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Subject: International Relations

  • India-Bangladesh Relations: The Golden Chapter

    Bangladesh

    Central Idea

    • In recent years, Bangladesh-India relations have entered the Golden Chapter in their relations. Setting the seal on this bilateral bonhomie, The Prime Minister of Bangladesh has been invited by the Indian Prime Minister to attend the G20 Summit as a special guest. Bangladesh is the only South Asian country to be on India’s guest list. India’s invitation to Bangladesh as its guest speaks volumes of the high priority the country accords its immediate eastern neighbor and ‘best friend’ in the neighborhood’.

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    India-Bangladesh ties: An organic transformation

    • India’s links with Bangladesh are civilization, cultural, social and economic.
    • There is much that unites the two countries – a shared history and common heritage, linguistic and cultural ties, and passion for music, literature and the arts.
    • It is also worth recalling that India shares its longest border of 4,096.7 kilometres with Bangladesh, which is also the fifth-longest border in the contemporary world.
    • With the onset of economic liberalization in South Asia, they forged greater bilateral engagement and trade.

    Bangladesh

    In Depth: Why Bangladesh is cardinally important to India?

    1. India’s largest trading partner in South Asia
    • Bangladesh emerged as India’s largest trading partner: In 2021-22, Bangladesh emerged as India’s largest trading partner in South Asia and India is Bangladesh’s second-largest trading partner and its largest export market in Asia. Despite the pandemic, bilateral trade has grown at an unprecedented rate of 14 per cent
    • Comprehensive Economic Partnership Agreement: The two countries are also preparing to sign the Comprehensive Economic Partnership Agreement, for substantial enhancement of trade and commercial partnerships between the two countries.
    1. Gateway for India’s Northeast
    • Strategic location: Efforts have been made in recent years by both Bangladesh and India to improve connectivity between Bangladesh and India’s Northeast, which is geographically located between West Bengal and landlocked Northeastern states.
    • Initiatives to Improve Connectivity: Initiatives such as inviting India to use Chattogram and Mongla ports, adding new ports and protocol routes to the shared inland waterway network, constructing the Maitri and Padma Setu bridges, and the upcoming Akhaura-Agartala rail line, aim to provide better trade and transport connectivity. The Mitali Express has also been operationalized for bi-weekly journeys between New Jalpaiguri and Dhaka.
    • Important for stability and security issues: Bangladesh has been an outstanding partner of India on security issues, especially with its zero-tolerance attitude towards terrorism. On several occasions, Bangladesh has arrested and handed over insurgents from the separatist militant groups in the Northeast (United Liberation Front of Asom) to India.
    • A central pillar in India’s Neighbourhood First and Act East Policies
    • Bay of Bengal’s Increasing Strategic Significance: The increasing strategic significance of the Bay of Bengal, heightened by China’s rising and assertive presence in this maritime space has led India to bolster relations with the Bay littorals to ensure its pre-eminence in the Bay, which it considers to be a primary area of interest.
    • Important  for India’s Eastern Neighborhood Policy: Furthermore, as its western front remains troubled, India is increasingly trying to build stronger relations with its eastern neighbourhood to realise its Indo-Pacific aspirations.
    • As china trying to make inroads, India Reviving and Cultivating Cooperation: As China also tries to make inroads into Bangladesh to gain a stronger foothold in the Bay region, India has felt an added impetus to nurture its relationship with the country, reviving age-old bonds and cultivating new avenues for cooperation.
    • India’s Vaccine Maitri Initiative For example: In the pandemic, India prioritised Bangladesh and supplied 10.3 crore vaccine doses to the country, making it the largest recipient of its Vaccine Maitri initiative. The gesture was generously reciprocated, by providing of

    Bangladesh

    Key Areas of Cooperation on India’s G20 Agenda

    1. Climate change and disaster management
    • Green Development, Climate Finance and LiFE’: As the name suggests, the segment is devoted to developing environmental consciousness and understanding the impact of climate change with a particular focus towards not only climate finance and technology, but also ensuring just energy transitions for developing nations across the world.
    • For instance: Both countries agreed to cooperate on climate change with particular attention to the Sundarban area which is facing challenges due to climate-induced sea level rise.
    • Disaster risk reduction: Both India and Bangladesh experience frequent disasters such as cyclones originating from the turbulent Bay of Bengal. Consequently, the two countries signed an MoU on Disaster Management in 2021, to mitigate this transnational threat.
    1. Transition to renewable energy
    • Energy transition and cooperation: As energy transitions are an important issue in India’s G20 mandate, recently, Bangladesh announced its target of generating 40 percent of power from clean energy by 2041. India-Bangladesh have increased cooperation in the energy sector.
    • Projects for instance: With projects such as the Friendship Pipeline and Maitree Super Thermal Power Project, and agreed to enhance cooperation in energy efficiency and clean energy, including biofuels.
    • Cyber security
    • Cyber security cooperation: Cyber security is an intrinsic aspect of Digital Public Infrastructures (DPI’s) and also happens to be one of the areas in which India-Bangladesh have agreed to cooperate.
    • Joining hands to enhance AI and cyber security: In June 2022, both countries decided to expand their strategic partnership to enhance Artificial Intelligence (AI) and cyber security.

