Foreign Trade Policy 2023

GS Paper III

Context: The goals of Foreign Trade Strategy 2023 include moving away from an incentive-based system to one based on tax remissions, enhancing business accessibility, encouraging exports through partnerships, and concentrating on emerging markets. By 2030, it wants to export $2 trillion worth of products and services, up from the prior goal of $900 billion.

Reducing Friction Points:

• Processes will be streamlined and regulatory barriers will be lessened for firms with automatic approvals for different licences.
• Export activities will be sped up by shorter processing times for revalidation of authorizations (anticipated to be reduced to one day), extension of export obligation periods, advance authorizations, and EPCG issuances.
• Reduced application fees for MSMEs would relieve financial pressure and motivate more small companies to engage in international commerce.

Supporting Export Growth:

• By facilitating e-commerce exports, Indian companies would be able to participate in the expanding global e-commerce sector, which is anticipated to increase to $6.07 trillion by 2024.
• Expanding the scope of the RODTEP would ensure that more exporters receive tax exemptions, boosting competitiveness.
• Increasing manufacturing, especially in labor-intensive industries, will increase employment and boost export potential.
• Businesses will find it simpler to get recognition and incentives for their export success if exporter recognition thresholds are rationalised.
• Reforming the merchanting system will increase the export of services and lower transaction costs.
• Increasing commerce with nations that have currency limitations and promoting the usage of the rupee in international trade can both assist to lower exchange rate risks.
• One-time Amnesty Scheme: The amnesty scheme aims at faster resolution of trade disputes, clearing pending cases, and improving the overall trade environment.

Supplemental Measures:

• Import tariff reductions will increase the affordability of raw materials and intermediary products, enhancing local production and export competitiveness.
• Indian products and services that are affordable on international markets would be improved by ensuring a competitive exchange rate.
• FTA’s: Expanding and deepening existing free trade agreements might help Indian exporters access new markets and draw in foreign capital.

Conclusion:

The Foreign Trade Strategy 2023 was released during a period of turmoil for the world economy, but given India’s minor role in it (about 1.8% of exports of goods and about 4% of services), there is still much opportunity for progress. The new strategy can improve the nation’s export performance and help it reach the lofty $2 trillion export goal by 2030. For companies to fully benefit from the policy, it is necessary to monitor its execution and handle any issues that may arise.

Source: The Hindu

 

Taiwan- China Conflict

GS Paper II

Context: In advance of a potential cross-strait confrontation between China and Taiwan, India needs to plan its military, diplomatic, and economic responses.

Background:

• Frequent military drills by the PLA close to Taiwan: The People’s Liberation Army (PLA) is regularly conducting military drills close to Taiwan, raising the possibility of an escalation in the Taiwan Strait.
• Reunification by force: According to some commentators, President Xi Jinping of China is gearing up for a campaign of violent reunification by 2027.

The impact of a cross-strait conflict between China and Taiwan on India:

Trade disruption: Almost 55% of India’s entire commerce with the Indo-Pacific area passes via the South China Sea (SCS). This commerce might be badly disrupted by a conflict in the Taiwan Strait, which would hurt India’s economy. Moreover, commerce with Taiwan, China, East Asia, and several Southeast Asian nations will also suffer significantly. China is India’s second-largest commercial partner.

India would experience significant strategic repercussions as a Quad member in the case of a cross-strait conflict. The expectation in New Delhi is that it would act to support its allies, especially the United States, which might cause a substantial shift in the regional balance of power and India’s diplomatic obligations.

Escalation along the Line of Actual Control (LAC): China may heighten tensions along the LAC in response to India’s involvement in a fight over Taiwan, raising the possibility of a military clash between China and India. As it would have to get ready for a hypothetical two-front fight, this would place additional strain on India’s military and resources.

Diplomatic difficulties: India’s engagement in a dispute over Taiwan would deteriorate relations with China and make it more difficult for it to pursue its regional foreign policy ambitions. New Delhi would have to strike a balance between its obligations to its friends and partners and the requirement to keep relations with China steady.

Economic costs: A cross-strait conflict may have a significant negative impact on India’s economy, including disrupting supply networks, investment flows, and efforts to integrate the regional economy. Short- to medium-term economic growth and development goals for India may be hampered by this.

