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Subject: International Relations

  • EAM Jaishankar attends SCO Summit

    Why in the News?

    External Affairs Minister S Jaishankar addressed the Shanghai Cooperation Organisation (SCO) summit in Kazakhstan’s capital Astana on behalf of Prime Minister Modi.

    About Shanghai Cooperation Organisation (SCO)

    Details
    Introduction
    • Established in 2001 by China and Russia, the SCO is a Eurasian political, economic, and security organization.
    • It spans about 80% of Eurasia and encompasses 40% of the world’s population, with a GDP of around 20% of global GDP as of 2021.
    Origins
    • Successor to the Shanghai Five, formed in 1996 by China, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan.
    • It evolved into the SCO in 2001 with the inclusion of Uzbekistan.
    Expansion
    • India and Pakistan joined in June 2017, followed by Iran in July 2023, and Belarus in July 2024.
    • Several other countries participate as observers and dialogue partners.
    Governance
    • Governed by the Heads of State Council (HSC), the supreme decision-making body that meets annually.
    • Includes the Regional Anti-Terrorist Structure (RATS) as a key component for security coordination.
    Key Structures
    • Heads of State Council: Supreme decision-making body.
    • Heads of Government Council: Discusses multilateral cooperation and approves budgets.
    • Council of Foreign Ministers: Regular meetings on international affairs.
    • Council of National Coordinators: Coordinates multilateral efforts.
    Secretariat
    • Headquartered in Beijing, China, the Secretariat executes organizational decisions, drafts documents, and promotes SCO activities.
    • Secretary-General serves a 3-year term.
    RATS Executive Committee
    • Based in Tashkent, Uzbekistan, RATS fosters cooperation against terrorism, separatism, and extremism.
    • The director serves a three-year term overseeing these efforts.
    Official Languages Chinese and Russian are the SCO’s official languages.
    Key Agreements
    • Treaty on Deepening Military Trust in Border Regions (1996)
    • Treaty on Reduction of Military Forces in Border Regions (1997)
    • Declaration on a “multipolar world” (1997)
    Major Activities
    • Annual summits and meetings across member states;
    • Initiatives in transportation, energy, and telecommunications;
    • Regular gatherings of security, defence, economic, and cultural officials.
    International Relations Established partnerships with various global bodies including the UN, ASEAN, CIS, CSTO, ECO, and CICA, reflecting its broad engagement in regional and international affairs.

    Strategic Significance of SCO for India

    • Open-door for bilateral: Membership facilitates India’s engagement with Central Asian nations and major regional powers like China and Russia on shared security challenges.
    • China-Russia Dynamics: SCO serves as a platform for China and Russia to assert influence and counter Western dominance in international forums.
    • Belt and Road Initiative (BRI) Dispute: India’s stance against endorsing BRI projects through SCO reflects its concerns over sovereignty, particularly regarding CPEC passing through Pakistan-occupied Kashmir.

    About Kazakhstan

    • Kazakhstan is the world’s largest landlocked country and the ninth-largest country by land area, spanning an area of 2.7 million square kilometres.
    • It borders Russia to the north and west, China to the east, Kyrgyzstan, Uzbekistan and Turkmenistan to the south, and the Caspian Sea to the southwest

     

    PYQ:

    [2022] Consider the following:

    1. Asian Infrastructure Investment Bank
    2. Missile Technology Control Regime
    3. Shanghai Cooperation Organisation

    India is a member of which of the above?

    (a) 1 and 2 only
    (b) 3 only
    (c) 2 and 3 only
    (d) 1, 2 and 3

    [2021] Critically examine the aims and objectives of SCO. What importance does it hold for India?

  • An overview of the French elections

    Why in the news? 

    On June 30, during the first phase of the French elections called after President Emmanuel Macron unexpectedly dissolved parliament, the far-right National Rally (RN) and its allies emerged as frontrunners with a 33% vote share.

    Why did French President Emmanuel Macron decide to dissolve parliament and call for snap elections?

    • Strategic Decision: Macron dissolved parliament three years early to seek a clear majority for governance. His centrist bloc suffered a major defeat in the European Parliament elections against the RN. The decision aimed to consolidate votes against the rising far-right influence.
    • Low Approval Ratings: Macron’s approval ratings plummeted to 36%. The snap election was seen as a gamble to prevent the RN from gaining more power.

    How did the far-right National Rally become so popular?

