💥Join UPSC 2027,2028 Mentorship (August Batch) + XFactor Notes & Microthemes PDF
Talk to Mentor

Civilsdaily

Login

Subject: International Relations

  • India-Japan friendship can help global peace, prosperity

    Context

    The year 2022 marks the 70th anniversary of the establishment of diplomatic relations between Japan and India.

    Historical background of India-Japan relationship

    • We have a long history of people-to-people exchanges that can be traced back to the sixth century.
    • Buddhism was brought to Japan and, in 752.
    • During Meiji Restoration in the late 19th Century — Japan needed natural resources to modernise its industry.
    • Many Japanese travelled to India to purchase cotton, iron ore, etc.
    • Formal relations between Japan and India began in 1952.
    • After the Second World War, instead of signing the multilateral San Francisco Peace Treaty, India opted for concluding a bilateral peace treaty with Japan, considering that honour and equality should be ensured for Japan to rejoin the international community.
    • But even before the establishment of diplomatic relations, the goodwill between the people of the two countries was deeply rooted through business, academic and cultural exchanges.
    • After 70 years of multi-layered exchanges, the relationship between our two countries grew into a “Special Strategic and Global Partnership”. 

    Future possibilities

    [1] As democratic countries, contribute to global peace and prosperity

    • As democratic countries in Asia, India and Japan can cooperate to contribute to global peace and prosperity.
    • We share political, economic and strategic interests based on the firm foundations of common values and traditions.
    • We are continuing our efforts to build a rules-based free and open international order.

    [2] Cooperation in security

    • There are a plethora of fields that we can cooperate in security issues including cyber security, outer space and economic security.

    [3] Augmenting economic relations

    •  For long, Japan has been the largest ODA (Official Development Assistance) donor to India.
    • One of the most recent and ongoing examples of our collaboration is the Mumbai-Ahmedabad High-Speed Rail project.
    • Japan is also one of the largest investors in India.
    • Both countries have also promoted economic cooperation in other countries to enhance social infrastructure and connectivity.
    • Our economic partnership can further strengthen the economy of the Indo-Pacific, as well as the world economy.

    [4] Cultural exchange

    • Cultural exchanges including literature, movies, music, sports and academics are essential for our relations, enabling a better understanding.

    Consider the question “The year 2022 marks the 70th anniversary of the establishment of diplomatic relations between Japan and India. The future offers enormous possibilities for the partnership. In context of this, examine the future possibilities the two countries can explore.” 

    Conclusion

    India-Japan ties will continue to flourish. Our long history substantiates that.

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

    Meiji Restoration in Japan

    • In Japanese history, the political revolution in 1868 that brought about the final demise of the Tokugawa shogunate (military government)—thus ending the Edo (Tokugawa) period (1603–1867)—and, at least nominally, returned control of the country to direct imperial rule under Mutsuhito (the emperor Meiji).
    • In a wider context, however, the Meiji Restoration of 1868 came to be identified with the subsequent era of major political, economic, and social change—the Meiji period (1868–1912)—that brought about the modernization and Westernization of the country.

  • India to seal a Free Trade Agreement (FTA) with UK

    India and the United Kingdom have launched formal Free Trade Agreement (FTA) negotiations with the aim of concluding an early harvest trade agreement over the next few months.

    What is a Free Trade Agreement (FTA)?

    • A FTA is a pact between two or more nations to reduce barriers to imports and exports among them.
    • Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.
    • The concept of free trade is the opposite of trade protectionism or economic isolationism.

    Key benefits offered by FTA

    • Reduction or elimination of tariffs on qualified: For example, a country that normally charges a tariff of 12% of the value of the incoming product will rationalize or eliminate that tariff.
    • Intellectual Property Protection: Protection and enforcement of intellectual property rights in the FTA partner country is upheld.
    • Product Standards: FTA enhances the ability for domestic exporters to participate in the development of product standards in the FTA partner country.
    • Fair treatment for investors: FTA provides treatment as favourably as the FTA partner country gives equal treatment for investments from the partner country.
    • Elimination of monopolies: With FTAs, global monopolies are eliminated due to increased competition.