    Way ahead: Forging better multilateralism

    • Within G20, a priority for India is to promote reformed multilateralism which cultivates accountable, inclusive, just, equitable and representative multipolar international systems, fit for addressing contemporary challenges.
    • As one of the fastest-growing economies in the world, Bangladesh will become even more important for India in future.
    • In many of the multilateral platforms in India’s neighbourhood (an area India seeks to influence), Bangladesh is also a member, for e.g., SAARC, BIMSTEC, and IORA.
    • The country’s support is, therefore, necessary, if India’s G20 aspiration is to find a reflection in regional multilateral platforms.

    Bangladesh

    Conclusion

    • As India tries to shape the global agenda through G20 it needs Bangladesh’s support to translate many of these ideas into action in its neighbourhood. This will lend further credibility to its presidency and in the long run, some of these nascent areas of cooperation may add pages to the “Golden Chapter” in India-Bangladesh relations.

  • Lankan Fishermen Oppose Proposal to License Indian Fishermen

    fish

    Sri Lanka’s northern fishermen fiercely oppose the government’s plan to issue licenses to Indian fishermen to enter Sri Lankan waters, terming the move a “serious setback” to their nearly 15-year-long struggle.

    Recent development

    • The Sri Lankan government has proposed issuing fishing licenses to Indian fishermen to fish in Sri Lankan waters.
    • The proposal has been met with fierce opposition from Northern Province fishermen who view it as a threat to their livelihoods and an infringement on their fishing rights.
    • Indian fishermen have been accused of using illegal fishing methods and damaging the marine ecosystem, which has further fueled tensions between the two groups.
    • The conflict over fishing rights has led to violence and arrests on both sides.

    Issues for Sri Lanka

    • Proliferation of Trawlers: The overuse of mechanized trawlers in Palk Bay is damaging the marine ecosystem in SL waters.
    • Breach of sovereignty: There were many favorable reasons too for Indian fishermen as their access to Sri Lankan waters was easier at the time of Sri Lankan civil war.
    • Porous borders: Maritime boundaries were never tightly guarded as a result, Indian trawlers continue to routinely enter Lankan waters for fishing.
    • End of Civil War: Everything changed in 2009 with the end of civil war. Arrests and attacks increased on Indian fishermen as they continued entering Lankan waters because of depletion of marine resources on the Indian side.

    Fishermen’s concern:

    (1) Depletion of fisheries

    • There is a depletion of fisheries on the Indian side, so Indian fishermen cross into Sri Lankan waters thus denying the livelihood of their counterparts.
    • They deliberately cross the territorial waters even at the risk of getting arrested or shot dead by the Sri Lankan Navy.
    • Sri Lankan fishermen across Palk Bay are concerned over similar depletion on their side (where there is a ban for trawlers) because of poaching by Indian fishermen.

     (2) Rights over Katchatheevu Island

    • Tamil fishermen have been entering Sri Lankan waters nearby Katchatheevu island, where they had been fishing for centuries.
    • In 1974, the island was ceded to Sri Lanka after an agreement was signed by Indira Gandhi between the two countries without consulting the Tamil Nadu government.
    • The agreement allows Indian fishermen “access to Katchatheevu for rest, for drying of nests and for the annual St Anthony’s festival” but it did not ensure the traditional fishing rights.

    (3) Hefty fines

    • After some respite in the last couple of years, Sri Lanka introduced tougher laws banning bottom-trawling and put heavy fines for trespassing foreign vessels.
    • SL has increased the fine on Indian vessels found fishing in Sri Lankan waters to a minimum of LKR 6 million (about ₹25 lakh) and a maximum of LKR 175 million (about ₹17.5 Crore).
    • Quiet often, the fishermen are shot dead by SL marines.

    Fishermen issue in TN politics

    • It has been often a sensitive political issue in Tamil Nadu in the past one decade.
    • In a defiant speech in 1991, late CM Jayalalitha had called on the people of Tamil Nadu to retrieve the Katchatheevu Island.

    Way forward

    • Leasing: Two courses of action exist: (1) get back the island of Katchatheevu on “lease in perpetuity” or (2) permit licensed Indian fishermen to fish within a designated area of Sri Lankan waters and vice versa.
    • Licensing: The second course of action would persuade Colombo to permit licensed Indian fishermen to fish in Sri Lankan waters for five nautical miles from the IMBL.
    • Reconsidering old agreements: The 2003 proposal for licensed fishing can be revisited.
    • Looping in fishermen themselves: Arranging frequent meetings between fishing communities of both countries could be systematized so as to develop a friendlier atmosphere mid-seas during fishing.

    Conclusion

    • The underlying issues of the fisheries dispute need to be addressed so that bilateral relations do not reach a crisis point.
    • Immediate actions should be taken to begin the phase-out of trawling and identify other fishing practices.
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  • Explained: Biodiversity Beyond National Jurisdiction (BBNJ) Treaty

    bbnj

    For the first time, United Nations members have agreed for an early conclusion of the International Legally Binding Instrument of BBNJ under the United Nations Convention on the Law of the Sea (UNCLOS).

