11 April 2024

• Economy: India invokes the WTO Peace Clause for the fifth consecutive year, shielding domestic rice support above the 10 per cent cap.
• Trade: India reviews its 2015 Bilateral Investment Treaty model text after losing the Vodafone and Cairn arbitrations.
• Polity: India's liquor policy landscape: five jurisdictions maintain prohibition while the sector contributes 15 to 30 per cent of many state revenues.
• Science: DESI instrument maps 11 billion years of cosmic history and measures the universe's expansion rate at 68.5 km/s per megaparsec.
• Space: TSAT-1A, the first sub-metre satellite assembled and tested in India, is launched on a SpaceX Falcon 9.

GS area: Economy (trade policy, agriculture)

India invoked the WTO Peace Clause for the fifth consecutive year for rice subsidies in the marketing year 2022-23.

Key facts:

• The 10 per cent cap: WTO's Agreement on Agriculture restricts the domestic support that developing countries can provide to any single crop to 10 per cent of the total production value.
• India's breach: India's rice support (minimum support price and procurement) exceeded this cap.
• Peace Clause (Bali Decision, 2013): Agreed at the 2013 WTO Ministerial Conference in Bali, it grants developing countries immunity from legal challenges while they exceed the 10 per cent cap, until a permanent solution is negotiated.
• Why it matters: Without the clause, any WTO member could challenge India's rice procurement as an unfair subsidy. The clause buys time while permanent reform of the Agreement on Agriculture is negotiated.
• India's position: India argues the 10 per cent calculation uses 1986-88 base prices, which severely understate current procurement costs. India wants a revised methodology.
• Permanent solution: Not agreed so far despite multiple ministerial conferences.

Static linkage: WTO, agriculture policy, food security, India's trade diplomacy.

GS area: Economy (international trade, investment)

The Prime Minister's Office directed the Commerce Ministry to review India's 2015 Bilateral Investment Treaty model text in light of ongoing negotiations and lessons from lost arbitration cases.

Key facts:

• BIT: A treaty between two countries that sets out terms for investment protection, including guarantees against expropriation and rights to international arbitration.
• Lost cases:
  • Vodafone: India sought capital gains tax on a 2007 cross-border deal. An international tribunal ruled against India in 2020.
  • Cairn Energy: India's retrospective tax claim led to a 1.2-billion-dollar arbitration loss in 2021.
• 2015 Model BIT: Replaced India's earlier 1993 model. It narrowed investor protection, excluded taxation and government procurement from its scope, and made dispute resolution harder for investors.
• Current negotiations: India is negotiating BITs with the United Kingdom and the European Free Trade Association (EFTA) nations.
• PMO concern: The review seeks to ensure the model is fit for purpose after the retrospective taxation controversies were resolved by legislation in 2021.

Static linkage: international trade, investment policy, India's legal disputes.

GS area: Polity (state list, DPSP), Economy

The Delhi Excise Policy scandal (2021-22) brought attention to the dynamics of state liquor policy in India.

Key facts:

• Constitutional position: Liquor regulation is a State List subject (Entry 8, List II, Seventh Schedule). Article 47 of the DPSP encourages states to pursue prohibition.
• Revenue significance: States derive 15 to 30 per cent of their own tax revenue from excise duty on liquor. Karnataka, Uttar Pradesh, Punjab, and West Bengal each earn over 20 per cent.
• Tax rates: Domestic liquor attracts duties exceeding 200 per cent. Imported spirits face customs duties above 150 per cent.
• Prohibition jurisdictions: Bihar, Gujarat, Lakshadweep, Nagaland, and Mizoram maintain total prohibition.
• Delhi case: The 2021-22 excise policy allegedly granted waivers and preferential terms to select liquor firms. The CBI and ED have made multiple arrests and the policy was subsequently scrapped.
• India's market: India is the third-largest alcoholic beverage market globally, after China and Russia.

Static linkage: federalism, Directive Principles, state finances.

GS area: Science and Technology, Economy

The World Economic Forum published a report projecting the global space economy will grow to 1.8 trillion dollars by 2035, from 630 billion dollars in 2023.

Key facts:

• India's current space economy: Approximately 8.4 billion dollars.
• India's target: 44 billion dollars by 2033.
• India's unicorn gap: India has 67 unicorns (third globally), but lacks unicorns in aerospace and space technology, per Hurun Research Institute's Global Unicorn Index 2024.
• Policy enabler: India established IN-SPACe (Indian National Space Promotion and Authorisation Centre) in 2020 to bring private companies into the space sector.
• Antimicrobial resistance (AMR) parallel: The same report period saw global leaders set a target of 10 per cent reduction in bacterial AMR deaths by 2030.

Static linkage: science and technology, space policy, India's economy.

GS area: Science and Technology

TSAT-1A was launched aboard a SpaceX Falcon 9 rocket from Kennedy Space Center, Florida.

Key facts:

• Developer: Tata Advanced Systems Limited.
• Significance: India's first satellite to be assembled and tested entirely within India at sub-metre resolution.
• Capabilities: High-resolution optical imaging with multispectral and hyperspectral functionality.
• Sub-metre resolution: The satellite can capture images where each pixel represents less than one metre on the ground, enabling applications in defence, urban planning, and disaster monitoring.
• Atmanirbhar Bharat angle: The assembly-in-India milestone reduces dependence on foreign satellite manufacturing.

Static linkage: science and technology, Atmanirbhar Bharat, space.

GS area: Science and Technology

The Dark Energy Spectroscopic Instrument published its first major results, mapping 11 billion years of cosmic history.

Key facts:

• DESI: Uses 5,000 optical fibres attached to robotic positioners at the Mayall 4-metre telescope at Kitt Peak National Observatory in the United States.
• Universe expansion rate measured: 68.5 (plus or minus 0.6) km/s per megaparsec.
• Dark energy: The mysterious force driving the universe's accelerating expansion. Along with dark matter, it constitutes approximately 95 per cent of the universe's content.
• Lambda CDM model: The standard cosmological model. DESI data tests whether dark energy is constant (the "cosmological constant" Lambda) or varies over time.
• Indian contribution: Researchers from Indian institutions participated in the international collaboration of 70-plus institutions.

Static linkage: science and technology, cosmology.

• Botswana's elephant problem: Botswana hosts the world's largest elephant population. Elephants are migrating from neighbouring countries including Zimbabwe and Zambia, causing crop conflict. Botswana lifted its trophy hunting ban to manage the population.
• Global Unicorn Index 2024: India has 67 unicorns, third after the USA and China. The index by Hurun Research Institute identifies privately held companies valued at over one billion dollars.
• Illegal HFC trade: A report by the Environmental Investigation Agency flagged significant illegal trade in hydrofluorocarbons, which replaced ozone- depleting CFCs/HCFCs but are themselves potent greenhouse gases.