Weekly Current Affairs (22nd to 30th November 2024) Part - 1 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

GS3/Economy

India's Trade Deficit as an Opportunity

Why in News?

According to some economists, India’s trade deficit is not a sign of weak manufacturing but reflects India’s strength in services and attractiveness as an investment destination.

What is the State of India’s Trade Deficit?

A trade deficit occurs when a country imports more goods and services than it exports. It represents the excess of imports over exports within a specific timeframe.

• India’s Trade Scenario: Overall Trade Deficit decreased from USD 121.6 billion (FY23) to USD 78.1 billion (FY24).
• Services Trade: Services exports amounted to USD 339.62 billion in FY24, with a services trade surplus of USD 162.06 billion.
• India’s share in global services exports grew from 0.5% in 1993 to 4.3% in 2022, positioning India as the largest services exporter worldwide.
• Merchandise Trade: Merchandise exports reached USD 776 billion in FY23, with the merchandise trade deficit narrowing to USD 238.3 billion in FY24, down from USD 264.9 billion in FY23.
• Current Account Deficit (CAD) was reduced to USD 23.2 billion (0.7% of GDP, FY24) from USD 67 billion (2% of GDP, FY23).
• Capital Account Balance: Net inflows increased from USD 58.9 billion (FY23) to USD 86.3 billion (FY24), driven primarily by foreign portfolio investment (FPI).

Why is India's Trade Deficit not a Weakness?

• Strength in Services: India is a global leader in services, particularly in IT and pharmaceuticals, enabling it to sustain a trade deficit in goods.
• The surplus in services exports allows for greater imports without destabilizing the economy.
• Investment Destination: Attracting foreign investment results in a capital account surplus, balanced by a current account deficit, which is a natural outcome of India's investment strategy.
• Competitive Exports: A trade deficit can lead to a depreciated currency, making exports cheaper and more competitive globally, which could enhance export activities.
• Healthy Current Account Deficit: India maintains a sustainable current account deficit at around 2% of GDP, a level that does not threaten economic stability as long as capital inflows match the deficit.
• Comparative Advantage: The trade deficit reflects India’s comparative advantage where it exports services and imports goods that are less efficient to produce domestically.
• Manufacturing Growth: The current account deficit does not impede potential growth in manufacturing; importing machinery and engineering goods supports initiatives like "Make in India."
• Higher Consumption Capacity: Imports broaden the range of available products for consumers, improving living standards by providing access to goods that may be costly or unavailable domestically.
• Economic Flexibility: When domestic production falls short of demand, imports can fill the gap, ensuring goods are accessible to consumers and businesses.
• Economic Integration: Trade deficits signify global economic integration, allowing access to essential imports that support both industries and consumers.

What are the Disadvantages of Trade Deficits?

• Loss of Economic Sovereignty: Prolonged trade deficits can enable foreign nations to acquire domestic assets, potentially leading to a loss of control over critical sectors and increased vulnerability to external pressures.
• Higher Unemployment: Continuous trade deficits may cause domestic firms to struggle against cheaper imports, resulting in job losses and economic stagnation.
• Twin Deficits Hypothesis: Trade deficits are often associated with budget deficits when a government borrows to meet financial needs, especially when exports fall short of covering imports.
• Deindustrialization: Chronic trade deficits can harm domestic manufacturing, resulting in a decline in industrial sectors as they face competition from cheaper or superior imports.
• Balance of Payments Crisis: Financing trade deficits through borrowing can lead to a Balance of Payments crisis if foreign investor confidence wanes, similar to the crisis experienced by India in 1991.

What Measures are Needed for a Balanced Trade?

• Export Credit Support: Encouraging financial institutions to provide affordable and sufficient export credit, particularly for micro, small, and medium enterprises (MSMEs), to enhance competitiveness in foreign markets.
• Logistics Infrastructure: Utilizing initiatives like the PM GatiShakti National Master Plan and the National Logistics Policy (NLP) to optimize operations, reduce costs, and improve the logistics sector to support cost-effective domestic manufacturing.
• NLP aims to lower logistics costs from the current 13-14% to 8% by 2030.
• Free Trade Agreements (FTAs): Negotiating better terms for essential imports through FTAs, allowing for cost-effective fulfillment of domestic demand.
• GVC Participation: Engaging in Global Value Chains (GVCs) enables Indian firms to integrate into international supply networks, broadening customer reach and increasing export volumes.
• Domestic Manufacturing: Expanding Production-Linked Incentive (PLI) schemes and enhancing the Districts as Export Hubs (DEH) initiative can stimulate domestic manufacturing and exports, helping to mitigate the trade deficit.
• High Value Trade: Focusing on increasing exports of high-value goods and services can diminish India's trade deficit by raising revenue per unit exported.
• For instance, companies like Tata Motors and Mahindra Electric can boost exports of high-value electric vehicles (EVs) and renewable energy technologies such as solar panels.
• Diversification of Export Basket: Expanding exports into sectors like defense equipment, aerospace, and renewable energy (solar panels, wind turbines) can enhance revenue generation and help reduce the trade deficit.
• Addressing Sanitary and Phytosanitary Barriers: By tackling barriers such as pesticide residue limits, quarantine requirements, and animal health regulations, India can unlock new markets in high-income countries like the US, boosting exports and addressing trade deficits.