    • Rebranding and Policy Changes: Under Marine Le Pen, the RN rebranded from the National Front (FN). The party softened its stance on extreme policies, like leaving the EU.
    • Response to Societal Issues: Capitalized on fears of cultural clashes, cost-of-living crises, and dissatisfaction with Macron’s policies. Opposed immigration and advocated for ‘national priority’ policies favoring French citizens in social services.
    • Political Strategy: Increased its presence in provincial towns and among blue-collar workers. Rose from 7 seats to 89 in the French parliament in 2022, aiming for 240-300 seats now.

    How are the two rounds of elections conducted in France?

    • First Phase: Equivalent to a qualifying round where candidates need at least 12.5% of locally registered votes.Candidates who get more than half the votes win outright.
    • Second Phase: Candidates meeting the qualifying criteria move to the second round. Common practice of ‘horse-trading’ where parties form alliances to avoid splitting votes.
    • Overall Structure:577 seats in the French parliament. A party needs 289 seats for an absolute majority.

    Why have left-wing parties also formed a bloc?

    • Republican Front Strategy: Centrist and left-wing parties team up to prevent right-wing parties from gaining power.Formation of the New Popular Front is a reference to the 1936 alliance against far-right rioters.
    • Electoral Tactics: Over 200 candidates from centre and left alliances have dropped out to consolidate votes against the RN. Aimed at countering the RN’s rise and preventing fragmentation of the anti-RN vote.
    • Challenges and Unity: Presence of controversial leftist figures like Jean-Luc Mélenchon has made the unity fragile.Despite internal differences, the bloc aims to present a united front against the far-right surge.

    Conclusion: The rise of the far-right National Rally in France may lead to stricter immigration policies, affecting Indian students, workers, and diaspora. Economic relations could face uncertainties, impacting trade and bilateral cooperation. So,India’s diplomatic strategies may need adjustments to navigate the changing political landscape in France.

    Mains PYQ: 

    Q Critically examine the procedures through which the Presidents of India and France are elected. (UPSC IAS/2022)

  • What we know about North Korea’s new ballistic missile test  

    Why in the news?

    North Korea has announced that it has successfully tested a new tactical ballistic missile designed to carry a “super-large warhead”.

    About the Recent Hwasongpho-11 Da-4.5 Test

    • North Korea announced the successful test of a new tactical ballistic missile, Hwasongpho-11 Da-4.5, capable of carrying a “super-large warhead.”The test was conducted with a simulated heavy warhead to verify flight stability and accuracy.
    • The test violates UN prohibitions on North Korea testing ballistic projectiles and is part of their ongoing efforts to advance nuclear capabilities. North Korea’s military plans another launch of the same missile type in July to test the “explosion power” of the super-large warhead.

    South Korea’s Reaction

    • Dismissal as Deception: South Korea’s Joint Chiefs of Staff spokesperson, Colonel Lee Sung-jun, dismissed the test as likely “deception,” questioning the success of the inland test-fire.
    • Artillery Drills: South Korea’s military conducted artillery drills near the Military Demarcation Line in response.
    • Military Pact Suspension: These drills resumed following North Korea’s launch of balloons carrying garbage into South Korea, which led to the suspension of a military pact with Pyongyang.
    • Concerns Over Russia Ties: South Korea is increasingly worried about North Korea’s warming relations with Russia, suspecting North Korea of supplying ballistic missiles and artillery shells to Russia, despite both countries denying these allegations.

    Geopolitical Implications on the Indo-Pacific Region

    • Increased Tensions: North Korea’s missile tests exacerbate tensions in the Indo-Pacific region, raising security concerns among neighbouring countries and global powers.
    • Regional Arms Race: The tests could prompt an arms race, with countries like South Korea and Japan potentially enhancing their military capabilities in response.
    • US and Allies’ Response: The United States and its allies in the region may increase military presence and conduct joint exercises to counter North Korea’s missile advancements.
    • Impact on Diplomacy: The tests complicate diplomatic efforts to denuclearize the Korean Peninsula and might lead to further sanctions and isolation of North Korea.
    • China’s Role: China’s influence in the region and its relationship with North Korea could be pivotal in addressing the security challenges posed by these missile tests.

    Way forward ( What can India do?)

