Tag: Free Trade Agreement (FTA) Signed Between UK-India

UPSC DAILY CURRENT AFFAIRS (8th May,2025) Early Onset of Indian Monsoon Syllabus: GSI/ Indian Physical Geography In Context As per the IMD, there are chances of early onset of the southwest monsoon. The normal onset date of the monsoon over Kerala is June 1 and it usually takes about 10 days for the system to reach Kerala from the Nicobar islands. Mechanism of the Indian Monsoon: The Driving Forces Differential Heating of Land and Sea: In summer, India’s landmass heats faster than the ocean, creating low pressure over land and drawing in moisture-laden winds from the sea. Inter-Tropical Convergence Zone (ITCZ): The ITCZ, where trade winds meet near the equator, shifts north during summer, intensifying low pressure over the Indo-Gangetic plain and drawing in monsoon winds. Tibetan Plateau: Its high elevation heats up, creating an upper-air low-pressure zone that strengthens vertical circulation and attracts monsoon winds. Tropical Easterly Jet: Develops during summer, strengthening monsoon trough and rainfall. ENSO: El Niño: Warms Pacific waters, usually weakening Indian monsoon. La Niña: Cools Pacific, often strengthening monsoon. Indian Ocean Dipole (IOD): Positive IOD: Strengthens monsoon with warm western Indian Ocean. Negative IOD: Weakens monsoon. Onset and Advancement Arabian Sea Branch: Hits Kerala around June 1, moves up the west coast, bringing heavy rain to Western Ghats and inland states. Bay of Bengal Branch: Reaches Northeast India in early June, then moves westward along the Indo-Gangetic plain. India is usually fully covered by mid-July. Retreat of the Monsoon: Retreat begins in October from northwest India. Clear skies and residual moisture cause hot, humid conditions called “October heat.” Reversal of wind direction brings rain to the southeastern coast, notably Tamil Nadu and Andhra Pradesh. Impact of the Monsoon Agriculture: Essential for Kharif crops like rice and maize. A good monsoon improves yields; a poor one leads to drought. Economy: Monsoon-linked agriculture influences GDP, rural income, and food prices. Water Resources and Hydropower: Rains recharge rivers and reservoirs, crucial for drinking water, irrigation, and electricity. Environment and Culture: Supports biodiversity and cultural traditions like festivals celebrating rain. Disasters: Heavy rains can trigger floods, landslides, and other disasters, especially in vulnerable regions. Recent Government Initiatives to Improve Monsoon Forecasting Monsoon Mission: Launched in 2012 by the Ministry of Earth Sciences it was a major initiative aimed at enhancing the accuracy of monsoon forecasting. National Supercomputing Mission: Aimed at enhancing computational infrastructure needed for running high-end dynamical weather models. ICAR & IMD Collab: The IMD, in collaboration with the Indian Council of Agricultural Research (ICAR), provides Agromet Advisory Services. Free Trade Agreement (FTA) Signed Between UK-India Syllabus: GS2/International Relations, GS3/ Economy Context India and the United Kingdom have signed a landmark Free Trade Agreement (FTA) after nearly three years of negotiations. What is a Free Trade Agreement or FTA? FTAs are arrangements between two or more countries or trading blocs that primarily agree to reduce or eliminate customs tariff and non tariff barriers on substantial trade between them. They can cover both goods and services. FTAs also address issues such as investment, mobility of professionals, and regulatory cooperation. The India–UK FTA negotiations were formally launched in 2022, as part of efforts to deepen economic cooperation and boost bilateral trade. Key highlights of FTA Tariff Elimination: Nearly 99% of Indian exports to the UK will now be tariff-free. Key sectors to benefit include: textiles, marine products, leather, footwear, sports goods, toys, gems and jewellery, engineering goods, auto components, and organic chemicals. Services Sector Gains: UK has offered its most ambitious market access commitments for Indian service providers. Indian professionals in the UK will be exempt from paying UK social security contributions for up to three years, reducing employment costs and increasing competitiveness. Enhanced Mobility: Simplified visa and mobility norms for Indian professionals and intra-corporate transferees. Special quotas for Indian workers in select UK sectors. Benefits for the UK Whisky and Gin: Tariffs to be halved from 150% to 75% immediately, and further reduced to 40% in 10 years. Automobile Exports: India to reduce import duty on cars to 10% under a quota system. Other sectors benefitting: Cosmetics, medical devices, aerospace Electrical machinery, chocolate, soft drinks, lamb. Trade and Economic Impact India was Britain’s 11th largest trade partner in 2024 and accounted for 2.4% of total UK trade. India’s exports to the UK were worth $34 billion (£25.5 billion) in 2024, and UK exports to India amounted to $22.8 billion (£17.1 billion) in 2024. Why was the FTA needed? Post-Brexit Strategy: The UK needed new trade partnerships after losing access to the EU market and India’s large and growing economy offers a viable alternative. China-Plus-One Policy: Western nations are reducing dependence on Chinese supply chains, seeking diversified