Russia and China aim to exploit divisions within the West to transform the global order and build a post-Western order. However, the Indian strategic community should not expect the fault lines within the West to be fatal, as history has shown that such dreams have not come to fruition.
Post-Western Order
Building a post-Western order: Russia and China have talked of upending the world order before, with the history of international communism in the 20th century being about building a post-Western order.
America’s internal fissures and divisions between the US and Europe: While Moscow and Beijing are convinced that they can put the West on the defensive by pooling their strengths, the success of this strategy rests on the Moscow-Beijing axis successfully leveraging America’s internal fissures and divisions between the US and Europe.
Dividing America from Europe
The Moscow and Beijing are hoping to divide America from Europe: Russia’s latest version of its foreign policy doctrine singles out the US as the main instigator, organizer, and executor of the aggressive anti-Russian policy of the collective West.
China’s diplomatic Europe strategy: China’s love for Europe’s strategic autonomy is equally passionate. However, it is unlikely that there will be a decisive movement on either issue, but both sides see the diplomatic dance as a valuable exercise.
Sino-European Engagement
Europe’s pressure on Russia: Europe wants Xi to put pressure on Putin to end the war in Ukraine, and Beijing would like Europe to distance itself from the US on its China policy.
Europe not ready to busy China’s peace initiative: While Europe is not ready to buy China’s peace initiative on Ukraine, it has convinced itself that Xi is the only leader who can nudge Putin towards peace.
India’s Perspective
The realists in India are aware of the many differences between the US and Europe, but they are also aware that Western strategic unity has endured since World War II.
The Russian and Chinese overreach has cemented broad Western unity rather than separating Europe from the US.
Conclusion
While Russia and China aim to exploit divisions within the West to transform the global order, it is unlikely that they will succeed in building a post-Western order. The fault lines within the West are real, but they are by no means fatal.
Lessons learned from the liberalization of upstream petroleum sector can guide India’s transition to a self-reliant clean energy system.
Background
In 1980, then-Prime Minister Indira Gandhi took a significant step in liberalizing the upstream petroleum sector in India. This move aimed to reduce the country’s reliance on external sources for petroleum and protect it from supply shocks. However, the liberalization did not bridge the gap between domestic demand and indigenous supply.
In 2020, Prime Minister Narendra Modi introduced the production-linked incentive (PLI) scheme to promote investment in minerals, components, and equipment required for the generation and consumption of clean energy. This decision was driven by the strategic imperative to transition to a self-reliant clean energy system and reduce dependence on external sources of energy.
Bridging the gap between demand and supply in the clean energy sector
Demand and supply gap: The liberalization of upstream petroleum did not bridge the gap between the domestic demand for petroleum and indigenous supply.
Capital is not enough: The clean energy sector must not presume that the availability of technical talent and capital will be enough to create a world-class hub for the manufacture of batteries, solar cells, wafers, and modules.
Efficient Implementation of Technology in Clean Energy Sector
India’s oil and gas producing average: The recovery rate of oil and gas from India’s producing fields has averaged between 25-30%, while fields of comparable geology across the world have a recovery rate between 40-60%.
China’s dominance in clean energy value chain: China’s dominance of the clean energy value chain is because its process engineers have perfected the implementation of the several technological steps required to convert raw material into end product.
Reduce entry barriers and improve business condition
India cannot compete on the size of the incentive package, and the endeavor should instead be to lower entry barriers, ease business conditions and remove the perception that India offers a high-cost operating environment.
India’s Dependency on External Market and Two-Track Policy with China
India remains dependent on the external market for supplies of petroleum, but the country should desist from building a high-cost, domestic, clean energy hub that is forever dependent on subsidies.
India should continue with its two-track policy and strengthen its trading relationship with China.
Conclusion
India can learn from the lessons of the last 40 years to transition to a self-reliant clean energy system. The country needs to focus on creating an enabling ecosystem, efficiently utilizing technology, and easing business conditions to attract international investment. India should focus on trading relationships and not build a high-cost, domestic clean energy hub dependent on subsidies.
Mains Question
Q. India’s clean energy sector has enormous potential for growth, however there is a gap between domestic demand and indigenous supply. What specific measures can India take to bridge this gap and emerge as global leader in renewable energy?