    • Strengthen Regional Alliances and Diplomatic Engagements: India should enhance its collaboration with key regional players like Japan, South Korea, and ASEAN countries to ensure collective security and stability in the Indo-Pacific region.
    • Enhance National Defense Capabilities: India should focus on bolstering its own defense infrastructure and capabilities to prepare for any potential threats arising from the increased militarization in the region.

    Mains PYQ: 

    Q The new tri-nation partnership AUKUS is aimed at countering China’s ambitions in the Indo-Pacific region. Is it going to supersede the existing partnerships in the region? Discuss the strength and impact of AUKUS in the present scenario. (UPSC IAS/2021)

  • France: India’s steady partner in green growth

    Why in the news?

    On July 14, 2023, in Paris, President Emmanuel Macron and Prime Minister Narendra Modi elevated the ‘Partnership for the Planet’ to one of the three central pillars of the Indo-French Horizon 2047 Roadmap.

    Indo-French Horizon 2047 Roadmap are:

    • Strategic Partnership: Enhancing defense, security, and geopolitical ties.
    • Economic Partnership: Promoting trade, investments, and sustainable development.
    • Partnership for the Planet: Focusing on environmental sustainability and green technologies.

    India- France Bilateral Ties   

    • Strategic Partnership: India and France established a strategic partnership in 1998, which covers cooperation in defense, civil nuclear energy, space, and security. This partnership is considered a cornerstone of their bilateral ties.
    • High-Level Exchanges: There have been frequent high-level exchanges between the leaders of both countries, including state visits and participation in each other’s national events like the Republic Day parade. This demonstrates the close political ties.
    • Defense Cooperation: Defense is a major pillar of the India-France partnership. The two countries conduct joint military exercises, collaborate on defense equipment manufacturing, and have an “intelligence and information exchange” mechanism.
    • Space Cooperation: India and France have robust space cooperation, including co-development and launch of satellites, research on new launch technologies, and connecting startups. They recently launched a Strategic Space Dialogue to guide their space partnership.
    • Convergence on Indo-Pacific: Both countries share concerns over China’s assertiveness in the Indo-Pacific region. They have agreed to intensify cooperation in the strategically important Southwest Indian Ocean and work with other like-minded countries to address regional security challenges.

    How France is India’s steadfast partner to achieve its sustainability goals?

    • Financial Support: France, through the French Development Agency (AFD) and Proparco, has committed substantial financial resources to India. This includes over €4 billion since 2008 for nearly 100 projects, with a significant focus on climate change mitigation and adaptation.
    • Strategic Focus Areas: Cooperation spans key sectors like energy transition, sustainable urban development, biodiversity conservation, resilience of territories, and reduction of inequalities. These efforts contribute directly to India’s sustainable development agenda.
    • Project Implementation: AFD’s involvement in projects such as metro systems in Pune and Nagpur, forest conservation in Rajasthan, and urban water management across 20 cities demonstrates tangible contributions to India’s environmental and social sustainability.
    • Partnership in Innovation: Collaborative initiatives underpinning innovation, including the Indo-French Year of Innovation in 2026, aimed at fostering solutions that integrate social inclusion with environmental sustainability.
    • Indo-Pacific Engagement: Strengthening bilateral ties with an Indo-Pacific dimension, focusing on initiatives like the Indo-Pacific Parks Partnership and joint funds for scaling up green technologies, showcasing France’s commitment to regional sustainability efforts.

    Private sector-led projects

    • Investment in Agriculture: Proparco’s €11.2 million investment in Sahyadri, supports farmer-led initiatives to reduce farm losses, pesticide and fertilizer use, and enhance yields and produce quality.
    • Healthcare Investments: Proparco’s €33 million equity investment in Quadria, aimed at improving access to affordable quality healthcare in underserved regions of India and Southeast Asia.
    • Innovation and Sustainability: Emphasis on innovative solutions blending social inclusion with sustainability, such as through the Indo-French Year of Innovation in 2026 and joint efforts to scale up green technologies in the Indo-Pacific region.

    Way forward: 

    • Strengthen bilateral agreements to facilitate smoother cooperation and ensure compliance with international sustainability standards.
    • Foster deeper public-private partnerships to leverage expertise, funding, and innovation for sustainable development projects.
    • Promote continuous high-level dialogues and joint initiatives to address global challenges, enhance regional security, and drive economic growth and environmental sustainability.

