💥UPSC 2026, 2027, 2028 UAP Mentorship (March Batch) + Access XFactor Notes & Microthemes PDF

Type: Explained

  • Wildlife Conservation Efforts

    The blurry lines between wildlife ‘capture’ and ‘rescue’  

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: NA

    Mains level: Blurred lines between "rescue" and "capture"

    Why in the news? 

    The human-animal conflict in India is a significant issue, with several lives lost and property damage due to the increasing interactions between humans and wildlife

    Difference between between wildlife ‘capture’ and ‘rescue’

    • Capture:  It refers to the act of taking wild animals into custody, often due to conflicts with humans, such as when an animal poses a threat to human safety or property. This may involve trapping, sedating, or physically restraining the animal. The primary goal of capture is to ensure human safety and prevent further damage. Captured animals may be relocated, rehabilitated, or, in some cases, euthanized, depending on the situation and the animal’s condition.
    • Rescue:  It refers to the act of providing assistance to wild animals in distress, such as those injured, orphaned, or trapped in a dangerous situation. The primary goal of rescue is to help the animal recover and, if possible, return it to the wild. Rescue efforts may involve medical treatment, rehabilitation, and release back into the wild.

    Blurred lines between “rescue” and “capture”

    • Guidelines vs. Reality: Despite government guidelines discouraging capture without considering preventative measures, in practice, animals are often captured hastily rather than adopting non-invasive approaches.
    • Case of Elephant “Rescue”: An elephant was captured under the pretext of rescue from a coffee plantation but was subsequently released 200 km away in an unfamiliar landscape, leading to further complications and ultimately its death.
    • Unintended Consequences: The attempt to “rescue” the elephant resulted in its straying into a neighboring state, highlighting the unintended consequences and potential risks associated with such actions.
    • Case of Leopard “Rescue”: Similarly, a leopard was “rescued” after being sighted in an agricultural field, but it died shortly after for unknown reasons, raising questions about the efficacy and ethics of such operations.

    Issues related to rescue of snakes

    • High Frequency of Interactions: Interactions with snakes are more frequent than with other wild animals, resulting in higher incidences of misguided rescue attempts.
    • Failure to Distinguish Between Actions: There’s a lack of distinction between capture, removal, and rescue when managing conflicts with snakes, leading to poor handling and unnecessary removal from habitats under the guise of rescue operations.
    • Issues with Relocation: Relocated snakes have poor survival prospects and relocation doesn’t effectively resolve conflict, potentially increasing future conflict occurrences.
    • Harmful Effects of “Rescue” Operations: Such operations can cause physical trauma, injuries, and stress to animals, reducing their post-release survival chances.

    Suggestive measures

    • Education and Training: Provide comprehensive training to wildlife rescuers on species-specific rescue techniques and emphasize the importance of non-invasive approaches.
    •  Habitat Restoration: Focus on habitat conservation and restoration to reduce human-snake conflicts and provide natural habitats for snakes.
    • Research and Monitoring: Conduct research to understand snake behavior and ecology better, enabling more informed rescue and relocation decisions.
    • Collaboration: Foster collaboration between wildlife authorities, conservation organizations, and local communities to develop effective strategies for managing human-snake conflicts sustainably.

    Conclusion 

    Enhanced training, habitat restoration, research, and collaboration are vital for navigating the blurry lines between wildlife “capture” and “rescue,” ensuring humane and effective management of human-animal conflicts in India.


    Mains question for practice 

    Q Discuss the blurred lines between wildlife “capture” and “rescue” in India, highlighting issues and proposing measures for effective human-animal conflict management.

  • Foreign Policy Watch: India-ASEAN

    India Initiates Review of Asean Trade Pact to Boost Domestic Manufacturing

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: ASEAN-India Trade in Goods Agreement (AITIGA)

    Mains level: he trade deficit between India and the ASEAN region is primarily due to the following reasons

    Why in the news?

    The review aims to address concerns such as the inverted duty structure, which puts local manufacturers at a disadvantage.

