1 January 2023

• International: India assumes chairmanship of the Wassenaar Arrangement, the 42-nation voluntary export-control regime covering conventional weapons and dual-use goods.
• Economy: The rupee closed 2022 as the worst-performing Asian currency, having shed roughly 10 per cent of its value against the dollar over the year.
• Polity: Stockholm Convention's Persistent Organic Pollutants Review Committee listed chlorpyrifos and four other chemicals as POPs, a classification with implications for India's agrochemical regulation.
• Environment: India's total forest cover stands at 80.9 million hectares, equal to 24.62 per cent of the country's geographical area, against the National Forest Policy target of 33 per cent.

GS area: International Relations, Security

India assumed the chairmanship of the Wassenaar Arrangement on 1 January 2023. The arrangement is the primary multilateral framework that governs trade in conventional arms and dual-use goods and technologies.

• Established: 1996 in Wassenaar, the Netherlands, replacing the Cold War-era COCOM (Coordinating Committee for Multilateral Export Controls).
• Members: 42 nations; membership requires adherence to non-proliferation norms and an effective national export-control system.
• Scope: Covers small arms, battle tanks, combat aircraft, and dual-use goods such as machine tools, advanced electronics, and encryption software.
• India's four memberships: Wassenaar Arrangement (2017), Missile Technology Control Regime or MTCR (2016), Australia Group on chemical and biological weapons (2018), and Nuclear Suppliers Group application pending. India is not a member of the Zangger Committee or the NSG.
• Significance of chairmanship: Rotates annually; the chair sets the agenda for the plenary and working-group sessions.

Static linkage: International organisations (GS Paper 2), Security and border management.

GS area: Economy (monetary policy, exchange rates)

The Indian rupee fell approximately 10 per cent against the US dollar during 2022, touching a lifetime low of 83.2 rupees per dollar. It was the worst-performing Asian currency for the year.

• Primary cause: The US Federal Reserve raised its policy rate by 425 basis points across 2022 to fight domestic inflation. Higher US rates pulled capital out of emerging-market assets globally.
• Capital flight: Foreign Portfolio Investors withdrew approximately 1.34 lakh crore rupees from Indian equity and debt markets.
• RBI response: The Reserve Bank of India intervened repeatedly in the foreign-exchange market to limit rupee volatility. India's foreign-exchange reserves fell by roughly 70 billion dollars over the year as a result.
• Concept anchor: Nominal exchange rate versus real effective exchange rate. A falling nominal rate makes exports cheaper in dollar terms but raises import costs, particularly for oil.

The exchange-rate story is directly linked to India's current-account deficit and the monetary policy divergence between the US Fed and the RBI.

Static linkage: Monetary policy, balance of payments (GS Paper 3).

GS area: Environment (pollution, international conventions)

The 18th meeting of the Persistent Organic Pollutants Review Committee under the Stockholm Convention recommended listing chlorpyrifos and four other chemicals as POPs. Chlorpyrifos is a widely used organophosphate insecticide registered in India under the Insecticide Act, 1968.

• Stockholm Convention: Adopted in 2001. Aims to eliminate or restrict the production, use and trade in POPs. India is a signatory.
• POP characteristics (POPS criteria): Persistence in the environment, bioaccumulation in fatty tissue, long-range transport, and toxicity.
• Chlorpyrifos: Punjab and Haryana banned it among ten pesticides in August 2022. Its inclusion in the Stockholm list would trigger obligations to phase it out nationally.
• Other chemicals listed at POPRC-18: Chlorinated paraffins, dechlorane plus (flame retardant), long-chain perfluorocarboxylic acids, and UV-328.
• Implementation path: A listing recommendation goes to the Conference of Parties for final adoption.

Static linkage: International environmental conventions, pollution control (GS Paper 3).

GS area: Environment (forest conservation)

India's total forest and tree cover stands at 80.9 million hectares, which is 24.62 per cent of the country's geographical area. The National Forest Policy, 1988 sets 33 per cent as the target coverage for the country.

• Assessment source: Forest Survey of India's India State of Forest Report, published biennially.
• Breakdown: Forest cover is classified as very dense forest (above 70 per cent canopy density), moderately dense forest (40 to 70 per cent), and open forest (10 to 40 per cent).
• Top three states by forest cover percentage: Mizoram at 84.53 per cent, Arunachal Pradesh at 79.33 per cent, and Meghalaya at 76 per cent.
• Green India Mission: Under the National Action Plan on Climate Change. Target of adding 5 million hectares of new forest cover by 2025.
• Challenge: Urban expansion, mining, infrastructure corridors and agricultural encroachment continue to fragment existing forest.

Static linkage: Biodiversity conservation, climate change mitigation (GS Paper 3).

GS area: Economy (banking, financial sector)

Non-performing asset recovery through formal channels saw NPAs referred to recovery mechanisms rise fourfold in 2021-22 compared to previous years. Four principal channels handle bank NPA recovery:

• Lok Adalats: Handle cases up to 20 lakh rupees. Speedy settlement without appeals. Recovery rate was 2.3 per cent in 2021-22. Lower cost than litigation.
• Debt Recovery Tribunals (DRTs): Handle cases above 20 lakh. Established under the Recovery of Debts and Bankruptcy Act, 1993.
• SARFAESI Act, 2002: Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act. Allows banks to recover secured loans without court intervention.
• Insolvency and Bankruptcy Code, 2016: Structured resolution process with a 330-day timeline. Creditor-led recovery through National Company Law Tribunal.

The gap between referred amounts and recovered amounts remains large. Banks prefer Lok Adalats for smaller amounts because of lower transaction costs even though recovery rates are thin.

Static linkage: Banking sector, economy (GS Paper 3).

• National Beekeeping and Honey Mission: India ranks 8th globally in honey production. The world's first honeybee vaccine received conditional approval in the United States in January 2023, targeting American Foulbrood, a bacterial disease that kills bee larvae.
• HEFA: Higher Education Financing Agency, a joint venture between the Ministry of Education and Canara Bank established in 2017. It targets mobilising 1 lakh crore rupees for infrastructure in higher education institutions.
• Shumang Leela: Traditional theatre form from Manipur performed in open courtyards with cross-gender roles. Relevant in the context of performing arts and intangible cultural heritage.