UPSC DAILY CURRENT AFFAIRS (14th May,2025)

India rolls over $50 million worth Treasury Bill to help Maldives

Syllabus: GS2/IR

Context

• India has rolled over a $50 million-treasury bill to support Maldives.
  • Treasury bills are short-term debt instruments issued by a government to meet immediate funding needs.

About

• The rollover of the $50 million treasury bill helps provide temporary relief to the Maldives, which is grappling with significant debt and economic strain.
• Despite the economic challenges and tensions in bilateral relations, this extension of financial assistance underscores India’s strategic interest in maintaining stable ties with the Maldives, a key partner in the Indian Ocean region.
• The transaction was carried out by the State Bank of India, reflecting India’s active involvement in supporting the Maldives’ financial stability.

Brief on India – Maldives

• India considers the Maldives as a key maritime neighbour and an important partner in its ‘Neighbourhood First’ policy and Vision ‘MAHASAGAR’ i.e. Mutual and Holistic Advancement for Security and Growth Across Regions.
• Participation in Multiple Forums: Both nations are founding members of the South Asian Association for Regional Cooperation (SAARC), the South Asian Economic Union and signatories to the South Asia Free Trade Agreement. 
• Economic partnership: India and Maldives signed a trade agreement in 1981, which provides for export of essential commodities.
  • India-Maldives bilateral trade crossed the USD300 million mark for the first time in 2021 which further crossed the USD 500 million mark in 2022. The trade in 2023 stood at $ 548 mn.
  • India is one of the biggest investors and tourism markets for the Maldives, with significant trade and infrastructure projects underway.
• Defense and Security Cooperation: Since 1988, defence and security has been a major area of cooperation between India and Maldives.
• Tourism: In 2023, India was the leading source market for Maldives with a 11.8% market share. 
  • In March 2022, India & Maldives agreed for an open skies arrangement which will further improve connectivity between two countries.
• Connectivity: The Male to Thilafushi Link project, popularly known as the Greater Male Connectivity Project (GMCP),

Significance of Maldives for India

• Strategic Importance: The Maldives is strategically located in the Indian Ocean, and its stability and security are of interest to India.
• Trade Route: Situated along crucial maritime trade routes between the Gulf of Aden and the Strait of Malacca, the Maldives acts as a “toll gate” for nearly half of India’s external trade and 80% of its energy imports.
• Counterbalancing China: Maldives presents an opportunity for India to counterbalance China’s growing influence in the Indian Ocean, fostering regional balance of power.
• Diplomatic Leverage: Strong bilateral relations with the Maldives enhance India’s leadership role in the Indian Ocean Region (IOR) and in forums like the Indian Ocean Rim Association (IORA).

Challenges in Relations

• Change in Power: Changes in government create uncertainty and complicate long-term cooperation projects.
• Chinese Influence: China’s growing economic presence in the Maldives, evidenced by investments in infrastructure projects and debt-trap diplomacy, is perceived as a challenge to India’s strategic interests in the region.
• Non-traditional threats: Piracy, terrorism, and drug trafficking remain concerns in the region, requiring continuous collaboration and intelligence sharing between India and the Maldives.
• Extremism and radicalization: The Maldives’ vulnerability to religious extremism and radicalization poses a security threat that necessitates joint efforts in countering such ideologies.
• Trade imbalance: The significant trade imbalance between India and the Maldives leads to resentment and calls for diversifying trade partnerships in Maldives.

Way Ahead

• The evolution of India-Maldives relations reflects a combination of geopolitical dynamics, changes in leadership, and shared regional interests. 
• India is steadfast in its commitments towards Maldives and has always walked the extra mile towards building relations. 
• By acknowledging and addressing the challenges, India and the Maldives can navigate the complexities of their relationship and build a stronger, more resilient, and mutually beneficial partnership for the future.

Strengthening Inland Water Transport in India

Syllabus: GS3/Infrastructure

Context

• The Inland Waterways Authority of India (IWAI) has established a new regional office in Srinagar, committed ₹100 crore to improve three National Waterways in the region — River Chenab (NW-26), River Jhelum (NW-49), and River Ravi (NW-84).

Inland Water Transport in India

• National Waterways Act, 2016 has declared 111 inland waterways as ‘National Waterways’ (NWs) in the country to promote shipping and navigation on them.
  • The total length of NWs is 20,275 km spread across 24 States in the country.
• Currently, Indian operates to a few stretches in the Ganga-Bhagirathi-Hooghly rivers, the Brahmaputra, the Barak river, the rivers in Goa, the backwaters in Kerala, inland waters in Mumbai and the deltaic regions of the Godavari – Krishna rivers.

Advantages of Inland Water Transport

• Cost-Effective Logistics: Waterways offer lower transportation costs compared to road and rail.
  • Fuel consumption per ton-km is significantly less, reducing overall logistics expenses.
  • 1 Litre of fuel moves 24 tonne on road, 95 tonne on rail and 215 tonne on IWT (for a kilometer).
• Reducing Pressure on Rail and Road Networks: India’s railways and highways are overburdened, leading to delays and inefficiencies.
  • IWT can supplement existing transport modes, improving cargo movement efficiency.
• Environmentally Sustainable: IWT produces lower carbon emissions, making it a greener mode of transport.
  • Reduces traffic congestion and air pollution in urban areas.