    Trade deficit issue with ASEAN 

    • High trade deficit: The trade deficit between India and the Association of Southeast Asian Nations (ASEAN) has been a significant issue, with the deficit widening to USD 43.57 billion in the last fiscal from USD 25.76 billion in 2021-22 and just USD 5 billion in 2010-11
    •  Review AITIGA:This has led to a review of the ASEAN-India Trade in Goods Agreement (AITIGA) by 2025, aiming to address concerns about trade barriers, abuse of the agreement, and the growing trade gap between India and the ASEAN region

    ASEAN-India Trade in Goods Agreement (AITIGA)

    • The ASEAN-India Trade in Goods Agreement (AITIGA) is a trade agreement between the ten member states of ASEAN and India, signed in 2009 and implemented in 2010. The agreement aims to establish a free trade area between the parties, covering trade in physical goods and products, and progressively eliminating duties on 76.4 percent of goods. 

    The trade deficit between India and the ASEAN region is primarily due to the following reasons:

    • Tariff disparities: India’s tariffs were much higher than partner countries, leading to a significant reduction in tariffs for partner countries, which in turn caused India’s imports to grow faster than exports. This imbalance has been widening since 2010-11, the year India entered into an agreement with ASEAN
    • Non-tariff barriers and regulations: India’s exports to ASEAN have been affected due to non-reciprocity in FTA concessions, non-tariff barriers, import regulations, and quotas. These factors have hindered India’s ability to fully benefit from the FTA
    • Routing of goods from third countries: There have been concerns about the routing of goods from third countries, such as China, to ASEAN countries with minimum value addition and then being imported into India, misusing the India-ASEAN FTA. This practice has contributed to the growing trade deficit
    • Limited market access for Indian products: India’s exports of products such as textile clothing, footwear, food products, and minerals don’t have a significant place in ASEAN imports, while there is a higher dependence on products such as vegetables, fuels, chemicals, and metals from ASEAN, which are essential commodities

     Conclusion 

    India’s review of the ASEAN-India Trade in Goods Agreement aims to tackle the widening trade deficit by addressing tariff disparities, non-tariff barriers, and the misuse of the agreement, crucial steps toward fostering fair and balanced trade relations.


    Mains question for practice 

    Q Discuss the factors contributing to high  deficit between India and ASEAN. 

     

  • Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

    ADB raises India’s GDP growth forecast for FY25 to 7% from 6.7% earlier

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Asian Development Bank (ADB);

    Mains level: Developments in Indian Subcontitnent; India's GDP growth projection by ADB;

    Why in the News?

    The Asian Development Bank (ADB) increased its GDP growth projection for India for the current fiscal year to 7%, up from its previous estimate of 6.7%.

    Reason behind the increased India’s GDP growth projection by ADB:

    • Manufacturing Sector: The manufacturing sector growth of India in the 2023 fiscal year was robust, with the S&P Global India Manufacturing PMI rebounding to 56.0 in November 2023 from an eight-month low of 55.5 in October 2023.
    • Investment and Consumption Demand: Investment and Consumption demand are both expected to drive India’s economic growth in 2024 and FY25. Private Final Consumption Expenditure (PFCE) grew at 3.5% in the December quarter of FY24.
    • Inflation Trend: Inflation in India is expected to continue its downward trend in tandem with global trends Inflation in India decreased to 5.09 percent in February 2024 from 5.10 percent in January 2024. India’s inflation rate is projected to trend around 4.30 percent in 2025, according to econometric models.
    • Monetary policy: The RBI has kept the repo rate unchanged at 6.5% for 2023-24, focusing on withdrawal of accommodation to ensure that inflation progressively aligns to the target while supporting growth.