Mains Question

Q: Discuss the factors contributing to India’s trade deficit and suggest measures to address it.

GS3/Environment

Global Decline in Freshwater Reserves

Why in news?

Recent data from the National Aeronautics and Space Administration (NASA) and the German GRACE (Gravity Recovery and Climate Experiment) satellites have highlighted a substantial drop in Earth's total freshwater levels since 2014.

What is the Status of Decline in Freshwater Reserves?

Global Overview:

• From 2015 to 2023, freshwater reserves on land—including lakes, rivers, and groundwater—have decreased by 1,200 cubic kilometers.
• More than half of the world’s countries have compromised freshwater systems, with over 400 river basins showing reduced water flow, including significant watersheds like the Congo Basin.
• The World Meteorological Organization has reported that 2023 was the driest year for rivers globally in over 30 years, worsening the freshwater crisis.

India's Situation:

• India, which has 18% of the global population, possesses only 4% of the world’s freshwater resources and occupies 2.4% of the Earth's surface.
• Nearly half of India’s rivers are polluted, and more than 150 primary reservoirs are at just 38% of their storage capacity, deepening the country’s water crisis.
• The 2018 Composite Water Management Index by NITI Aayog indicates that a large segment of India's population faces significant to extreme water stress, with around 600 million people experiencing water scarcity.
• Groundwater depletion is particularly alarming in agrarian states like Punjab and Haryana, where excessive use for irrigation and domestic needs has led to a significant drop in water tables.
• Regions in central and western India, such as Rajasthan, Maharashtra, and Gujarat, often face droughts that further deplete already limited water resources.

What are the Causes for the Decline in Freshwater Levels?

Role of El Niño Events:

• The El Niño event from 2014 to 2016 was one of the most significant in over 70 years, disrupting global rainfall patterns.
• Warmer temperatures in the Pacific Ocean altered atmospheric jet streams, exacerbating drought conditions worldwide.

Effects of Climate Change:

• Climate change has led to irregular rainfall patterns, causing prolonged dry spells, droughts, and unpredictable monsoon seasons.
• Intense precipitation events often result in surface runoff rather than replenishing groundwater.
• Extended dry periods compact soil, which diminishes its water absorption ability, heightening evaporation and increasing atmospheric water-holding capacity, thus worsening drought conditions.
• Regions particularly impacted include Brazil, Australasia, North America, Europe, and Africa.

Over-extraction of Groundwater:

• Heavy reliance on groundwater for irrigation, especially in areas with insufficient rainfall, has led to its decline, as extraction frequently surpasses natural replenishment.
• Industries and urban centers further contribute to groundwater depletion.

Loss of Ecosystems:

• Destruction of natural ecosystems like wetlands and forests diminishes the land's capacity to retain water.
• Deforestation leads to soil erosion, which decreases the land's ability to absorb rainwater and diminishes the replenishment of water bodies.

Agricultural Practices and Pollution:

• Agriculture accounts for 70% of the world's accessible freshwater, but inefficient irrigation practices and the cultivation of water-intensive crops result in substantial water waste.
• Industrial waste and untreated sewage contribute significantly to water body pollution, impacting water quality and availability over the long term.

What are the Implications of Freshwater Decline?

Impact on Biodiversity:

• The World Wildlife Fund (WWF) reports an 84% decline in freshwater species since 1970, driven by habitat loss, pollution, and barriers to migration such as dams.
• These factors destabilize ecosystems, posing a threat to biodiversity and the essential services they provide.