    Mains PYQ:

    Q What were the events that led to the Suez Crisis in 1956? How did it deal a final blow to Britain’s self-image as a world power? (UPSC IAS/2014)

  • India seeks Tariff Elimination on key items in CEPA Talks with South Korea

    Why in the News?

    • India wants, South Korea to eliminate tariffs on items such as varieties of meat, milk, fruits, fish, stones, yarn, and petroleum products.
      • These items were previously exempted or protected against steep cuts in the India-Korea Comprehensive Economic Partnership Agreement (CEPA).

    What is CEPA?

    Details
    Definition A CEPA is a broad trade agreement that encompasses trade in goods and services, investments, intellectual property rights, and economic cooperation.
    Key Components
    • Trade in Goods: Reduction/elimination of tariffs and non-tariff barriers.
    • Trade in Services: Liberalization of service sectors.
    • Investment: Protection and promotion of investments.
    • Intellectual Property Rights (IPR): Strengthening protection of IPR.
    • Economic Cooperation: Collaboration on economic and technical aspects.
    • Dispute Resolution: Mechanisms for resolving disputes.
    Objectives
    • Enhance bilateral trade.
    • Promote investment.
    • Foster economic integration.
    • Encourage innovation and economic growth.
    Examples
    • India-Japan CEPA: Signed in 2011, focuses on tariff reduction, service trade liberalization, and investment promotion.
    • India-Mauritius CECPA: Effective from April 2021, includes provisions on trade in goods, services, and investment.
    • India-UAE CEPA: Entered into force on May 1, 2022
    Significance for India
    • Economic Growth: Provides new markets for Indian goods and services.
    • Job Creation: Increased trade and investment can create jobs.
    • Technological Advancements: Access to new technologies and best practices.
    • Strategic Partnerships: Strengthens economic and strategic ties.
    Challenges
    • Implementation Issues: Requires robust legal and institutional frameworks.
    • Domestic Industry Impact: Concerns about increased competition.
    • Regulatory Harmonization: Differences in regulatory standards can pose challenges.

    India-South Korea CEPA: A quick recap

    • The India-South Korea CEPA was signed in August 2009 and implemented in January 2010.
    • It covers trade in goods, investments, services, and bilateral cooperation.
    • Tariff Concessions:
      • India offered tariff elimination or concessions on 83.8% of tariff lines from South Korea.
      • While South Korea offered concessions on 93.2% of tariff lines.

    Upcoming Negotiations

    • Trade Deficit Focus: Narrowing the trade deficit with South Korea is high on India’s agenda.
    • Stakeholder Involvement: Indian industry stakeholders have been provided with a draft request list and asked to suggest more items for tariff cuts or propose deletions if needed.
    • Standards and Technical Barriers: The Department of Commerce has requested the industry to share issues related to SPS (Sanitary and Phytosanitary) and TBT (Technical Barriers to Trade) standards faced while exporting to South Korea.

    Back2Basics:

    Sanitary and Phytosanitary (SPS) Measures:

    • SPS measures are protocols implemented by countries to protect human, animal, and plant life from diseases, pests, and contaminants. 
    • These measures are primarily focused on ensuring the safety of food products and preventing the spread of diseases and pests across borders.
    • SPS measures must be based on scientific evidence and risk assessments to ensure they are appropriate and effective.
    • Examples: quarantine requirements for imported plants and animals, limits on pesticide residues in food, and import bans from regions affected by specific diseases.

    Technical Barriers to Trade (TBT):

    • TBT are regulations and standards related to product safety, quality, and environmental impact.
    • They aim to protect human health and safety, animal and plant life, the environment, and to prevent deceptive practices.
    • These measures should not create unnecessary obstacles to international trade and must be transparent and non-discriminatory.
    • Examples: Labeling requirements for food products, safety standards for electrical appliances, and environmental regulations for vehicle emissions.

    Major Issue: Trade Deficit Concerns

    • Trade Deficit Focus: Reducing the trade deficit with South Korea is a key discussion point for India.
      • Before CEPA (2007-09), India’s average exports to South Korea were $3.4 billion, with imports at $7.3 billion, leading to an average trade deficit of $4 billion.
    • Trade Statistics: In 2023-24, India’s imports from South Korea were $21.13 billion, while exports were only $6.41 billion.
    • Post-CEPA Data: After CEPA (2022-24), average exports increased to $7.1 billion, and imports surged to $19.9 billion, resulting in an average trade deficit of $12.8 billion.
    • GTRI Analysis: The Global Trade and Research Initiative (GTRI) report indicates a 220% increase in the trade deficit from the pre-CEPA period to the post-CEPA period.