    Background

    • The UN Convention on the Law of the Sea was established in 1994 before marine biodiversity became a well-established concept
    • An updated framework to protect marine life in the high seas had been in discussions for over 20 years.
    • BBNJ is an agreement that aims to protect marine biodiversity in areas beyond national jurisdiction (ABNJ).
    • ABNJ refers to the high seas, which are not governed by any country but are still important for global biodiversity.

    What is the BBNJ treaty?

    • The BBNJ Treaty also called the Treaty of the High Seas, is an international agreement that aims to preserve and sustainably use the marine biodiversity of areas beyond national jurisdiction.
    • This includes the high seas, which are outside of countries’ exclusive economic zones and makeup nearly half of the Earth’s surface.
    • These areas are currently poorly regulated and only 1% of them are protected.
    • The High Ambition Coalition on BBNJ was launched in February 2022 to negotiate and achieve a comprehensive and ambitious outcome.

    Key areas of agreement

    The negotiations focus on elements agreed upon such as the-

    1. Conservation and sustainable use of marine genetic resources,
    2. Area-based management tools like marine protected areas,
    3. Environmental impact assessments, and
    4. Capacity-building and technology transfer

    Consensus reached

    • A new body will be created to manage the conservation of ocean life and establish marine protected areas in the high seas
    • The treaty establishes ground rules for conducting environmental impact assessments for commercial activities in the oceans
    • Several marine species, including dolphins, whales, sea turtles, and many fish, make long annual migrations, crossing national borders and the high seas

    What is the significance of this treaty?

    • Beyond jurisdiction coverage: BBNJ refers to the areas beyond the jurisdiction of any single country, such as the high seas, the deep sea floor, and the international seabed area. These areas are critical for the health of the ocean, the well-being of coastal people, and the overall sustainability of the planet.
    • Covers entire oceans: BBNJ comprises 95% of the ocean and provides invaluable ecological, economic, social, cultural, scientific, and food-security benefits to humanity.
    • Hard-arrived consensus: BBNJ is governed by a patchwork of international agreements, conventions, and bodies, but there is no single comprehensive framework that regulates activities in these areas.

    Various threats

    • BBNJ, despite its resilience in the past, is currently at risk due to several emerging dangers such as pollution, overexploitation, and the observable consequences of climate change.
    • In the future, the escalating need for marine resources, whether for food, minerals, or biotechnology, may intensify these issues.
    • For example, deep-sea mining, where valuable metals are extracted from the ocean floor, is becoming more prevalent despite the fact that little is known about the biodiversity in these areas.

    Why protect deep seas?

    • The deep seafloors, believed to be the harshest habitat, are also facing the extinction process.
    • A recent study assessed 184 species of Molluscs in the deep sea and found that 62% are listed as threatened: 39 are critically endangered, 32 are endangered and 43 are vulnerable.
    • Yet, the International Seabed Authority, a Jamaica-based intergovernmental body, is allowing deep-sea mining contracts.

    Way forward

    Ans. Create legally binding instrument

    • To address these threats, there is a need for a legally binding instrument for BBNJ.
    • The instrument would provide a framework for the conservation and sustainable use of BBNJ and would address gaps in the current international legal regime.
    • The legally binding instrument would establish a mechanism for the conservation and sustainable use of BBNJ, including measures to protect biodiversity, manage human activities, and ensure the equitable sharing of benefits.
    • It would also provide for capacity-building and technology transfer to support the implementation of these measures.
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  • G20: Multilateralism and India’s Diplomacy

    G20

    Central Idea

    • The inability of the G20 finance ministers to agree on a joint statement last week points to an important reality about multilateralism. When great powers are at peace with each other, multilateralism has reasonable chances of success; but when they are at each other’s throats, the room for global cooperation shrinks.

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    What is multilateralism?

    • Multilateralism is an approach in which multiple countries or parties come together to address and solve common problems, through negotiations and cooperation, while respecting each other’s sovereignty and interests.
    • In international relations, multilateralism can take different forms, such as multilateral agreements, treaties, and organizations.
    • The United Nations (UN) is an example of a multilateral organization, which brings together almost all countries in the world to promote peace, development, and cooperation.

    Multilateralism and Major Powers: From Cooperation to Conflict

    1. The Cold War and Multilateralism:
    • Lack of cooperation during the Cold War, except in a few areas such as nuclear arms control
    • The formation of the UN after the Second World War with the expectation of great power cooperation.
    • Allies turning into adversaries and sharp division of the world into competing economic and military blocs.
    1. Post-Cold War Multilateralism:
    • Collapse of the Soviet Union in 1991 led to an expansive phase of multilateralism
    • Great power cooperation at the UN and creation of the WTO
    • The financial crisis of 2008 and the rallying of the top 20 economies to stabilise the global economy.
    1. Current State of Multilateralism
    • World of shared interests among top nations no longer exists
    • Simmering political conflict between Russia and the West, possibility of military conflict between the US and China.
    • Consensus on key issues eludes the G20 today
    • Rising geopolitical conflict mirrored in the economic domain
    • Efforts by the US and China to reduce their massive economic exposure to each other
    • Economic conflict enveloping emerging technologies, especially in the digital domain.

