business that operates across geographies.
    • Typically, the revenue earned from these companies’ India operations is much smaller than their income in other regions, such as the US and Europe.

  • Climate Justice and Accountability: Can Countries be Sued for Failing to Avert Climate Emergencies

    Central Idea

    • The UN General Assembly has asked the International Court of Justice to weigh in on whether countries can be sued under international law for failing to avert climate emergencies, reflecting the frustration of the international community with global climate agencies and the need for more effective climate action.

    Background

    • Resolution by Vanuatu: The resolution, sponsored by the small Pacific island nation of Vanuatu, was adopted unanimously, indicating global consensus on the climate crisis.
    • Delay climate action: Frustration with the procedures of global climate agencies, particularly the United Nations Framework Convention on Climate Change (UNFCCC), stems from their deliberations often ending in compromises that delay climate action.
    • ICJ’s decision carries moral weight: The Hague-based court’s opinion will not be binding but carries moral weight, potentially setting the stage for countries to incorporate climate justice in their legal frameworks.

    Role of ICJ and its jurisdiction

    1. Contentious: Contentious jurisdiction refers to the ICJ’s authority to resolve legal disputes between consenting states. Decisions made under contentious jurisdiction are binding
    2. Advisory:
    • Advisory jurisdiction allows the UN General Assembly (UNGA), the Security Council (SC), and other specialized bodies of the organization to request the ICJ’s opinion on a legal question.
    • The ICJ’s advisory opinions are non-binding. However, they hold significant normative weight and serve to clarify international law on relevant issues.
    • The ICJ’s advisory opinion on climate change can be useful in climate-related litigation at the national level.

    Previous attempts to address climate change in non-environmental forums

    • Global warming on agenda: Global warming has been part of the UN Security Council’s agenda since 2007, with the UNSC attempting to frame the issue from a security standpoint, rather than solely from developmental or environmental perspectives.
    • Securitization of climate change: Developing countries, including India and China, have rightly resisted the securitization of climate change, arguing that it could lead to the imposition of sanctions and other coercive measures.
    • Rights and justice: The use of rights and justice vocabulary has given the Vanuatu-sponsored proposal more traction and global support.

    Rights and justice vocabulary and recent developments

    • Climate justice: The Vanuatu-sponsored proposal emphasizes the importance of climate justice in addressing the issue.
    • Right to reparations: Countries have started asserting their right to reparations after climate emergencies, such as Pakistan after the devastating floods in 2020 and the recent discussions on loss and damage during the COP26 conference in Glasgow.
    • Rising climate litigation cases worldwide: The rise of climate litigation cases worldwide, where citizens and organizations sue governments and corporations for their failure to act on climate change, highlights the growing demand for climate justice.

    Challenges in holding countries accountable

    • Holding individual accountable: Holding individual countries or governments accountable for their climate inaction has been a major stumbling block at several climate meets.
    • Compensation issue: The Paris Agreement contains a clause specifying that the pact does not involve or provide a basis for any liability or compensation, inserted under pressure from US diplomats.
    • Adamant stance: American support for the UNGA resolution was reportedly reluctant, indicating that powerful countries might resist being held accountable for their climate inaction.

    Conclusion

    • The UNGA’s intervention should not detract from the task of reforming the UNFCCC. Institutions of the umbrella climate agency need to be more equity-sensitive and justice-oriented. Engaging with the ICJ could push it in that direction, but wealthier members of the UNFCCC must show more initiative. The growing demand for climate justice and the increasing number of climate litigation cases highlight the importance of addressing the issue in a just and equitable manner.
  • 31st Mar 23 | Nikaalo Prelims- Mini Test 3 (Nanotechnology and Nuclear Technology)

    31st Mar 23 | Nikaalo Prelims- Mini Test 3 (Nanotechnology and Nuclear Technology)

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