    How many FTAs does India have?

    • India has signed it’s first Free Trade Agreement (FTA) with Sri Lanka in 1998.
    • Likewise, India had FTAs with: Nepal, Bhutan, Thailand, Singapore, ASEAN, Japan and Malaysia.
    • The discussion is going for an FTA with Australia.
    • India has signed Preferential Trade Agreements such as:
    1. Asia Pacific Trade Agreement (APTA) with Bangladesh, China, India, Lao PDR, Republic of Korea, and Sri Lanka
    2. Global System of Trade Preferences (GSTP)
    3. India – MERCOSUR PTA etc. with South American countries

    Back2Basics: Types of Trade Agreements

    (1) Free Trade Agreement – discussed above

    (2) Preferential Trade Agreement

    • In this type of agreement, two or more partners give preferential right of entry to certain products.
    • This is done by reducing duties on an agreed number of tariff lines.
    • Here a positive list is maintained i.e. the list of the products on which the two partners have agreed to provide preferential access.
    • Tariff may even be reduced to zero for some products even in a PTA.
    • India signed a PTA with Afghanistan.

    (3) Comprehensive Economic Partnership Agreement

    • Partnership agreement or cooperation agreement are more comprehensive than an FTA.
    • CECA/CEPA also looks into the regulatory aspect of trade and encompasses and agreement covering the regulatory issues.
    • CECA has the widest coverage. CEPA covers negotiation on the trade in services and investment, and other areas of economic partnership.
    • It may even consider negotiation on areas such as trade facilitation and customs cooperation, competition, and IPR.
    • India has signed CEPAs with South Korea and Japan.

    (4) Comprehensive Economic Cooperation Agreement

    • CECA generally cover negotiation on trade tariff and Tariff rate quotas (TRQs) rates only.
    • It is not as comprehensive as CEPA.
    • India has signed CECA with Malaysia.

    (5) Framework Agreement

    • Framework agreement primarily defines the scope and provisions of orientation of the potential agreement between the trading partners.
    • It provides for some new area of discussions and set the period for future liberalisation.
    • India has previously signed framework agreements with the ASEAN, Japan etc.

    (6) Early Harvest Scheme

    • An Early Harvest Scheme (EHS) is a precursor to an FTA/CECA/CEPA between two trading partners. For example, early harvest scheme of RCEP has been rolled out.
    • At this stage, the negotiating countries identify certain products for tariff liberalization pending the conclusion of actual FTA negotiations.
    • An Early Harvest Scheme is thus a step towards enhanced engagement and confidence building.

     

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

  • Philippines approves deal for BrahMos Missile

    In the first export order for the BrahMos supersonic cruise missile system, the Philippines has approved a $374.96 mn contract for the purchase of a shore-based anti-ship variant of the missile from India.

    About BrahMos Missile

    • BrahMos missile derives its name from the combination of the names of Brahmaputra and Moskva Rivers.
    •  They are designed, developed and produced by BrahMos Aerospace, a joint venture company set up by DRDO and Mashinostroyenia of Russia.
    • It is a two-stage missile with a solid propellant booster as the first stage and liquid ramjet as the second stage.
    • The cruise missiles like BrahMos are a type of system known as the ‘standoff range weapons’ which are fired from a range sufficient to allow the attacker to evade defensive fire from the adversary.
    • Such weapons are in the arsenal of most major militaries in the world.

    Its capability

    • BrahMos missile flies at a speed of 2.8 Mach or almost three times the speed of sound.
    • It is the main weapon system of the Indian Navy warships and has been deployed on almost all of its surface platforms.
    • An underwater version is also being developed which will not only be used by the submarines of India but will also be offered for export to friendly foreign nations.