    India’s Multilateral Diplomacy amidst the Great Power Conflict

    • Multilateralism and G20: As the current chair of the G20 in 2023, India has to steer the group amidst the renewed rivalry between the major powers. Reducing the impact of the political conflicts on the G20 would be a diplomatic achievement for India.
    • Delhi’s Troubled Relationship with Beijing: India is part of the great power rivalry with China. The conflict is not just about military assertiveness but also deep differences on multilateral issues
    • Need to Balance China: India cannot stand apart from the great power conflict while representing the Global South at the G20. India has to balance its cooperation and contestation with China in various multilateral forums.
    • India’s Participation in Multiple Multilateral Institutions: India’s approach to multilateralism has evolved from a focus on the UN and NAM to participation in multiple institutions including the Quad and the G7. It is also working to strengthen its coalition with the Global South.

    Conclusion

    • The diversity of India’s multilateralism reflects the structural imperatives of global politics. Delhi must cooperate with adversaries for regional and global problem-solving while wrestling with rivals and collaborating with like-minded countries. Cooperation and contestation balance depend on the issue and context.

    Mains Question

    Q. What do you understand by Multilateralism? India is continuously expanding its multilateral approach. Discuss.

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  • Windsor Framework: The deal between UK and EU

    windsor

    The ‘Windsor Framework’ will replace the Northern Ireland Protocol, which had proved to be among the thorniest of Brexit fall-outs, creating problems both economic and political.

    You must know!

    England is a country in its own right and forms part of Great Britain, along with Scotland and Wales. Great Britain is a geographical term that refers to the island that contains England, Scotland, and Wales.

    On the other hand, the United Kingdom (UK) is a sovereign state that includes England, Scotland, Wales, and Northern Ireland.

    Hence, England is a part of Great Britain, and Great Britain is a part of the UK.

    What is the Northern Ireland Protocol?

    • After the UK left the European Union, Northern Ireland remained its only constituent that shared a land border with an EU-member, the Republic of Ireland.
    • Since the EU and the UK have different product standards, border checks would be necessary before goods could move from Northern Ireland to Ireland.
    • However, the two Irelands have had a long history of conflict, with a hard-fought peace secured only in 1998 under the Belfast Agreement, also called the Good Friday agreement.
    • Fiddling with this border was thus considered too dangerous, and it was decided the checks would be conducted between Great Britain and Northern Ireland.
    • This was called the Northern Ireland Protocol.

    Why was it contentious?

    • Under the protocol, Northern Ireland remained in the EU single market, and trade-and-customs inspections of goods coming from Great Britain took place at its ports along the Irish Sea.
    • The checks made trade between Great Britain and Northern Ireland cumbersome, with food products, especially, losing out on shelf life while they waited for clearance.
    • Some taxation and spending policies of the UK government could not be implemented in Northern Ireland because of EU rules.
    • The sale of medicines, too, was caught between different British and EU rules.

    What does the Windsor Framework proposes?

    • The Windsor Framework Deal proposes two crucial aspects. The first aspect is the introduction of a green lane and red lane system for goods.
    1. The green lane system will be for goods that will stay in Northern Ireland.
    2. The red lane system will be for goods that will go to the EU.
    • The second aspect is the ‘Stormont Brake’.
    1. It allows Northern Ireland lawmakers and London to veto any EU regulation.
    2. The veto is applicable if they believe that the regulation affects the region adversely.

     

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  • I2U2: Significance Of The Minilateral Grouping

    Central Idea

    • 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.

    Background: I2U2 forum

    • Following the Abraham Accords between Israel and the UAE, I2U2 was founded in October 2021 to address marine security, infrastructure, and transportation challenges in the region.
    • It was known as the ‘International Forum for Economic Cooperation’at the time. At that time, UAE had referred to the new grouping as the ‘West Asian Quad’.
    • As the Accords opened room for increased interactions between Israel and its Gulf neighbours, it has become less difficult for other partners like the US and India to engage with the region through plurilateral forums.
    • I2U2 prioritizes economic strengths over political differences, leveraging India’s growing economy, Israel’s technical expertise, UAE’s capital, and USA’s international clout for mutual cooperation.
    • I2U2 meetings explore B2B relations and establish I2U2 Business Forum; proposal to form ‘I2U2 Hub’ in UAE as ideation center for forging economic partnerships and sharing profits of intellectual property