Impact on Human Communities:

• A 2024 UN report on water stress emphasizes that decreased water availability pressures farmers and communities, leading to famine, conflicts, poverty, and increased risk of waterborne diseases.
• Water scarcity also impacts industries, hindering economic development and job creation.
• By 2025, an estimated 1.8 billion people might face "absolute water scarcity," exacerbated by rapid population growth, inefficient water usage, and inadequate governance.
• Urban areas, including cities like Chennai and Bengaluru, have encountered severe water shortages recently, disrupting daily life and increasing costs for water management and transportation.

Ecosystem Services:

• Freshwater ecosystems support nutrient cycling, enhancing agricultural productivity.
• Wetlands play a role in flood mitigation and improving climate resilience; their degradation threatens these vital services, compromising both environmental and community stability.

Geopolitical Conflicts:

• 60% of the world's freshwater is shared between two or more nations. The decline of these resources can lead to disputes over water rights and usage.
• Water scarcity can heighten political tensions, exemplified by the Nile River disagreement involving Egypt, Sudan, and Ethiopia.
• The construction of the Grand Ethiopian Renaissance Dam has raised concerns in Egypt over its water supply, potentially leading to broader conflicts.
• In India, disputes over river water sharing, such as those related to the Indus Water Treaty with Pakistan and inter-state conflicts over the Cauvery and Krishna rivers, have resulted in ongoing tensions.

Science and Technology:

• The reduction in freshwater resources affects Artificial Intelligence (AI) systems, which require water for cooling data centers.
• By 2027, AI is projected to consume between 4.2 to 6.6 billion cubic meters of water annually, further straining already limited water supplies.

Way Forward

• Policy Reorientation: Countries must recognize water as a common good, adjusting public policies regarding water pricing, subsidies, and procurement to promote conservation, especially among heavy water users. Ensuring vulnerable communities have access to clean water and sanitation is crucial to addressing water-related inequalities.
• Rainwater Harvesting: Implementing rainwater harvesting systems can significantly augment freshwater supplies, particularly in water-scarce regions.
• Optimise Desalination: While desalination is energy-intensive and costly, it offers a viable solution to water scarcity in coastal regions.
• Improving energy-efficient technologies like reverse osmosis can help reduce costs and environmental impacts, and developing nanotechnology-based devices could lead to more efficient water purification methods.
• Infrastructure Development: Enhancing infrastructure such as dams, stepwells, reservoirs, and aqueducts can improve water storage and distribution; however, careful planning is necessary to mitigate environmental and social issues.
• New dam projects should prioritize ecological restoration, sediment management, and equitable water distribution.
• Bottled Water Alternatives: Promoting sustainable alternatives like water filters and refillable containers can help reduce the demand for bottled water and encourage environmentally friendly consumption.

Mains Question

Q: Examine how climate change contributes to freshwater scarcity and suggest measures society should adopt to mitigate its impact on water resources.

GS3/Environment

Global Soil Conference 2024 and Soil in India

Why in news?

Recently, the Global Soil Conference (GSC) 2024 was convened in New Delhi, emphasizing the critical role of soil health in ensuring food security, mitigating climate change, and enhancing ecosystem services.

What is the Global Soil Conference 2024?

• The GSC 2024 was organized by the Indian Society of Soil Science (ISSS) in partnership with the International Union of Soil Sciences (IUSS).
• It aims to tackle challenges in sustainable soil and resource management.
• The conference sought to promote a global conversation on how soil conservation can support sustainability across various sectors.

Theme:

• Caring Soils Beyond Food Security: Climate Change Mitigation & Ecosystem Services.

Key Highlights of GSC 2024:

• The significance of soil health was highlighted, with soil degradation posing a risk to productivity and threatening global food security.
• Approximately 30% of India's soil is reported to be compromised due to factors such as erosion, salinity, pollution, and loss of organic carbon.
• The conference emphasized the necessity for international collaboration to address soil erosion, aligning with the Sustainable Development Goal 15 (SDG 15) of the United Nations.
• SDG 15 focuses on the protection, restoration, and sustainable use of terrestrial ecosystems, the sustainable management of forests, the combat against desertification, and the halt of land degradation and biodiversity loss.

What are the Concerns Regarding Soil Health in India?

