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Subject: International Relations

  • 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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  • 34 years of Soviet Invasion of Afghanistan

    afghanistan

    Central idea: The article discusses the Soviet Union’s withdrawal from Afghanistan 34 years ago, which marked the end of a nearly decade-long occupation.

    Fun fact:

    “Charlie Wilson’s War” is a 2007 American biographical comedy-drama based on the true story of Charlie Wilson, a former United States Congressman who played a key role in supporting the Afghan mujahideen during the Soviet-Afghan War of the 1980s.

    The film is notable for its depiction of the complex and often murky world of international politics and covert operations. It also highlights the unintended consequences of the US’s support for the Afghan mujahideen, which included the rise of the Taliban and the emergence of al-Qaeda.

     

    Why did the Soviet Union invade Afghanistan?

    • Establish influence: The Soviet Union invaded Afghanistan in December 1979 in an attempt to support a friendly communist government (Saur Revolution) that had seized power in Kabul earlier that year.
    • Prevent radicalization of its southern states: The Soviet Union saw the situation in Afghanistan as an opportunity to extend its influence in the region and to protect its southern borders from Islamic fundamentalism.
    • Countering US influence in Pakistan: The Soviet Union was concerned about the possibility of the United States gaining a foothold in Afghanistan and potentially using it as a base for attacks against the Soviet Union.

    What led to its withdrawal?

    • US-powered rebel groups: The Soviet Union’s occupation of Afghanistan faced fierce opposition from Afghan rebel groups, who were supported by the US and trained by Pakistan hoping that the jihadis would wage war on India and liberate Kashmir.
    • Huge casualties: The conflict turned into a protracted and costly war that lasted almost a decade, with the Soviet Union suffering significant casualties and eventually withdrawing its troops in 1989.
    • Fall of USSR: After the Soviets withdrew from Afghanistan in 1989, the Afghan government, which had been propped up by the Soviet Union, soon collapsed, and the country plunged into a civil war.

    Aftermath: Radicalization of Afghanistan

    • Rise of Taliban: Various factions vied for power, and the Taliban emerged as a dominant force. The Taliban, a hardline Islamist group, took control of the country in 1996 and imposed a strict interpretation of Islamic law. This rule was marked by brutality and oppression, including the widespread use of public executions, amputations, and other forms of punishment.
    • Safe havens for terror: The group provided a safe haven for Al Qaeda, which was responsible for the 9/11 attacks in the US.

    How US came to Afghanistan?

    • In response to the 9/11 attacks, the United States led a coalition of forces in an invasion of Afghanistan in 2001.
    • The Taliban was quickly ousted from power, and a new ‘democratic’ government was established.
    • However, the conflict continued, and the Taliban gradually regained strength, launching attacks on government forces and civilian targets.

    Why did the US left Afghanistan?

    In August 2021, the US completed its withdrawal of troops from Afghanistan, marking the end of a 20-year-long military presence in the country.  It decided to withdraw its troops from Afghanistan for several reasons-

    • Massive cost: The conflict had lasted for two decades, and the United States had spent over $2 trillion on the war effort.
    • Huge casualties: The number of lives lost by the United States in the war in Afghanistan is a matter of debate, but it is estimated that more than 2,400 US military personnel were killed in the conflict.
    • Mission accomplished: The US had achieved many of its initial objectives in Afghanistan, such as dismantling Al Qaeda’s infrastructure and removing the Taliban from power.
    • Foreign policy shift: The withdrawal of US forces was part of a broader shift in US foreign policy towards a focus on great power competition, particularly with China and Russia.
    • America first policy: The US had also sought to end what it saw as “endless wars” in the Middle East and refocus its attention on domestic priorities.

    Assessing Taliban rule now

    Since taking control of Afghanistan in August 2021, the Taliban has taken a number of steps to consolidate its power and impose its ideology on the Afghan people. Some of the ways in which the Taliban has been accused of ruining Afghanistan are:

    • Imposing Sharia: The Taliban is an Islamist extremist group that seeks to impose its strict interpretation of Islamic law on the country.
    • Human rights abuses: The Taliban has been accused of committing widespread human rights abuses, including extrajudicial killings, summary executions, and forced disappearances.
    • Oppression of women: The group has also targeted women and girls, imposing strict dress codes and limiting their access to education and employment.
    • Restrictions on free speech and the press: The Taliban has cracked down on freedom of expression and the press, shutting down independent media outlets and arresting journalists and activists who oppose their rule.
    • Economic and humanitarian crisis: The Taliban’s takeover has caused an economic and humanitarian crisis in Afghanistan, with many people struggling to access basic necessities like food and medical care.
    • International isolation: Many countries have suspended aid and diplomatic relations with Afghanistan, and the UN has expressed concern about the group’s human rights record.