trade ties. India’s Global Trade Realignment: The India-UK FTA is part of India’s broader strategy to diversify trade partners and reduce dependence on China and multilateral blocs like RCEP, which India opted out of in 2019 over concerns of trade imbalances and inadequate safeguards. Global Trade Uncertainties: With US tariffs and geopolitical instability, the FTA provides a more stable and predictable trade relationship. Concerns Limited Additional Benefits: The Global Trade Research Initiative (GTRI) suggests that the FTA might yield only marginal gains, as many Indian goods already faced low or zero tariffs. Environmental Tariffs: The UK’s carbon border tax proposal on imports like metals posed a potential barrier for Indian exporters which needed further negotiation. Concluding remarks The India-UK FTA is a significant stride in India’s evolving trade architecture. While its immediate economic impact may be modest, strategically it enhances India’s global trade integration, supports domestic reforms, and lays the groundwork for deeper economic engagement with developed nations. Successful implementation and follow-up negotiations in sensitive sectors will be key to realizing its full potential. Sutlej-Yamuna Link (SYL) Canal Syllabus: GS2/Governance Context The Supreme Court recently termed Punjab’s de-notification of land acquired for the construction of the Sutlej-Yamuna Link (SYL) canal an act of “high-handedness”. About The court reminded Punjab of its 2017 order to maintain status quo on canal-related land and property. The SYL canal was conceptualised for the effective allocation of water from the Ravi and Beas rivers. The project envisaged a 214-km canal, of which 122 km was to be constructed in Punjab and 92 km in Haryana. Background of the Dispute: 1981 Agreement: Between Punjab, Haryana, and Rajasthan for sharing Ravi-Beas waters; SYL canal was a key part. 1996 Suit: Haryana filed a case seeking completion of the canal. 2002 Verdict: Supreme Court ruled in favor of Haryana; Punjab was directed to complete its share. 2004 Action: Punjab passed the Termination of Agreements Act, halting construction unilaterally. 2016 Ruling: A Constitution Bench struck down Punjab’s 2004 Act as unconstitutional. Recent Court Directions: The apex court appointed Union Home Secretary, Punjab Chief Secretary, and DGP Punjab as Receivers to oversee land-related issues. It urged Punjab, Haryana, and the Centre to work towards a mutually agreeable solution. If unresolved, the matter will be listed again on August 13. Dispute Resolution Mechanism for Inter-State Water Sharing in India Constitutional Provisions: Article 262 of the Indian Constitution empowers Parliament to legislate for adjudication of inter-state river water disputes. Bars the jurisdiction of the Supreme Court or any other court in such matters if a law is made under this provision. Parliament enacted the below-mentioned Acts according to Article 262 of the Indian Constitution: River Board Act, 1956: The Act empowered the Central Government to establish boards for Interstate Rivers and river valleys in consultation with State Governments. However, no board has been created to date. Inter-State Water Dispute Act, 1956: If the State Government(s) approach the Central Government for the constitution of the Tribunal, the Centre may form a Tribunal after trying to resolve the dispute through consultations. The Supreme Court shall not question the Award or formula given by the Tribunal but it can question the working of the Tribunal. The Inter-State River Water Disputes Act, 1956 was amended in 2002, to include the major recommendations of the Sarkaria Commission. The Tribunal has to be constituted within a year of getting the request. The tribunal must give the award within the maximum period of 5 years. The Tribunal award is not immediately implemented and the concerned parties may seek clarification within 3 months of the award. Tribunal Awards will have the same force as the order or decree of the Supreme Court. The award is final and beyond the jurisdiction of the Supreme Court. Issues with Inter-State River Disputes Tribunals Prolonged Proceedings and Delays: Tribunal decisions often take decades, defeating the objective of timely resolution. The Cauvery Water Disputes Tribunal took nearly 17 years (1990–2007) to deliver its final award. Even after a decision, implementation lags due to lack of enforcement mechanisms. Judicial Review: Although the Inter-State River Water Disputes Act declares tribunal decisions as final, States or affected parties approach the Supreme Court under Article 136 (Special Leave Petition) and Article 32, by invoking Article 21 (Right to Life). Tribunal Composition Lacks Multidisciplinarity: Tribunals are typically headed by retired or sitting judges. It leads to overreliance on judicial reasoning instead of technical-scientific evaluation. Inadequate and Non-Transparent Water Data: No centralized or publicly accessible repository of authoritative water flow and usage data. States often withhold or manipulate data to suit their legal arguments. Complex Federal Structure and Procedural Hurdles: Overlapping roles of state and central agencies lead to bureaucratic red tape. Recent and Proposed Reforms: Inter-State River Water Disputes (Amendment) Bill, 2019 (Pending in Parliament): Proposes permanent tribunal with time-bound adjudication. Creates a Dispute Resolution Committee (DRC) for pre-tribunal negotiation. The tribunal must Include technical experts (engineers, hydrologists, ecologists) as permanent members. An independent water data authority can be established under the Central Water Commission (CWC). Alternative Dispute Resolution (ADR): Negotiations and Mediation by neutral parties or the Centre can resolve disputes effectively. Revised SHAKTI (Scheme for Harnessing and Allocating Koyala Transparently in India) Policy for Coal Allocation Syllabus: GS3/Economy Context The Cabinet Committee on Economic Affairs (CCEA) has accorded its approval for the Revised SHAKTI (Scheme for Harnessing and Allocating Koyala Transparently in India) Policy for Coal Allocation to Power Sector. SHAKTI Policy It was introduced in 2017 and there was a paradigm shift of the coal allocation mechanism from a nomination-based regime to a more transparent way of allocation of coal linkages through auction / tariff-based bidding. The current revision with innovative features will further enhance the scope and impact of the SHAKTI policy and support the power sector through: Greater flexibility Wider eligibility and Better accessibility to coal. It will ensure coal linkage to all power producers leading to generation of more power, cheaper tariffs and an overall positive impact on the economy. Coal Sector of India Production: India surpassed one billion tonnes of coal production in FY 2024-25, with a 4.99% growth in output compared to the previous year. India is the second largest coal producing country globally. Import: Imports decreased by 8.4%, leading to substantial foreign exchange savings and a reduction in import dependency. Importance in Energy Mix: With the fifth-largest coal reserves and as the second-largest consumer, coal remains crucial, contributing 55% to the national energy mix and fuelling over 74% of total power generation. Coal Fields: The major coal fields in India are located in the eastern states of Jharkhand, Odisha, and West Bengal, as well as in central states like Chhattisgarh and Madhya Pradesh. Key contributions: Railways & revenue: Coal stands as the single largest contributor to railway freight, with an average share of nearly 49% of total freight income. Government earnings: The coal sector contributes over Rs. 70,000 Crore annually to the central and state governments through royalties, GST, and other levies. Employment: The sector provides jobs to over 239,000 workers in Coal India Ltd and thousands more in contractual and transport roles. Challenges Faced by the Coal Sector of India Environmental Impact: The coal sector faces significant environmental challenges, including air pollution, greenhouse gas emissions, and the impact of coal mining on local ecosystems and communities. Dependence on Coal Imports: Despite being the world’s 5th largest coal reserve holder, India still imports significant quantities of coal (especially coking coal for steel and high-GCV thermal coal). Import dependency increases foreign exchange outflow and vulnerability to global price volatility. Slow Environmental Clearances & Land Acquisition: Delays in forest/environmental clearances and land acquisition hinder timely development of coal blocks. Underutilization of Mining Capacity: Coal India and other miners often operate below capacity due to demand uncertainties, regulatory hurdles, and infrastructure delays. India’s Green Commitments: Coal is the most carbon-intensive fossil fuel. India’s commitment to global climate goals (e.g., Paris Agreement, Net Zero by 2070) puts pressure to reduce coal dependency. Low Private Sector Participation: Despite reforms, coal mining remains dominated by PSUs (Coal India Ltd. and SCCL), limiting competition and innovation. Government Initiatives for Coal Sector in India Commercial Coal Mining: Launched in 2020, allowing private companies to mine coal for commercial sale without any end-use restrictions. Encourages competition, improves supply efficiency, and aims to reduce import dependency. Single Window Clearance Portal: Launched in 2021 to provide a centralized platform for obtaining all approvals and clearances (e.g., land, forest, environmental) for coal mining projects. Aims to streamline project execution and reduce delays. Auction of Coal Blocks for Non-Regulated Sectors: Coal blocks are regularly auctioned for use in sectors like steel, cement, and aluminum, promoting diversified usage. Coal Gasification and Liquefaction Promotion: The government aims to gasify 100 million tonnes of coal by 2030. Promotes cleaner usage of coal and aligns with India’s energy transition goals. Technology & Automation Push: Use of drone surveillance, GPS tracking, online coal sale portals, and automated loading systems in mines. Enhances transparency, safety, and production tracking. Coal Logistics Reforms: Development of coal corridors, dedicated freight corridors, and first-mile connectivity projects to improve coal evacuation. Coal Allocation to Small Consumers: Through e-auctions, even small and medium enterprises can now access coal at market-determined prices. Conclusion While coal will continue to play a vital role in India’s energy