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With merchandise exports shrinking 15.1% in the first quarter of this year, after racking up a record $450 billion in 2022-23, the government is playing it safe on announcing a clear target for outbound shipments this year and is likely to opt for a range of scenario-based targets instead.
While the Commerce Ministry has undertaken an internal exercise to set a target for exports in 2023-24 — and has even communicated a number to export promotion councils of different industrial sectors as well as overseas diplomatic missions — there is now a rethink underway.
Goods exports had decelerated 12.6% in April and 10.2% in May, but recorded their steepest fall in 37 months this June with a 22% drop. The $32.7 billion export tally for last month was the lowest in absolute terms since October 2022.
While the final June numbers for exported services are still awaited, forex earnings from these intangible exports have also slowed sharply after growing about 28% to $325 billion in 2022-23.
As per estimates, services exports have grown just 5.2% to $80 billion, while goods exports stand at a little over $102 billion through the first quarter.
Our broader target for exports, as per the new Foreign Trade Policy, is to achieve $2 trillion by 2030, with services and goods exports accounting for a trillion dollars each.
A fascinating fusion of rock art in A.P.’s Rudragiri (Page no. 6)
(GS Paper 1, Culture)
Rudragiri hillock, located in the village of Orvakallu, Atchampet mandal, in Guntur district of Andhra Pradesh, boasts a celebrated historical past and remarkable archaeological monuments.
This site unveils a fascinating combination of prehistoric rock paintings from the Mesolithic period and exquisite artwork from the Kakatiya dynasty.
Rudragiri, nestled amidst the Eastern Ghats, features five naturally formed rock shelters at its foothills, facing westward. These shelters served as living quarters for people during the Mesolithic age around 5000 B.C., and they bear witness to the luminous rock paintings of that era.
Interestingly, two natural caves at the southern end of the hillock also exhibit exceptional murals from the renowned Kakatiya kingdom.
These caves showcase the artistic brilliance of the Kakatiya period. While many have suffered damage over time due to exposure to the elements, some sketches and outlines have managed to survive.
The paintings, adorned with a variety of colours derived from white kaolin and different pigments, depict captivating scenes from the epic Ramayana.
Despite the impact of nature’s wrath, fragments of these paintings offer valuable insights into their creation during the 13th century A.D.
The first cave, starting from the southern end of the hillock, presents a narrative mural portraying the intense battle between the Vanara brothers — Vali and Sugriva.
In the middle cave, a grand sketch of Hanuman, accompanied by sacred symbols of the conch (Sankha) and the fire altar (Yagna Vedi), captures visitors’ attention. Hanuman is depicted carrying the Sanjivani hill in his hand, symbolising his mission to save Lakshmana’s life.
The third cave houses the prehistoric rock paintings from the Mesolithic era. Interestingly, the Kakatiya artist chose the same rock shelter to superimpose the elegant figure of Hanuman, who is portrayed in a unique ‘Anjali’ posture, folding his hands in a divine offering.
Editorial
India, France and what keeps their ties ticking (Page no. 8)
(GS Paper 2, International Relation)
In 1998, India put France in what should have been a tough spot. Just a few months after French President Jacques Chirac had been the chief guest at the Republic Day Parade in Delhi, and Prime Minister I.K. Gujral signed India’s first ever Strategic Partnership agreement with him, newly elected Prime Minister Atal Bihari Vajpayee announced that nuclear tests had been conducted in Pokhran (Pokhran-II), in May.
In the United Nations (UN) Security Council, French diplomats joined the P-5 countries in condemning the tests, but did not join (along with the United Kingdom and Russia) the United States-led move to impose sanctions on India. Nor did France scrap the Strategic Partnership Agreement.
Throughout their relationship, New Delhi and Paris have built a tradition of joining each other’s national day parades — Chirac himself was guest at India’s Republic Day twice (his first appearance was in 1976), Valéry Giscard d’Estaing (1980), Nicolas Sarkozy (2008) and François Hollande (2016) have been guests since, Prime Minister Manmohan Singh (2009) and now Prime Minister Narendra Modi were invited to the Bastille Day parade.
While the purchase of defence equipment often overshadows the outcome of any of these big visits, it is the underlying philosophy of their engagement that propels India and France ties forward.