    Government Initiatives taken for Regional Development:

    • Regional Cooperation and Integration (RCI) Conference, 2023:
        • It was organised by the Asian Development Bank (ADB) at Tbilisi, Georgia.
        • Theme: ‘Strengthening Regional Cooperation and Integration through Economic Corridor Development (ECD)’.
        • Objective: To integrate spatial transformation and area-centric approach with the help of Economic Corridor Development.
        • In this Conference, India offered its indigenously developed GIS-based technology though knowledge sharing  to ADB and South Asia Sub-Regional Economic Cooperation (SASEC) countries for enhancing socio-economic planning and regional cooperation.
    • PM GatiShakti National Master Plan and Multi-modal Connectivity:
      • Basically, PM Gati Shakti is principled to bring socio-economic area-based development as part of regional connectivity.
      • It is being implemented to enhance connectivity with regional partners with the help of GIS-based technology. For Example: Indo-Nepal Haldia Access Controlled Corridor project.

    BACK2BASIC:

    About Asian Development Bank(ADB):

    • Established in 1966, it is owned by 68 members-49 from the region. ADB’s five largest shareholders are Japan and the United States (each with 15.6% of total shares), the People’s Republic of China (6.4%), India (6.3%), and Australia (5.8%).
    • Headquarters: Manila, Philippines.
    • Objective: To foster social and economic development across Asia and the Pacific region.

     

    Conclusion: Indian  government’s effort across the robust manufacturing growth, investment, working on consumption demand, decreasing inflation, and supportive monetary policy, aligning with its goal of promoting regional social and economic development are gaining some fruits.

    Mains PYQ:

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

    Q India has recently signed to become founding member of New Development Bank (NDB) and also the Asian Infrastructure Investment Bank (AIIB). How will the role of the two Banks be different? Discuss the strategic significance of these two Banks for India. (UPSC IAS/2014)

  • Innovations in Biotechnology and Medical Sciences

    Crafted in Indian labs, NexCAR19 takes India to next level in Cancer Care

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Science and Technology; Biotechnology; NexCAR19;

    Mains level: Process and Significance of CAR T thearpy;

    Why in the News? 

    • President Droupadi Murmu launched India’s first indigenously-developed CAR T-cell therapy, hailing it as a major breakthrough against cancer.
    • This therapy was developed by the Indian Institute of Technology (IIT) Bombay and the Tata Memorial Centre, and it is known as ‘NexCAR19 CAR T-cell therapy’.

    BACK2BASICS:

    What is CAR T cell thearpy? 

    CAR T-cell therapy is a type of immunotherapy that involves modifying a patient’s T cells, a type of white blood cell that plays a crucial role in the immune system, to recognize and attack cancer cells. This therapy is designed to target specific proteins found on the surface of cancer cells, such as CD19, which is commonly found on B cells.

    How are CAR-T cells made?

    Significance of CAR T Thearpy:

    • Promising results:  This therapy has shown promising results in treating some types of blood cancers, including certain kinds of lymphoma, pediatric leukemia, and adult leukemia.  It has shown with approximately 70% of patients responding to the treatment.
    • Less time for treatment: CAR T-cell therapies are generally a single infusion with less than 2 weeks of inpatient care, while stem cell transplants and chemotherapy treatment regimens can take months to complete

    Limitiations of CAR-T Therapy:

    • Risks of CAR-T Therapy: The efficacy of CAR-T therapy varies from person to person, and it is too early to declare it a complete cure. While it has shown remarkable progress in challenging cases, its effectiveness is not universal.
    • High Cost Therapy: NexCAR19 is priced at a fraction of its US counterpart, it remains relatively high for many Indians, ranging from ₹40 to 45 lakh.
    • It’s Side Effects includes:
      • Cytokine Release Syndrome (CRS): CRS is the most common side effect of CAR-T therapy, triggering an ‘Inflammatory Response’ that leads to immune system hyperactivity.
      • Neurotoxicity: Although not observed in early-stage clinical trials, neurotoxicity is a common side effect of CAR-T therapy that can manifest as confusion, seizures, or difficulty speaking or walking.
      • Infections and Blood Cell Counts: Patients undergoing CAR-T therapy may experience infections and low blood cell counts as anticipated side effects.

    Conclusion: India’s is moving towards heralding a breakthrough in Cancer Care Therapy. Despite cost challenges, Government efforts are aimed to enhance accessibility and better outputs in Healthcare Sector.

  • Electoral Reforms In India

    Is Transparency lacking in Candidate Disclosure?