• Soil Degradation: Over one-third of India's land is at risk due to unsustainable farming and poor soil management practices.
• Soil Erosion and Loss of Fertility: India experiences a loss of 15.35 tonnes of soil per hectare annually, decreasing crop productivity and resulting in a loss of 13.4 million tonnes of rainfed crops. This leads to economic losses and increased occurrences of floods and droughts, contributing to a 1-2% annual reduction in reservoir capacity.
• Soil Salinity: High salinity levels reduce water infiltration and nutrient uptake, harming soil health and crop productivity by disrupting soil structure and promoting salt-tolerant organisms.
• Low Organic Content and Nutrient Levels: Indian soil's organic content is alarmingly low (approximately 0.54%), indicating a lack of essential nutrients, negatively impacting soil fertility and agricultural output.
• More than 70% of Indian soils are afflicted by soil acidity or alkalinity, disrupting the natural nutrient cycle.
• Essential nutrients such as nitrogen, phosphorus, and potassium are often deficient in Indian soils, worsening the health crisis.
• Desertification: This process reduces organic matter, nutrient content, and moisture retention, leading to lower agricultural productivity and increased erosion and biodiversity loss.
• Diversion of Fertile Land: A considerable portion of fertile agricultural land is being redirected for non-agricultural uses, causing a loss of valuable soil resources.

What are the Key Facts About Soil in India?

Classification of Soils:

• India's diverse relief features, landforms, climatic zones, and vegetation types have resulted in various soil types.
• Historically, Indian soils were classified into two primary categories: Urvara (fertile) and Usara (sterile).
• The Soil Survey of India, established in 1956, and the National Bureau of Soil Survey and Land Use Planning have classified Indian soils according to the USDA Soil Taxonomy, taking into account genesis, color, composition, and location.

Major Soil Types in India:

What Can Be Done to Enhance Soil Health?

• Policy: Implement comprehensive schemes like the Soil Health Card (SHC) program to provide farmers with detailed insights into the nutrient status of their soil, aiding informed decisions about fertilizer application and soil management.
• Carbon Sequestration: This process enhances soil health by capturing atmospheric carbon dioxide as organic carbon, thus improving fertility and moisture retention. Practices such as cover cropping and reduced tillage can improve carbon levels and sustainability.
• Sustainable Farming Practices: Large-scale adoption of no-till farming, akin to methods successfully used in Brazil, can improve soil health, reduce erosion, and increase crop yields. Other sustainable practices include crop rotation, agroforestry, and organic farming, which are crucial for soil health and environmental conservation.

Conclusion

• The Global Soil Conference 2024 underscored the necessity for sustainable soil management to secure food availability and enhance climate resilience. India must adopt improved agricultural practices and policies to combat soil degradation. 
• Strengthening soil health is vital for ensuring long-term agricultural viability and economic sustainability.

Mains Question:

Q: Soil health is integral to ensuring food security. Discuss the challenges faced by India regarding soil degradation and propose sustainable solutions.

GS2/International Relations

2nd India-CARICOM Summit

Why in news?

Recently, the Prime Minister of India chaired the 2nd Summit in Georgetown, Guyana, alongside the Prime Minister of Grenada, who is the current CARICOM Chair. The first India-CARICOM Summit took place in 2019 in New York.

Key Highlights of the 2nd India-CARICOM Summit

• 7 Pillars of Cooperation:India’s Prime Minister proposed seven key pillars to strengthen ties between India and CARICOM. These pillars include:
• C: Capacity Building: India announced an additional 1000 ITEC (Indian Technical and Economic Cooperation) slots for CARICOM countries over the next five years.
• A: Agriculture and Food Security: India shared its expertise in agriculture, especially in technology such as drones, digital farming, and farm mechanization.
• R: Renewable Energy and Climate Change: India emphasized the need for increased collaboration on global initiatives, including the International Solar Alliance and the Mission LiFE.
• I: Innovation, Technology, and Trade: Prime Minister Modi offered India’s Digital Public Infrastructure and other technological models to enhance public service delivery.
• C: Cricket and Culture: India proposed organizing "Days of Indian Culture" in CARICOM nations and providing cricket training for young women cricketers in the region.
• O: Ocean Economy and Maritime Security: India expressed its willingness to collaborate on maritime domain mapping and hydrography in the Caribbean Sea.
• M: Medicine and Healthcare: India offered its model for affordable healthcare, including the distribution of generic medicines through Jan Aushadhi Kendras and the promotion of Yoga for well-being.
• Climate Justice: CARICOM leaders acknowledged India’s leadership in advocating for climate justice, particularly for Small Island Developing States (SIDS), which contribute less than 1% of global greenhouse gas emissions but face significant climate change impacts.

What is the Caribbean Community (CARICOM)?

