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Type: IOCR

  • OPEC+ decision on Oil Supply cut

    opec

    Central Idea

    • Saudi Arabia has decided to decrease its oil supply to the global economy.
    • This unilateral action aims to stabilize the declining crude oil prices.
    • Previous efforts by major oil-producing countries within the OPEC+ alliance to cut supply did not yield desired price increases.

    What is OPEC+?

    • The non-OPEC countries which export crude oil along with the 14 OPECs are termed as OPEC plus countries.
    • OPEC plus countries include Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan, and Sudan.
    • Saudi and Russia, both have been at the heart of a three-year alliance of oil producers known as OPEC Plus — which now includes 11 OPEC members and 10 non-OPEC nations — that aims to shore up oil prices with production cuts.

    Reasons for OPEC+ Production Cuts

    • Russian war: Oil prices rose significantly following Russia’s invasion of Ukraine.
    • Previous major cut: The recent production cut is the largest since 2020 when OPEC+ members reduced outputs by 10 million barrels per day (bpd) during the Covid-19 pandemic.
    • Benefit to Middle Eastern states: The cuts are expected to boost prices, benefiting Middle Eastern OPEC+ members who have become significant oil suppliers to Europe after sanctions were imposed on Russia.

    Concerns for India

    • Fuel price hike: Despite importing cheap Russian oil, India has not seen a decrease in fuel prices.
    • Fiscal challenges: Rising oil prices pose fiscal challenges for India, where heavily-taxed retail fuel prices have reached record highs, threatening the demand-driven economic recovery.
    • Reliance on West Asian supplies: India imports about 84% of its oil and depends on West Asian countries for over three-fifths of its oil demand.
    • Potential impact on consumption-led recovery: India, as one of the largest crude-consuming countries, is concerned that production cuts by OPEC+ nations could undermine the country’s consumption-led economic recovery and negatively affect price-sensitive consumers.

    Back2Basics: Organization of the Petroleum Exporting Countries (OPEC)

    Description
    Founding September 14, 1960
    Member Countries Algeria, Angola, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, United Arab Emirates, Venezuela
    Goal Coordinate and unify petroleum policies among member countries, ensure stability and predictability in oil markets, secure fair returns on investment for member countries’ petroleum resources
    Production Quotas Set production limits for member countries to manage oil supply and stabilize prices
    Market Monitoring Monitor global oil market conditions, supply, demand, inventories, and prices
    OPEC Meetings Regular meetings held every six months for member countries to discuss and negotiate oil production and pricing policies
    Pricing Policy Historically used the “OPEC basket” concept – a weighted average price of crude oil blends produced by member countries
    Influence on Prices OPEC’s decisions and actions can impact global oil prices by increasing or decreasing production levels
    Diminished Influence OPEC’s influence on oil prices has reduced due to factors like the rise of non-OPEC oil production, changes in global energy markets, and geopolitical developments
    Non-OPEC Cooperation OPEC cooperates with non-OPEC countries, notably through the “OPEC+” group, which includes Russia, to collectively manage oil supply levels and enhance market stability

  • In news: Helmand Water Conflict

    helmand

    Central Idea

    • Iran and Afghanistan have been engaged in a prolonged disagreement over the sharing of water from the Helmand River.
    • Violent confrontations have occurred in the border region between the two countries in the recent past.

    About Helmand River

    • The Helmand River is the longest river in Afghanistan, spanning approximately 1,150 kilometers (715 miles) in length.
    • It originates near Kabul in the western Hindu Kush mountain range.
    • The river flows in a south-westerly direction through desert areas before emptying into Lake Hamun, which straddles the Afghanistan-Iran border.
    • Lake Hamun, fed by the Helmand River, is the largest freshwater lake in Iran.
    • The Helmand River is a vital water source for both Afghanistan and Iran, supporting agriculture, livelihoods, and ecosystems in the region.

    Row over Helmand River and Lake Hamun

    • Afghanistan’s longest river: The Helmand River holds great importance for Afghanistan as it is the country’s longest river, originating near Kabul and flowing through desert areas.
    • Iran’s largest freshwater lake: Lake Hamun, located on the Afghanistan-Iran border, is Iran’s largest freshwater lake and has been historically sustained by the Helmand River.
    • Drying up due to drought: The Lake has experienced a drastic decline in water levels and has largely dried up, attributed to factors such as drought and the construction of dams and water control infrastructure.
    • Economic Importance: Lake Hamun plays a vital role in the regional ecosystem and supports agricultural activities, livelihoods, and economic sectors in the surrounding areas.