landscape in the near to mid-term, a balanced and strategic transition towards cleaner energy sources is essential. The Ministry of Coal is strengthening domestic production to enhance energy security and advance Viksit Bharat, ensuring a self-reliant, sustainable energy framework for long-term growth. Supreme Court Reviews PMLA Ruling, 2022 Syllabus: GS3/Challenges to Internal Security Context Recently, the Supreme Court of India has initiated a review of its 2022 ruling on the Prevention of Money Laundering Act (PMLA), which granted extensive powers to the Directorate of Enforcement (ED). About the PMLA 2002 It is India’s primary legislation to combat money laundering and financial crimes, enforced since July 1, 2005. It empowers authorities to investigate, prosecute, and confiscate assets linked to illicit financial activities. It aligns with global anti-money laundering frameworks, including recommendations from the Financial Action Task Force (FATF). Key Provisions of PMLA Definition of Money Laundering: Money laundering involves concealing, acquiring, or using proceeds from criminal activities. The Act criminalizes direct or indirect involvement in laundering illicit funds. Enforcement and Investigative Powers:ED is the primary agency responsible for investigating and prosecuting money laundering cases. Authorities can attach, freeze, and confiscate assets linked to financial crimes. Obligations for Financial Institutions: Banks, financial institutions, and intermediaries must verify client identities, maintain transaction records, and report suspicious activities. Non-compliance can lead to penalties and legal action. Special Courts and Appeals: The Act establishes Special Courts to handle money laundering cases. Appeals can be filed before the Appellate Tribunal and High Court. Key Issues Under Judicial Review Access to Enforcement Case Information Report (ECIR): The ECIR functions like an FIR in money laundering cases but is not shared with the accused, limiting transparency. The Supreme Court’s 2022 ruling upheld the ED’s discretion to withhold ECIR copies. A recent Supreme Court judgment contradicts this stance, stating that ECIR copies must be shared, prompting reconsideration. It is argued that denying access to ECIR violates fundamental rights, making legal defense difficult. Burden of Proof on the Accused: The burden of proof shifts to the accused under PMLA, requiring them to prove their innocence rather than the prosecution establishing guilt. It was argued that this undermines due process and fair trial rights. The Supreme Court’s review may reconsider this provision to align with constitutional safeguards. Expanding Scope of PMLA: Amendments have broadened the definition of money laundering, raising concerns about potential misuse. The Act now covers predicate offenses under various laws, increasing compliance burdens. Conclusion While the PMLA strengthens financial crime enforcement, concerns over ECIR access and burden of proof highlight the need for judicial scrutiny and legal reforms. Ensuring transparency, fair trial rights, and procedural safeguards will be crucial in balancing enforcement powers with constitutional protections. Cloud-Seeding Trials Across National Capital Region (NCR) Syllabus: GS3/Science and Technology, Environment Context The Delhi Cabinet approved a Rs 3.21-crore project for conducting five cloud-seeding trials across the National Capital Region (NCR) amid the fight against pollution. What is Cloud Seeding? Cloud seeding is a weather modification technique aimed at enhancing precipitation from clouds by introducing substances that act as cloud condensation or ice nuclei. Method: Aircraft or rockets disperse seeding agents like silver iodide, potassium iodide, or dry ice (solid carbon dioxide), or liquid propane into the atmosphere. Purpose: Stimulate rainfall, reduce dust, suppress hailstorms, and improve air quality by settling particulates. Suitable Conditions for Cloud Seeding Cloud seeding requires existing clouds; it will not produce rain out of thin air. Not all types of clouds are suitable for seeding. Clouds must be deep enough and of a suitable temperature (between -10 and -12 degrees Celsius) to be seeded effectively. The wind must be below a certain speed. These conditions are most common in mountainous areas. Concerns with Cloud Seeding Use of Chemicals: Some chemicals are potentially harmful to the natural environment. There is concern about soil and water contamination, especially affecting plants and crops that rely on rainwater for nourishment. Redistribution of Rainfall: Artificially inducing rainfall in one area may deprive adjacent areas of their natural precipitation, potentially triggering drought-like conditions elsewhere. High Cost: Cloud seeding requires specialized aircraft, meteorological expertise, and precision timing, making it a cost-intensive initiative. Concluding remarks Cloud seeding offers a technological solution to mitigate the immediate impact of air pollution in NCR, especially during critical months. However, it should be part of a multi-pronged approach involving emissions control, green infrastructure, and public health measures.

Tag: Free Trade Agreement (FTA) Signed Between UK-India

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