    PYQ:

    [2015] The terms ‘Agreement on Agriculture’, ‘Agreement on the Application of Sanitary and Phytosanitary Measures’ and Peace Clause’ appear in the news frequently in the context of the affairs of the:

    (a) Food and Agriculture Organization

    (b) United Nations Framework Conference on Climate Change

    (c) World Trade Organization

    (d) United Nations Environment Programme

  • IMF | Overlords of the developing world

    Why in the news?

    Once again, mass protests in Kenya, where at least 30 people were fatally shot by police, highlight opposition to an IMF-supported finance Bill proposing essential goods tax hikes.

    Bretton Woods Conference of 1944

    • The Bretton Woods Conference was held in 1944 in New Hampshire, USA. It established the International Monetary Fund (IMF) and the World Bank.
    • The IMF was designed to aid economic development and promote monetary cooperation and stability globally.
    • Criticism: It has been criticized for reflecting and perpetuating power dynamics favouring Western financial interests, with voting rights disproportionately allocated based on financial contributions rather than equal representation.

    Functions of IMF and Recent Challenges Faced by Developing Countries

    • Functions: The IMF aims to provide financial assistance and policy advice to member countries facing balance of payments problems.

    Challenges:

    • Austerity Measures: IMF loans often come with conditions such as austerity measures (like tax hikes and spending cuts) that can be unpopular and detrimental to social services and economic stability.
    • Dependency: Many developing countries face criticism for being overly dependent on IMF loans, which come with stringent conditions that may not always align with local priorities.
    • Public Backlash: There is often a public and political backlash against IMF policies perceived as imposing Western economic ideologies without adequate consideration for local contexts.

    SAP (Structural Adjustment Programs) and Its Impacts

    • Definition: SAPs are economic policies imposed by the IMF and World Bank on developing countries in exchange for loans.

    Impacts:

    • Economic Restructuring: SAPs typically involve privatization, deregulation, and liberalization policies aimed at restructuring national economies towards export-led growth.
    • Social Consequences: They often lead to job losses, reduced public spending on health and education, and increased poverty and inequality.
    • Criticism of SAPs: SAPs have been criticized for exacerbating social inequalities and benefiting Western financial interests over local populations.

    Way forward: 

    • Policy Transparency: The IMF could enhance transparency in its loan conditions and negotiations, ensuring that the terms and impacts of loans are clearly communicated to the public and local stakeholders.
    • Local Consultation: Before implementing major policy changes or austerity measures, the IMF could mandate extensive consultation with local governments, civil society organizations, and affected communities to ensure that proposed measures align with local economic priorities and social needs.

    Mains PYQ: 

    Q The World Bank and the IMF, collectively known as the Bretton Woods Institutions, are the two inter-governmental pillars supporting the structure of the world’s economic and financial order. Superficially, the World Bank and the IMF exhibit many common characteristics, yet their role, functions and mandates are distinctly different. Elucidate. (UPSC IAS/2013)

  • China’s ‘Five Principles’ of Foreign Policy

    Why in the News? 

    China is set to commemorate the 70th anniversary of the Five Principles of Peaceful Coexistence, a foreign policy concept initially outlined in a 1954 agreement with India, with special events scheduled for Friday, June 28th.

    How it started?

    • Historical Context: India attained independence from British rule in 1947, and the People’s Republic of China was established in 1949 after a civil war victory by the Chinese communists. Nehru aimed to establish good relations with China based on trust and mutual respect, a sentiment reciprocated by China initially.
    • Origins and Proposal: The Five Principles of Peaceful Coexistence, known as Panchsheel in India, were proposed by Chinese Premier Zhou Enlai during bilateral talks with India over Tibet in 1954. This initiative was favored by Indian Prime Minister Jawaharlal Nehru.
    • Panchsheel Agreement: The agreement, formally titled “The Agreement on Trade and Intercourse with Tibet Region,” was signed on April 29, 1954. It was intended to enhance trade and cooperation, establishing trade centers and pilgrimage routes while recognizing Tibet as part of China.
    • Principles: The five guiding principles laid out in the agreement were mutual respect for territorial integrity and sovereignty, mutual non-aggression, mutual non-interference, equality and mutual benefit, and peaceful coexistence.
    • Bandung Conference: The Five Principles featured prominently in the 1955 Bandung Conference in Indonesia, which included 29 Asian and African countries. The principles were co-opted into a 10-point declaration and later became central to the Non-Aligned Movement (NAM).