    Disagreements between Iran and Afghanistan (Taliban)

    • Fouling of the 1973 Helmand River Treaty: The agreement signed in 1973 between Iran and Afghanistan to regulate the allocation of river water has not been fully ratified or effectively put into practice.
    • Iran accuses Afghanistan of violating water rights: Iran has consistently accused Afghanistan of infringing upon its water rights, claiming that it receives significantly less water than agreed upon in the 1973 treaty.
    • Afghanistan blames climatic factors for reduced water flow: Afghanistan has refuted Iran’s allegations, citing climatic factors such as reduced rainfall and diminished river water volumes as the primary causes of the current situation.
    • Concerns over Afghanistan’s dam and irrigation projects: Tehran expresses concerns over Afghanistan’s construction of dams, reservoirs, and irrigation systems along the Helmand River, fearing that these initiatives negatively impact water flow into Iran.

    Tehran-Taliban Relations: A recent recap

    • Previous ties between Iran and the Taliban: Prior to the Taliban’s capture of Kabul, Iran maintained diplomatic relations with the group, driven by shared opposition to the presence of US forces in the region.
    • Lack of formal recognition of the Taliban government: Despite refraining from formally recognizing the Taliban government, Iran has pragmatically engaged with the ruling group in Afghanistan to protect its interests, including the preservation of Lake Hamun.
    • Border clashes since the Taliban’s takeover: Following the Taliban’s rise to power, there have been repeated incidents and clashes along the Iran-Afghanistan border.

    Why is Taliban furious this time?

    • Taliban’s interest in promoting agriculture: The Taliban seeks to prioritize agricultural development, which influences their approach to water management and distribution.
    • Tehran’s sudden attention to Sistan-Baluchistan after protests: Following nationwide protests, including Sistan-Baluchistan, Iran’s government has shown increased attention to the region due to its disadvantaged status and reliance on water resources from Lake Hamun.

    Major hurdles in the resolution

    • Lack of interest: Both Iran and the Taliban show little interest in addressing the mismanagement of water resources and environmental challenges in the region.
    • Short-term focus on internal problems: Both Iran and the Taliban prioritize short-term solutions and focus on internal issues rather than actively resolving the water dispute.

    Current situation in Sistan-Baluchistan

    • Mounting public anger: The region of Sistan-Baluchistan in eastern Iran experiences growing public anger and frustration, largely driven by water shortages and other economic and social challenges.
    • Water shortages and other problems: Sistan-Baluchistan faces severe water shortages, contributing to economic and social difficulties in one of Iran’s poorest areas.
    • Setting up an inquiry commission: In an effort to address the recent border clash, Iran and Afghanistan have agreed to establish a commission of inquiry to investigate the incident.

     

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  • BRICS FM meeting in South Africa

    brics

    Central Idea

    • External Affairs Minister S Jaishankar is in Cape Town, South Africa, to participate in a meeting of foreign ministers from the BRICS countries.
    • The foreign ministers’ meeting aims to finalize the agenda for the upcoming BRICS summit, scheduled to be held in South Africa in August.

    What is BRICS?

    Explanation
    About BRICS is a grouping of the world’s leading emerging economies: Brazil, Russia, India, China, and South Africa.
    History The term BRIC was coined in 2001 by British Economist Jim O’Neill to describe the four emerging economies of Brazil, Russia, India, and China. The grouping was formalized in 2006, and South Africa joined in 2010.
    Composition BRICS comprises the four emerging economies of Brazil, Russia, India, and China, with South Africa joining later.
    Footprints BRICS represents 41% of the global population, 24% of global GDP, and 16% of global trade.
    Chairmanship Rotates annually among the members, with India holding the chair in 2021.
    Initiatives
    1. New Development Bank: NDB funds infrastructure and sustainable development projects.
    2. Contingent Reserve Arrangement: CRA provides mutual support and strengthens financial stability among BRICS nations.
    3. BRICS Payment System: Aims to create an alternative payment system to SWIFT.
    4. Customs agreements: BRICS signed agreements to coordinate and ease trade transport.
    5. Satellite: A constellation of remote sensing satellites has been launched in collaboration with BRICS nations.

     

    Key agenda of this meet

    • Geopolitical consolidation and potential expansion: Two key items on the agenda attracting attention are the plan to expand the membership of BRICS and the discussion of a common currency.
    • Friends of BRICS meet: South Africa, as the chair this year, is hosting a Friends of BRICS meeting with foreign ministers from Africa and the Global South.