Expanding IWT Beyond Cargo Transport

• Roll-on/Roll-off (Ro-Ro) Services: Enables vehicle transportation across waterways, reducing road congestion.
• Tourism Development: Promotes river cruises, houseboats, and eco-tourism, boosting local economies.
• Passenger Ferry Services: Provides affordable and efficient travel options, especially in remote regions.

Key Government Initiatives 

• Jal Marg Vikas Project (JMVP): It focuses on developing NW-1 (Ganga-Bhagirathi-Hooghly river system) for cargo movement.
  • Includes multi-modal terminals, navigational locks, and fairway development.
• Jalvahak Scheme: It provides operating cost incentives for cargo owners using IWT routes.
  • It aims to increase IWT’s modal share from 2% to 5% by 2030.
• Hybrid Electric and Hydrogen Vessels: It promotes green technology for sustainable inland navigation.
• National Waterways (Construction of Jetties/ Terminals) Regulations, 2025: The Ministry of Ports, Shipping and Waterways has introduced new regulations, formulated by IWAI, to streamline processes and promote efficient use of India’s vast waterways network.

Government’s Vision for Inland Water Transport

• The Shipping Ministry has set a goal to complete 150 maritime projects by September 2025, strengthening India’s inland waterways sector.
• The Harbour Craft Green Transition Programme aims to accelerate the adoption of clean energy solutions across Indian ports.
• A Coastal Green Shipping Corridor is being developed, with the Kandla-Tuticorin route as the first corridor.

Challenges and Future Prospects

• Limited Depth in Rivers: Seasonal variations affect navigability, requiring dredging and water management.
• Infrastructure Gaps: Need for modern terminals, jetties, and intermodal connectivity.
• Investment: Encouraging private sector participation in IWT development.

Conclusion  

• India’s inland waterways can become a key pillar of sustainable transport, reducing logistics costs and environmental impact, with continued policy support and technological advancements.
• By enhancing waterway connectivity, tourism, and economic opportunities, the initiative aligns with India’s broader Blue Economy vision.

Natural Farming Certification System 

Syllabus: GS3/ Environment

Context

• In a bid to boost consumer trust and farmer incomes, the central government is likely to introduce a nationwide Natural Farming Certification System (NFCS).

What is Natural Farming?

• Natural Farming is a chemical-free farming system rooted in Indian tradition enriched with modern understanding of ecology, resource recycling and on-farm resource optimization. 

Key Features of Natural Farming

• Zero Budget Natural Farming (ZBNF): A popular model promoted by Subhash Palekar, aimed at drastically reducing input costs.
• Core practices:
  • Beejamrit: Natural seed treatment.
  • Jeevamrit: Soil inoculation using fermented cow dung and urine.
  • Mulching and Waaphasa: Moisture retention and aeration of soil.
• Low input, high sustainability: Reduces dependence on market-bought inputs.

Benefits of Natural Farming

• Lower Input Costs: Natural farming requires fewer external inputs like chemical fertilizers and pesticides, which can reduce overall production costs for farmers.
• Ensures Better Health: As Natural Farming does not use any synthetic chemicals, health risks and hazards are eliminated.
  • The food has higher nutrition density and therefore offers better health benefits.
• Environment Conservation: Natural Farming ensures better soil biology, improved agro-biodiversity and a more judicious usage of water with much smaller carbon and nitrogen footprints.
• Sustainable Farming Practices: By avoiding the overuse of chemical fertilizers and pesticides, natural farming promotes a more sustainable and regenerative approach to agriculture.

Why is Certification Needed?

• Trust Building: It helps consumers distinguish genuine natural farm produce.
• Market Access: It enables farmers to fetch premium prices and enter niche markets (domestic and international).
• Standardisation: It brings uniformity to natural farming practices.
• Monitoring and Accountability: It ensures traceability and quality control.

Challenges in Scaling Natural Farming

• Initial Yield Reduction: During the transition from conventional to natural farming, many farmers reported a temporary decline in crop yields.
• Limited Scientific Backing: Although natural farming is promoted as environmentally sustainable, there is limited large-scale, long-term scientific research validating its productivity, resilience, and scalability across diverse agro-climatic zones.
• Inadequate Institutional Support: Coordination between agriculture departments, research bodies, and rural institutions is limited.

World’s First Commercial-scale e-methanol Plant Opens in Denmark

Syllabus: GS3/ Environment

In News

• Denmark has launched the world’s first commercial-scale e-methanol plant in Kasso.
  • Developed by European Energy (Denmark) and Mitsui (Japan), the plant will produce 42,000 metric tonnes of e-methanol annually.

What is Methanol?

• About: Methanol (CH₃OH) is a light, volatile, and flammable liquid alcohol. Conventionally produced from natural gas and coal, it is used in chemicals, fuels, and plastics.