Aspirants, we hope your UPSC 2024 preparation is in full swing. However, for aspirants who are facing a serious time crunch like college aspirants and working professionals, or even home-makers consistency in preparation takes a toll.
But you don’t have to compromise with your dream nor with the effectiveness of your preparation. We have this special session for you.
Sukanya Ma’am, GS Mains Program Head of CivilsDaily and UPSC Ranker, Prabhat sir will take 2 Days’ Online LIVE sessions on Mains answer writing from 0 prior knowledge and a 5-hour prep strategy for College aspirants and working professionals.
Day 1: How to Start Answer Writing for UPSC Mains even if you’ve almost 0 content? 2 Foolproof Frameworks you must master
15th April (Saturday) 2023, 7:30 P.M
Senior IAS mentor, faculty & Mains GS Program Head, Sukanya Ma’am will take a LIVE workshop where she will be demonstrating LIVE how to begin GS Mains Answer Writing for UPSC Mains, Where you find how a topper approach and solve a Mains paper.
How to start picking topics to start Answer Writing for GS Mains?
How to identify the best methods of framing answers for different ‘DIRECTIVES’ in the Mains GS questions?
Which types of questions required your opinion and what types of Questions are Current-Affairs Charged?
Which types of questions required in-depth knowledge?
Day 2 with IRPS, Prabhat Sir: Preparing for UPSC 2024 with a 5-hour prep strategy for College aspirants and working professionals
16th April (Sunday) 2023, 7:30 P.M
UPSC Topper & Super Mentor at Civilsdaily, Prabhat Sir will take a LIVE workshop where he will be discussing the ‘5-hour UPSC 2024’ strategy.
Aspirants who are either working professionals, or college-going students as of now but aiming for UPSC 2024 must not let time (or lack of) limit their preparation.
Important takeaways:
How to manage time for UPSC Preparation if you’re a working Professional? How to utilize the time, left in your hand, in the best possible way?
UPSC preparation timetable and schedule with just 5 hrs of daily study time?
How to identify those people or things that deplete your energy and waste your time?
How to break down the syllabus into small chunks, and develop an effective & workable study strategy for UPSC preparation.
How to complete the syllabus, in a short time?
How to prioritize conventional topics/subjects?
How to divide your time and keep a balance between Prelims and mains preparation?
Selective reading or studying: How to deal with the ocean of current affairs and a mountain of GS?
How to tackle Optional subject preparation, Making Notes, and improving answer writing habits in a short time
Many more untold tips and techniques that only a topper can elaborate
Concluded Successfully | How to Start Answer Writing even if you’ve almost 0 content? 2 Foolproof Frameworks| The Most Important LIVE Masterclass + QnA session by Sukanya Ma’am
Is UPSCyour 1st Choice? If ‘YES’, don’t skip this First Step towards Level-up Answer writing…
Basically, 5 skills are required to clear the UPSC exam, and the most important one is Answer Writing for GS Mains. That’s why Serious aspirants don’t compromise with any loopholes in this Preparation. Because it’s your answer writing that will decide whether you’re a suitable character for a DM/SP’s chair.
But, this skill won’t develop in a single day.
And Good News is that there is no need to become a writer or have any prior skills to write a mark-leaving answer in UPSC mains. Every year, we notice, thousands of aspirants start answer writing with almost 0 content by following 2 Foolproof Frameworks and scoring a single-digit rank for themselves.
With her 10 yr of Mains experience & proven techniques developed over time with ex-mains-students, Rankers who have cleared this exam with flying colors, and last year’s toppers, Mains Program Head, Sukanya Ma’am is taking up a webinar masterclass to help you make a comparative analysis of Proven Methods for UPSC mains answers writing from almost 0 prior knowledge. She will also give valuable insights about 2 Foolproof Frameworks you must master.
What you should expect in the 1-1 LIVE Session by Sukanya Rana Ma’am?
What are the 2 Foolproof Frameworks you must master? Universal Practical Approaches to Acquire Basic Answer Writing Skills for GS Mains.
Why is UPSC Answer Writing is far unique?
Best Methods to Start Mains Answer Writing for GS-1, GS-2, GS-3 & GS-4 for Raw Beginners and unsuccessful veterans.
How to understand the demand of a question fully and correctly before contemplating an answer for it.