    Potential Expansion of BRICS

    • Countries in queue for BRICS membership: Around 19 countries are reportedly seeking to join BRICS, including Argentina, Nicaragua, Mexico, Uruguay, Venezuela, Nigeria, Algeria, Egypt, Senegal, Morocco, Saudi Arabia, the UAE, Turkey, Syria, Iran, Kazakhstan, Bangladesh, Afghanistan, Indonesia, and Thailand.
    • Inclusion of big oil producers: The list of potential new members includes major oil-producing countries like Saudi Arabia, Iran, the UAE, Nigeria, and Venezuela.

    China’s Role in BRICS

    • China driving expansion: China is leading the effort to expand its membership of BRICS and is promoting the idea of creating a bigger space for the Global South.
    • Focus on multilateralism: China emphasizes multilateralism as it criticizes US hegemony, using the theme of “multilateralism” rather than “multipolarity” in discussions about BRICS.
    • Challenging the Western geopolitical view: The conflict in Ukraine has strengthened the China-Russia partnership and transformed BRICS into an aspiring bloc that challenges the western geopolitical narrative.

    India’s Position in BRICS

    • India’s participation in BRICS and the G7: India’s involvement in both BRICS and the G7 demonstrates its engagement with multiple groupings and does not indicate alignment with an anti-Western coalition.
    • Non-Western group: India views BRICS as a non-western group and believes it should remain so, focusing on its role as a platform for Global South countries to express solidarity.
    • New challenges for India: Some analysts argue that as BRICS expands and more members join, it could sidelines India’s influence within the group.

    What about BRICS Common Currency?

    • Proposal for a common currency: Russia proposed the idea of a common currency at the BRICS summit in Beijing last year. Leaders established a committee to study its feasibility.
    • Cautious reception and challenges: The proposal for a common currency received cautious feedback, with concerns about its viability and complexities such as different economic and political systems among member countries.
    • Insulation from the dollar: The idea of a common currency presents an opportunity to reduce reliance on the US dollar, but not all members are convinced it is the right time.
    • Difficulties in currency trade: Negotiations between India and Russia for trading in their respective currencies have encountered difficulties, with Moscow preferring dollar payments due to limited imports from India.

    China’s stance on the US dollar

    • Retreating US dollar hegemony: China has expressed discontent with the “hegemony of the US dollar” and aims to promote the use of the Yuan as a trading currency in Central Asia.
    • No open voices abandoning the dollar: Despite its criticisms, there is no evidence to suggest that China is ready to completely abandon the US dollar at present.

     

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  • UAE withdraws from Combined Maritime Forces (CMF)

    Central Idea

    The United Arab Emirates (UAE) has announced its withdrawal from the U.S.-led Combined Maritime Forces (CMF), a maritime coalition responsible for securing Gulf waterways crucial to global oil trade.

    What is Combined Maritime Forces (CMF)?

    Establishment 2002
    Location Bahrain
    Objective Promoting security, stability, and prosperity across maritime regions
    Member Nations Over 30 member nations
    Primary Task Forces Combined Task Force 150 (CTF 150), Combined Task Force 151 (CTF 151), Combined Task Force 152 (CTF 152)
    Operations Counter-terrorism, counter-piracy, maritime security, and cooperation
    Collaborations United Nations, European Union, NATO, and regional partners
    Contributions Naval assets including warships, aircraft, and maritime patrol vessels
    Focus Areas Arabian Sea, Gulf of Oman, Gulf of Aden, Red Sea, Indian Ocean, Arabian Gulf, and surrounding areas

     

    Reasons for UAE’s withdrawal

    • UAE has not provided specific reasons for its withdrawal from the Combined Maritime Forces (CMF) in the official statement.
    • One potential factor could be a desire to distance themselves from perceived dependencies or entanglements with the US.
    • This could be part of a broader strategy by the UAE to assert its own regional influence, pursue independent foreign policies, or rebalance its relationships with China and Iran.

    Recent incidents and tensions in Gulf Waters

    • In late April and early May, Iran seized two tankers, one of which was empty and travelling between the UAE ports of Dubai and Fujairah.
    • Iran was also accused of launching a drone attack on an Israeli-owned tanker in November 2022, escalating tensions with the United States.
    • As a response to increasing harassment by Iran, the US announced the deployment of reinforcements to the Gulf, a vital route for a significant portion of the world’s sea-borne oil.

     

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  • Shifting US Policy: From Decoupling to De-risking in China Relations

    china

    Central Idea

    • The US is transitioning its policy on China from decoupling to de-risking, signalling a new approach.
    • The EU has already adopted a de-risking approach in its China policy, and the G-7 summit also expressed consensus on de-risking.

    Understanding the De-risking

    • After establishing diplomatic ties in 1979, the US and China developed a deep economic interdependence, benefiting China’s global engagement.
    • China’s rise challenged US global clout and impacted its domestic industries.
    • The Trump administration initiated a “decoupling” strategy to address the techno-economic challenge from China.
    • The Biden administration continues with a modified approach, shifting from decoupling to de-risking.
    • De-risking focuses on resilient supply chains to ensure the US is not subjected to coercion from other countries.