    How is India helping the Afghan people cause?

    India has been actively involved in providing humanitarian aid to the people of Afghanistan, especially in the wake of the Taliban’s return to power. Some of the ways in which India is helping the Afghan people are:

    • Providing food and medical aid: India has sent several consignments of food and medical aid to Afghanistan, including wheat, medicines, and other essential supplies. The aid is being delivered through various channels, including the Afghan Red Crescent Society and the UN.
    • Supporting refugees: India has a long history of providing support to Afghan refugees, and the government has pledged to continue this tradition in the wake of the Taliban’s return to power. India has said it will grant visas to Afghan nationals who are seeking refuge, and the government has also set up a new portal to streamline the visa application process.
    • Diplomatic efforts: India has been working to build international support for the Afghan people, and the government has been in touch with various countries and international organizations to coordinate relief efforts. India has also called for an inclusive political settlement in Afghanistan that respects the rights of all Afghan citizens, including women and minorities.

    Conclusion

    • The situation in Afghanistan is complex and challenging, and there are no easy solutions.

     

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  • Japan-India Combat Exercise and the Chinese Concerns

    Exercise

    Central Idea

    • Japan and India have launched their second Joint Air Defense Exercise called “Veer Guardian 2023” to conduct multi-domain air combat operations in a complex environment and deepen their mutual operational understanding while fostering closer defence cooperation. This increased military collaboration between Japan and India under US guidance in the Indo-Pacific is causing subdued panic among Chinese commentators.

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    Exercise

    All you need to know about Veer Guardian 2023

    • Bilateral exercise: Veer Guardian is a bilateral air exercise between the Indian Air Force (IAF) and the Japan Air Self-Defense Force (JASDF).
    • Fourth edition: The exercise took place at Hyakuri Air Base, near Tokyo in Japan in January 2023 and was the fourth edition of the Veer Guardian series.
    • Participation: The IAF participated with six Sukhoi Su-30MKI multirole fighters and two C-17 Globemaster transport aircraft, while the JASDF deployed six Mitsubishi F-2 fighters.
    • The primary objectives of the exercise: To enhance interoperability between the two air forces, exchange best practices and operational experiences, and improve understanding of each other’s tactics and procedures.
    • Drills: The exercise included various aerial manoeuvres, air combat scenarios, air-to-ground strikes, and close air support operations. The Indian side also participated in a humanitarian assistance and disaster relief (HADR) drill, which involved the C-17 aircraft dropping relief supplies to a simulated disaster-hit area.

    Japan-India collusion against China

    • Japan’s Pursuit of Allies: Japan has been actively seeking allies to counterbalance China’s rise in the Indo-Pacific region. It has formed alliances with several countries, including the US, Germany, the UK, Australia, and India.
    • Japan-India Security Cooperation: Japan and India have a reciprocal access agreement in place since 2020. They have regularly been conducting joint military exercises in naval, ground and air domains.
    • Opportunities for India to gain experience: India, having faced a three-year-long border standoff with China, sees the joint air exercises with Japan as a rare opportunity to gain experience over the East China Sea. Therefore, the joint drill with Japan can become a stepping stone to future quadrilateral air exercises.

    Exercise

    Why China is concerned about the increasing collaboration between Japan and India?

    • Japan’s National Security Strategy: The NSS sees China as Japan’s biggest challenge ever seen and recommends a counter-strike capability by 2027.
    • Japan’s strategy to counter China’s increasing influence in the Indo-Pacific region: The Chinese government believes that Japan is exaggerating the China Threat Theory as evidenced by Japan’s recently published National Security Strategy (NSS).
    • Limiting Strategic manoeuvrability: A stronger India poses a major threat to China’s west while Japan in the east remains a major threat. As both India and Japan are significant players in the Asia-Pacific region, their collaboration could potentially limit China’s strategic maneuverability.
    • Balance of power: Together, India and Japan can bring a paradigmatic shift in the region’s security. The increasing collaboration with India is one of the ways in which Japan is seeking to balance its power with China.
    • Concern for national security: Moreover, China sees Japan’s recent efforts to court allies and introduce NATO forces in the Asia-Pacific region as potentially leading to a resurgence of Japan’s militarist past, which is a concern for China’s national security.