How toppers develop a basic mental framework of the answer before committing anything on the paper
It is very difficult to write anything for the examiner. So, what is the best way to introduce as well as conclude your answer?
How to focus on Questions’ directives and comply with a minimum but effective requirement.
How to divide the main body of the answer into paragraphs or bullets as required.
How long should your introduction and conclusion be?
Where to and how to apply opinion-based answers!
The correct approach to writing a fact-based answerin GS-4 (Ethics & Integrity)
How to maintain ‘accuracy’, ‘brevity’, and ‘Clarity’ in each and every answer
How to do a comparative analysis of toppers’ approach. How do they create an on-demand answer and how do they follow the answer writing basic rules- ‘Brainstorming’, ‘Outlining’, ‘Idea/Argument placement, and ‘Structuring’
What Do and don’t of UPSC to keep in mind while answering writing? The most common mistakes will also be discussed.
Finland has become the 31st member of the North Atlantic Treaty Organization (NATO) and its decision to join the alliance should be viewed through the lens of conventional deterrence. The accession of Finland into NATO is a rational choice that may provide additional security guarantees and help to defend against possible aggression from Russia.
Historical context of Finland-Russia relations
The relationship between Finland and Russia has been a combination of struggle and compromise, dating back nearly 200 years.
In 1809, the Russian Tsar Alexander I acquired Finland and made it an autonomous Grand Duchy of the Russian empire.
Between the two world wars, the Finns felt less threatened by Germany than by Russia.
31st NATO member: Finland has become the 31st member of NATO, triggering possible countermeasures from Russia.
Independent choice: The decision to join NATO is seen as an independent choice, triggered largely by the Russia-Ukraine conflict.
Security guarantee: Finland’s accession to NATO is a rational choice to receive additional security guarantees from the alliance. Article 5 of NATO’s founding treaty binds the members together, committing them to protect each other and setting a spirit of solidarity within the alliance.
Preparations for defense against possible aggression
Defence against possible aggression: Even prior to its membership in NATO, Finland had been preparing to defend itself against possible aggression.
The Finnish system of conscription has generated sufficient resources for the army, navy, and air force to act effectively in a war situation.
Implications for India and the Arctic region
Real punch to the Western alliance in the Nordic region: Finland has maintained a small but capable armed force that is well-trained and resilient, and its inclusion in NATO adds real punch to the Western alliance in the Nordic region.
High north is commercial attraction: As the Arctic ice cap melts amidst global warming, the high north has become attractive commercially and contested geopolitically.
India is an observer of the Arctic Council: India is an observer of the Arctic Council that seeks to promote wide-ranging cooperation in the polar north.
China raising profile in the Arctic: The militarisation of the high north appears inevitable as Finland and Sweden turn from neutrals to Western allies and China raises its profile in the Arctic in partnership with Russia.
Global governance: This might make global governance of the Arctic region increasingly problematic
Way ahead: The need for cautious behavior by NATO and Russia
Both NATO and Russia should exercise cautious behavior vis-à-vis each other to avoid further escalation of tensions.
Finland’s newly elected centre-right government should engage in bilateral dialogue with Russia, trying to understand each other’s security concerns.
There should be at least some NATO members who would be willing to rely more on diplomatic tools and lower the temperatures.
Conclusion
The decision of Finland to join NATO is seen as a rational choice, triggered largely by the Russia-Ukraine conflict. The accession of Finland into NATO should be viewed through the lens of conventional deterrence and could potentially persuade an adversary not to initiate a war. NATO and Russia should search for ways to lower the tensions and avoid implementing measures and imposing countermeasures.
Mains Question
Q. Finland has become the 31st member of NATO. In this light discuss the rationale behind this decision its implications.
The India-U.S. relationship will be crucial in the next six months with engagements set to happen between the two countries on various forums like the G20, Quad, and I2U2.
Divergence and Convergence
The appointment of Eric Garcetti as the U.S. Ambassador to India signals the potential for greater partnership, but there are also differences to be overcome.
The U.S. may want India to change its stance on the Ukraine crisis.
India may want a stronger position against China.
However, the two countries share strong areas of convergence such as
The India-U.S. Initiative on Critical and Emerging Technology and
The Indo-Pacific partnership aimed at promoting security, economic growth, and connectivity in the region.