Both countries have held on to three pillars in the relationship: non-interference in each other’s internal affairs, a steadfast belief in strategic autonomy as expressed by President Charles De Gaulle, and non-alignment, as expressed by Prime Minister Jawaharlal Nehru, and a refusal to pull the other into its own coalitions and alliances.
The awkwardness in 1998, after all, would have been nothing in comparison to Chirac’s visit to India in 1976. Not six months before that, Prime Minister Indira Gandhi had declared the Emergency, and suspended freedoms in a move that was criticised across the world.
But Chirac, who was the Prime Minister of France, saw no reason to cancel his visit. In December 1975, France had hosted the “Paris Conference on International Economic Cooperation”, that looked at the impact of the global energy crisis on developing countries that rose from U.S.-Arab tensions over the Yom Kippur war.
A push for GM mustard disregarding science, the law (Page no. 8)
(GS Paper 3, Science and Technology)
A determined battle by environmentalists in the Supreme Court of India against Delhi University’s genetically modified (GM) herbicide-tolerant (HT) mustard is all that stands between GM food and Indian farmers and consumers.
GM crops are quite different from conventional varieties and hybrids, such as those developed by farmers, agricultural research institutions and companies.
Biotechnologists insert select genes at a random location in the DNA of a plant to develop a GM crop. The insertion makes a GM crop express traits that it ordinarily would not.
For instance, GM mustard has been altered to withstand the broad-spectrum plant-killer or herbicide glufosinate. This makes it easier to develop hybrid mustard seeds for higher yields. And farmers growing GM mustard can spray the herbicide to kill all plants except the mustard.
India has seen a robust debate on GM crops in the last two decades. Environmentalists, scientists, politicians, farmers, consumers and the higher judiciary have asked probing questions about the safety, efficacy and even the very necessity of GM food.
Many have been alarmed by the experience with Bt cotton, the first and only GM crop approved in the country. Long-term research suggests that Bt cotton has provided only fleeting benefits to farmers, while enormously increasing their costs of cultivation and risk. On the other hand, some seed companies have profited handsomely from the expensive GM seeds.
In the wake of the fierce debate, two Standing Committees of the Parliament independently and comprehensively examined GM crops and food.
The Supreme Court also appointed a Technical Expert Committee (TEC) in the public interest litigations filed separately by the non-government organisation Gene Campaign and the environmentalist, Aruna Rodrigues.
Opinion
Authorities who misconstrue authority (Page no. 9)
(GS Paper 3, Economy)
The Prevention of Money Laundering Act (PMLA), 2002 vested a cadre of officers under the Directorate of Enforcement (ED) with powers to prevent money laundering, attach proceeds of crime, and confiscate assets.
However, over the last few years, the ED has assumed powers akin to that of a policing agency and has often been accused of turning its gaze against political opponents of the Union government.
These concerns were bolstered when the Union government granted ED Director Sanjay Kumar Mishra a third extension, which the Supreme Court struck down.
It has been repeatedly held that the PMLA is a sui generis legislation, enacted to tackle money laundering through white collar crimes.
According to Section 3 of the PMLA, the act of projecting or claiming proceeds of crime to be untainted property constitutes the offence of money laundering.
Under the Schedule to the PMLA, a number of offences under the Indian Penal Code and other special statutes have been included, which serve as the basis for the offence of money laundering.
In other words, the existence of predicate offence is sine qua non to charge someone of money laundering. It is crucial to note that the investigation and prosecution of the predicate offence is done typically by the Central Bureau of Investigation (CBI) or the State Police.
Section 50 of the PMLA provides powers of a civil court to the ED authorities for summoning persons suspected of money laundering and recording statements.
However, the Supreme Court held that ED authorities are not police officers. It observed in Vijay Madanlal Choudhary v. Union of India (2022) that “the process envisaged by Section 50 of the PMLA is in the nature of an inquiry against the proceeds of crime and is not ‘investigation’ in strict sense of the term for initiating prosecution.”
Explainer
The India-UAE deal to trade with rupees (Page no. 10)
(GS Paper 3, Economy)
During Prime Minister Narendra Modi’s recent visit to the UAE, the Reserve Bank of India (RBI) and its Abu Dhabi-headquartered counterpart the Central Bank of the UAE signed two memoranda of understanding (MoUs).