Increasing military deployments, escalations, and proxy wars in the area might result from a cross-strait confrontation, heightening security worries for India. The Indian military and intelligence services would need to be more vigilant and prepared to deal with any threats as a result.

Humanitarian repercussions: In the case of a protracted war, India may find it difficult to address humanitarian issues brought on by displaced people, refugees, and the interruption of vital services in the area. The infrastructure and resources of India could be further strained as a result.

India’s likely responses:

• Military response: By sharing knowledge and intelligence on dealing with the PLA, India may support allies, especially the US. Moreover, it might grant access to its Andaman and Nicobar Island bases as well as the use of its mainland for aircraft refuelling.
• India might take part in a United Nations General Assembly resolution denouncing Chinese aggression as a diplomatic reaction.
• Economic response: Given the unfavourable trade balance between the two nations, India is unlikely to impose targeted penalties on China.

India’s proactive measures:

• Information sharing: India and Taiwan can create a safe communication channel to exchange critical intelligence and current details on Chinese military tactics and operations. Taiwan would be better able to foresee prospective threats and strengthen its defence capabilities as a result.
• India and Taiwan may discreetly work together to train the Taiwanese armed forces’ soldiers in specialised missions and tactics. Joint training programmes and exercises in counterinsurgency, mountain warfare, and special operations may be part of this, which might improve Taiwan’s military readiness.
• Consultation channels: In order to coordinate its strategic efforts to prevent a Chinese attack on Taiwan, India can establish consultative channels with Taipei, Tokyo, and Washington. With this cooperation, shared tactics, backup plans, and a coordinated conflict response might be created.
• Increasing defence connections: By giving Taiwan military supplies, technology, and logistical assistance, India can look into ways to increase defence ties with Taiwan. This may aid Taiwan in strengthening its defences and thwarting possible Chinese assault.
• Taiwan’s need to diversify its economy away from reliance on China, and India may play a vital part in this process. India can provide Taiwan the size it needs to lessen its overdependence on Beijing by boosting bilateral commerce, investment, and technology collaboration.
• Soft power diplomacy: Through fostering intercultural exchanges, academic partnerships, and cultural events, India may use its soft power and cultural linkages to forge closer ties with Taiwan. This would improve relations between the two nations while also drawing attention to and backing for Taiwan’s position on a global scale.
• Promoting global support: India can engage with its Quad partners and allies as well as other regional and international venues to create a larger coalition in support of Taiwan’s security and sovereignty. India can assist Taiwan get more worldwide recognition and influence other nations to support Taiwan in the event of a crisis by promoting its participation in global organisations and forums.

Conclusion:

Although though a cross-strait conflict would present difficulties for India, it is critical for New Delhi to prepare for the worst and think ahead to its military, diplomatic, and economic responses to such a crisis.

Source: The Hindu

 

Asia-Pacific Trade Treaty

GS Paper II

Context: After leaving the European Union, the United Kingdom has decided to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a trade agreement centred on the Pacific Ocean.

Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP):

• 11 nations, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam, reached an agreement on the CPTPP free trade agreement (FTA) in 2018.
• The partnership will welcome Britain as its first new member since it was founded, making it the 12th member overall.
• The Trans-Pacific Partnership (TPP) was the name given to the first proposal, which sought to establish a free trade zone including 12 nations, including the US.
• The CPTPP was subsequently renegotiated by the remaining 11 nations when the US withdrew from the pact in 2017.

Economic prospects:

• Whenever Britain enters, the GDP of the CPTPP nations will be around 11 trillion pounds ($13.6 trillion), or 15% of the world economy.
• Because there is no single market for products or services, unlike the European Union, whose trade circle Britain exited at the end of 2020, regulatory harmonisation is not necessary.

Key trade objectives of CPTPP:

• The CPTPP aims to lower tariffs and increase economic integration among its participants.
• It wants to remove tariffs on more than 95% of the products exchanged among its members and to open up larger markets for investments and services.
• The agreement also contains clauses about labour laws, environmental standards, and intellectual property.

How much does Britain trade with CPTPP?

• In the year ending in September 2022, British exports to CPTPP nations were valued 60.5 billion pounds.
• Long-term membership will provide an additional 1.8 billion pounds each year, and maybe more if other nations join.

