IASbaba’s Daily Current Affairs – 16th April, 2016

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IASbaba’s Daily Current Affairs – 16th April, 2016

INTERNATIONAL

TOPIC: 

General studies 2:

• Bilateral, regional , global groupings and agreement involving India and affecting its interest
• India and its neighborhood- relations. 

General studies 3:

• Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

Maritime India Summit 2016: Taking initiatives to push maritime trade

Background:

• Recent inaugural of the Maritime India Summit 2016 in Mumbai, Maharashtra is India’s first ever Maritime Summit and the flagship event organized by Union Ministry of Shipping.
• The main focus of summit is to give impetus to Make In India and blue economy under the Union Government’s ambitious Sagarmala Project emphasizing on port-led development

Current status of Maritime trade:

• Skewed pattern of trade:
• Goods imports are 50 per cent bigger than exports, so ships that bring goods to Indian ports often have no return cargo
• In the case of some ports, the import-export ratio is as skewed as 90:10
• Freight rates are high
• Lack of port-based development as an industrial strategy.

Importance of Maritime sector:

• The maritime sector has a vital role to play in India’s growth story. As India enjoys long coastal boundary it is of paramount importance to revitalize the ports and the shipping sector to increase capacity and efficiency.
• India’s marine export-import trade has been growing at a rate of 4.5 per cent annually and accounts for 95 per cent of total exim trade volume for India.
• A three-pronged plan consisting of a workable policy, fiscal incentives and infrastructure would ensure development of India’s coastal shipping sector and strong growth.
• Apart from having a multiplier effect on the economy, the maritime sector itself has the potential to significantly contribute to GDP.
• India’s main trade commodities are crude and petroleum products, bulk commodities such as coal, iron ore and containerized cargo. Trade growth is expected to remain strong, at 5-10 per cent, for most commodities over the next 10 years representing massive opportunity.

Ocean of opportunity:

The biggest benefit from a robust shipping sector will be massive cost-saving:

• The cost for coastal shipping is Rs. 0.15-0.2 per tonne/km compared to Rs. 1.5 for railways and Rs. 2.5 for road. This represents the potential to lower logistics cost by Rs. 21,000-27,000 crore by 2025.
• Coastal shipping can be a catalyst for coastal industrial clusters and fit in with the plan to develop new smart port cities.
• Inland water transport is an environment-friendly and cost-effective mode of transportation, which has the potential to reduce logistic cost and relieve the congestion on road and railways.

Compelling reasons to invest in Indian ports:

• Government has allowed 100 per cent FDI in ports and 10-year tax holiday has been extended to enterprises engaged in developing, maintaining, and operating ports, inland waterways, and inland ports.
• Projected cargo traffic to be handled by 2021-22 is 1,695 mt according to the National Transport Development Policy Committee, an increase of 643 mt from 2014-15
• Around 2,422 mt of cargo handling capacity is required by 2021-22.
• Additional cargo handling capacity of 901 mt is required to be created in the next 6-7 years.

Need of the hour: focus on the improvement of infrastructure and deployment of technology

 To project sea transport as the prime mode of transportation and effectively utilise our 7,517-km coastline we need –

• First and last mile connectivity
• Large scale containerization of cargo
• Development of efficient multi-modal transport services.
• Setting up port-based SEZs at all ports housing a cluster of maritime-related industries
• Warehouses and ship repair facilities would help develop a robust maritime sector.

Working on improvising trade infrastructure:

• Inland waterways extend to about 14,500 km across the country. In sharp contrast to peer countries, only 3.5 per cent of India’s trade is being done through waterways as against 47 per cent in China, 40 per cent in Europe, 44 per cent in Japan and Korea, and 35 per cent in Bangladesh.
• Colombo can handle more container traffic than all of India’s ports put together because India’s ports are too shallow to accommodate big container vessels. 

Way ahead: increase port capacity with the help of private companies

• For instance Adani private group of companies have increased the capacity of Mundra port in Gujarat to overtake Kandla to become the country’s largest.
• Building deepwater port at Vizhinjam in Kerala designed to take some of the trans-shipment traffic away from Colombo.

Strategic aspect of Maritime trade:

Apart from the length of the coastline, 7,500 km, India’s maritime potential also lies in its strategic location on all major shipping highways:

• India has begun to collaborate with neighbouring Bangladesh and Myanmar in building waterways and port infrastructure. This is essential as ultimately it is economics that provides the necessary push to take forward strategic overtures.
• Indian Navy played a pivotal role in containing piracy on the high seas and is positioning itself as the ‘net security provider’ in the broader Indian Ocean region with capacity building, joint exercises and increased multilateral exchanges.
• New emphasis is two-sided — securing energy and trade routes to sustain economic growth and keeping a check on increasing forays by other countries into India’s backyard.

Recent Initiatives to strengthen maritime trade:

Sagarmala Project:

• The key objective of Sagarmala project develop port infrastructure in India that results in quick, efficient and cost-effective transport to and from ports.
• It also includes establishment of rail / road linkages with the port terminals, thus providing last mile connectivity to ports; development of linkages with new regions, enhanced multi-modal connectivity including rail, inland water, coastal and road services.