    Various versions

    • The versions of the BrahMos that are being tested have an extended range of around 400 km, as compared to its initial range of 290 km, with more versions of higher ranges currently under development.
    • Various versions including those which can be fired from land, warships, submarines and Sukhoi-30 fighter jets have already been developed and successfully tested in the past.
    • The earliest versions of the ship launched BrahMos and land-based system are in service of the Indian Navy and the Indian Army since 2005 and 2007 respectively.

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

    Back2Basics:

    Explained: India’s Missile Capability

     

  • The Indo-Pacific opportunity

    Context

    The geopolitics of the Indo-Pacific, which is changing fast. As it moves into 2022, the region will carry the imprint of the past five years, and will have to chart a course through inter-state tensions and crises, using both diplomacy and military preparedness.

    What will shape the geopolitics and geoeconomics of the Indo-Pacific?

    • Key players in the region: The region is central to world economy and peace, and nine countries are key players: the US, China, Japan, India, Germany, the UK, Russia, Australia and France.
    • The geopolitics and geo-economics of the Indo-Pacific will be largely shaped by the interplay of relations among these nations.
    • US-China relations: Of paramount importance is the US-China equation.
    • Expect this relationship to be marked by continually adversarial, competitive and cooperative traits.
    • Beijing’s south/east China policy, aggressive postures towards Taiwan, human rights violations in Xinjiang, the subjugation of Hong Kong’s citizenry and assertive economic outreach in the Indo-Pacific — these will weigh heavily on US-China relations.

    A significant role of groupings and individual nations

    • In this standoff, the role of new groupings and individual nations is significant.
    • Role of Quad: Foremost are the Quad, a strategic partnership between the US, India, Japan and Australia and the militaristic AUKUS (Australia, UK, US). 
    • India-Australia ties: Meanwhile, India and Australia are on track to deepen ties, not only bilaterally but also with the other two Quad powers.
    • The next Quad summit, probably hosted by Japan, will cement the grouping.
    • EU’s role: The EU’s Indo-Pacific strategy, announced last September, aims at increasing its economic and security profile in, and linkages with, the region.
    • UK’s role: Only by being more strategic and less mercantilist, more candid and assertive with China, and more cooperative with partners such as India, can the EU — and its former member the UK — hope to become vital players in the Indo-Pacific.
    • ASEAN, located in the middle of the Indo-Pacific waters, faces the heat of China’s aggression and the sharpening great power rivalry.
    •  It must enhance its realism and shed its tendency of wishing away problems.

    Suggestions for India

    • 1]Strengthen the Quad – especially by ensuring that the grouping fulfils its commitment to deliver at least one billion vaccine doses to Indo-Pacific nations by December 2022.
    • India must protect its established relationship with Russia, and show some resilience in dialogue with Beijing.
    • 2] Enhance relations with ASEAN nations: It must enhance cooperation with key Southeast Asian partners —Indonesia, Vietnam, Philippines and Thailand — while humouring ASEAN as a grouping.
    • 3] Give attention to African and Indian Ocean island states: The eastern and southern planks of Africa and the Indian Ocean island states need continued high policy attention and financial resources.
    • A clear economic and trade agenda to follow the flag in this vital region, is certain to yield long-term dividends.

    Consider the question “Indo-Pacific will present India strategic and economic opportunities that India must not miss. However, the region will have to chart a course through inter-state tensions and crises. Comment.”

    Conclusion

    India has done well by fulfilling its humanitarian duties during the pandemic. Learning how to convert them smartly into economic and strategic opportunities in its periphery is the focused task for the nation in 2022.

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

  • China does not have it all its way in the South China Sea

    Context

    South-East Asian countries are increasingly wary of their giant neighbour.

    Background of dispute

    • Disputes in the South China Sea go back decades.
    • But it was only ten years ago that China, which makes maritime claims for nearly the whole sea, greatly upped the ante.
    • Countries involved: They involve Brunei, China, Malaysia, the Philippines, Taiwan and Vietnam, all with contesting claims.
    • China provoked a stand-off that left it in control of an uninhabited atoll, Scarborough Shoal, which under un maritime law clearly belongs to the Philippines.
    • Then China launched a massive terraforming exercise, turning reefs and rocks into artificial islands hosting airstrips and bases.