    Conclusion

    • In sum, the Japan-India joint air drill will impart crucial combat experience to both air forces. It will also further Japan’s approach to involve India deeper in the East Asian security architecture. However, for China, the air drill comes as an ominous portent for the future.

    Mains question

    Q. What is the significance of the Veer Guardian 2023 joint air exercise between India and Japan, and why is China concerned about the increasing collaboration between these two countries? Discuss

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  • Spy Balloon: Another Grey-zone warfare tactics

    Balloon

    Central Idea

    • The recent incident of a Chinese ‘spy balloon’ sighted 60,000 feet over the skies of Montana in the United States (US) which was finally shot down by a missile from a US F22 fighter jet off the coast of South Carolina has left far too many questions unanswered.

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    What the debris indicates?

    • While some of the clues emerging from the balloon’s debris have unravelled some information, the incident itself is a reminiscent of Cold War era tactics and is a pointer towards archetypical grey-zone activities which could characterise China’s standard operating procedure in the future.

    US claims

    • The US State Department’s confident claims that the balloon “was clearly for intelligence surveillance and was likely capable of collecting and geo-locating communications” point to an incoming precipitation of crisis in US-China relations.

    Understanding Chinese perceptions

    • Spy balloon episode gives us a peek into the worldview of chinese strategists: There is a strategic awareness in Beijing that even as the war has raged on in Europe for over a year, the US may be turning its attention to the Western Pacific region where it is rebuilding its naval power, resuscitating alliances, and consolidating its position as the centre of its hub-and-spokes network in the Pacific theatre.
    • US-Philippines defence cooperation: There has been the renewal of the US-Philippines defence cooperation, which bolsters America’s defences with respect to Taiwan.
    • Japan’s return to geopolitics is another basis for such perceptions within China: Japanese PM Fumio Kishida’s warning that East Asia could suffer the same fate as Ukraine has led the nation to radically alter its security policy. On one hand, Japan is building domestic capabilities like incrementally increasing spending on defence, and planning for a missile arsenal to deter China, it is also expanding defence cooperation with the US and the North Atlantic Treaty Organization (NATO).
    • Chinese apprehensions about Indo pacific concept: Chinese strategists have red-flagged the Indo-Pacific concept, likening America’s approach of developing ties with China’s neighbours with an aim of creating regional blocs like NATO to contain China.
    • Japan’s new military posturing is being viewed with trepidation in Beijing:
    1. First, it is believed that Japan will deploy missiles in bases closer to Taiwan.
    2. Second, there is a belief that Japan’s increasing defence capabilities in the region combined with America’s growing military power in the Western Pacific may exceed China’s comprehensive national power eventually.

    Grey-zone warfare: A key feature of China’s aggression and expansionism

    • Reclaiming reefs in south China sea: The first step in its expansion into the South China Sea was reclaiming reefs and then building military infrastructure there.
    • Villages near Indian border: Similarly, China has constructed ‘xiaokang’ villages near the Indian border in a bid to bolster its territorial claims.
    • Spy balloon episode is one of the grey zone tactics: The spy balloon episode marks a major inflection point in this approach, since the US, for the first time, has been at the receiving end of China’s grey-zone tactics.

    Conclusion

    • The United States uses a variety of tools, from satellites to intercepted communications to surveil China. It’s not unreasonable that China would attempt to do the same to the United States. In between these two views is the realisation that the dragon’s hidden grey-zone tactics have reached the continental US more brazenly than ever before.

    Mains question

    Q. In the backdrop of Chinese spy balloons episode, Discuss the Chinese perceptions that drive grey-zone activities, and how these tactics could impact the global order in the future?

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  • Central agencies gear up for FATF mutual evaluations

    Central agencies, including the Financial Intelligence Unit (FIU) and the Directorate of Revenue Intelligence (DRI), have begun preparations for the Financial Action Task Force’s (FATF) mutual evaluation process of India.

    What is the news?

    • India is due to undergo the mutual evaluation process in the second half of 2022, which will assess the country’s compliance with international anti-money laundering and counter-terror financing standards.

    What is FATF?