• About: CARICOM is a collective of 21 countries, comprising 15 Member States and 6 Associate Members, including island nations and mainland territories like Suriname and Guyana. Established in 1973 with the signing of the Treaty of Chaguaramas by four founding members: Barbados, Guyana, Jamaica, and Trinidad and Tobago.
• Diversity: The community's population is composed of individuals from African, Indian, European, Chinese, Portuguese, and Indigenous backgrounds.
• Population: Approximately 16 million people, with 60% under the age of 30, indicating a youthful demographic.
• Languages: The region is multilingual, predominantly using English, along with French, Dutch, and various African and Asian languages.
• Geographical Spread: Member states stretch from The Bahamas in the north to the southern regions, covering a vast area with varying levels of economic and social development.
• Pillars of CARICOM's Integration:CARICOM's integration is guided by four main pillars that shape the community's objectives:
• Economic Integration: Enhancing development and competitiveness through trade and productivity.
• Foreign Policy Coordination: Presenting a unified voice in international diplomacy.
• Human and Social Development: Focusing on health, education, and poverty alleviation.
• Strengthening regional security: Enhancing disaster response and crime prevention efforts.

Why is India and CARICOM Important for Each Other?

• Strategic Expansion: The Latin America and the Caribbean (LAC) region is diversifying its geopolitical ties and seeking new partnerships in Asia, aligning with India’s ambition to expand its influence.
• Shared Climate Concerns: Both India and CARICOM face similar challenges, such as rising sea levels and extreme weather. Their efforts at COP-26 align with CARICOM’s appeal for climate finance for mitigation and adaptation.
• International Solar Alliance (ISA): Co-founded by India, the ISA serves as a platform for CARICOM nations to enhance solar energy deployment. The One World One Sun One Grid (OWOSOG) initiative aims to create a global grid for transmitting solar energy across continents.
• Digital Health Collaboration: India’s advancements in digital health, such as the CoWin initiative and National Digital Health Mission (NDHM), provide a model for improving healthcare systems in CARICOM, particularly addressing climate-induced health threats.
• Biofuel and Energy Cooperation: India’s partnership with Brazil in biofuel research could extend to CARICOM nations, fostering joint energy solutions and biofuel production.
• Strengthened Partnerships: The Prime Minister’s visit and India’s ongoing development assistance programs, including a USD 1 million contribution to the CARICOM Development Fund, establish a strong foundation for future collaborations.

Conclusion

The summit marked a significant advancement in deepening bilateral ties, focusing on renewable energy, climate change, healthcare, and economic development. This collaboration presents vast opportunities to tackle shared challenges, particularly climate change and sustainable growth, while enhancing India’s role in the Caribbean region.

Mains Question

Q: Discuss the current state of India-CARICOM relations and the potential for enhancing bilateral cooperation in trade, climate change, and people-to-people connections?

GS2/Governance

Rethinking New Population Strategy

Why in News?

Recently, Andhra Pradesh reversed its longstanding two-child policy, which had been in place for nearly three decades and prohibited individuals with more than two children from contesting local body elections to control population growth. 
The government argued that the state was facing the challenges of a rapidly aging population and a declining fertility rate, which could have serious long-term economic and social consequences.

What is the Need of the New Population Strategy in India?

Declining Total Fertility Rate:

• India's Total Fertility Rate (TFR) has steadily decreased over recent decades.
• According to NFHS-5 (2019-21), India's TFR is now 2.0 children per woman, which is below the replacement level of 2.1. This trend raises concerns about a potential long-term population decline.
• Some states, such as certain regions with a TFR of 1.5, are already significantly below this threshold, which could lead to a shrinking workforce.
• This demographic shift may result in labor shortages and increased pressure on the working-age population, potentially hampering economic growth.

Demographic Dividend for Economic Growth:

• Approximately 68% of India's population falls within the working-age group (15-64 years), and 26% are in the 10-24 age group, positioning India as one of the youngest countries globally.
• A new population policy is essential to harness this potential and address forthcoming challenges, alongside necessary investments in education, skills training, and job creation.

Aging Population:

• According to the India Ageing Report 2023 by the United Nations Population Fund, over 20% of India’s population will be aged 60 or above.
• This aging demographic presents challenges, including increased demand for healthcare and chronic geriatric care, necessitating family planning policies that address healthy aging and elderly care.

Resource Scarcity and Environmental Pressure:

• A growing population exerts pressure on natural resources, with cities like Delhi and Bangalore experiencing severe water stress as per capita water availability declines.
• Moreover, unplanned urbanization, driven by high population growth, results in overburdened infrastructure and pollution, underscoring the need for improved planning to avoid skewed development.

Rising Inequality and Low Living Standards:

• Rapid population growth strains public resources, limiting access to essential social services.
• High fertility rates in impoverished areas exacerbate broader economic inequality and low living standards.