    Significance of I2U2: Own motivations for joining the grouping

    1. For India:
    • I2U2 bolsters India’s strategic engagement with West Asia and strengthens its robust bilateral relationships with the UAE, Israel, and the US.
    • India’s total trade with UAE amounted to US$ 73 billion in 2022, making UAE India’s third largest trading partner. UAE is also India’s second largest export destination and accounts for 40 percent of India’s total trade with the Arab world.
    • Israel, is one of India’s top suppliers of defence equipment and a key technology partner in different domains including defence, space, agriculture, and cybersecurity.
    • The US is India’s largest trading partner and second-largest foreign investor, with bilateral trade reaching US$ 119 billion in 2022 and investments accounting for 18 percent of total Foreign Direct Investment.
    1. For Israel:
    • From Israel’s perspective, I2U2 is a continuation of the Abraham Accords and presents a new opportunity to build a platform where it can combine its old partners (the US and India) with the new (UAE) through a wider economic and strategic partnership.
    1. For UAE:
    • The Emiratis is of the view that such a grouping, with a focus on complementarities, will help solve global challenges such as those related to security in food, energy, and water.
    • The UAE knows these challenges only too well, given its own food and water shortages, with an annual rainfall of only 100mm and importing 85 percent of its food supplies.
    • UAE also sees I2U2 as a platform that can serve its interests in strengthening bilateral ties with the other three nations, while placing itself as the bridge between West Asia and South Asia.
    1. For the United States:
    • The grouping is a low-hanging fruit, following the Abraham Accords, through which it can nurture relationships with its allies and partners bilaterally as well as multilaterally, especially in the West Asian region.
    • This also helps the US in checking the expanding Chinese footprint in the region, particularly in the fields of investment, innovation, and technology.
    • US participation also indicates that it has shed its traditional strategic and security lens and now views the world order in a trans-regional and multilateral way.

    What makes this forum different?

    • Economic cooperation: The I2U2 is a regional forum focused on economic cooperation, distinguishing it from other forums like the Quad, Negev Forum, and AUKUS.
    • Six core sectors for intervention: The I2U2 has identified six core sectors for intervention are water, energy, transportation, space, health, and food security.
    • Active role for joint investments: The grouping envisions an active role for private capital and technology, aiming to collaborate on joint investments, resource mobilization, and new initiatives.
    • Key global concerns are prioritized: Two key global concerns are being prioritised by the grouping food security and clean energy which have local, trans-regional and long-term dimensions.

    Food corridor project

    • I2U2’s Food Security Project Addresses Global Hunger Crisis: I2U2 aims to combat global hunger crisis by utilizing member countries’ strengths in finance, technology, agriculture, and knowledge.
    • For instance: The project will use Israeli and American technology to establish integrated food parks in the states of Gujarat and Madhya Pradesh, with future expansion planned for other states, including Telangana, Andhra Pradesh, and Maharashtra .
    • Broader objective is to create alternate supply chains: The broader objective of the initiative is to create alternate supply chains among countries with similar goals, to guarantee food security that is environmentally sustainable

    Hybrid renewable energy project

    • Renewable Energy Project in Gujarat: I2U2’s second project aims to establish a 300 MW hybrid renewable energy facility in Gujarat with advanced battery storage technology developed through Israeli expertise and Emirati and American investments.
    • Strong Interest in UAE-India Partnership for Renewable Energy: UAE-based companies like Masdar are interested in partnering with India to explore renewable energy opportunities, especially with India’s goal of achieving 500 GW of non-fossil fuel capacity by 2030.

    What are the Potential Challenges?

    • Security Interests Could Pose Challenges for I2U2: Individual countries may prioritize their own security interests, which could conflict with those of others.
    • For instance: US and Israeli outlook on West Asia is affected by Iranian rivalry, while India and UAE might have a different perspective. While these security considerations have not yet affected the project, the unpredictable situation with Iran could pose a challenge.
    • China’s Presence in the Region Raises Concerns: The US and India are wary of China’s expanding presence in the region through trade deals, infrastructure investments, and security cooperation whereas Israel and UAE, have a more positive view of China,
    • For instance: UAE upgrading its ties to a Comprehensive Strategic Partnership and Israel engaging in defence and technical cooperation with China
    • Institutional Bottlenecks Could Hinder I2U2: Institutional bottlenecks could be a potential roadblock for the I2U2 project, as there may be a lack of synergy in the working cultures of business people from the four countries, and accountability mechanisms may be vague.

    Way ahead: India’s Stakes

    • India’s participation in I2U2 is crucial due to its position as a connector between West Asia and South Asia.
    • The initiative can bring investments, innovation and technology to India, boosting its journey to become the world’s third largest economy.
    • I2U2 can also support ‘Make in India’ by attracting manufacturing facilities in fields such as AI, fintech, transportation, and space.
    • To facilitate cooperation, India can designate nodal officers in its embassies and form a Coordinating Committee with the sherpa.
    • I2U2 could also inspire India to establish similar minilateral groupings with its partners in South Asia and Africa.

    Conclusion

    • As an alternative to the dismal performance of most multilateral institutions, minilaterals like I2U2 provide hope for more effective and mutually beneficial international cooperation. Such platforms can provide a sound framework to explore opportunities, support collective resolution of global challenges, and unlock avenues for greater convergence of interests and actions between countries.