    • FATF is an intergovernmental organization founded in 1989 on the initiative of the G7 to develop policies to combat money laundering.
    • The FATF Secretariat is housed at the OECD headquarters in Paris.
    • It holds three Plenary meetings in the course of each of its 12-month rotating presidencies.
    • As of 2019, FATF consisted of 37 member jurisdictions.

    India’s say in FATF

    • India became an Observer at FATF in 2006. Since then, it had been working towards full-fledged membership.
    • On June 25, 2010, India was taken in as the 34th country member of FATF.

    What is FATF’s mutual evaluation process?

    • The mutual evaluation process is a review of a country’s legal and institutional framework to combat money laundering and terrorist financing, as well as its implementation of measures to prevent these crimes.
    • During the process, the FATF assesses a country’s compliance with its 40 recommendations on anti-money laundering and counter-terror financing, as well as the level of effectiveness of these measures in practice.
    • The outcome of the mutual evaluation is a report that highlights a country’s strengths, weaknesses, and areas for improvement, and assigns a rating based on the level of compliance and effectiveness.

    How will FATF evaluate India?

    • The FATF’s evaluation will cover a wide range of areas, including India’s legal framework, regulatory system, law enforcement efforts, and international cooperation.
    • Central agencies have been working to ensure that India’s anti-money laundering and counter-terror financing laws are in line with international standards, and that their implementation is effective.

    Significance of this evaluation

    • The outcome of the evaluation will be a report that highlights India’s strengths, weaknesses, and areas for improvement, and assigns a rating based on the level of compliance and effectiveness.
    • The mutual evaluation process is an important tool in the global fight against money laundering and terrorist financing.
    • Its outcome can have significant implications for a country’s access to international financial markets and its reputation in the global community.

     

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  • India- France: Expanding strategic partnership

    France

    Context

    • The celebration by India and France of 25 years of their strategic partnership (January 26) presents an important opportunity for both to introspect on their relations. Signed in 1998, the time-tested strategic partnership has continued to gain momentum over shared values and aspirations of peace, stability and, most importantly, their desire for strategic autonomy. There are no real substantive disagreements between the two nations.

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    France a largest foreign investor in India

    • France has emerged as a key trading partner of India with annual trade of $12.42 billion in 2021-22.
    • It is the 11th largest foreign investor in India with a cumulative investment of $10.31 billion from April 2000 to June 2022, which represents 1.70% of the total foreign direct investment inflows into India.

    France

    France a key defence trading partner of India

    • Second largest defence supplier in 2017-2021: France has emerged as a key defence partner for India, becoming the second largest defence supplier in 2017- 2021. France has emerged as a major strategic partner for India with crucial defence deals and increased military to military engagement.
    • For example: A key example of this is the inducting of the French Scorpene conventional submarines, being built in India under technology transfer agreement of 2005, and the Indian Air Force having received 36 Rafale fighter jets.
    • Joint venture for aircraft manufacturing: The Tata group has also tied up with Airbus to manufacture C-295 tactical transport aircraft in Vadodara, Gujarat. This line is expected to be expanded into other civilian and military aircraft manufacturing in a joint venture with France.
    • Regular joint exercises: These relations are further fortified with the robust network of military dialogues and regularly held joint exercises Varuna (navy), Garuda (air force), and Shakti (army).
    • France is a willing partner for India: The importance of the defence partnership was further underscored in the recent statement by the French Ambassador to India, Emmanuel Lenain that France is a willing partner for India as it builds its national industrial base for the defence industry and for critical strategic defence projects.

    France

    Maritime ties

    • Joint Strategic Vision of India-France Cooperation in the Indian Ocean Region: India and France are resident powers of the Indian Ocean and in the Indo-Pacific. The importance of the Indian Ocean Region was visible during the visit of French President Emmanuel Macron’s visit to New Delhi in 2018 when the leadership of both countries welcomed the Joint Strategic Vision of India-France Cooperation in the Indian Ocean Region which presented a blueprint for a strengthening of ties.
    • Like-minded partners: In operational terms, Franco-Indian joint patrolling in the Indian Ocean signals New Delhi’s intent to engage with like-minded partners in expanding its footprint in the Indian Ocean.
    • Common vision for open Indo-Pacific: Maritime security has further gained momentum as both countries have articulated their common vision for a free, fair and open Indo-Pacific. Both countries seeks to provide comprehensive solutions for maritime security, regional cooperation, climate change adaptation.
    • Common concerns over China’s aggressive behaviour: Both countries share concerns over the rise of China and its aggressive behaviour, regionally and globally, and have committed to working together to ensure that there is no imbalance in the Indo-Pacific
    • Indo-Pacific Trilateral Development Cooperation Fund: India and France in September 2022 agreed to set up an Indo-Pacific Trilateral Development Cooperation Fund that will support sustainable innovative solutions for countries in the region. The two partners have formed a trilateral grouping with the United Arab Emirates to ensure maritime domain awareness and security from the east coast of Africa to the far Pacific.