• Applications: Used in shipping fuel, plastic production, manufacturing fuel cells etc.

Challenges in e-Methanol Adoption

• High Cost: Not yet price-competitive with fossil fuels; price parity expected around 2035.
• Scale of Production: Infrastructure for large-scale green methanol is nascent.
• CO₂ Sourcing: Sustainable and reliable CO₂ capture remains a technological challenge.
• Storage and Distribution: Needs new or adapted logistics infrastructure.

India’s Methanol Economy Programme

• About: Launched by NITI Aayog, the Methanol Economy Programme aims to reduce oil import bills, curb pollution and promote cleaner alternatives of fuel. 
• Key Pillars: Production of methanol from coal, biomass, and municipal waste can be used in LPG blend, power generation, and transportation which eventually helps in reducing India’s oil import bill & greenhouse gas (GHG) emissions.
  • The program targets a 10% reduction in crude oil imports by 2030 by substituting it with methanol.
• Government Initiatives and Progress:  The Department of Science and Technology (DST) has initiated the Methanol Economy Research Programme (MERP) to support research and development in methanol production and utilization.
  • Blending of 15% methanol in gasoline (M15) has been notified, and test standards are being developed.
  • National Policy on Biofuels 2018 recognizes methanol and DME (dimethyl ether) as alternative fuels.

How is the Shipping Industry Tackling Emissions?

Syllabus: GS3/ Economy, GS3/ Environment

Context

• At the 83rd session of the Marine Environment Protection Committee (MEPC-83) of the International Maritime Organization (IMO), a landmark vote was held to adopt a Market-Based Measure (MBM) for decarbonising international shipping.

What is Green Shipping?

• Green shipping refers to environmentally sustainable practices and technologies used in the maritime industry to reduce the environmental impact of shipping activities.
• It includes cutting greenhouse gas (GHG) emissions, improving energy efficiency, and minimizing marine pollution.

Need for Green Shipping

• Global Emissions: The shipping industry emits around 1 billion tonnes of GHG annually, accounting for about 2.8% of global emissions
• Future Projections: Emissions may increase by 50–250% by 2050 if unchecked.
• Measures Already Enforced:
  • Energy Efficiency Design Index (EEDI): Sets efficiency standards for new ships.
  • Energy Efficiency Management Plan (SEEMP): Operational plans to cut emissions.
  • Mandatory fuel oil consumption reporting: Improves accountability and transparency.

MEPC-83 Proposals for emissions levy mechanisms

• The International Chamber of Shipping advocated for a fixed levy per every tonne of CO₂ emitted.
• China proposed a market-driven approach where ships could trade compliance units and invest in alternative fuels.
• The European Union suggested a fixed Greenhouse Gas (GHG) levy, managed by an IMO-administered fund.
• India proposed a ‘bridging mechanism’, which would target only under-compliant ships to bear the financial burden, while rewarding those using Zero or Near-Zero (ZNZ) fuels.
• Singapore proposed a hybrid model based on India’s proposal, including a GHG Fuel Standard (GFS) and a tiered system rewarding surplus emission units and requiring the purchase of remedial units for underperformance.

What was decided?

• IMO adopted Singapore’s hybrid model, influenced significantly by India’s proposal, as its Net Zero Framework.
• This marks the first time a global industry has adopted a mandatory emissions levy. However, the decision of the MEPC-83 is not final yet.

Roadblocks in implementations

• The MEPC-83’s decision, having approved the Net Zero Framework, needs to amend Annex VI of the MARPOL convention, which governs air pollution from ships.
  • The amendment will undergo a six-month circulation period among all contracting parties to MARPOL. 
• For final adoption, it requires a two-thirds majority of votes from members present and voting; this means that if all 101 parties participate, at least 67 must support the measure. 
• There should be no formal objection by one-third of the parties accounting for 50% of global shipping tonnage.

What are the Concerns?

• Oil-exporting countries, led by Saudi Arabia, opposed any significant transition to green fuels, prioritising the protection of their fossil fuel markets.
  • China and large shipping nations favoured low levies to maintain trade competitiveness.
  • Scandinavian countries demanded credit for early green efforts.
• The original ‘Common But Differentiated Responsibilities and Respective Capabilities’ (CBDR-RC) principle is eroding.
  • Developed countries are pushing for uniform rules, disregarding historical emissions and economic capacities of developing nations.

Impact on India

• Short-Term Impact: India’s international fleet ( around 135 ships) would incur an additional $108 million/year in fuel costs by 2030 — manageable given the scale.
• Long-Term Opportunities:
  • India is investing heavily via the National Hydrogen Mission.
  • Indian ports are developing green hydrogen bunkering capabilities.
  • Indian hydrogen already meets the IMO’s fuel reward thresholds, aiding its export potential.

Concluding remarks

• The MEPC-83’s approval of a market-based emissions framework represents a significant milestone in global efforts to decarbonise the shipping industry.
• If successful, this could serve as a model for other sectors in achieving a low-carbon global economy.