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Representation of the People Act, 1951;

    Mains level: Election Issues; Judiciary; 244th Report of Law Commission; Accountability

    Why in the news? 

    The Supreme Court held that candidates need not to disclose every piece of Information and Possession in their Election Affidavit unless it is Substantial in Nature.

    What are the Legal Provisions?

    • Nomination paper with Affidavit: Section 33 of the Representation of the People Act, 1951 (RP Act) read with rule 4A of election rules, requires every contesting candidate to file their nomination paper for elections along with an Affidavit in a ‘prescribed format’.
    • Association of Democratic Reforms (ADR) Vs Union of India (2002): The Supreme Court held that voters have the right to know about the criminal antecedents, income and asset details of the candidate and his/her dependants and educational qualification of contesting candidates.
      • This judgement resulted in Section 33A being added to the RP Act that requires details of criminal antecedents to be part of the election affidavit.
    • Punishable Offence: Section 125A of the RP Act further provides that failure to furnish required information, giving false information or concealing any information in the nomination paper or affidavit shall be punishable with imprisonment up to six months or fine or both.

    Present Dilemma of Accountability:

    • Candidates with Criminal Charges: The significant issue of candidates with serious criminal charges contesting elections raises questions about the integrity and suitability of such candidates for public office.
      • According to a report by ADR, 19% of candidates in the 2019 Lok Sabha election faced charges of rape, murder or kidnapping.
    • Circumvention of Disclosure Requirements: Some candidates attempted to circumvent disclosure requirements by leaving certain columns blank and filing incomplete affidavits, indicating loopholes in the electoral process.

    Recommendations by Election Commission and Law Commission in its 244th report:

    • A conviction for filing a false affidavit should attract a punishment of a minimum of 2 years imprisonment and be a ground for disqualification.
    • The Trials in such cases must be conducted on a day-to-day basis.
    • Persons charged by a competent court with offences punishable by imprisonment of at least 5 years should be debarred from contesting in the elections provided the case is filed at least 6 months before the election in question.

    Supreme Court’s Judgement to resolve this issues: 

    • In Public Interest Foundation Vs Union of India (2018) directed candidates as well as political parties to issue a declaration about criminal antecedents, at least three times before the election, in a newspaper in the locality and electronic media.

    Way Forward:

    • Debarring from contesting elections : Debarring chargesheeted candidates from contesting elections is likely to be misused by various ruling parties.
    • Increasing Punishment for False Affidavits: Increasing punishment for filing false affidavits and making it a ground for disqualification need to be implemented.
    • Strict Implementation of SC order:The Supreme Court’s order to provide wide publicity of criminal records should also be strictly implemented.

    Conclusion: Addressing challenges in candidate disclosure, enhancing electoral integrity can be achieved through measures such as imposing stricter penalties for false affidavits, enforcing disclosure laws rigorously, and ensuring widespread dissemination of candidates’ criminal records.

  • Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

    On Unemployment in Indian States

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Important reports in the News; Trends in unemployment

    Mains level: Urbanisation and Unemployment;

    Why in the news? 

    A recent report by the International Labour Organization (ILO) and the Institute for Human Development (IHD) revealed that two out of every three unemployed individuals were young graduates.

    Unemployment across Indian States: 

    • Highest Unemployment Rate: At almost 10%, Goa’s unemployment rate is more than three times the national average of 3.17%.
      • Four of the top five states with high unemployment rates (Goa, Kerala, Haryana, and Punjab) are comparatively richer states.
    • Lower Unemployment Rates: Maharashtra and Gujarat, which are rich states in western India, experience unemployment rates far less than the national average.
    • Unemployment in Northern and Southern states: All northern states (Jammu and Kashmir, Punjab, Haryana, Uttarakhand, and Himachal Pradesh) and most southern states have unemployment rates higher than the national average, except Karnataka.
    • Unemployment below the National Average: Out of the 27 states considered, 12 states have unemployment rates less than the national average.
    • Lower unemployment rates in poorer states: Except for Maharashtra and Gujarat, most states with unemployment rates lower than the national average also have per capita incomes lesser than the national average.