    Other areas of cooperation 

    • Nuclear cooperation: France was among the first countries with which India signed a civil nuclear deal. Paris also played a critical role in limiting India’s isolation in the non-proliferation order after the 1998 nuclear tests.
    • Support for India’s bid for permanent membership of UNSC: In a sign of expanding cooperation, France supports India’s bid for permanent membership of the United Nations Security Council as well as its entry into the Nuclear Suppliers Group.
    • India supported France in the Paris Agreement: An area of importance for both is climate change, where India has supported France in the Paris Agreement expressing its strong commitment towards mitigating climate change impact. New Delhi and Paris, as part of their joint efforts on climate change, launched the International Solar Alliance in 2015.
    • Deepening cooperation in complex geological order: As the complexities in the international geopolitical order have emerged, both countries have worked towards a deepening and broadening of their cooperation.

    France

    Way ahead

    • India’s partnership with France is built on common values and goals.
    • Both have underlined the importance of maintaining strategic autonomy with a shared understanding of global risks in many domains.
    • There is a high-level India-France political dialogue that is ongoing in defence, maritime, counterterrorism and the Indo-Pacific.
    • They are now forging ahead with cooperation in issues such as digitisation, cyber, green energy, a blue economy, ocean sciences, and space.

    Conclusion

    • India and France understand each other’s interests and dependencies, be it in relation to China or Russia. In the marking of a long strategic partnership, a common interest in enhancing strategic autonomy and improving resilience, there is much ground ahead for further collaboration.

    Mains question

    Q. India’s partnership with France is built on common values and goals. In recent times, France has emerged as a key defence trading partner of India. Discuss.

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  • US bombed Nord Stream Gas Pipeline

    nord

    An American investigative journalist has claimed that the September 2022 bombing of the undersea Nord Stream gas pipelines was carried out by the US Central Intelligence Agency (CIA).

    What is Nord Stream Pipeline?

    (1) Nord Stream 1:

    • Nord Stream 1 is the biggest pipeline transporting natural gas between Russia and Europe via Germany.
    • It is a system of offshore natural gas pipelines running under the Baltic Sea from Russia to Germany.
    • Nord Stream 1 is a 1,224 km underwater gas pipeline that runs from Vyborg in northwest Russia to Lubmin in northeastern Germany via the Baltic Sea.

    (2) Nord Stream 2:

    • Russian threats to choke this gas supply to Europe present an economic threat to Germany.
    • To expand options and double the supply from Russia, Germany decided to build Nord Stream 2.
    • The construction of the $11 billion-worth Nord Stream 2 was completed in 2021 but never began commercial operations.

    Why the Nord Stream pipeline is so much in news?

    • For Germany: Energy prices in Germany, Europe’s largest economy, are among the lowest in the continent because of the cheap gas supplies via Nord Stream 1. This also makes German manufactured goods more competitive in the international market.
    • For European Union: In 2021, Russia supplied nearly 40 per cent of the EU’s natural gas needs through this pipeline. The flows through Nord Stream play a vital role in filling up the national storage tanks of EU. It is crucial to provide the required heating in the upcoming winter.
    • For Russia: Russia is using the supplies via the crucial pipeline as a bargain to navigate its economy through sanctions from the western countries.

    What is the current status of Nord Stream Pipeline?

    • Nord stream pipeline is the largest single supply route for Russian gas to Europe. The Russian state owned gas company Gazprom has a majority ownership in the pipeline.
    • While it was running at just 20% of its capacity since the Russia-Ukraine conflict began, the company, in early September fully cut gas flows from the pipeline on the pretext of maintenance.
    • According to Bloomberg, while 40% of Europe’s pipeline gas came from Russia before Russia Ukraine the war, the number now stands at just 9%.
    • Even though both pipelines were not running commercially, they had millions of cubic metres of gas stored in them.

     

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