    China’s strong-arm tactics

    • China’s long-term aim is to project Chinese power deep into the South China Sea and beyond, and to hold the Americans away during any conflict.
    • The immediate aim, though, is to dominate politically and economically as much as militarily.
    • China has challenged oil-and-gas activity by both Indonesia and Malaysia, and sent drilling rigs to both countries’ eezs and continental shelves.
    • It has bullied foreign energy companies into dropping joint development with Vietnam and others.

    Implications

    • China has paid a diplomatic price.
    • Impact on relations with ASEAN: Had Mr Xi engaged in none of the terraforming and bullying, China would be better admired among members of the ten-country Association of South-East Asian Nations (ASEAN).
    • Naval presence of the US: The United States and its Western allies have upped their naval presence in the sea, welcomed by most ASEAN members.

    Negotiation on Code of conduct on South China Sea

    • For years China dragged its feet on agreeing with ASEAN a code of conduct on the South China Sea, a principle agreed on 20 years ago in order to promote co-operation and reduce tensions.
    • These days, China likes to play willing.
    • China is demanding, in effect, the right of veto over ASEAN members’ naval exercises with foreign powers.
    • It also wants to keep out foreigners from joint oil-and-gas development.
    • Such demands are unacceptable to members.

    Conclusion

    Despite China’s efforts to establish its wild claims of sovereignty, China has been facing sustained resistance from the ASEAN countries.

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

  • India extends $900 mn aid to Sri Lanka

    India has confirmed a $400 million currency swap with Sri Lanka while deferring another $500 million due for settlement to the Asian Clearing Union (ACU).

    What is the news?

    • Sri Lanka is facing a severe dollar crunch that economists say might lead to a default on external debt and create a food shortage in the imports-reliant island nation.
    • In this regard, the Reserve Bank of India has extended currency swap facilities of $900 million to Sri Lanka.

    What are Currency Swaps?

    • A currency swap, also known as a cross-currency swap, is an off-balance sheet transaction in which two parties exchange principal and interest in different currencies.
    • Currency swaps are used to obtain foreign currency loans at a better interest rate than could be got by borrowing directly in a foreign market.

    Practice question for mains:

    Q. What are Currency Swaps? Discuss the efficacy of Currency Swap Agreements for enhancing bilateral cooperation in Indian context.

    How does it work?

    • In a swap arrangement, RBI would provide dollars to a Lankan central bank, which, at the same time, provides the equivalent funds in its currency to the RBI, based on the market exchange rate at the time of the transaction.
    • The parties agree to swap back these quantities of their two currencies at a specified date in the future, which could be the next day or even three months later, using the same exchange rate as in the first transaction.
    • These swap operations carry no exchange rate or other market risks, as transaction terms are set in advance.

    Why does one need dollars?

    • FPIs investors look for safer investments but the current global uncertainty over COVID outbreak has led to a shortfall everywhere in the global markets.
    • This has pulled down foreign exchange reserves of many small and developing countries.
    • This means that the government and the RBI cannot lower their guard on the management of the economy and the external account.

    Benefits of currency swap

    • The absence of an exchange rate risk is the major benefit of such a facility.
    • This facility provides the flexibility to use these reserves at any time in order to maintain an appropriate level of balance of payments or short-term liquidity.
    • Swaps agreements between governments also have supplementary objectives like the promotion of bilateral trade, maintaining the value of foreign exchange reserves with the central bank and ensuring financial stability (protecting the health of the banking system).