Way Forward

• Focus on Voluntary Family Planning: India must implement rights-based family planning policies that empower individuals. Strategies should focus on empowering women by enforcing laws against sex-selective abortion, promoting female literacy, and ensuring equal workforce opportunities, alongside education, economic independence, and social security.
• Emphasize a Region-Specific Approach: Given India's demographic diversity, a tailored approach is necessary. States with high fertility rates, such as Uttar Pradesh and Bihar, may require specific strategies, while states with low fertility rates, like Tamil Nadu and Andhra Pradesh, need policies that address their unique challenges.
• Family Planning as a Holistic Development Agenda: Family planning should be integrated into a broader socioeconomic development framework. Linking family planning with employment generation and poverty alleviation will create a more sustainable development model that aligns with India's long-term growth and social justice goals.
• Strengthen Social and Healthcare Systems: India needs to invest in healthcare infrastructure, especially to tackle the challenges posed by an aging population. Expanding facilities, promoting the silver economy, and offering flexible work arrangements for older workers can help mitigate the pressures of a shrinking workforce.

Mains Question

Q: What challenges does India face with its ageing population, and how can family planning policies address these issues?

GS3/Environment

UNFCCC COP29 Baku

Why in News?

Recently, the United Nations Framework Convention on Climate Change (UNFCCC) Conference of the Parties 29 (COP29) concluded in Baku, Azerbaijan. This conference brought together representatives from around 200 countries to negotiate agreements aimed at tackling global climate challenges.

Key Highlights of COP29

• New Climate Finance Goal: A significant development at COP29 was the introduction of the New Collective Quantified Goal on Climate Finance (NCQG), which aims to increase climate finance for developing nations to USD 300 billion annually by 2035, up from the previous target of USD 100 billion. Developed countries are expected to take the lead in this initiative. Additionally, there is a broader call for all stakeholders to raise climate financing to USD 1.3 trillion per year by 2035 from various public and private sources to assist developing countries in adapting to and mitigating climate impacts.
• Carbon Markets Agreement: COP29 achieved a groundbreaking agreement to finalize the mechanisms for carbon markets. This includes trade agreements between countries (Article 6.2 of the Paris Agreement) and a centralized carbon market under the United Nations (Article 6.4). Article 6.2 allows for bilateral agreements among countries to trade carbon credits based on mutually agreed terms, while Article 6.4 seeks to create a centralized carbon emissions offset and trading system.
• Declaration on Reducing Methane: More than 30 countries, including the US, Germany, the UK, and the UAE, endorsed the COP29 Declaration on Reducing Methane from Organic Waste (with India not being a signatory). This declaration aims to address methane emissions from the waste sector, which account for 20% of global methane emissions. It emphasizes five key areas: Nationally Determined Contributions (NDCs), regulations, data management, finance, and partnerships, urging countries to incorporate specific targets for reducing methane emissions from organic waste in their NDCs. This initiative builds on the Global Methane Pledge, which seeks a 30% reduction in global methane emissions by 2030 from sources such as agriculture, waste, and fossil fuels.
• Indigenous Peoples and Local Communities: COP29 highlighted the critical role of Indigenous Peoples and local communities in combating climate change. The conference adopted the Baku Workplan and renewed the mandate of the Facilitative Working Group (FWG) under the Local Communities and Indigenous Peoples Platform (LCIPP). The Baku Workplan aims to integrate indigenous knowledge with modern scientific approaches, enhance the involvement of indigenous groups in climate discussions, and incorporate indigenous values into climate policies. The FWG will implement this plan in a collaborative and gender-sensitive manner, with progress reviews scheduled for 2027.
• Gender and Climate Change: A decision was made to extend the Lima Work Programme on Gender (LWPG) for an additional ten years, reinforcing the importance of gender equality in climate action. It was agreed that a new gender action plan will be established at COP30 in Belém, Brazil. The LWPG, initiated in 2014, focuses on promoting gender balance and integrating gender considerations into climate policy under the Convention and the Paris Agreement.
• Baku Harmoniya Climate Initiative for Farmers: The COP29 Presidency, in collaboration with the Food and Agriculture Organization (FAO), launched the Baku Harmoniya Climate Initiative for Farmers. This initiative aims to consolidate various existing climate initiatives in food and agriculture to ease access for farmers to support and financing.