    Rationale behind De-risking

    • Geopolitical Competition: China’s rise as a strategic competitor challenges US global influence, prompting de-risking to reduce vulnerabilities and maintain an advantage.
    • National Security: Concerns about risks like intellectual property theft and cyber threats lead to de-risking to safeguard sensitive technologies and protect national security interests.
    • Resilient Supply Chains: The COVID-19 pandemic exposed vulnerabilities in supply chains, driving the need for de-risking to ensure diversified and resilient networks.
    • Fair Trade Practices: De-risking addresses concerns over China’s trade practices, such as intellectual property infringement and forced technology transfers, aiming for fairer trade by diversifying partners.
    • Alliance Building: De-risking aligns with allies’ interests, promoting collaboration and a united front against China’s rise.

    Geopolitical Ramifications

    • De-risking for Stronger Alliances: The US adopts de-risking to strengthen alliances in its rivalry with China, as seen in the G-7 summit declaration.
    • China’s Skepticism: China views de-risking as disguised decoupling, shifting blame for risks to China.
    • Aligning with Decoupling and United Front: De-risking aligns with decoupling by diversifying supply chains, while fostering a united front among allies.
    • Uncertain Effectiveness: The effectiveness of de-risking is uncertain, influenced by China’s response and challenges in diversifying supply chains.
    • Short-Term Indo-Pacific Impact: De-risking may temporarily divert focus from the Indo-Pacific, necessitating a balance with maintaining a robust strategy in the region.

    Way forward

    • The de-risking approach should be further developed and coordinated with allies to effectively counter China’s rise.
    • Balancing the benefits of de-risking with the need to maintain a robust Indo-Pacific strategy is crucial.
    • Engaging in strategic dialogues and strengthening alliances can help shape a cohesive approach in addressing China’s influence while minimizing risks.

     

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  • India’s Initiative for ASEAN Women in UN Peacekeeping

    asean un peacekeeping

    Central Idea

    India-ASEAN Initiative for Women in UNPK Operations

    • Defence Minister proposed this initiative last year to strengthen India-ASEAN defence cooperation.
    • Tailor-made courses for women peacekeepers from ASEAN member-states will be conducted at the Centre for United Nations Peacekeeping (CUNPK) in India.
    • Twenty peacekeepers, two from each country, will receive training in various aspects of peacekeeping.
    • A “Table Top Exercise” focusing on UNPK challenges will be held in December, specifically designed for women officers from ASEAN.

    India’s Training and Capacity Building

    • The Indian Army has established the Centre for United Nations Peacekeeping (CUNPK) in New Delhi, which trains over 12,000 troops annually in peacekeeping operations.
    • The CUNPK hosts foreign delegations, shares best practices, and dispatches mobile training teams to Friendly Foreign Countries for capacity building in UNPK.
    • India has deployed Female Engagement Teams, Women Military Police, and women staff officers and military observers in various UN missions.
    • India has the second-largest women contingent in the United Nations Organization Stabilization Mission in the Democratic Republic of the Congo and UN Interim Security Force for Abyei.

    What is United Nations Peacekeeping?

    • UN Peacekeeping helps countries navigate the difficult path from conflict to peace.
    • UN peacekeepers are often referred to as Blue Berets or Blue Helmets because of their light blue berets or helmets) can include soldiers, police officers, and civilian personnel.

    UN Peacekeeping is guided by three basic principles:

    1. Consent of the parties
    2. Impartiality
    3. Non-use of force except in self-defence and defence of the mandate

    UNPKF in operation

    • Since 1948, UN Peacekeepers have undertaken 71 Field Missions.
    • There are approximately 81,820 personnel serving on 13 peace operations led by UNDPO, in four continents currently.
    • This represents a nine-fold increase since 1999.
    • A total of 119 countries have contributed military and police personnel to UN peacekeeping.
    • Currently, 72,930 of those serving are troops and military observers, and about 8,890 are police personnel.

    Why UN Peacekeeping is needed?

    • Conflict resolution: UN peacekeeping missions play a crucial role in assisting host countries in transitioning from conflict to peace.
    • Burden sharing: UN peacekeeping utilizes a global coalition of troops and police to share the responsibility of maintaining peace and stability worldwide.
    • Democratization: Peacekeepers provide security and political support to facilitate the early transition to peace and support democratic processes in post-conflict countries.