    Present Scenario:

    • After the India-China War of 1962: The principles of Panchsheel were severely undermined by the Sino-Indian War in 1962, leading to criticism of Nehru for misjudging Chinese intentions.
    • China’s Foreign Policy Shift: Over the past three decades, especially under President Xi Jinping, China has adopted a more aggressive foreign policy. This includes territorial claims in the South China Sea and hostile situations with neighbouring countries.
    • China’s Relations with the U.S: China’s relationship with the United States has been marked by hostility, characterized by trade and diplomatic challenges to American dominance globally.
    • India-China Relations Today: Since 2020, Indian and Chinese forces have been in a standoff along the Line of Actual Control (LAC) in Ladakh, with repeated but unsuccessful attempts to resolve the conflict.
    • Commemoration of 5 Principles by China: Despite the current strained relations, China commemorates the 70th anniversary of the Five Principles with a forward-looking theme, emphasizing building a community with a shared future for mankind.

    Way forward: (What can India do?)

    • Engage in Diplomatic Dialogue: Despite historical tensions, maintaining open lines of diplomatic communication with China is crucial. India can continue efforts to engage in dialogue at multiple levels to manage and resolve bilateral disputes, including the ongoing situation along the Line of Actual Control (LAC) in Ladakh.
    • Strengthen Regional Alliances: Enhancing partnerships with other countries in the region and beyond can provide India with strategic leverage. Strengthening alliances through economic cooperation, military partnerships, and cultural exchanges can help counterbalance China’s influence and foster stability in the region.
    • Focus on Economic and Technological Development: Investing in economic growth and technological advancement can bolster India’s position on the global stage. Developing robust infrastructure, promoting innovation and entrepreneurship, and advancing sustainable development goals can strengthen India’s resilience and competitiveness in the face of geopolitical challenges.

    Mains PYQ: 

    Q China is using its economic relations and positive trade surplus as tools to develop potential military power status in Asia’, In the light of this statement, discuss its impact on India as her neighbor. (UPSC IAS/2017)

  • India achieves an ‘outstanding outcome’ in FATF mutual evaluation 2023-24 

    Why in the News?

    • India has achieved an outstanding outcome in the 2023-24 Mutual Evaluation by the Financial Action Task Force (FATF).
      • India is placed in the “regular follow-up” category, a distinction shared by only four other G-20 countries.

    FATF Evaluation:

    The reason behind India’s Achievements

    • High Level of Compliance: The FATF stated that India reached a high level of technical compliance with its requirements.
    • Effective Regimes: India’s AML (anti-money laundering), CFT (countering the financing of terrorism), and CPF (counter-proliferation financing) regimes achieved good results.
    • International Cooperation: Notable achievements include international cooperation, access to basic and beneficial ownership information, use of financial intelligence, and depriving criminals of their assets.

    Need Improvement

    • Non-Financial Sectors: The FATF noted that improvements are needed to strengthen the supervision and implementation of preventive measures in some non-financial sectors.
    • Prosecution Delays: India needs to address delays in concluding ML (money laundering) and TF (terrorist financing) prosecutions.
    • Non-Profit Sector Risks: Ensure CFT measures prevent the non-profit sector from being abused for TF, including conducting outreach to NPOs on their TF risks.

    Mitigation Efforts taken

    • Mitigating ML/TF Risks: FATF recognized India’s efforts in mitigating risks from ML/TF, including corruption, fraud, and organized crime.
    • Digital Economy Transition: Effective measures have been implemented to transition from a cash-based to a digital economy, reducing ML/TF risks.
    • JAM Trinity Implementation: The JAM (Jan Dhan, Aadhaar, Mobile) Trinity, along with stringent cash transaction regulations, has increased financial inclusion and digital transactions, making them more traceable.

    About Financial Action Task Force (FATF)

    • FATF was established in 1989 through the initiative of the G7 nations.
    • Its Secretariat is headquartered at the OECD headquarters in Paris, France.
    • FATF conducts 3 Plenary meetings during each of its 12-month rotating presidencies.
    • As of 2019, FATF consists of 37 member jurisdictions.