While the first established a framework to promote the use of local currencies for cross-border transactions, the other was for interlinking payment systems.
The first of the two MoUs aims to establish a Local Currency Settlement System (LCSS) to promote the use of rupee and the dirham bilaterally.
It will cover all current and permitted capital account transactions. This, the RBI said, would enable exporters and importers to send invoices and pay in their respective domestic currencies, which in turn would help the development of the INR-AED foreign exchange market.
It would also help promote investments and remittances between the two countries. Broadly, the arrangement would help optimise transaction costs and settlement time for transactions, including for remittances from Indians residing in UAE.
The focus on denominating export contracts and invoices in the local currency helps avert exchange-rate risks (such as when a third currency is being used as a standard), which further facilitates the scope to discover competitive pricing.
Moreover, it could also lead to enhanced avenues for cooperation among the banking systems of the two countries, thereby contributing to the expansion of trade and economic activity for both.
The major items of export from India to the UAE include mineral fuels, mineral oils and products, bituminous substances, mineral waxes, followed by pearls, precious stones and metals, electrical machineries and equipment, among other things.
The major items imported by India are petroleum crude and petroleum related products. India-UAE trade rose to $85 billion in 2022.
Furthermore, the UAE was India’s third largest trading partner and second-largest export destination in FY2022-23. Conversely, India was the UAE’s second largest trading partner.
News
India reports a record 93% DPT3 immunisation coverage in 2022: WHO (Page no. 14)
(GS Paper 2, Health)
The coverage rate for DPT3, the third dose of diphtheria, pertussis and tetanus vaccines, in India rose to an all-time of 93% in 2022, surpassing the previous pre-pandemic best of 91% recorded in 2019, and also marking a sharp increase from the 85% recorded in 2021.
The WHO and UNICEF estimates for national immunisation coverage for 2022, showed that in the WHO South-East Asia Region, the coverage rate for DPT3 recovered to the pre-pandemic level of 91%, a sharp increase from the 82% recorded in 2021. The region also witnessed a 6% improvement in the coverage of the measles vaccine, rising to 92% in 2022 from 86% in 2021.
The number of zero-dose children (those that have not received even the first dose of DPT vaccine) halved to 2.3 million in 2022 from 4.6 million in 2021.
Similarly, the number of partially vaccinated children (those that have received at least one dose of DPT vaccine but did not complete the primary series of three doses) reduced to 6.5 lakh in 2022 from 1.3 million in 2021.
The region had the best immunisation recoveries among all the WHO regions. This can be majorly attributed to the efforts being made by India and Indonesia.
She said every child deserved to be protected against life-threatening diseases with routine immunisation, adding that the momentum built with impressive efforts and immunisation service must continue to benefit every child.
Indonesia reported a DPT3 coverage of 85% in 2022, the same as in 2019, but rising sharply from the 67% recorded in 2021.
Bhutan recorded 98% and the Maldives 99%, surpassing their pre-pandemic rates. Bangladesh with 98% and Thailand 97% demonstrated consistency in routine immunisation coverage throughout the COVID-19 pandemic and beyond.
Business
Monsoon’s uneven march could fuel food inflation, caution economists (Page no. 16)
(GS Paper 3, Economy)
Despite a wetter July so far lifting the overall rainfall above the long period average, the southern peninsula, Deccan Plateau and the eastern region continue to experience a below-normal monsoon and kharif sowing remains lower than last year for crops like rice and pulses, risking faster food price inflation.
By July 15, the overall sown area of kharif crops was 2% lower compared with the same time in 2022, with maize (-5.6%), rice (-6.1%) and pulses (-13.3%) being some of the major crops facing shortfalls in sowing this year.
The widest fall was recorded in Arhar, with the area sown more than 38% lower than last year, Bank of Baroda’s economics researchers observed in a note.
Worryingly, reservoir levels in the western and southern regions were also at lower marks than last year, even as there had been uneven distribution of rainfall, with parts of West and North India seeing excessive rainfall, while it was deficient in States like Bihar and Jharkhand.
With the Indian Meteorological Department signalling those parts of Uttar Pradesh, Bihar, Assam, Punjab, Karnataka and Tamil Nadu may see less than normal rainfall this month, sowing of paddy and pulses could be further affected. These effects were already exacerbating food inflation, reckoned analysts at Motilal Oswal.