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A Chinese naval flotilla set off to join Russian naval and air forces in the Sea of Japan in an exercise aimed at “safeguarding the security of strategic waterways”, according to China’s defence ministry.
Codenamed “Northern/Interaction-2023”, the drill marks enhanced military cooperation between China and Russia since Moscow’s invasion of Ukraine and is taking place as Beijing continues to rebuff U.S. calls to resume military communication.
The Chinese flotilla comprised of five warships and four ship-borne helicopters, left the eastern port of Qingdao and will rendezvous with Russian forces in a “predetermined area”, the ministry said on its official WeChat account.
The ministry said Russian naval and air forces would participate in the drill taking place in the Sea of Japan. This would be the first time both Russian forces take part in the drill.
Gromkiy and Sovershenniy, two Russian warships taking part in the Sea of Japan drill, had earlier this month conducted separate training with the Chinese navy in Shanghai on formation movements, communication and sea rescues.
Before making port at the financial hub of Shanghai, the same ships had sailed passed Taiwan and Japan, prompting both Taipei and Tokyo to monitor the Russian warships.
US, China aim to revive climate cooperation (Page no. 4)
(GS Paper 3, Environment)
The United States and China will look to revive efforts to combat global warming this week, in bilateral meetings that observers hope will raise the bar on ambitions ahead of UN-sponsored climate talks in late 2023.
The talks follow two other high-level U.S. visits to China this year, as the world’s largest greenhouse gas emitters work to stabilize a relationship strained by trade disputes, military tensions and accusations of spying.
John Kerry, the U.S. special envoy on climate change, will join bilateral talks with his Chinese counterpart Xie Zhenhua in Beijing from July 16-19 that will focus on issues including reducing methane emissions, limiting coal use, curbing deforestation and helping poor countries address climate change.
The pair, who have cultivated a warm relationship over more than two decades of diplomacy, will also likely discuss China’s objections to U.S. tariffs and other restrictions on imports of Chinese solar panel and battery components.
Washington is seeking to protect U.S. manufacturers from low-cost competitors in China, including those it suspects of using forced labor, which Beijing denies.
“I wouldn’t look for breakthroughs in these meetings but my hope is that they restore normal alignment and diplomacy,” said David Sandalow, director of the US-China program at the Center on Global Energy Policy.
Kerry addressed his objectives for the China trip at a House foreign relations subcommittee hearing on “What we’re trying to achieve now is really to establish some stability with the relationship without conceding anything.”
Republicans have accused the Biden administration of being too soft on Beijing in climate diplomacy, arguing that China continues to increase its greenhouse gas emissions while the United States imposes costly measures to clean up.
Iraqi PM in Syria on first trip since Syrian war; talks security, water (Page no. 4)
(GS Paper 2, International Relation)
Iraqi Prime Minister Mohammed Shia Al-Sudani held talks with Syrian President Bashar al-Assad in Damascus in the first such visit by an Iraqi premier since the outbreak of the Syrian war in 2011.
Assad and Sudani discussed securing their shared 600km border from security threats, including Islamic State militants, and agreed to enhance cooperation to reduce drug smuggling, they said during a joint news conference.
Sudani said they also discussed ways to combat drought conditions in both countries caused by a reduction in rainfall, climate change and upstream damming by Turkey.
Sudani said Iraq supported the lifting of sanctions on Syria, put in place and expanded by the U.S. and European countries since 2011.
Iraq and Syria, which have close economic, military and political ties to regional heavyweight Iran, maintained relations throughout Syria’s civil war even as other Arab states withdrew their ambassadors and closed their embassies in Syria.
Baghdad and Damascus, along with Shi’ite armed groups backed by Iran, cooperated in the fight against Islamic State, which spread from Iraq into Syria and at one point controlled more than a third of both countries.
Farhad Alaaldin, foreign affairs adviser to the prime minister, said before the meeting that Sudani was set to discuss combatting the flow of the amphetamine Captagon and possibilities for reopening a Mediterranean oil export pipeline, which could help Iraq diversify its export routes.