    India’s Contribution to UN Peacekeeping

    • Largest troop contributor: India has a long-standing history of contributing personnel to UN peacekeeping missions, with over 253,000 Indians serving in 49 out of 71 missions.
    • Current deployments: Approximately 5,500 Indian troops and police are deployed in UN peacekeeping missions, ranking India as the fifth-highest troop-contributing country.
    • Women in Indian Peacekeeping: India has played a pioneering role in deploying women peacekeepers, starting with an all-women contingent to Liberia in 2007.
    • Humanitarian services: Indian peacekeepers also provide medical care, veterinary support, and engineering services to communities in need.

    Issues with UN Peacekeeping

    [A] Issues for India

    • Kashmir interference: India has expressed discontent with the UN Military Observer Group in India and Pakistan (UNMOGIP) operating in Kashmir, considering it irrelevant after the Shimla Agreement.
    • Disregard for India-Pak ceasefire: UNMOGIP continues to observe hostilities and ceasefire violations along the Line of Control, which India believes is unnecessary.

    [B] Global Challenges

    • Diverse security challenges: UN peacekeeping operations need to adapt to rapidly evolving security dynamics.
    • Resource allocation: Mandates of peacekeeping missions should align with available resources.
    • Greater involvement of troop-contributing countries: Countries providing troops and police should have a meaningful role in mission planning.
    • Investment in peacebuilding: Adequate financial and human resources are required for post-conflict peacebuilding.

    Way Forward

    • UNSC reform: Reform the UN Security Council to reflect the changing global landscape.
    • Multi-partner collaboration: Enhance effectiveness by involving actors beyond the UNSC in counterterrorism efforts.
    • Modernization of peacekeeping: Strengthen UN Peacekeeping Forces through modernization and inclusivity.
    • Human-centric decision-making: Promote accountability and transparency in the UNSC’s decision-making processes.

    Conclusion

    • India’s commitment to promoting women’s participation in UNPK operations underscores its dedication to global peace and security.
    • These initiatives aim to enhance the capabilities and representation of women in peacekeeping, recognizing their valuable contributions to maintaining peace and stability worldwide.

     

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  • ‘Route of Development’: Iraq’s Ambitious Infrastructure Plan

    iraq development

    Central Idea

    • Iraq aims to establish itself as a regional transportation hub by enhancing its road and rail infrastructure.
    • The ambitious project, known as the “Route of Development,” is estimated to cost $17 billion.

    Route of Development Project

    • Project Scope: The “Route of Development” will span 1,200 kilometers from the northern border with Turkey to the Gulf in the south.
    • Economic Objectives: The project aims to promote a sustainable non-oil economy and strengthen regional connectivity.
    • Port Capacity: The commercial port of Al-Faw will undergo expansion to handle cargo for the project.
    • Train Stations: Around 15 train stations will be constructed along the route, including major cities like Basra, Baghdad, Mosul, and up to the Turkish border.

    Challenges and Priorities

    • Infrastructure Condition: Iraq’s infrastructure, including roads, requires reconstruction and maintenance due to the impacts of war, corruption, and sanctions.
    • Focus on Electricity: Upgrading the failing electricity infrastructure is a priority for the government.

    Geopolitical Position and Economic Benefits

    • Strategic Geographical Location: Iraq aims to capitalize on its position by becoming a transportation hub for goods and people between the Gulf, Turkey, and Europe.
    • Port Expansion: The commercial port of Al-Faw will serve as a gateway for cargo before transportation through the new road and rail links.
    • Train Station Network: The construction of train stations in major cities along the route will facilitate efficient transportation.
    • Trade Opportunities: The Gulf presents significant trade prospects, especially in the transport of hydrocarbons.

    Challenges and Skepticism

    • Viability Concerns: Some experts question the project’s feasibility, highlighting the need for “fluidity” in transportation routes and the preference for direct shipping without intermediate loading and unloading.
    • Adaptation to Customer Preferences: Consideration should be given to evolving global transport dynamics and customer preferences.

     

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  • Highlights of the Joint Malnutrition Estimates (JME)

    Central Idea

    • According to the Joint Malnutrition Estimates (JME) by UNICEF, WHO, and the World Bank, India has shown a reduction in stunting among children under five.

    Such reports (including NFHS) are credible sources of information to substantiate your answers in Mains answer writing ….

    What is Stunting and Wasting?