    Mains Question

    Q. What is I2U2 minilateral forum? Discuss the Significance of I2U2 as the member counties driven by own motivations for joining the grouping. Also note down the potential challenges.

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  • Free Trade Agreements (FTAs) and its Geoeconomic Implications

    Trade

    Central Idea

    • With a projected 7 per cent growth for the ongoing year, the Indian economy is set to register the highest growth rate across all the major economies of the world. Moreover, Indian growth story for the years to come will be shaped by the unfolding geoeconomic and geopolitical forces that will sustain its consumption-driven-growth phenomenon, further driving investment and production.

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    What is Regional Trade Agreement (RTA)?

    • RTA is a treaty between two or more countries in a particular region that aims to reduce or eliminate trade barriers, such as tariffs and quotas, to facilitate increased trade between the member countries.
    • RTAs can take various forms, such as Free Trade Agreements, Customs Unions, Common Markets, and Economic Unions.

    Trade

    What is Free Trade Agreement (FTA)?

    • FTA is a specific type of RTA that eliminates tariffs and other trade barriers on goods traded between the member countries.
    • FTAs may also include provisions on trade in services and investment, but they are primarily focused on reducing tariffs on goods.

    India’s tryst with RTAs/ FTAs

    • From 2021, there has been a sudden spurt in signing bilateral trade agreements by India.
    • The India-Mauritius CECPA in 2021, India-UAE CEPA and Australia-India ECTA in 2022, are some examples.
    • Talks on these grounds with the UK and Canada are in advanced stages,
    • Serious intentions on inking FTAs with the EU and Israel have also been expressed.

    Geoeconomic Implications

    1. India-UAE Comprehensive Economic Partnership Agreement (CEPA):
    • Western QUAD: The India-UAE CEPA strengthens Indian commitment with I2U2 (i.e. Israel, India, UAE and the United States), also referred to as the western QUAD, a regional force convened in October 2021.
    • Access to the western neighbours: This agreement provides India an access to the western neighbours that can facilitate the process of negotiating trade agreements in the absence of China.
    • Advantage for India-GCC FTA: It puts India a step ahead towards having an India-GCC (Gulf Cooperation Council) FTA, thereby ameliorating its relations with the gulf nations.
    • Boost to economy: On the economic front, the trade pact is envisioned to almost double bilateral commodity trade by 2027, increase service trade and generate 10 lakh jobs in labour-intensive sectors.
    1. The Australia-India Economic Cooperation and Trade Agreement (ECTA)
    • The Australia-India ECTA boosts Australia-India ties on various fronts, including geopolitical one.
    • Once a more comprehensive FTA, i.e. the CECA (Comprehensive Economic Cooperation Agreement) gets inked between the two nations, various other areas such as services, investments, government procurement and intellectual property will be covered.
    • Even within the QUAD, the strong relationship between Australia and India will help in creating an Australia-India niche.
    1. Indo-Pacific Economic Framework for Prosperity (IPEF)
    • The IPEF, an economic initiative driven by the Biden administration with a total of fifteen participating member nations, presents the massive potential to ink a regional trade agreement and create a trade bloc without China.
    • If that happens, India, being a member, will definitely be a beneficiary.

    Trade

    How FTA’s will lead to Consumption-driven growth?

    • FTAs boosting consumption demand, this can happen through two avenues.
    • Increase consumption choice: The FTAs will enable cheaper imports of commodities and will increase the consumption choice.
    • Multiplier effect on domestic incomes: The second is that the direct multiplier effect of enhanced trade and increased employment will have its multiplier effect on domestic incomes.
    • Increase purchasing power: Both the forces combined together will increase the purchasing power of the consumers, and increase consumption demand.

    Trade

    Factors that put India at Competitive Advantage

    • India’s demographic dividend: India’s competitive advantage lies with its comparative demographic dividend over China. The under-30 population in India, being about 52 percent, compares favorably with around 40 percent for China, which is going to shrink faster over the next decade. The young population is expected to boost consumption, savings and investments, and will drive consumption-led-growth.
    • Low wage and thereby Cost-competitiveness: Second, as per 2019 estimates, the average Indian wage is 10% of that of China, thereby rendering relative cost-competitiveness to the products manufactured in India as compared to China. This is already enticing foreign investment.
    • National Infrastructure Pipeline: India’s massive emphasis on physical infrastructure through projects like the National Infrastructure Pipeline (NIP) for FY 2019-25 and transport sector growth will reduce the transaction costs of doing business.
    • Reforms in business environment: India has been working extensively to reform its business environment through effective policy practices be it through measures like Production Linked Incentive (PLI) scheme, or bringing about substantial changes in its tax regimes, liberalization of the Foreign Direct Investment (FDI) policies in manufacturing, etc.
    • Digital literacy: It entails digital literacy and English language skills. On both counts, the Indian youth is way ahead of China.
    • Strong Indian Diplomacy: Indian diplomacy is also playing an important role with trade agreements being used as important instruments of diplomacy. This is true for the UAE, Australia, and the partnerships like QUAD (or even IPEF), and I2U2.