    India’s Engagement with FATF

    • Observer Status: India became an Observer at FATF in 2006, marking the beginning of its association with the organization.
    • Full Membership: On June 25, 2010, India officially became the 34th country to attain full membership in FATF, signifying its active participation and commitment to the organization’s objectives.

    Understanding the Mutual Evaluation Process

    • FATF’s mutual evaluation assesses countries’ frameworks against money laundering and terrorist financing, reviewing compliance with its 40 recommendations and effectiveness, resulting in a report with strengths, weaknesses, and improvement suggestions.

    FATF’s Evaluation of India

    • Comprehensive Assessment: FATF’s evaluation of India encompasses various aspects, including the nation’s legal framework, regulatory system, law enforcement efforts, and international collaboration.
    • Alignment with Global Standards: Central agencies in India have been actively working to ensure that the country’s anti-money laundering and counter-terrorism financing laws align with international standards and that their practical implementation is effective.

    Back2Basics: FATF Grey and Black List

    FATF maintains two primary lists to identify countries with deficiencies in their anti-money laundering and counter-terrorist financing (AML/CTF) regimes: the Grey List and the Black List.

    Grey List (Jurisdictions under Increased Monitoring): 

    It includes countries that have strategic deficiencies in their AML/CTF regimes but have committed to resolving these issues swiftly within agreed timeframes. These jurisdictions are subject to increased monitoring by the FATF. Ex. Turkey, Panama etc. (Pakistan and UAE have exited this list.)

    Impact:

    • Countries on the Grey List are required to work closely with the FATF to address the identified deficiencies.
    • Being on the Grey List can lead to economic repercussions such as reduced foreign investment and increased scrutiny from financial institutions and regulators globally.
    • The FATF regularly reviews the progress of these countries and updates the list accordingly.

    Black List (High-Risk Jurisdictions subject to a Call for Action): 

    It includes countries with significant strategic deficiencies in their AML/CTF regimes and have not made sufficient progress in addressing these issues. These jurisdictions are subject to a call for action to protect the international financial system from the risks emanating from these countries.

    Impact:

    • Countries on the Black List face severe economic and financial consequences. They are subject to enhanced due diligence and, in the most serious cases, counter-measures by FATF member states.
    • This listing can result in limited access to the international financial system such as IMF, World Bank; reduced foreign investment, and increased difficulty in conducting international business.

    Current Black List Countries:

    • North Korea
    • Iran
    • Myanmar (Burma) (added in February 2023)

     

    PYQ:

    [2021] Discuss how emerging technologies and globalisation contribute to money laundering. Elaborate measures to tackle the problem of money laundering both at national and international levels.

  • In great power rivalry across Eurasia, an opening for India 

    Why in the News?

    The significant upheaval caused by the increasing interdependence of European and Asian theatres is accompanied by the rise of influential middle powers. India can seize this opportunity to enhance its national power.

    Complex and Deepening Interconnections between European and Asian Security:

    • Asia’s Active Role in European Geopolitics: Unlike the colonial era, Asian states now actively influence the balance of power in Europe. Both Russia and Western Europe are engaging Asia to shape the narrative on the Ukraine war.
    • Asian Arms Supply to Europe: Asia has emerged as a major supplier of arms in European conflicts, with North Korea supplying ammunition to Russia and South Korean arms flowing to Ukraine.
    • Asian Agency in Great Power Dynamics: Putin’s visit to North Korea and Vietnam highlights the increased agency of Asian states in leveraging great power rivalries for their own strategic benefits.
    • Impact on Western Alliances: The increasing agency of Asian countries like North Korea and South Korea affects the dynamics of Western alliances, with the US seeking stronger ties with South Korea and Japan in response to Russia’s actions.

    Scope for a Strategic Window:

    • Increased Asian Maneuverability: Countries like Vietnam are skillfully balancing their relationships with China, the US, and Russia, enhancing their strategic autonomy and influence in the region.
    • Western Dilemmas: The US is facing challenges in balancing its strategic focus between Europe and Asia, with debates on whether to prioritize the Ukraine conflict or the challenge posed by China.
    • Europe’s Defence Responsibilities: Both Biden and Trump agree on the need for Europe to take greater responsibility for its own defense, urging Eurasian nations to balance Russia and China.
    • Opportunities for Middle Powers: Middle powers like India have a unique opportunity to enhance their national power and military capabilities through strategic partnerships with the US and its allies. This includes modernizing India’s defense industrial base and expanding arms production, crucial for achieving strategic autonomy.