In July 2022, India, Israel, the United States (US), and the United Arab Emirates (UAE) in a hybrid summit announced the establishment of a new minilateral grouping called the I2U2.
The four countries envision their alliance as an ad-hoc, informal, issue-specific and geoeconomic initiative.
Realignment of U.S. Supply Chains
Disrupted supply chains: In recent years, there has been growing interest in diversifying supply chains away from China due to geopolitical tensions, trade disputes, and concerns about over-reliance on a single country.
India is emerging as attractive destination: India’s growing consumer market makes it an attractive destination for U.S. businesses looking to expand their customer base.
Ups and Downs in India-U.S. relationship
The India-U.S. relationship has had its ups and downs over time, with key moments such as the nuclear deal, liberalisation of markets, and the outsourcing of Indian techies for U.S. companies.
The U.S. has also played an important role in making India an IT superpower.
The two countries are also partners in combating climate change and aligned on the importance of space technology.
Trust Deficit
In the past, there has been a trust deficit between India and the U.S., with Indians feeling that the U.S. has not always supported India and has instead supported Pakistan.
The U.S. has flagged issues related to terrorism, human rights, and democracy in India. However, the two countries can become stronger together by building on their strategic partnership.
Conclusion
The next six months will be critical for India-U.S. ties, with both countries looking to enhance collaboration and partnership. While there are differences in opinions to be addressed, the two countries also share strong areas of convergence that can be leveraged to strengthen their strategic partnership.
Mains Question
Q. What is I2U2 initiative? Evaluate how does it fit into the broader context of the India- US relationship?
The addition of the fake news provision in the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (Intermediary Guidelines) must be seen in the context of protecting fundamental rights while combatting fake news. The recent addition by the central government clearly militates against settled law and the Constitution.
Fake news refers to intentionally fabricated or misleading information presented as if it were real news. It can be spread through traditional media sources like newspapers or television, but it is more commonly associated with social media platforms and other online sources.
Fake news can range from completely made-up stories to misleading headlines and selectively edited or out-of-context information designed to deceive readers.
It is often used for political purposes, to manipulate public opinion or to spread misinformation about individuals, organizations or events.
Existing Provisions to Combat Fake News
Intermediary Guidelines of 2021: The most preferred democratic process to combat the threats and impact of fake news on a polity would be through Parliament-enacted laws. India opted for the speedier alternative of an addition to the Intermediary Guidelines of 2021 (as amended), through Rule 3(1)(v).
Can not disseminate misleading content: Under this rule, intermediaries including social media platforms have to ensure that users do not disseminate content that deceives or misleads on the origin or knowingly and intentionally communicates any information which is patently false or misleading in nature but may reasonably be perceived as a fact.
Remedies Available
Complaints and grievance: Any complaints from users, government, or court have to be actioned by the grievance officer of an intermediary, including social media platforms, within 15 days. This timeframe for actioning a complaint for complaints of false or misleading news is reduced to 72 hours.
Resolution: The next step for resolution is provided through the Grievance Appellate Committees, which the government recently announced appointments for.
Other actions: These remedies are independent of and in addition to the remedies available in law for a government agency to seek takedowns or blocking, as per due process or for courts to decide thereon.
Critique of the Addition
Provisions already exists: The recent addition of a separate category for restraint on dissemination by users of content in respect of any business of the Central Government is unwarranted as provisions already exist. The restraint is on users and not intermediaries, as misconceived by many. The onus on intermediaries is only of reasonable effort.
No transparency: With merely a central government-authorised fact check unit saying so, content could be classified as fake, false or misleading and a takedown and action necessitated, without even a semblance of due process.
No legitimacy: In the present instance, there is an absolute absence of legitimate aim for this additional restriction on users and an abject lack of procedures that would assure due process.
Reaffirming the Need for Legitimacy
The recent addition clearly militates against settled law and the Constitution: The Supreme Court in Puttaswamy judgment reaffirmed the need for legitimacy, supported by parliament enacted laws, which are proportionate to meet the test of constitutionality.
Media One case: Supreme Court’s recent judgment in the Media One case (Madhyamam Broadcasting Limited v. Union of India, April 5, 2023) reiterates that any law or regulation inconsistent with fundamental rights is void. This judgment also reaffirms the four principles that will decide the constitutionality of a law or regulation: (i) unreasonableness or irrationality; (ii) illegality; and (iii) procedural impropriety.