India’s Stance at COP 29

• Opposition to the Deal: India rejected the NCQG, criticizing it as inadequate. The USD 300 billion pledge was considered insufficient to address the climate challenges faced by developing nations. India, along with other Global South countries, is advocating for a minimum of USD 1.3 trillion annually to meet the climate demands of developing nations, with at least USD 600 billion as grants or grant-equivalent resources.
• Article 9 of the Paris Agreement: India emphasized that developed countries should spearhead climate finance mobilization, as stipulated in Article 9 of the Paris Agreement. However, the final deal shifted the responsibility to all actors, including developing countries, rather than holding developed nations accountable for their historical emissions and financial commitments.
• Solidarity with Vulnerable Nations: India expressed support for the concerns of Least Developed Countries (LDCs) and Small Island Developing States (SIDS), which withdrew from negotiations, claiming their demands for fair and adequate financial targets were overlooked.

Why is COP Important for India?

• India's Climate Commitments and Achievements: India submitted its first Nationally Determined Contribution (NDC) in 2015 and updated its climate goals in 2022, showcasing achievements such as reducing emissions intensity by 33-35% and achieving 40% of its energy capacity from non-fossil fuels.
• Securing Climate Finance: India has been a significant beneficiary of funds through mechanisms like the Green Climate Fund and carbon credit markets. Discussions at COP regarding the Loss and Damage Fund are vital for India to secure financial support to address climate-induced impacts such as floods and cyclones.
• Global Climate Leadership: COP offers India a platform to assert its leadership in global climate action, exemplified by initiatives like the International Solar Alliance (ISA) aimed at fostering sustainable solutions for climate challenges.
• Leveraging International Influence: India leads the Like-minded Developing Countries (LMDC) and BASIC group at COP, amplifying the voices of developing nations and advocating for equitable climate action. Forums like COP allow India to promote initiatives such as the Lifestyle for Environment (LiFE) and the Mangrove Alliance for Climate.

How has India’s Role in Global Climate Governance Evolved?

• 1970s to 2000s: India adopted a cautious approach towards Western environmental calls, fearing they could impede economic development. At the 1972 Stockholm Conference, then Prime Minister Indira Gandhi emphasized the need to balance environmental protection with poverty alleviation. By signing the UNFCCC in 1992 at the Earth Summit in Rio de Janeiro, India formally embraced sustainable development and supported Common But Differentiated Responsibilities (CBDR), recognizing the differing capacities and responsibilities of developed and developing nations. India hosted COP8 in 2002, marking its transition from a passive participant to an active player in climate negotiations. In 2008, India launched the National Action Plan on Climate Change (NAPCC), underscoring its commitment to reducing emissions and promoting renewable energy.
• Post-2015: The Paris Agreement in 2015 represented a significant shift in global climate governance, enabling developing nations like India to engage in climate action without disproportionate obligations. This transition allowed India to align its climate commitments with developmental objectives through voluntary NDCs rather than rigid emission reduction targets. India submitted its NDCs and updated them in 2022, contributing USD 1.28 billion to climate finance for other developing countries in 2022, reinforcing its position as a climate leader.
• Advocacy for Climate Equity and Justice: India champions the need for developed nations to provide financial and technological support to developing countries, actively endorsing mechanisms like the Green Climate Fund and Loss and Damage Fund.
• Leading Global Initiatives: Initiatives led by India include the International Solar Alliance (ISA), launched in 2015 with France at COP21 in Paris, aimed at promoting global solar energy adoption; the Lifestyle for Environment (LiFE) initiative advocating sustainable consumption patterns to minimize carbon footprints; and the Mangrove Alliance for Climate, which promotes the conservation of mangrove ecosystems to mitigate climate impacts.

Mains Question:

Q: Discuss the outcomes of COP29 and their implications for global climate governance. How does India’s stance align with its climate goals and development priorities?

GS3/Science and Technology

Coking Coal as Critical Mineral

Why in News?

Recently, a NITI Aayog report titled ‘Enhancing Domestic Coking Coal Availability to Reduce the Import of Coking Coal’ has recommended that coking coal be classified as a critical mineral for India.

Why Should Coking Coal Be Declared a Critical Mineral?

Coking coal fulfills all the criteria necessary for classification as a ‘critical mineral.’ Critical minerals are essential for the economy and are characterized by a high risk of supply due to significant import dependence and concentration in specific countries.
There are limited substitutes available, owing to the unique properties of these materials that are vital for both current and future applications.