Key benefits to be reaped by UK:

• Even while doing business with nations that have bilateral free trade agreements in place, exporters may profit from CPTPP membership.
• Exporters must prove that a product contains a certain percentage of “locally” sourced components in order to qualify for favourable tariffs.
• Exporters may classify EU inputs as “local” under the rules of origin under rolled-over post-Brexit free trade agreements with Japan, Mexico, and Canada, for example.
• Nonetheless, the CPTPP gives exporters another choice if it is advantageous because inputs from CPTPP members are often regarded as local.

Geopolitical considerations:

• There are additional reasons for Britain to join the bloc, even though the long-term economic impact is expected to be minimal.
• China’s decision to join the pact will be subject to UK’s veto. Beijing submitted a membership application to the group in September 2021.

Source: The Hindu

 

India’s Semiconductor Dreams

GS Paper III

Context: The goal of India’s semiconductor policy should change from luring multinational corporations like Intel to utilising current resources and creating homegrown products for the electronics industry.

Background:

• A new memorandum of understanding between the US Department of Commerce and the Ministry of Trade and Industry of India aims to prevent subsidies from impeding India’s aspirations in the semiconductor industry.
• Due to its concentration on fabs in the US, Intel is less likely to invest in a greenfield 300mm wafer manufacturing facility in India.

Semiconductors:

• Materials known as semiconductors have characteristics that fall between between those of insulators and conductors, such as copper (such as rubber).
• In some circumstances, they can carry electricity, but not under others.
• With the addition of impurities or doping with other materials, semiconductor conductivity may be altered. By this process, the material’s electrical characteristics are changed, and areas of surplus or deficiency electrons—referred to as p-type and n-type regions, respectively—are produced. A p-n junction, which serves as the contact between these two areas, is a key component of several semiconductor devices.

Applications:

• Semiconductors are an essential part of contemporary technology and play a big role in many aspects of our everyday lives.
• Electronics industry: One of the fastest-growing sectors in the world, the electronics industry relies heavily on semiconductors. Semiconductors are a common component in a variety of electronic products, including computers, cellphones, medical equipment, and home appliances.
• Devices that are more compact, powerful, and energy-efficient have been made possible by the ability to miniaturise electrical components utilising semiconductors. This made it possible for the creation of portable technology, such laptops and smartphones, which have become indispensable in our everyday lives.
• Energy efficiency: The development of energy-efficient gadgets, which are essential in the context of climate change and global warming, has been made possible by semiconductors. For instance, LEDs and other semiconductor materials are used in energy-efficient lighting because they require a lot less energy than conventional incandescent lights.
• Renewable energy: The development of renewable energy technologies like solar cells and wind turbines depends heavily on semiconductors. For instance, semiconductor materials are used in solar cells to transform solar energy into electrical energy.
• Medical applications: From imaging equipment to implanted medical devices, semiconductors are employed in a variety of medical applications. For the diagnosis and monitoring of diseases, semiconductor-based biosensors in particular are becoming more and more significant.

All you need to know about India’s semiconductor policy:

• The National Policy on Electronics (NPE), a new semiconductor strategy introduced by India in 2019, seeks to develop an internationally competitive Indian electronics manufacturing sector.
• The goal of the programme is to increase investment in fabs, sometimes referred to as semiconductor fabrication units, and to promote the growth of a local semiconductor design and manufacturing ecosystem.

The key objectives of the policy:

• Investment attraction: The programme tries to entice multinational semiconductor firms to establish production facilities in India by offering incentives including financial support, tax breaks, and land at discounted prices.
• Encouragement of local manufacturing: The strategy tries to encourage domestic semiconductor component manufacture by offering incentives such production-linked incentives, subsidies, and preferential market access to goods created in India.
• Creating human resources: In partnership with top academic institutions, the policy offers training and educational programmes with the goal of creating a competent workforce in the semiconductor industry.
• Research and development support: By giving money to research organisations and start-ups, the programme hopes to promote research and development in the semiconductor industry.

India’s Semiconductor History:

• To build an electronic environment, the Semi-Conductor Laboratory (SCL) was founded in Mohali in 1983.
• These aspirations were thwarted by market liberalisation in 1991 and a fire in 1989, but the facility still has the capacity to serve India’s semiconductor ecosystem.