Some of the dangers of fake news
Inciting communal violence: In India, fake news has been known to incite communal violence. For instance, the spread of fake news on social media was one of the factors behind the Muzaffarnagar riots of 2013.
Undermining public trust: Fake news can undermine public trust in institutions and the media. This can have serious consequences for democracy and social cohesion.
Impact on health: Fake news about health issues can have serious consequences. For example, during the COVID-19 pandemic, fake news about remedies and cures for the disease led to people consuming dangerous substances.
Misinformation during elections: Fake news can also be used to spread misinformation during elections, which can influence voters and distort the democratic process.
Economic harm: Fake news can cause economic harm by spreading false information about businesses, leading to loss of investor confidence and financial losses.
Spreading rumors: Fake news can also be used to spread rumors about individuals, which can have serious consequences, such as the recent case of fake news leading to the lynching of two men in Assam.
Conclusion
The recent addition is unsustainable and unwarranted as provisions already exist. The fight should be for the protection of fundamental rights that are essential to our very existence.
The BRICS collective, comprising Brazil, Russia, India, China and South Africa, is working on a common currency in an attempt to ditch the US dollar and push back against America’s dominance.
The move comes as Moscow and Beijing call for de-dollarisation in the face of Western sanctions.
In this context, this edition of the burning issue will elaborate on this idea of de-dollarisation.
Background of the news
The US dollar has been the official currency for international trade for years now. However, in recent times there have been talks of creating a new currency in an attempt to dump the dollar and push back against American hegemony.
This de-dollarisation has received a boost in recent times, especially after the Russia-Ukraine war began last February.
This movement received further impetus when the news broke out that the BRICS nations are in the process of creating a new medium for payments — established on a strategy that “does not defend the dollar or euro”.
About US Dollar: The Global Currency
The U.S. dollar has been the world’s dominant currency since the end of World War II.
Roughly half of the international trade, international loans, and global debt securities are denominated in USD.
The USD became the official reserve currency of the world in 1944. The decision was made by a delegation from 44 Allied countries called the Bretton Woods Agreement.
Despite the challenges faced by the US economy due to fiscal and external deficits of the 1980s, the dollar’s share of global reserves remained steady and reserves even grew as time progressed.
The dominance of the dollar is backed by strong and highly credible institutions, deep markets and the fact that it is freely convertible.
Almost 40% of the world’s debt is issued in dollars. As a result, foreign banks need a lot of dollars to conduct business. This became evident during the 2008 financial crisis.
What is de-dollarisation?
The US dollar has been called the king of currency. It became the official reserve currency of the world in 1944. The decision was made by a delegation from 44 Allied countries called the Bretton Woods Agreement.
Since then, the dollar has enjoyed a powerful status in the world. It has given the US a disproportionate amount of influence over other economies. In fact, the US has for long used the imposition of sanctions as a tool to achieve foreign policy goals.
However, not everybody likes playing by US rules and countries like Russia and China have called a halt to dollar hegemony. This process is called DE-DOLLARISATION — and it refers to reducing the dollar’s dominance in global markets. It is a process of substituting the US dollar as the currency used for trading oil and/or other commodities.
To punish Russia for its invasion of Ukraine, western governments froze $300 billion of Russia’s foreign currency reserves last year, roughly half the total, and expelled Russian banks from the Swift international payments system.
As Jason Hollands, managing director of investment platform Bestinvest, explains, “The so-called DOLLAR “WEAPONISATION” has rattled many countries and not just Russia.”
Some recent examples
Countries willing to continue to trade with RUSSIA, like India and China, have started doing so in rupees and yuan instead, triggering talk of the de-dollarisation of the international trading order.
BRAZIL and CHINA are now trading with each other in yuan, helping to establish the Chinese renminbi as an international currency and dollar challenger.
INDIA too has been trying to move away from the dollar. Recently, 18 countries, including UK, Germany, Russia and even the United Arab Emirates, have been given permission to trade in Indian rupees. In February, noted economist Nouriel Roubini had said that the Indian rupee over time could become one of the global reserve currencies in the world.