    Conclusion

    • No doubt, FTAs are emerging as important tools for economic diplomacy for India for deeper levels of engagement with friendly nations. At the same time, the FTAs are two-level games for India. At the international level, it has to negotiate with the concerned nation/s, while at the domestic level it has to negotiate with various contending constituencies. Yet, FTAs’ role as a growth driver through trade and investment cannot be ignored. In addition, with India becoming the most populous nation in the world, surpassing China in January 2023, it presents itself as the largest product and factor market to the global community.

    Mains Question

    Q. What are FTAs and RTAs? India is enhancing its FTAs and RTAs in recent times. Discuss how it will contribute to the growth of the economy.

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  • Russia officially ‘suspends’ New START Treaty

    Central idea: The article provides an overview of the New START treaty, which was signed by Russia and the United States in 2010. It highlights how the treaty limits the number of nuclear weapons that the two countries can possess and deploy.

    The New START, INF and the Open Skies …. Be clear about the differences of these treaties. For example- to check if their inception was during cold war era etc.

    New START Treaty

    • The New Strategic Arms Reduction Treaty (New START) pact limits the number of deployed nuclear warheads, missiles and bombers and is due to expire in 2021 unless renewed.
    • The treaty limits the US and Russia to a maximum of 1,550 deployed nuclear warheads and 700 deployed missiles and bombers, well below Cold War caps.
    • It was signed in 2010 by former US President Barack Obama and then-Russian President Dmitry Medvedev.
    • It is one of the key controls on the superpower deployment of nuclear weapons.

    Background of US-Russia Nuclear Relations

    • The US formally QUIT the Intermediate-Range Nuclear Forces (INF)
    • The agreement obliged the two countries to eliminate all ground-based missiles of ranges between 500 and 5,500 km.

    When did nuclear disarmament begin?

    • In 1985, the two countries entered into arms control negotiations on three tracks.
    • The first dealt with strategic weapons with ranges of over 5,500 km, leading to the START agreement in 1991.
    • It limited both sides to 1,600 strategic delivery vehicles and 6,000 warheads.
    • A second track dealt with intermediate-range missiles and this led to the INF Treaty in 1987.
    • A third track, Nuclear, and Space Talks was intended to address Soviet concerns regarding the U.S.’s Strategic Defence Initiative (SDI) but this did not yield any outcome.

    Success of INF

    • The INF Treaty was hailed as a great disarmament pact even though no nuclear warheads were dismantled.
    • As it is a bilateral agreement, it did not restrict other countries.
    • By 1991, the INF was implemented. USSR destroyed 1,846 and the US destroyed 846 Pershing and cruise missiles. 
    • Associated production facilities were also closed down.
    • INF Treaty was the first pact to include intensive verification measures, including on-site inspections.

    How has the nuclear behavior been?

    start

    • With the end of the Cold War and the break-up of the USSR in end-1991, former Soviet allies were joining NATO and becoming EU members.
    • The U.S. was investing in missile defense and conventional global precision strike capabilities to expand its technological lead.
    • In 2001, the U.S. announced its unilateral withdrawal from the 1972 Anti-Ballistic Missile Treaty (ABM Treaty).
    • The US also blamed Russia for not complying with the ‘zero-yield’ standard imposed by the Comprehensive Test Ban Treaty (CTBT). This may indicate the beginning of a new nuclear arms race.

    Implications of the New Start

    • The 2011 New START lapsed in 2021. It may meet the fate of the INF Treaty.
    • The 2018 NPR envisaged the development of new nuclear weapons, including low-yield weapons.
    • China is preparing to operate its test site year-round with its goals for its nuclear force.
    • CTBT requires ratification by U.S., China, and Iran, Israel and Egypt and adherence by India, Pakistan and North Korea. It is unlikely to ever enter into force.

    Conclusion

    • A new nuclear arms race could just be the beginning. It may be more complicated because of multiple countries being involved.
    • Technological changes are bringing cyber and space domains into contention. It raises the risks of escalation.

     

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  • The India-US ICET: Transformative Impact On Bilateral Relations

    ICET

    Centra Idea

    • Earlier this month, the U.S. and India inaugurated their initiative on critical and emerging technologies (ICET). The promise of this initiative, if fulfilled, could have a transformative impact on India-U.S. relations. On the eve of the dialogue, National Security Adviser Ajit Doval said that the big need was to convert intentions and ideas into deliverables. This is where there has usually been a slip.

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    Background

    • India’s attempts towards US Technology Parallels: Since the 1960s, India has made many attempts to jump on the U.S. technology bandwagon.
    • Failed because of mismatch: But all of them have failed, primarily because of the mismatch between the two countries on the purposes for which they collaborated.
    • The ICET is perhaps better positioned: Unlike the earlier iterations, it comes at a time when India, too, has developed technological and managerial capacities and is emerging as a major economic power.

    ICET

    What is Initiative on Critical and Emerging Technologies (ICET)?