    Back2Basics: Asian Clearing Union (ACU)

    • The ACU with headquarters in Tehran, Iran, was established on December 9, 1974, at the initiative of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    • The primary objective of ACU was to secure regional co-operation as regards the settlement of eligible monetary transactions among the members of the Union/
    • It now aims to provide a system for clearing payments among the member countries on a multilateral basis.
    • The unit of settlement of ACU transactions is a common unit of account of ACU, and the unit is equivalent to one USD, and the Asian Monetary Unit may be denominated as ACU dollars and Euro.

    Must read:

    [Burning Issue] India – Sri Lanka relations in recent times

     

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

  • Pakistan’s New Security Policy

    Peace with India and its immediate neighbors is set to be the central theme of Pakistan’s first-ever National Security Policy.

    Why has this news made headlines?

    • Pakistan’s (official) policy now leaves the door open for trade with India even without the settlement of the Kashmir issue – provided there is headway in bilateral talks.
    • Earlier, Kashmir used to be at the centre-stage of all Pakistani outcry.

    New Security Policy

    • The country’s new policy would act as an umbrella document, to be used as a guideline for Pakistan`s foreign, international and defence related policies.
    • The five-year-policy document, which will span 2022-26, is being touted by the Pakistan government as the country’s first-ever strategy paper of its kind.

    Key highlights

    • Focus on trade: The 100-page policy document has also put out elaborate plans to open trade and business ties with India.
    • Silent on Kashmir: Kashmir issue with India has been identified as a ‘vital national policy’ issue for Pakistan.
    • No public discussion: Only a part of the national security policy will be made public.
    • Defying hostility with India: The document states that Pakistan is not seeking hostility with India for the next 100 years.
    • Curbing militancy: The new policy also deals with the issue of militant and dissident groups and advocates dialogue with ‘reconcilable elements.’
    • No re-conciliation with India: There are no prospects of rapprochement with India under the current government.
    • Others: On the internal front, the new policy identifies five key areas of population/migration, health, climate and water, food security and gender mainstreaming.

    Significance of such policy

    • Pakistan and India have mostly been at loggerheads with each other throughout history.
    • During the first term of Narendra Modi in 2014, the relations took a positive turn when he announced his intentions to have cordial relations with Pakistan.
    • He had also visited Islamabad in 2015 unannounced to attend a marriage ceremony in Ex-PMs family.
    • However, the relations deteriorated following the horrific 2016 Uri attacks.

    Way ahead

    • Pivotal equations between India and Pakistan will continue to be dominated by Kashmir, the ongoing proxy war and terrorism.
    • It is unlikely that this prevailing equilibrium is likely to be reset by this classified policy document. That too overnight.
    • The India-centric security obsession will remain the core of this policy.

     

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

  • Chinese scramble for Africa

    Chinese Foreign Minister has visited Eritrea, Kenya, and Comoros in the first week of January as part of a five-nation tour.

    Why in news?

    • Chinese FM was observing a 32-year-old Beijing ritual of visiting Africa at the beginning of every year.
    • In fact, China’s links with the continent go back farther than the last three decades.

    China-Africa Ties: A backgrounder

    • In the Cold War years, as the US and Soviet Union jousted for influence over Africa, China maintained an ideological presence on the continent.
    • In 1966, after Kwame Nkrumah was ousted in a coup while he was in Beijing, the Chinese put up the Ghananian independence leader for a few days before he decided to leave for Guinea.
    • Since the 1990s, China has successfully used its old ties with several African countries to remodel the relationship, using the abundant natural resources of the continent to service its own massive growth.

    [A] Strategic gestures

    • Diplomatic establishments: China has a special envoy to the Horn of Africa where Eritrea, Ethiopia, Somalia, Djibouti and Kenya are located. It shows the strategic importance of this Indian Ocean region for China.
    • Military bases: Since 2017, Beijing has had a military base in Djibouti with 400 soldiers of the PLA, in close proximity to French and an American base.
    • Railway lines: A Chinese-built railway line connects Djibouti to the Ethiopian capital Addis Ababa.