    What is the Relationship between Urbanisation and Unemployment? (ILO observations)

    • Relationship between Self-employment and Unemployment: The trend line shows a downward slope, indicating a negative relationship between self-employment and unemployment.
    • Informal self-employment mainly in Agriculture and Rural Economy: A significant portion of informal self-employment is in agriculture and the rural sector.

    • Relationship between Labor Force and Unemployment: Figure 3 illustrates a positive relationship between the urban share of the labor force and the unemployment rate. Highly urbanized states tend to have higher unemployment rates (Positive relationship).
    • High Unemployment and Urbanized states: States like Goa and Kerala, which are highly urbanized, experience high unemployment rates. This is attributed to the limited scope for informal jobs in urban settings compared to rural agriculture, which acts as a reserve for absorbing surplus labor.
    • Limited Informal Sectors: Although informal sectors exist and thrive in urban settings, they have limited capacity to absorb job-seekers compared to rural agriculture.
    • Exceptions states: Gujarat and Maharashtra, despite being highly urbanized, have lower unemployment rates compared to states like Uttar Pradesh and Madhya Pradesh.

    Nexus between Education and Employment:

    • Highly educated labor force and unemployment: Kerala, with a highly educated labor force (30% of graduates), faces high unemployment.
      • In contrast, Gujarat and Maharashtra have lower proportions of graduates in their labor force (14% and 20% respectively) and experience lower unemployment rates despite being richer and urbanized.
    • High unemployment among graduates: Graduates may lack the skills required for the growing modern sector, highlighting the need for improved teaching infrastructure and standards.
      • Graduates aspire to high-wage jobs that match their skills, leading to unemployment if the modern sector doesn’t expand enough to absorb them.

    Conclusion: Addressing youth unemployment necessitates improving education quality to match job market demands, fostering skill development for the modern sector, promoting entrepreneurship, and enhancing rural employment opportunities. Policy interventions should target these areas for inclusive growth and employment generation.

  • Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

    The advent of a holistic approach to ‘one health’

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: National One Health Mission; Lumpy Skin disease;

    Mains level: Healthcare in India; National One Health Mission;

    Why in the news? 

    In the past, we have seen that there is interdependence between humans, animals, and the environment has been made increasingly evident with the emergence of pandemics such as COVID-19.

    • It is not just humans who are affected by pandemics but also livestock — an example being the outbreak of lumpy skin disease that has spread across countries.

    Why an integrated idea like the ‘One Health’ Mission is needed?

    One Health is an interdisciplinary approach that recognizes the interconnectedness of human health, animal health, and environmental health. It emphasizes collaboration across various sectors, including medicine, veterinary science, ecology, and public health, to address health challenges comprehensively.

    Key features of National One Health Mission:

    • Intersectoral Collaboration: The mission aims to coordinate, support, and integrate all existing One Health initiatives in the country, including the Ministries of Health and Family Welfare, Fisheries, Animal Husbandry and Dairying, Environment, and Science and Technology
    • Integrated Disease Surveillance: The mission implements integrated disease surveillance within and across human, animal, and environmental sectors to address communicable diseases, including zoonotic diseases, and improve overall pandemic preparedness and integrated disease control.
    • Consolidation of data: The mission creates an integrated, science-based environment where researchers from various disciplines can use laboratories as necessary and generate requisite inputs for One Health Science, including databases and models with a consolidated approach of ecologists, field biologists, epidemiologists, and other scientists.

     Challenges in National One Health Mission

    • Limited Database: There have been limited efforts to develop databases and models with a consolidated approach of ecologists, field biologists, epidemiologists, and other scientists to understand and respond to the drivers that threaten health and optimize the effectiveness of public health systems in achieving these goals within each sector.
    • Lack of Awareness and Understanding: The lack of awareness and understanding of the One Health concept among stakeholders hinders collaborative efforts required to address complex public health issues
    • Funding Constraints: Funding constraints are a significant barrier to implementing One Health interventions, especially in low- and middle-income countries that may need more resources to invest in One Health initiatives

    Conclusion: To address challenges in the National One Health Mission, efforts must focus on enhancing data collection, raising awareness among the stakeholders, and securing adequate funding. These measures are essential for effective implementation and holistic health management.