      Stunting Wasting
    Definition Impaired growth and development due to chronic malnutrition. Rapid weight loss and muscle wasting in a short period.
    Measurement Height-for-age comparison against standardized growth reference. Weight-for-height comparison against standardized growth reference.
    Causes Insufficient intake of essential nutrients, frequent infections, poor maternal health. Inadequate caloric intake, poor feeding practices, infectious diseases.
    Effects Irreversible consequences, reduced cognitive development, increased disease vulnerability. Increased morbidity and mortality, severe malnutrition.
    Time Frame Long-term condition Short-term condition
    Overall Nutritional Status Reflects chronic malnutrition Represents acute malnutrition
    Focus Impacts growth and development Impacts weight and muscle mass

     

    Decline in Child Stunting in India

    • The prevalence of stunting in India dropped from 41.6% in 2012 to 31.7% in 2022, with 1.6 crore fewer stunted children recorded.
    • India’s share of the global burden of stunting declined from 30% to 25% in the past decade.

    Concerns over Wasting

    • Wasting remains a concern in India, with an overall prevalence of 18.7% in 2022.
    • India contributes 49% to the global burden of wasting, reflecting the severity of this malnutrition indicator.
    • Two-thirds of wasting cases in India may be attributed to maternal malnutrition, leading to low birth weight for height.

    Rise in Obesity

    • The prevalence of obesity in India increased marginally from 2.2% in 2012 to 2.8% in 2022.
    • India’s obesity classification remains low compared to the global prevalence of 5.6%.
    • Obesity contributes to 8.8% of the global burden, with 31.8 lakh obese children in India.

    Way Forward

    • The JME report highlights the need for accelerated efforts to achieve global nutrition targets.
    • India’s progress aligns with the National Family Health Survey (NFHS) data, indicating a reduction in stunting.
    • More research is needed to understand the complexities of wasting, particularly its links to maternal malnutrition.
    • Continued focus on addressing malnutrition, access to health services, and maternal nutrition is crucial for further improvement.
    • Learning more about wasting and its determinants will be essential for tailored interventions in India and Asia.

     

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  • WTO reforms a top priority: India

    wto

    Central Idea

    • India has stressed the urgent need for prioritizing reforms within the World Trade Organisation (WTO).
    • India has been advocating for WTO reforms and improved dispute settlement mechanisms during G20 discussions.

    About WTO

    Functions and Principles
    Establishment 1 January 1995
    Functions
    • Negotiating trade agreements
    • Enforcing trade rules
    • Providing technical assistance and capacity building
    • Sharing trade-related information and conducting research
    Fundamental principles
    • Non-discrimination
    • Reciprocity
    • Transparency
    • Predictability and stability
    Membership 164 member countries representing over 98% of global trade
    Decision-making
    • Decisions made by consensus among member countries
    • General Council is the highest decision-making body

     

    Prioritizing WTO Reforms

    • India’s Push for Reforms: India has been actively advocating for reforms within the World Trade Organisation.
    • Better Dispute Settlement Mechanisms: Alongside reforms, India is pushing for improved dispute settlement mechanisms within the WTO.
    • Reaffirming Foundational Principles: The discussions aim to reaffirm the principles enshrined in the Marrakesh Agreement and the multilateral trade agreements, emphasizing the importance of an open, fair, inclusive, and transparent WTO.

    Reforms that India is seeking

    • Structural Reforms: There is an urgent need for reforms within the WTO to address issues such as transparency, shorter time frames, the establishment of a permanent panel body, and special and differential treatment for developing countries.
    • Benefit for Developing Countries: Developing countries, including India, can benefit from these reforms if proposals specific to their needs are accepted.
    • Trade Facilitation for Services: While the WTO has made progress with the Trade Facilitation Agreement (TFA) concerning goods, there is a need for reforms in trade facilitation for services. India, as a major service provider, stands to benefit from improved cross-border movement of people.
    • Inclusivity: It is crucial to establish procedures and practices that are more inclusive, particularly for developing countries.
    • Peace Clauses: Adoption of “peace clauses” for developing countries’ implementation of current agreements can formalize commitments by major trading powers to allow grace periods and exercise due restraint.
    • Evolving Negotiation Modes: The single package approach used in the Uruguay Round is not effective in the Doha Round, necessitating the exploration of new negotiation modes.
    • Strengthened Dispute Settlement Mechanism: The dispute settlement mechanism within the WTO requires strengthening and expediting to enhance its effectiveness.
    • Separation of Political and Human Rights Issues: There is a need to separate political and human rights issues from trade disputes under Sanitary and Phytosanitary (SPS) norms.

    Crossroads for WTO

    • Stalled Multilateral Trade Negotiations: The multilateral trade negotiations, including the Doha Round, have reached an impasse, with limited progress in overall rule-making.
    • Challenges from Alternative Trade Pacts: Alternative trade pacts, such as mega-regional arrangements, have emerged and posed challenges to the position of trade multilateralism.
    • Disagreements on Market Access and Protection: The impasse in the Doha Round primarily stems from differences between highly industrialized countries and large developing countries regarding market access and protection of vulnerable economic sectors.