    [B] Infrastructure Projects

    • Tanzania: The first Chinese infrastructure project on the continent was the 1,860-km Tanzania-Zambia railway in the 1970s — the first transnational railway in Africa.
    • Zambia: In addition to carrying passengers, it transported ore from Zambian copper mines to the port city of Dar-es-Salam in Tanzania.
    • Kenya: China has undertaken major Belt and Road initiatives in Kenya. Recently, there was held completion ceremony of the Chinese-built oil terminal at the port city of Mombasa.
    • Comoros Islands: In the Comoros Islands, off Mozambique, China has made many development assistance.

    [C] Loans and trade

    • For a dozen years, China has been Africa’s biggest trading partner. Undoubtedly, the balance of trade is heavily in favour of China.
    • Two-way trade in 2020 was $ 187 billion, according to the ‘China-Africa Annual Economic and Trade Relationship Report 2021’.
    • The top five African recipients of Chinese investments are South Africa, the Democratic Republic of Congo, Angola, Ethiopia, and Zambia.
    • While the main investments in countries across Africa are in infrastructure construction projects and mining, China is also investing in transport, scientific research, and the services sector.

    [D] Others

    • China has huge demand for African ivory, abalone, rhinoceros tusk and materials from other endangered species.
    • This has taken a significant toll on conservation efforts.

    Major Chinese accomplishments

    • The question of Taiwan has been a key political issue for China these days.
    • In 1971, the support of African nations was crucial in China’s joining the United Nations (UN), taking over the seat on Taiwan.
    • Many African countries, such as Algeria, Egypt, Ethiopia, and Zambia have stressed their support for a “one-China policy”.

    Criticisms of Chinese Scramble in Africa: A neo-colonialism in making

    • There are a variety of critical perspectives scrutinizing the balance of power relationship between China and Africa, and China’s role concerning human rights in Africa.
    • Increasingly, concerns have been raised by Africans and outside observers that China’s relationship with Africa is neocolonialist in nature.

     

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

  • India appeals against WTO order on Sugar

    India has appealed against a ruling of the World Trade Organisation’s (WTO) trade dispute settlement panel on domestic sugar subsidies, stating that the panel had committed “certain errors of law” in its report.

    What is the case?

    • India’s Minimum Selling Price system for Sugarcane was brought to notice to the WTO by Brazil, Australia and Guatemala.

    What was the complaint against India?

    Australia, Brazil, and Guatemala said India’s domestic support and export subsidy measures appeared to be inconsistent with various articles against WTO’s:

    1. Agreement on Agriculture
    2. Agreement on Subsidies and Countervailing Measures (SCM)
    3. Article XVI (which concerns subsidies) of the General Agreement on Trade and Tariffs (GATT)
    • Domestic Support: All three countries complained that India provides domestic support to sugarcane producers that exceed the de minimis level of 10% of the total value of sugarcane production.
    • Various subsidies: They also raised the issue of India’s alleged export subsidies, subsidies under the production assistance and buffer stock schemes, and the marketing and transportation scheme.
    • Notifying support: Australia accused India of “failing” to notify its annual domestic support for sugarcane and sugar subsequent to 1995-96, and its export subsidies since 2009-10.

    India’s reply to WTO panel

    • India rejected the panel’s findings as “erroneous”, “unreasoned”, and “not supported by the WTO rules”.
    • It argued that the requirements of Article 3 of the SCM Agreement are not yet applicable to India.
    • It has a phase-out period of 8 years to eliminate export subsidies under the agreement.
    • India also argued that its mandatory minimum prices are not paid by the governments but by sugar mills, and hence do not constitute market price support.

    Backgrounder: Sugarcane Pricing in India

    Who determines Sugarcane prices?

    Sugarcane prices are determined by the Centre as well as States.

    1. The Centre announces Fair and Remunerative Prices which are determined on the recommendation of the Commission for Agricultural Costs and Prices (CACP) and are announced by the Cabinet Committee on Economic Affairs, which is chaired by Prime Minister.
    2. The State Advised Prices (SAP) are announced by key sugarcane producing states which are generally higher than FRP.