    Way forward: 

    • Engage with Key Allies: India should Deepen strategic partnerships with the US, Japan, Australia, and South Korea to enhance security cooperation and joint defense initiatives. 
      • These partnerships can provide India with access to advanced military technology and training, as well as opportunities for joint exercises and intelligence sharing.
    • Leverage International Platforms: India must actively participate in international platforms like the Quad and the Coalition for Disaster Resilient Infrastructure (CDRI) to strengthen India’s role in regional security and disaster resilience efforts.

    Mains question for practice: 

    Q Discuss the complex and deepening interconnections between European and Asian security in the current geopolitical landscape. How can India leverage these dynamics to enhance its national power?  15M 

  • It’s time for India to reclaim its voice on Tibet

    Why in the News? 

    A U.S. lawmaker delegation’s visit to Dharamshala closely followed the passage of the ‘Promoting a Resolution to the Tibet-China Dispute Act’ in Congress, awaiting Biden’s approval.

    About the delegation on ‘Promoting a Resolution to the Tibet-China Dispute Act’ 

    • Legislative Background: The U.S. Congress passed the ‘Promoting a Resolution to the Tibet-China Dispute Act,’ emphasizing support for Tibetan autonomy and human rights. 
      • The delegation’s visit to Dharamshala, India, followed this legislative action to underscore U.S. commitment to Tibetan freedom.
    • Delegation Composition and Purpose: The delegation included bipartisan U.S. lawmakers who were co-authors of the Act, invited by the Central Tibetan Administration.
      • Their visit aimed to advocate for restarting dialogue between the Dalai Lama’s representatives and Beijing, stalled since 2010.
    • India’s Diplomatic Calculus: Hosting the U.S. delegation amidst ongoing tensions with China signals India’s nuanced diplomacy in managing its relations with both nations. 
      • It reflects India’s stance on Tibet as sensitive, balancing its traditional policy of non-interference with growing international scrutiny.
    • Geopolitical Implications: The delegation’s visit raises geopolitical questions about India’s sovereignty and diplomatic independence in the face of U.S.-China strategic competition.
      • It underscores India’s role in regional stability and global human rights discourse, impacting its strategic partnerships and international standing.

    Challenges and weaknesses involved        

    • Diplomatic Sensitivities: India faces challenges in balancing its historical support for Tibetan refugees with its current diplomatic relations with China, a crucial economic and strategic partner. 
      • Hosting U.S. lawmakers advocating for Tibetan autonomy could strain India-China relations, given Beijing’s sensitivity to international interference on Tibet-related issues.
    • Domestic Perception and Political Messaging: Allowing U.S. lawmakers to publicly advocate for Tibetan independence in India could be perceived domestically as compromising India’s stance on sovereignty and non-interference in internal matters. 
      • There is a risk of domestic backlash or political opposition questioning the government’s handling of sensitive foreign policy issues, particularly regarding Tibet and China.
    • Impact on Bilateral Relations: The visit and the Act may lead to diplomatic friction between India and China, potentially affecting bilateral cooperation in various domains, including trade, defense, and regional stability. 
      • China’s response to perceived foreign interference on Tibet could escalate tensions, impacting broader regional dynamics and India’s strategic autonomy.

    Future Scope (Way forward):

    • International Advocacy and Diplomatic Engagement: The U.S. delegation’s visit and advocacy for the Tibet-China Dispute Act highlight ongoing international interest and support for Tibetan autonomy. 
      • The future scope involves continued diplomatic engagement by global stakeholders to advocate for human rights and autonomy for Tibetans, potentially influencing China’s policies.
    • India’s Strategic Positioning: India may explore a nuanced approach to balance its historical support for Tibetan refugees with its current diplomatic relations with China. 
      • Future scope includes India asserting its stance on Tibet in international forums while managing bilateral relations with China to avoid escalation and maintain regional stability.

    Mains question for practice: 

    Q The recent visit of a delegation of U.S. lawmakers to Dharamshala, closely following the passage of the ‘Promoting a Resolution to the Tibet-China Dispute Act’ in the U.S. Congress, has brought forth significant diplomatic challenges and implications for India.15M

    Mains PYQ: 

    Q “The USA is facing an existential threat in the form of China, that is much more challenging than the erstwhile Soviet Union.” Explain. (UPSC IAS/2021)