  • Corruption Challenges – Lokpal, POCA, etc

    Corruption has risen over the past five years, say 55% of respondents

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: NA

    Mains level: ARC report;

    Why in the news? 

    In the run-up to elections, political parties make allegations of corruption against their rivals to reach out to voters and influence voting patterns. So, let’s see about the corruption trend in India.

    What is Corruption? 

    Corruption refers to dishonest or unethical conduct by individuals or institutions, often involving the misuse of entrusted power or resources for personal gain. It can take various forms, including bribery, embezzlement, fraud, nepotism, cronyism, and favoritism. Corruption undermines the principles of fairness, integrity, and accountability in both public and private sectors.

    Corruption in India (Pre-poll survey of 2024 compared with 2019 Survey):

    • Increase in Corruption: According to a pre-poll survey, more than half (55%) of respondents believe that corruption has increased in the past five years.
      • The proportion of respondents believing that corruption has decreased has declined significantly, from 37% in 2019 to 19% in 2024.
    • Causes for Corruption in India: A majority of respondents (56%) hold both Union and State governments responsible for the increase in corruption, with a higher proportion blaming the Union government specifically.
    • Across Spatial Consistency: Regardless of whether respondents live in villages, towns, or cities, the perception of increased corruption is widespread.
    • Opinion of Respondents: Both rich and poor respondents largely agree that corruption has increased, though there is a slight increase in the perception of decreased corruption among richer respondents.

    What does the 2nd Administrative Reforms Commission (ARC) report say?

    • Lack of Transparency: The opacity of government processes and decision-making provides opportunities for corruption.
    • Regulatory Environment: Cumbersome and complex regulations create opportunities for rent-seeking behavior by officials and bureaucrats.
    • Political Interference: Politicization of administrative processes and appointments leads to patronage networks and favoritism, fostering corruption.
    • Lack of Whistleblower Protection: The absence of robust mechanisms to protect whistleblowers discourages individuals from reporting corruption. Fear of retaliation and inadequate legal safeguards inhibit the exposure of corrupt practices.
    • Weak Enforcement Mechanisms: Inadequate enforcement of laws and regulations allows corrupt practices to thrive.

    Conclusion: To combat rising corruption in India, comprehensive measures including enhancing transparency, simplifying regulations, strengthening enforcement, depoliticizing administration, and implementing robust whistleblower protection are imperative for fostering integrity and accountability in governance.

     

  • Minimum Support Prices for Agricultural Produce

    Understanding perspectives: Farmers’ Protests raise divisive opinions

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: Agriculture Sector and Farmers Protest;

    Mains level: Farmer Demands and Government Initiatives;

    Why in the news? 

    A recent survey conducted by CSDS-Lokniti aimed to gather opinions regarding the ongoing farmer protests.

    Opinion about the Farmer Protest:

    The major key demands of Farmers in India include:

    • On Minimum Support Price (MSP): Farmers demand a legal guarantee for MSP for crops, which is a crucial lifeline for farmers facing market uncertainties.
    • On Electricity Act 2020: Farmers are demanding the repeal of the Electricity Act 2020, which they believe will negatively impact their income.
    • On Compensation: Farmers are demanding compensation for farmers who died during the previous agitation in Lakhimpur Kheri.
    • Withdrawal of Cases: Farmers are demanding the withdrawal of cases registered against farmers during the 2020-21 agitation.

    Government Initiatives: 

    • Negotiations: The government has taken several steps to address the farmer agitation, including negotiations with protesting farmers, proposing the formation of a committee to provide statutory backing to the Minimum Support Price (MSP), and engaging in talks with farmer representatives.
    • Demands: Despite promises made to farmers in 2021, the government has not fully responded to their demands, leading to continued tensions and protests. The government’s reaction to the protest still appears to be focused on maintaining law and order rather than proactively addressing the underlying issues raised by the farmers

    Conclusion: The CSDS-Lokniti 2024 pre-poll survey highlights divisive opinions on farmer protests, citing demands for an MSP guarantee, repeal of the Electricity Act, and compensation for fatalities. Despite negotiations, unresolved grievances persist, indicating a need for proactive governmental action and dialogue

  • OBOR Initiative

    What’s behind the latest US-China trade fight?