Shifting Focus:

• Although Intel has been courted by the Ministry of Electronics and Information Technology (MeITy), their efforts may not be successful.
• Using SCL’s current resources and concentrating on the Greater than Moore semiconductor market (>180 nm node) for car electronics, PV-inverters, 5G infrastructure, and train electronics would be a superior strategy.

Incentives and Subsidies:

• Targeting fabless design firms with tested designs ready to produce at the SCL in the 180nm+ node is a good use of subsidies.
• Moreover, incentives must to be given to international design firms with goods intended for markets unique to India.
• Such incentives are not offered by the current DLI/PLI programmes, hence a change in strategy is required.

Leveraging Existing Infrastructure:

• We support initiatives to extend subsidies to multinational small- and medium-sized businesses in the upstream supply chain.
• The established incentives and focused enhancements must be combined with these efforts, nevertheless, for success.
• Leadership and Execution: Rather than a career scientist from the Department of Space, the SCL requires a full-time director with past “More than Moore” foundry expertise to carry out this ambition over the next five years.

Conclusion:

The goal of India’s semiconductor policy should change from luring multinational corporations like Intel to utilising current resources and creating homegrown products for the electronics industry. A strategic shift in emphasis, focused incentives, and capable leadership will be needed for this. India could once again miss out on the semiconductor manufacturing bandwagon if nothing is done.

Source: Indian Express

 

Anganwadi Services

GS Paper II

Context: The MGNREGA program’s contribution to the construction of Anganwadi centres was recently disclosed to the Parliament by the Ministry of Women and Child Development.

According to information provided by the ministry, 75% of the new anganwadi centres that will be erected this year will be done so in coordination with the MGNREGA programme.

Moreover, it has said that the 12 lakh construction costs for each anganwadi centre will be divided, with 8 lakh coming from MGNREGS. The Federal and State governments will each contribute an equivalent amount towards the remaining 4 lakh.

Anganwadi Centres:

• The Integrated Child Development Services scheme’s anganwadi centres are the initial point of contact for nutrition, health, and early learning in the hamlet.
• The ICDS, which serves around 88 million Indian children between the ages of 0 and 6, is the biggest of its kind.
• Early childhood care and education are centred in anganwadis (ECCE).
• In Indian communities, they also offer little medical services. It is a component of the public healthcare system in India.

Significance of Anganwadi scheme:

• Healthcare that is both affordable and accessible: In India today, nearly 2 million anganwadi workers assist 70 million mothers, children, and sick people in becoming and maintaining their health. The most crucial and often overlooked connection in Indian healthcare are anganwadi employees.
• Local Connectivity & Community Mobilization: Anganwadi workers have an advantage over doctors who reside in the same rural region since this provides them knowledge of the local health situation and helps them to determine the root of issues and how to address them.
• Eliminating Malnutrition: India is home to one-third of the world’s stunted youngsters. Anganwadis are crucial to the success of the ICDS programme, which meets the requirements of mothers, teenage girls, and children up to the age of six in terms of nutrition, health, and pre-education.
• Access to Government Programs: Anganwadi workers are India’s main weapon against the threat of newborn mortality, child education gaps, community health issues, and the reduction of avoidable illnesses. For remote populations to obtain essential health services and benefits, these community health professionals have served as point people.
• Health Crisis Management: They visited homes to raise awareness about COVID-19 and do jobs like contract tracking, while having little experience and taking a great deal of danger.

Issues with Anganwadi centres:

• Lack of technical expertise: Despite being the primary source of dietary guidance, anganwadi employees may be underqualified. Mothers who were designated as anganwadi workers had little knowledge of important health behaviours including complementary feeding and hand cleaning.
• Lack of Resources: Anganwadi staff typically lack the equipment or expertise required to provide ECCE.
• Demoralizing service circumstances The Anganwadi Centers’ frontline staff inadequate service conditions and future career opportunities Often, the officers and their assistants who work Anganwadis are women from low-income households. Unlike other government employees, these people do not have stable careers with full retirement benefits.
• Lack of Time: Because administrative tasks take up a lot of time, essential services like early childhood education suffer.
• Infrastructure Deficit: Anganwadis usually lack infrastructure. Just 59% of anganwadis, according to NITI Aayog, had enough seats for kids and staff, and more than half were filthy.

