International Relations: March 2025 UPSC Current Affairs | UPSC Mains: International Relations PDF Download

India-Mauritius Relations

Why in News?

During the recent visit of the Indian Prime Minister to Mauritius, both nations formalized several agreements focused on trade, maritime security, and defense. This visit marks a significant step in enhancing regional cooperation and elevating the bilateral relationship to a more strategic partnership. The Prime Minister was also honored with Mauritius' highest national award, the 'Grand Commander of the Order of the Star and Key of the Indian Ocean.'

Key Takeaways

• Enhanced Strategic Partnership: The ties between India and Mauritius have been strengthened, focusing on security, trade in local currencies, and development initiatives.
• Double Taxation Avoidance Agreement (DTAA): Both countries agreed to ratify a protocol amending the DTAA to comply with international treaty standards.
• MAHASAGAR Initiative: India launched the MAHASAGAR (Mutual and Holistic Advancement for Security and Growth Across Regions) initiative aimed at boosting engagement with the Global South.
• Security Cooperation: Collaboration on the usage of Agalega Island's new runway and jetty, with India reaffirming its support for Mauritius’ claim over the Chagos Archipelago.
• Developmental Support: India announced a rupee-denominated Line of Credit to assist Mauritius in upgrading its water pipelines.
• New Parliament Building: India will construct a new Parliament building in Mauritius as a gesture of goodwill.
• Multilateral Engagements: India committed to working with Mauritius in various regional and international forums.

Additional Details

• Maritime Significance: Mauritius' strategic location in the western Indian Ocean positions it as a key maritime partner under India’s SAGAR initiative.
• Countering China: The strengthening of ties helps India secure its strategic interests in the face of China's growing influence in the region.
• Cultural Links: Approximately 70% of Mauritius' population is of Indian descent, fostering strong cultural ties and celebrations.
• Leading Development Partner: India has been a vital development ally for Mauritius, supporting major infrastructure projects.
• Disaster Assistance: India has been a first responder in various crises, providing crucial aid during natural disasters.
• Capacity Building: Mauritius benefits significantly from India's training programs, enhancing local governance capabilities.

In conclusion, the recent developments in India-Mauritius relations signify a robust strategic partnership characterized by mutual cooperation in trade, security, and development. The initiatives like the MAHASAGAR vision and infrastructural support are pivotal in fostering regional stability and economic growth, underlining the importance of this partnership for both nations.

India’s Energy Strategy

Why in News?

India has committed to increasing its oil and natural gas imports from the US, with energy trade expected to rise from USD 15 billion to USD 25 billion in the near future. This initiative is part of a broader objective to double bilateral trade to USD 500 billion. The decision enhances India’s energy security while strengthening economic ties amid global geopolitical shifts.

Key Takeaways

• India is the world’s 3rd-largest oil importer, relying on imports for over 85% of its crude oil needs.
• The primary energy demand in India is projected to nearly double by 2040, necessitating stable supply sources.
• Expanding energy trade with the US will diversify sources and reduce dependency on West Asia and Russia.
• The US aims to be a leading supplier of competitively priced crude and LNG to support India’s industrial growth.
• Stronger US-India energy ties can help counterbalance China's influence in global energy markets.

Additional Details

• Energy Security: India’s reliance on crude oil imports has increased to 87.8% in 2023-24, with domestic production meeting less than 13% of total demand. Future projections indicate crude oil consumption will grow at a CAGR of 4.59% to reach 500 million tonnes by FY40.
• Infrastructure Boost: The US’s competitive pricing aims to enhance India's refining capacity, supporting industrial growth and petrochemical investments.
• Natural Gas and Cleaner Fuels: India plans to raise the share of natural gas in its energy mix to 15% by 2030 from the current ~6% and aims to import 31.80 billion cubic meters (bcm) worth USD 13.405 billion in LNG for 2023-24.
• Ethanol Blending Target: India targets a 20% ethanol blending by 2025-26, aiming to reduce fossil fuel reliance, with a production capacity of around 1,600 crore litres as of September 2024.

In conclusion, India's energy needs are driven by its economic growth and rising demand, necessitating a diversified import strategy and increased domestic production. By expanding its energy relationships, particularly with the US, India aims to ensure energy security while transitioning to cleaner energy sources.

Route for IORA Under India’s Chairship

Why in News?

• India is preparing to assume the chairmanship of the Indian Ocean Rim Association (IORA) in November 2025, aiming to strengthen the organization’s governance.
• To achieve this, India plans to increase IORA’s budget, improve data management through technology, and collaborate with institutions to develop maritime courses over the next two years.

What is the Indian Ocean Rim Association (IORA)?

• About: IORA is an intergovernmental organization focused on promoting economic cooperation and regional integration among countries bordering the Indian Ocean. Member states collaborate on initiatives related to trade, investment, and sustainable development in the Indian Ocean region (IOR).
• Background: Established on March 7, 1997, IORA was inspired by a vision during late President Nelson Mandela’s 1995 visit to India. This led to the Indian Ocean Rim Initiative (IORI) in 1995 and the formation of the Indian Ocean Rim Association for Regional Cooperation (IOR-ARC) in 1997, now known as IORA.
• Membership: IORA welcomes all sovereign states along the Indian Ocean Rim that adhere to its Charter’s principles and objectives. Currently, it comprises 23 member states and 10 dialogue partners, covering Asia, Africa, and Oceania, with connections facilitated by Indian Ocean waters. 

Indian Ocean Region

The IOR is a distinct geopolitical and economic zone within the broader Indo-Pacific region, home to two-thirds of the world’s population and playing a crucial role in global trade and energy security.