    Importance of Addressing WTO Reforms

    • Vital Role of WTO: The Minister emphasized that addressing WTO reforms is of utmost importance as the organization plays a crucial role in ensuring fairness and transparency in global trade.
    • Backbone of Multilateral Trading System: The WTO forms the backbone of the multilateral trading system and its reforms are necessary to strengthen its functioning.

    India’s Aspirations in International Trade

    • Global Leadership Ambition: India has expressed India’s aspiration to emerge as a global leader in the international trade landscape.
    • E-commerce Market Potential: India is poised to become the world’s second-largest e-commerce market, reflecting its transformation driven by open markets, global integration, and a strong entrepreneurial spirit.

    Way Forward

    • The urgent need for WTO reforms necessitates concerted efforts and global attention to ensure the fairness, transparency, and effectiveness of the multilateral trading system.
    • India’s active participation in advocating for reforms, along with its ambition to become a global leader in international trade, reflects its commitment to fostering a thriving and inclusive global trade environment.
    • It is essential for countries to collaborate and engage in constructive dialogue to address the challenges and opportunities in the evolving global trade landscape.

    Back2Basics: WTO Agreements and Accords

    • General Agreement on Tariffs and Trade (GATT): The GATT is the predecessor to the WTO and was in effect from 1948 to 1994. It aimed to reduce trade barriers and promote international trade through negotiations and tariff concessions.
    • Agreement on Agriculture (AoA): This agreement aims to establish fair and market-oriented agricultural trading systems. It addresses issues such as market access, domestic support, and export subsidies related to agricultural products.
    • Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS): The TRIPS agreement sets minimum standards for protecting intellectual property rights, including patents, copyrights, trademarks, and trade secrets.
    • Agreement on Trade-Related Investment Measures (TRIMs): This agreement prohibits certain investment measures that restrict trade or are inconsistent with the GATT’s principles.
    • Agreement on Sanitary and Phytosanitary Measures (SPS): The SPS agreement sets out rules for food safety and animal and plant health standards to ensure that countries do not use sanitary and phytosanitary measures as unjustified trade barriers.
    • Agreement on Technical Barriers to Trade (TBT): The TBT agreement aims to ensure that technical regulations, standards, and conformity assessment procedures do not create unnecessary obstacles to trade.
    • Agreement on Subsidies and Countervailing Measures (SCM): The SCM agreement regulates the use of subsidies and provides a framework for countervailing measures to address unfair trade practices arising from the use of subsidies.
    • Trade Facilitation Agreement (TFA): The TFA aims to simplify and streamline customs procedures, enhance transparency, and improve efficiency in international trade, with a focus on reducing trade costs and facilitating cross-border trade.

     

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  • India-Australia ties built on Trust: PM

    australia

    Central Idea

    • PM Modi addressed a community event in Sydney, emphasizing the strong foundations of trust and respect between India and Australia.
    • He credited the Indian diaspora for the success of this relationship.
    • The event aimed to strengthen cultural ties and was attended by over 21,000 people, including Australian PM Anthony Albanese.

    India-Australia Relations: A Backgrounder

    • The India-Australia bilateral relationship has undergone evolution in recent years, developing along a positive track, into a friendly partnership.
    • The two nations have much in common, underpinned by shared values of a pluralistic, Westminster-style democracies, Commonwealth traditions, expanding economic engagement etc.
    • Several commonalities include strong, vibrant, secular and multicultural democracies, free press, independent judicial system and English language.

    Historical Perspective

    • Early colonization: The historical ties between India and Australia started immediately following European settlement in Australia from 1788.
    • A penal colony: All trade, to and fro from the penal colony of New South Wales was controlled by the British East India Company through Kolkata.
    • Diplomatic ties: India and Australia established diplomatic relations in the pre-Independence period, with the establishment of India Trade Office in Sydney in 1941.
    • Expansion of ties: The end of the Cold War and simultaneously, India’s decision to launch major economic reforms in 1991 provided the first positive move towards development of bilateral ties.

    Various dimensions of ties

    [A] Political partnership

    • Both countries are members of-
    1. G-20
    2. ASEAN Regional Forum (ARF),
    3. IORA (Indian Ocean Rim Association),
    4. Asia Pacific Partnership on Climate and Clean Development,
    5. East Asia Summit and
    6. The Commonwealth
    7. QUAD (Quadrilateral Security Dialogue)
    • Australia has been extremely supportive of India’s quest for membership of the APEC (Asia Pacific Economic Cooperation).
    • Australia wholeheartedly welcomed India’s joining of the MTCR (Missile Technology Control Regime).