Remedial Measures:

• Convergence with MNREGA: As part of the Mahatma Gandhi National Rural Employment Guarantee Plan (MGNREGS), the government has begun construction on 4 lakh AWC structures across the nation (ICDS Scheme).
• Mobile phones: To ensure effective service delivery, Anganwadi Workers (AWWs) have been given Smart Phones.
• A number of topics, including quality assurance, duty holders’ duties and obligations, the procurement process, AYUSH concept integration, and data administration, were covered in streamlined guidelines that were released.
• Enhanced Training: The Ministry has developed a thorough training plan for the Anganwadi Services employees. The functionaries get training on a regular basis. For 26 working days, job training is offered to anganwadi workers. The knowledge, comprehension, and abilities of Anganwadi Workers on numerous Acts, Policies, and Programmes pertaining to Women and Children, setting up thriving Anganwadi Centers, and conducting Early Childhood Care and Education Activities were developed throughout this work training.
• ICT Integration: Poshantracker, a powerful ICT enabled platform, was created to collect real-time data on the deployment and monitoring of Anganwadi Services across the nation.
• The Poshan Tracker management tool offers a 360-degree view of the operations of the Anganwadi Center (AWC), service delivery by Anganwadi Workers (AWWs), and full beneficiary management.

Way Forward:

• Anganwadis, the biggest supplier of early childhood care in the world, play a critical role in influencing the outcomes of children’s lives in India.
• We need to increase anganwadi funding dramatically and use tried-and-true cutting-edge strategies to enhance these results.

Source: Indian Express

 

Facts for Prelims

Integrated Child Development Services:

• A significant national programme that caters to the requirements of young children under the age of six is Integrated Child Development Services (ICDS).
• It aims to give young children a comprehensive array of services, including supplemental nourishment, medical attention, and pre-school instruction.
• The programme also includes adolescent girls, pregnant women, and nursing moms because a child’s health and nutritional needs cannot be met independently from those of his or her mother.
• The Anganwadi centre is where the programme is mostly distributed. The Ministry of Women and Child Development oversees the programme.

The recipients of Integrated Child Development Services will get the following six services, which are centrally sponsored:

• Supplementary Nutrition (SNP)
• Health & Nutrition Check-Up
• Immunization
• Non-Formal Education for Children in Pre-School
• Health and Nutrition Education
• Referral services

 

FAME:

• The Union Ministry of Heavy Industries created the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) Programme in 2015 to encourage the use of electric and hybrid cars in the nation.
• Now, Phase-II of the plan (FAME II) is being executed with a total budgetary assistance of 10,000 crore over a five-year period beginning April 1, 2019.
• Demand generation, technology platforms, pilot projects, and charging infrastructure are the areas that are being focused on.
• All vehicle segments, including 2-wheelers, 3-wheelers, passenger 4-wheelers, light commercial vehicles, and buses, were intended to be encouraged through market formation through demand incentives.
• Phase II: Incentives are mostly available to cars registered for commercial usage or for use in public transportation.
• The benefits of incentives will be extended to vehicles fitted with advanced batteries like Lithium-Ion batteries.

 

Three new resources launched under Atal Innovation Mission (AIM):

ATL Tinkering Curriculum: It is a systematic learning route created to support students in enhancing and developing their innovative thinking abilities.

A wide range of topics, including fundamental electronics and mechanics and cutting-edge technologies like 3D printing and the Internet of Things, are covered in the curriculum that Makerghat and other educational institutions have designed together.

Through practical, experiential learning, this curriculum will teach students to see challenges in their daily lives and propose innovative solutions.

Equipment Manual: It offers thorough instructions on the tools used in the Atal Tinkering Laboratories located in schools around the nation.

Each piece of equipment and tool is described in length in the handbook, along with instructions on how to use them and examples of projects that may be made with them.

It is a useful tool for anyone trying to learn more about the potential for creativity and problem-solving.

Calendar of Activities for 2023-24: It contains an annual calendar of activities, training sessions, and contests meant to encourage students to be innovative and entrepreneurial.