    • Launched by PM Modi and President Joe Biden: The ICET initiative was launched by Indian Prime Minister Narendra Modi and U.S. President Joe Biden in May 2022.
    • Goal to elevate and expand Indo-US Partnership: strategic technology partnership and defense industrial cooperation between the governments, businesses, and academic institutions of the two countries.
    • Directly monitored by PMO and White house: The Prime Minister’s Office in Delhi and the White House in Washington will oversee and direct the ICET.
    • Six focus areas of co-development and co-production: Strengthening innovation ecosystems, defence innovation and technology cooperation, resilient semiconductor supply chains, space, STEM talent, and next generation telecom.

    American aid so far

    • Significant role in India’s development efforts and quest for technological capability: A major driver of the process was the Cold War which persuaded the U.S. to provide sweeping assistance in a range of areas to India. While the Soviet Union emerged as a major player in areas like steel, heavy electricals, petroleum and mining, the U.S. focused on modernising engineering and management education, science and technology (S&T), and agriculture.
    • Nuclear energy cooperation: US helped build India’s first reactors for research and power. An entire generation of Indian nuclear scientists were trained in the U.S., including some who subsequently helped in making nuclear weapons.
    • Aid in Education in initial phase and vice versa: The massive aid provided by the U.S. to modernise Indian education, especially engineering and management, should have led to a growing industrial sector, but the Indian economy stalled in the 1960s and India ended up with a system where IIT and IIM graduates ended up benefiting the U.S. economy.
    • Aid in agriculture: The one area in which India did get lasting and important benefits was agriculture where American S&T helped trigger the Green Revolution and end an era of food shortages.
    • Gandhi-Reagan Science and Technology Initiative: The Gandhi-Reagan Science and Technology Initiative led to the 1984 India-U.S. MoU on sensitive technologies, commodities and information.
    • New American willingness to promote Indian S&T and the arms industry: In 1987, the U.S. agreed to assist India’s Light Combat Aircraft (Tejas) programme and allowed the sale of front-line GE 404 engine to India.

    ICET

    Current Status

    • India has steadily advanced in status as a friend of the U.S. and has purchased U.S. weapons and systems worth billions of dollars.
    • It is now deemed to be a Major Defence Partner, though not a Major Non-Nato Ally, a much more useful designation that Pakistan still retains.
    • The course has not been problem-free witness the pressure India faced under CAATSA and on account of its oil trade with Russia.

    Ambitious goals

    • Great deal for India: The ICET has set up a range of ambitious goals which mean a great deal for India. Some of them are aspirational, others political. A few are over the top, such as the belief that the U.S. will help India to develop advanced jet engines.
    • Licence for jet engines: As of now, all that is on the table is the possible licence manufacture of GE-404/414 engines for the LCA. This is not new. But cutting-edge jet engines are the crown jewels of the U.S., which the country will not part with.

    ICET

    Conclusion

    • After presenting the Union Budget, the finance minister said in an interview, “This is a golden opportunity for India. We should really not miss the bus this time.” The remark is truer of the technology and industrialisation bus that the ICET could be.

    Mains question

    Q. What is Initiative on Critical and Emerging Technologies (ICET)? Highlight the significance of ICET for India while noting down the American cooperation so far.

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  • What is Munich Security Conference?

    Central idea: The article is about the controversy surrounding billionaire philanthropist and political activist George Soros and his alleged statements on India and the Indian PM at the Munich Security Conference.

    Who is George Soros?

    • George Soros, the 92 YO billionaire philanthropist and political activist, has been at the center of several controversies over the years.
    • Some of the key controversies associated with Soros include:
    1. Currency manipulation: Soros became famous in the 1990s for his role in the “Black Wednesday” financial crisis in the UK, where he was accused of profiting from the devaluation of the pound sterling by short-selling it.
    2. Insider trading: Soros has also been accused of insider trading in several instances, including the case of the French bank Societe Generale.
    3. Political meddling: Soros has been accused of using his vast wealth to influence political campaigns and events around the world, including in countries like Hungary, Ukraine, and the United States.
    4. Anti-Semitic accusations: Soros has been the subject of numerous conspiracy theories and accusations of anti-Semitism, with some critics alleging that he is part of a secret globalist agenda to control world governments and economies.

    About Munich Security Conference (MSC)

    • The MSC was founded by a German official and publisher Ewald-Heinrich von Kleist at the peak of the Cold War (1947-1991).
    • Starting in 1963, the conference initially only focused on military issues and was mainly attended by western countries and their high-profile officials, who “came together to display a united front in their struggle with Soviet communism”.
    • After the end of the Cold War, the conference expanded its agenda that went beyond defense and security matters to include issues such as climate change and migration.
    • It also started to invite leaders from eastern nations, including Russia, India and China.

    What will be the focus of this year’s MSC?

    • This year’s edition might entail a refocus on its goal- the security order in Europe, in the backdrop of the Russia-Ukraine war that began just days after the MSC 2022 was concluded.
    • The conference might also serve as a platform for diffusing tensions between the United States and China, especially after the former shot down an alleged spy balloon.
    • Another theme on the agenda is to focus on diverse perspectives from the Global South, which included some of the poorest and least industrialized countries in the world.

     

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