    Minimum Selling Price (MSP) for Sugar

    • The price of sugar is market-driven & depends on the demand & supply of sugar.
    • However, with a view to protecting the interests of farmers, the concept of MSP of sugar has been introduced since 2018.
    • MSP of sugar has been fixed taking into account the components of Fair & Remunerative Price (FRP) of sugarcane and minimum conversion cost of the most efficient mills.

    Basis of price determination

    • With the amendment of the Sugarcane (Control) Order, 1966, the concept of Statutory Minimum Price (SMP) of sugarcane was replaced with the Fair and Remunerative Price (FRP)’ of sugarcane in 2009-10.
    • The cane price announced by the Central Government is decided on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP).
    • This is done in consultation with the State Governments and after taking feedback from associations of the sugar industry.

    What is FRP?

    • FRP is fixed under a sugarcane control order, 1966.
    • It is the minimum price that sugar mills are supposed to pay to the farmers.
    • However, states determine their own State Agreed Price (SAP) which is generally higher than the FRP.

    Factors considered for FRP:

    • The amended provisions of the Sugarcane (Control) Order, 1966 provides for fixation of FRP of sugarcane having regard to the following factors:

    a) cost of production of sugarcane;

    b) return to the growers from alternative crops and the general trend of prices of agricultural commodities;

    c) availability of sugar to consumers at a fair price;

    d) price at which sugar produced from sugarcane is sold by sugar producers;

    e) recovery of sugar from sugarcane;

    f) the realization made from the sale of by-products viz. molasses, bagasse, and press mud or their imputed value;

    g) reasonable margins for the growers of sugarcane on account of risk and profits.

     

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

  • China’s disputed ‘Developing’ Country Status at WTO

    China’s status as a ‘developing country’ at the World Trade Organization (WTO) has become a contentious issue with a number of countries raising concerns.

    Defining a country’s ‘Development’

    • There are no WTO definitions of “developed” or “developing” countries.
    • Developing countries in the WTO are designated on the basis of self-selection although this is not necessarily automatically accepted in all WTO bodies.
    • The WTO however recognizes as least-developed countries (LDCs) those countries which have been designated as such by the United Nations.

    Benefits of ‘Developing Country’ tag

    • Special and differential treatment: Certain WTO agreements give developing countries special rights through ‘special and differential treatment’ (S&DT) provisions.
    • Preferential treatment: The classification also allows other countries to offer preferential treatment.
    • Longer timeframe for pacts: WTO can grant developing countries longer timeframes to implement the agreements and even commitments to raise trading opportunities for such countries.

    Issues with Chinese ‘Developing Country’ status

    • China has become an upper-middle-income country according to the World Bank.
    • It involves in unfair trade practices such as preferential treatment for state enterprises, data restrictions and inadequate enforcement of intellectual property rights.

    How has China responded?

    • China has consistently maintained that it is the “world’s largest developing economy”.
    • It has recently indicated that it may be willing to forego many benefits of being a developing country.

    What are the benefits of LDC classification?

    • The WTO recognizes LDCs relying on a classification by the UN based on criteria that is reviewed every three years. LDCs are often exempted from certain provisions of WTO pacts.
    • Bangladesh, currently classified as an LDC, receives zero duty, zero quota access for almost all exports to the EU.
    • It is, however, set to graduate from the LDC status in 2026 as its per capita GDP has risen sharply surpassing that of India in FY21.

    Try this question from CS Mains 2018:

     

    Q.What are the key areas of reform if the WTO has to survive in the present context of ‘Trade War’, especially keeping in mind the interest of India?

     

    Reference: https://www.civilsdaily.com/sansad-tv-perspective-wto-reforms/

    (Aspirants need not write whole answers. Just a quick summary with keywords would suffice.)

     

    [wpdiscuz-feedback id=”49mr6oddi2″ question=”Post your answers here.” opened=”1″] [/wpdiscuz-feedback]

     

     

    UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)