Taking this forward, the BRICS collective —is also mulling over creating a new currency to facilitate trade. It is reported that the new financial agreement could be seen as soon as in August when the countries meet for their annual summit in South Africa.
Proponents of de-dollarization
Reduce dependence on US: The proponents of de-dollarisation say that this process would reduce other countries’ dependence on the US dollar and the US economy.
Decouple from US Economy shocks: It could help mitigate the impact of economic and political changes in the US on their own economies.
Improve economic stability: countries can reduce their exposure to currency fluctuations and interest rate changes, which can help to improve economic stability and reduce the risk of financial crises.
Reducing share in forex: In 2022, the International Monetary Fund noted that central banks today are not holding the greenback as reserves in the same quantities as yesteryear. The dollar’s share of global foreign-exchange reserves fell below 59 per cent in the final quarter of last year.
Impact of de-dollarization
Decrease in demand for the U.S. dollar: If more countries switch to using their own currencies or other currencies (e.g. euro, yuan) in international transactions, the demand for U.S. dollars could decrease. This could potentially lead to a decrease in the value of the dollar relative to other currencies, which could make imports more expensive for the United States and reduce the purchasing power of Americans abroad.
Reduced role of the United States in the global financial system: If the U.S. dollar loses its status as the world’s reserve currency, the United States could lose some of its power and influence in global financial affairs. This could potentially weaken the U.S. economy and reduce its ability to borrow money at favorable rates.
Increased volatility in currency exchange rates: As more countries move away from the U.S. dollar, there could be increased volatility in currency exchange rates, which could make international trade more difficult and expensive.
Potential benefits for other currencies: If the U.S. dollar loses some of its dominance, other currencies (such as the euro or yuan) could potentially benefit from increased demand and become more widely used in international transactions.
Volatility in global markets: As the demand for the US Dollar is decreasing in the world, US bonds are also falling, and in order to make them float, banks like SVB have no solution but to offer higher interest rates, which burn holes in their liquidity and thus causing their collapse. Such collapse impacts the world economy,
What is India’s plan: Internationalisation of the Rupee
The process of increasing the use of local currency in cross-border transactions is known as the internationalization of the rupee. Promoting the rupee for use in import and export trade, other current account transactions and capital account transactions are all components of this strategy.
Recently, a deputy governor of the Reserve Bank of India (RBI) emphasized the benefits and dangers of the rupee’s internationalization. The RBI has also launched a mechanism in July 2022 to make rupee-based international trade easier.
About 35 nations have expressed an interest in learning more about how the rupee trade mechanism works. India would save money on foreign exchange if it were able to begin rupee trade even with some of them.
Advantages
Indian businesses can reduce currency risk by using the rupee in cross-border transactions. Security from cash instability not just lessens the cost of carrying on with work, it likewise empowers better development of business, working on the opportunities for Indian business to universally develop.
India will be less susceptible to external shocks if it reduces its reliance on foreign currency. For instance, during periods of financial fixing in US and reinforcing dollar, unreasonable unfamiliar cash liabilities of homegrown business bring about a true homegrown fixing. The impact of capital flow reversals would be significantly lessened if currency risk was reduced.
It lessens the requirement for holding unfamiliar trade saves. Reserves cost the economy, but they help control exchange rate volatility and project external stability.
The bargaining power of Indian businesses would increase as the rupee becomes more important, adding weight to the Indian economy and enhancing India’s global standing and respect.
Challenges
A diminished role for convertible currencies in external transactions may result in lower reserve accretion.
However, if the trade deficit is funded in rupees, the requirement for reserves would also decrease.
Rupee holdings held by non-residents might make it harder for domestic financial markets to absorb stimulus from outside the country, which would raise volatility.
Non-residents, for instance, might convert their Rupee holdings and leave India during a global risk-off period.
Conclusion
India is looking into signing rupee trade agreements with some countries, particularly those with deficit-ridden economies. India would benefit from payments being made in rupees when imports are greater than exports.
At the moment, the US dollar is the currency of choice for international trade. Because of this, the value of the dollar can affect trade between countries. India’s reliance on the US dollar will be lessened by transactions in rupee.
Even though the current situation prevents the rupee from becoming a reserve currency like the US dollar, it is a small first step. The prospects for bilateral trade with India will improve as more nations begin to invoice in rupees for their exports and imports.