Key Activities under Sagarmala project:

• Port-led industrialization and Port based urbanization
• Port based and coastal tourism and recreational activities
• Short-sea shipping coastal shipping and Inland Waterways
• Transportation Ship building, ship repair and ship recycling Logistics parks, warehousing, drilling platforms
• Specialization of ports in certain economic activities such as energy, containers, chemicals, coal, agro products.

National Waterways Bill, 2015:

• The Bill identifies additional 101 waterways as national waterways.
• The Bill repeals the five Acts that declare the existing national waterways.  These five national waterways are now covered under the Bill.
• Bill states that while inland waterways are recognized as a fuel efficient, cost effective and environment friendly mode of transport, it has received lesser investment as compared to roads and railways.  Since inland waterways are lagging behind other modes of transport thus there is need to evolve policy for integrated development of inland waterways.

Connecting the dots:

• Can Sagarmala project and National waterway bill pitch-in merry-time for maritime trade in parallel with strengthening inland waterways?

INTERNATIONAL

TOPIC:  General studies 2

• Bilateral, regional , global groupings and agreement involving India and affecting its interest
• Effect of policies and politics of developed and developing countries on India’s interests, Indian Diaspora.

The Obama Doctrine

Foreign Policy Shift

• Holds strong views on foreign policy issues; having little regards for the Washington-based tribe of U.S. foreign policy experts (“The Washington playbook”), and even less for their enduring belief that military force is the answer to every problem
• Exhibits little interest in the West Asian affairs and in the politics of oil at the same time being harsh in his judgement of leaders of West Asian countries
• Shows interest in the “Pivot to Asia” and the consequences of the rise of China and India in the region; while being accommodative of China in his-scheme of outlook

Forsaking old friends

• Display of distrust or disdain for long-established relationships and allies—the “black hole” and the Achilles heel of the pronouncements
• The reluctance to accept his foreign policy mistakes, preferring to put the blame on allies and friends
• Holds a viewpoint that the West Asian sheikhdoms are “free-riders” and at the same time, he sees an emerging Iran as a bright patch as far as West Asia is concerned. The President is thus, preparing to jettison Saudi Arabia — despite it having been the U.S.’s staunchest ally for the past half century — and readying to embrace Iran
• His criticism for Mr. Cameron as a mere tactician lacking in strategic vision does sound the death knell for the “Special Relationship” that has been part of U.K.-U.S. entente since the end of the Second World War (Libyan imbroglio)
• Obama is also contemptuous of is Russia’s Vladimir Putin (events in Ukraine and the West’s debacle in Crimea)— describing Putin as business-like and eager to reclaim for Russia the co-equal status that it once enjoyed with America

The core logic of the Obama Doctrine being:

• The U.S. no longer needed to engage in geopolitical competition with powers like Russia and China
• The collapse of countries like Egypt was of little consequence to the U.S
• The primary concern was to avoid risking the lives of U.S. citizens unless the vital interests of the U.S. were directly involved
• To get others to do the hard work of fighting on issues relating to ensuring a rule-based international order and defeating terrorism.

Lessons for India

• India needs to understand and formulate its own strategic viewpoint w.r.t. its own strategic interests as well as Obama Doctrine’ before arriving at a certified conclusion.
• With no conflict of interest as far as the South and East China Seas are concerned, it risks provoking China if it gets more deeply engaged on U.S. insistence— when the U.S. cannot be expected to come to India’s aid in the event of an India-China conflict along the disputed land border or anywhere else
• The U.S. has been willing to sell F-16 fighters and attack helicopters to Pakistan, so that Pakistan can fight its battles in Afghanistan and the region as well as is willing to placate Pakistan on the nuclear issue, even implying that Pakistan’s tactical nuclear weapons programme was possibly a response to India’s Cold Start doctrine—despite India’s concerns about this move

IASbaba’s Views:

• Although, the new Framework for the India-U.S. Defence Relationship (signed in June 2015) as intended to increase strategic cooperation to help safeguard security and stability across the region and around the world is touted as one of the defining moments of the 21st century, it is imperative for India to take a closer look at such entanglement with the U.S.
• With the signing of a Logistics Exchange Memorandum of Agreement (LEMOA) which would ultimately pave way for a Strategic Logistic Agreement in the near future, India is not only opening up to the U.S. in terms of buying military hardware but also as a meaningful strategic partnership— one, which has to pursued, keeping with our national interests in the region and beyond.
• While appreciating Obama’s role as the likely bridge to an era of retrenchment, burden-sharing, great-power accommodation and spheres of influence, India also needs to construct a secure balance of power in Asia and the Indo-Pacific— that will have much to collaborate on with a changing America

 (Logistics is the activity of organising the movement, equipment, and accommodation of military forces— forms the backbone of military operations and is considered the first step in any military campaign)

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MIND MAPS

1. SAGAR over Sagarmala