    Note4Students

    From UPSC perspective, the following things are important:

    Prelims level: NA

    Mains level: Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora, Indian Economy, and issues.

    Why in the news? 

    China’s burgeoning production of electric cars and other green technologies has become a flashpoint in a new US-China trade fight, highlighted by US Treasury Secretary Janet Yellen during her five-day visit to China.

    Context:  

    • According to the Paris-based International Energy Agency, China has built a substantial car industry that accounts for 60% of global electric vehicle sales. Similar dynamics exist in other industries, such as solar panels, batteries, and steel.
    • China is now the world’s largest producer of solar cells.
    • Now the main concern is that the Chinese are building up a lot of capacity in many industries across the board, including these new technology sectors, and if domestic demand does not pick up, they are going to be looking for markets outside the country.

    US-China Trade Dispute:

    • The US and China have been slugging it out since Trump slapped heavy tariffs on imported steel and aluminum items from China in March last year, and China responded by imposing tit-for-tat tariffs on billions of dollars worth of American imports.
    • The IMF noted that the US-China trade tension was one factor that contributed to a “significantly weakened global expansion” late last year, as it cut its global growth forecast for 2019.

    US-China Trade and Investment Facts:

    • US GOODS & SERVICES trade with China totalled an estimated $737.1 billion in 2018. Exports: $179.3 billion; imports: $557.9 billion; deficit: $378.6 billion
    • CHINA IS CURRENTLY the US’s largest goods trading partner with $659.8 billion in total (two-way) goods trade in 2018. Exports: $120.3 billion; imports: $539.5 billion; US goods trade deficit: $419.2 billion
    • US FDI IN CHINA (stock) was $107.6 billion in 2017, a 10.6% increase from 2016. US direct investment in China is led by manufacturing, wholesale trade, finance and insurance
    • CHINA FDI IN THE US (stock) was $39.5 billion in 2017, down 2.3% from 2016. China’s direct investment in the US is led by manufacturing, real estate, depository institutions

    How does China’s Auto Industry pose an external threat to Indian Market?

    • Market Dominance: China is dominating the local market and threatening to dominate India’s traditional export markets, which could cause concern for the ‘Make in India‘ program.
    • Quality Concerns: The quality of auto parts coming from China is a major concern for the safety of vehicles in India. With increasing stakes by Chinese vendors, the situation is expected to become more challenging.
    • Cost Advantage: Chinese automakers have a cost advantage over North American and European brands, allowing them to undercut rivals. This cost advantage is due to Chinese manufacturers’ ability to produce EVs more efficiently and profitably than their Western counterparts.
    • Security concerns: Chinese automakers flooding foreign markets with their autos and the potential for these vehicles to be used for espionage, data collection, or sabotage.

    How India can benefit from the ongoing US-China trade war?

    • Export Opportunities: India can tap export opportunities in both the US and China, particularly in areas such as garments, agriculture, automobile, machinery, apparel, and readymade garments
    • Export Growth: India’s exports to the US increased by 11.2% in 2018, and to China by 31.4% in the same year, indicating the potential for further growth
    • Product Opportunities: India can boost exports of around 350 products to the US and China, including items like copper ores, rubber, paper/paperboard, industrial valves, vulcanised rubber, carbon or graphite electrodes, and natural honey
    • Trade Deficit Reduction: Increasing exports would help India narrow the widening trade deficit with China, which stood at USD 50.12 billion during April-February 2018-19

    Conclusion: The US-China trade fight intensifies over China’s dominance in green technology sectors like electric vehicles. India stands to benefit from increased exports to both nations, potentially narrowing its trade deficit with China while tapping into new markets.