    [B] Trade and Economy

    • 5th largest trade partner: India is the 5th largest trade partner of Australia with trade in goods and services.
    • Huge trade volume: Two-way trade between India and Australia was worth A$ 24.3 billion ($18.3 billion) in 2020, up from just $13.6 billion in 2007, according to the Australian government.
    • Uranium exports: After a series of attempts, in 2016, Australia opened the door for uranium exports to India.
    • R&D: An Australia-India Strategic Research Fund (AISRF) which was established in 2006, supports collaboration between scientists in India and Australia on cutting-edge research.

    [C] Cultural ties

    • P2P ties: There is a longstanding people-to-people ties, ever increasing Indian students coming to Australia for higher education.
    • Bond over cricket and tourism: Growing tourism and sporting links, especially Cricket and Hockey, have played a significant role in further strengthening bilateral relations between the two countries.
    • Skilled workforce: India is one of the top sources of skilled immigrants to Australia.
    • Indian students: The number of Indian students continue to grow with approximately 105,000 students presently studying in Australian universities.
    • Diaspora: After England, India is the second largest migrant group in Australia in 2020.

    [D] Strategic Partnership

    • In 2009, India and Australia established a ‘Strategic Partnership’, including a Joint Declaration on Security Cooperation which has been further elevated to Comprehensive Strategic Partnership in 2020.
    • The Mutual Logistics Support Agreement has been signed during the summit that should enhance defence cooperation and ease the conduct of large-scale joint military exercises.
    • There is a technical Agreement on White Shipping Information Exchange.
    • Both nations conduct bilateral maritime exercise AUSINDEX. In 2018, Indian Air Force participated for the first time in the Exercise Pitch Black in Australia.
    • Foreign and Defence Ministers of both countries agreed to meet in a ‘2+2’ format
    • The first-ever Quad Leaders’ Virtual Summit held on 12 March 2021 saw the participation of Prime Ministers of India, Australia, Japan and President of USA.
    • A Civil Nuclear Cooperation Agreement between the two countries was signed in September 2014 during the visit of then PM Tony Abbott to India.

    Significance of the ties

    • COVID Management: Australia is one of the few countries that has managed to combat COVID-19 so far through “controlled adaptation” by which the coronavirus has been suppressed to very low levels.
    • STEM: From farming practices through food processing, supply and distribution to consumers, the Australian agribusiness sector has the desired R&D capacity, experience and technical knowledge.
    • Natural resources: Australia is rich in natural resources that India’s growing economy needs. It also has huge reservoirs of strength in higher education, scientific and technological research.
    • Alliance with US: The two countries also have increasingly common military platforms as India’s defence purchases from the US continue to grow.
    • Affinity with ASEAN: Australia has deep economic, political and security connections with the ASEAN and a strategic partnership with one of the leading non-aligned nations, Indonesia.
    • Containing China: The Indo-Pacific region has the potential to facilitate connectivity and trade between India and Australia. Both nations can leverage their equation in QUAD to contain China.

    International cooperation

    • Support at UNSC: Australia supports India’s candidature in an expanded UN Security Council.
    • APEC: Australia is an important player in APEC and supports India’s membership of the organisation. In 2008, Australia became an Observer in SAARC.

    Some irritants in ties

    • Trade imbalance: India’s trade deficit with Australia has been increasing since 2001-02 due to India-Australia Free Trade Agreement. It is also a contentious issue in the ongoing RCEP negotiations which India left.
    • High tariff on agri products in India: India has a high tariff for agriculture and dairy products which makes it difficult for Australian exporters to export these items to India.
    • Non-tariff barriers in Australia: At the same time, India faces non-tariff barriers and its skilled professionals in the Australian labour market face discrimination.
    • Visa Policy: India wants greater free movement and relaxed visa norms for its IT professionals, on which Australia is reluctant.
    • Future of QUAD: Australian lobby has sparked speculation over the fate of the Quadrilateral Consultative Dialogue (the ‘Quad) involving India, Australia, Japan and the United States.
    • Nuclear reluctance: Building consensus on non-nuclear proliferation and disarmament has been a major hurdle given India’s status as a nuclear power.
    • Racism against Indians: Increasing Racist attacks on Indians in Australia has been a major issue.

    Way forward

    • Upgradation of 2+2 format: It is prudent too for New Delhi and Canberra to elevate the ‘two plus two’ format for talks from the Secretary level to the level of Foreign and Defence Ministers.
    • Removal of trade barriers: Both nations need to resolve disputes at the WTO with regard to the Australian sector can act as a serious impediment.
    • Balancing China: An ‘engage and balance’ China strategy is the best alternative to the dead end of containment.

     

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