• Steel Production: Coking coal is crucial for steel production, accounting for approximately 42% of the total steel cost, which is essential for infrastructure development and job creation in India. The availability of cost-effective coking coal is essential for maintaining economic stability.
• High Import Dependence: India imports around 85% of its coking coal, which is significantly higher than the European Union's 62%, raising concerns regarding the steel industry and economic stability. Domestic production of coking coal could have potentially saved Rs 1.5 lakh crore in FY 2023-24 by avoiding imports of 58 metric tonnes.
• Large Domestic Reserves: India possesses substantial proven reserves of coking coal—16.5 billion tonnes of medium-quality and 5.13 billion tonnes of prime-quality coal. Utilizing these reserves for metallurgical purposes would enhance energy security, mitigate supply chain risks, and bolster domestic steel production.
• Steel Industry’s Competitiveness: In FY 2023-24, Integrated Steel Plants (ISPs) spent approximately Rs 1.5 lakh crore on imported coking coal. Recognizing coking coal as a critical mineral could stimulate domestic production, reduce steel production costs, and improve global competitiveness.
• Full Capacity Utilization: In FY 2022-23, the capacity utilization of PSU washeries was below 32%, with only 35-36% yield of washed coal. Investment and subsidies in advanced technologies for washery equipment could enhance efficiency and reduce costs.
• Global Practices: The EU has identified coking coal along with 29 other raw materials, including green energy minerals like lithium, cobalt, and rare earths. India's move to classify coking coal similarly would align it with global standards and emphasize its significance for economic growth.
• Energy Security and Sustainability: Developing domestic coking coal resources can reduce reliance on imports, strengthen energy security, and support India's goal of achieving Net Zero emissions by 2070.

What are the Key Facts About Coking Coal?

• Coking coal, also known as metallurgical coal, is a sedimentary rock found in the earth's crust, with various quality grades including hard, semi-hard, and semi-soft coking coal, all utilized in steel production.
• It typically contains higher carbon content, lower ash, and less moisture compared to thermal coal, which is primarily used for electricity generation.
• During the process of coke production, coking coal is heated in the absence of air, resulting in a porous, carbon-rich material suitable for use in blast furnaces.
• Coke burns at high temperatures (1,000°C to 1,200°C) to produce carbon monoxide (CO), which is crucial for reducing iron ore into molten iron during steelmaking.
• The largest coking coal producers in 2022 included China (62%), Australia (15%), Russia (9%), the USA (5%), and Canada (3%).
• Steel is recognized as a strategic material essential for industries focused on the low-carbon transition, requiring 780 kg of coking coal to produce one ton of steel.
• By-products from coke production, such as tar, benzole, ammonia sulphate, sulphur, and coke oven gas, play significant roles in chemical manufacturing and energy generation.

What are Critical Minerals for India?

• Global Scenario: The classification of critical minerals varies by country based on their industrial needs and priorities, with the United States identifying 50, Japan 34, the United Kingdom 18, and the European Union 34.
• Indian Scenario: India has recognized 30 minerals as critical, which are essential for ensuring a stable supply chain.
• These minerals include Antimony, Beryllium, Bismuth, Cobalt, Copper, Gallium, Germanium, Graphite, Hafnium, Indium, Lithium, Molybdenum, Niobium, Nickel, PGE, Phosphorous, Potash, REE, Rhenium, Silicon, Strontium, Tantalum, Tellurium, Tin, Titanium, Tungsten, Vanadium, Zirconium, Selenium, and Cadmium.
• States/UTs with Critical Minerals: Critical minerals are found in states such as Bihar, Gujarat, Jharkhand, Odisha, Tamil Nadu, Uttar Pradesh, Chhattisgarh, and Jammu and Kashmir.

• India’s Import Dependency: India heavily relies on imports for critical minerals, with a complete reliance for certain minerals like lithium, cobalt, and nickel. This dependency is projected to persist as the demand for these minerals is expected to double by 2030.

Conclusion

• Coking Coal as a ‘Critical Mineral’: It is recommended that coking coal be officially designated as a critical mineral to promote domestic production, enhance the competitiveness of the steel sector, and generate skilled manufacturing jobs.
• Whole-of-Government Approach: To tackle the shortage of domestic metallurgical coal, a comprehensive 'whole-of-government' approach is advised, involving various ministries such as Coal, Steel, and Environment.
• Private Participation: Formation of Special Purpose Vehicles (SPVs) in a Public-Private Partnership (PPP) framework is encouraged to develop coalfield reserves.
• Optimizing Coal Production: Successful production of metallurgical coal requires collaborative efforts among mine planners, geologists, mining engineers, and washery operators.

Mains Question

Q: Discuss the strategic importance of coking coal for India’s steel industry and economy. How can India address its high dependency on imports of coking coal?