• The Indian Ocean facilitates 75% of global trade and 50% of daily oil consumption, generating USD 1 trillion in goods and services, with intra-IORA trade reaching USD 800 billion in 2023.

What is India’s Role and Strategic Contributions in IORA?

• Alignment with SAGAR Vision: India’s Security and Growth for All in the Region (SAGAR) vision aligns with IORA’s strategic goals, focusing on maritime security, economic cooperation, and sustainable development.
• Leveraging Diplomatic and Economic Ties: India aims to strengthen its diplomatic and economic relationships with IORA member states to foster sustainable and cooperative solutions for regional challenges.
• Enhancing IORA’s Budget: India plans to secure sustainable funding for IORA through public-private partnerships, leveraging maritime sectors like shipping, oil, gas, and tourism to boost economic cooperation.
• Integrating Technology: India aims to improve data governance and policy analysis through digital tools, ensuring transparency, efficiency, and quicker decision-making.
• Maritime Capacity Building: India will collaborate with academic institutions to introduce marine-focused courses, building a skilled workforce to drive innovation and growth in the blue economy.

What is the Role of IORA in the Indian Ocean Region?

• Role in Regional Cooperation: IORA, as one of the oldest regional inter-governmental organizations, plays a crucial role in promoting multifaceted cooperation among its member states.
• Facilitation of Dialogue: IORA actively facilitates structured dialogue on cultural and academic exchanges, disaster risk management, and maritime security to strengthen regional resilience and promote sustainable development.
• Influence of Middle and Small Powers: While global powers like the U.S., China, and the EU engage as dialogue partners, IORA is primarily driven by middle and small powers that shape its agenda and decisions.

What are the Challenges Faced by IORA?

• Financial Constraints: IORA faces significant financial constraints with a budget of USD 1.3 billion for 2020-2025, relying heavily on member-state contributions, which limits its operational capacity. Most members, except Singapore, the UAE, and France, are budget-constrained developing economies, affecting the organization’s financial stability.
• Resource-Intensive Engagement Areas: IORA’s expanding mandate in critical areas such as maritime safety, fisheries management, disaster risk reduction, and the blue economy requires sustained financial and institutional resources, posing a challenge to effective implementation.
• Private Sector Involvement: IORA struggles to attract private sector engagement from key maritime industries like shipping, oil & gas, and tourism. Strengthening partnerships with these sectors is crucial for alternative funding sources and operational efficiency.
• Limited Institutional Capacity: IORA’s Secretariat in Mauritius operates with a small workforce and limited resources, hindering its ability to manage administrative and strategic functions effectively.
• Challenges in Data Management: The absence of advanced data management systems leads to inefficient record-keeping, increasing errors, and impeding accurate policy formulation and decision-making.

Conclusion

Building a skilled maritime workforce is essential for driving innovation and addressing challenges in the maritime sector. This requires collaboration between industries and academic institutions, along with the introduction of specialized courses in key areas. Strengthening partnerships and enhancing regional cooperation, resource mobilization, and operational capacity will maximize IORA’s impact and ensure economic sustainability in the Indian Ocean region. As India takes the lead in IORA, these efforts will be crucial for fostering a resilient and cooperative maritime environment.

Reimagining India’s Bilateral Investment Treaty (BIT) Framework

Why is it News?

• The Union Budget 2024-25 suggests updating the 2015 Model Bilateral Investment Treaty (BIT) to attract more foreign investment.
• Experts recommend a dual-model BIT strategy to suit India's different relationships with capital-exporting and capital-importing countries.

The 2015 Model BIT: A Defensive Approach

• India’s 2015 Model BIT focused on protecting its sovereignty and regulatory freedom.
• Key features included:
• Requiring local remedies to be exhausted for at least five years before resorting to international arbitration.
• A narrow definition of what constitutes an investment.
• Outcome: The model did not gain global acceptance and discouraged potential investors.

Dual BIT Models: A "Horses for Courses" Strategy

• Suggestion: Implementing different BIT models based on the economic relationship with the country in question.
• Defensive BIT: For capital-importing relationships, such as with certain African nations.
• Investor-friendly BIT: For capital-exporting relationships, like with countries where Indian companies invest significantly.
• Goal: To maximize benefits by aligning treaty terms with the economic roles of the countries involved.

Challenges with the Dual BIT Approach

• Evolving Economic Relations: Countries' roles as capital importers or exporters change over time. For instance, India was a capital importer from the UK in 1994 but is now a capital exporter.
• Legal Inconsistency: Having different BIT models could lead to varying legal standards, particularly concerning the investor-state dispute settlement (ISDS) mechanism. This could harm India's credibility in international negotiations and forums like the UN Commission on International Trade Law (UNCITRAL), which is currently discussing ISDS reforms.

Misunderstood Origins and Role of the Most Favoured Nation (MFN) Clause

• Clarifying MFN History: Experts believe that the MFN clause is based on multilateral treaties. However, historically, MFN clauses have been part of bilateral commercial treaties since the 17th century.
• Importance in BITs: The MFN clause ensures equal treatment among treaty partners. Contrary to some beliefs, MFN clauses improve treaty fairness and uphold the principle of equality.

Towards a Balanced BIT Framework

• One Model, Better Design: Instead of multiple models, the focus should be on creating a single, balanced BIT that:
• Protects investments while allowing for sovereign regulatory flexibility.
• Projects a principled and consistent approach in international law.

Conclusion

•  India needs to develop a BIT model that is flexible enough to adapt to changing global investment trends while maintaining legal consistency and credibility. 
•  A well-thought-out, balanced, and investor-friendly model is crucial for attracting foreign investments and safeguarding the interests of Indian investors overseas.