UK FTA: Template for other trade pacts in mind, India moves cautiously (Page no. 5)
(GS Paper 3, Economy)
As India and the UK engage in negotiations to resolve contentious issues in the ongoing talks for the India-UK Free Trade Agreement (FTA), the overarching focus from New Delhi’s perspective is to ensure a comprehensive deal without ceding too much ground, given that this deal will serve as a template for all upcoming trade pacts, including ones being discussed with the EU (European Union) and the EFTA (European Free Trade Association) countries viz., Iceland, Liechtenstein, Norway and Switzerland.
Officials said the nitty-gritty and contentious issues of the trade pact revolving around intellectual property rights, global value chains, digital trade and rules of origin are being discussed threadbare for the UK FTA, in what is being seen as the most expansive trade deal ever undertaken by India, with the pace being moderate and steady to ensure maximum gains.
“We are negotiating, we are seeing how we gain in the negotiations… how our interests are protected while we gain from them in the negotiations… so that we don’t end up giving up more,” a senior government official told The Indian Express.
Apart from negotiations for the UK deal, India is in talks with the EU, the EFTA countries, Canada (for an early harvest deal) and with Australia to wrap up the early harvest deal into a full-scale trade pact by the end of this year.
Editorial
The French connection (Page no. 12)
(GS Paper 2, International Relation)
While India has more than 30 strategic partnerships with various countries, it would be misleading to say that they all are of the same significance.
Measured against these two criteria, the Franco-Indian strategic partnership comes out on top. The Franco-Indian partnership spans the full spectrum of what may be considered strategic — defence, space, climate change, critical technologies and people-to-people ties.
More importantly, France has stood by India through thick and thin from the time the strategic partnership was first established in 1998.
Prime Minister Narendra Modi has just concluded a hugely significant visit to France. For once, words like “unprecedented” and “historic” used are not just hyperbole. This was after all France, so of course, there was pomp and circumstance.
France bestowed on PM Modi the highest civilian honour. Our tri-services contingent, which marched past Champs-Elysees, must have made every Indian’s heart swell with pride.
Three documents, namely, the joint communique, the Horizon 2047 roadmap and the list of specific outcomes put out by the two sides is enough to overwhelm even the most inveterate policy wonk. Some have compared this visit to the one that PM Modi undertook to the US not so long ago.
It should be obvious that the fact that PM Modi went to France so close on the heels of the US is the ultimate expression of India’s strategic autonomy.
Ideas Page
Look who’s talking (Page no. 13)
(GS Paper 3, Economy)
In the third decade of a rather turbulent 21st century, the visit of an Indian Prime Minister to the United States was always going to be an event of great significance and symbolism.
Coming as it does in the backdrop of the bloody stalemate in Ukraine, a resurgent and aggressive China, a slowing global economy and the looming climate change crisis, the meeting between the duly elected leaders of the world’s largest democracy and the world’s richest and most powerful democracy was going to be watched keenly by the whole world.
Looking at the pomp and ceremony that has characterised the PM’s visit — the Americans certainly know how to put on a show to woo a visiting foreign leader when they want to.
Even as they come up with plenty of side shows that pull in different directions. While the US government is laying out the red carpet for PM Modi, influential voices in the American media, academia and politics, led by a personality no less than former President Barack Obama, are busy criticising and lecturing India along predictable lines.
Their concerns about the health of our democracy, about the freedom of our press, the integrity of our institutions and the welfare of our religious minorities, appear to be sincere and well-meaning.
This posturing certainly strikes a chord with many of our own left-leaning intellectuals. And on cue, our newspapers and news portals are waxing lyrical about a not-too-distant and glorious past when supposedly, India was truly democratic, and the apparently gloomy present when our democracy, according to its critics in the West and their acolytes at home, supposedly is in some sort of existential danger.
Explained
Debate over definition of child age of consent in data protection bill (Page no. 14)
(GS Paper 3, Science and Technology)
The upcoming data protection Bill could empower the Central government to lower the age of consent from 18, for accessing Internet services without parental oversight.
It could also exempt certain companies from adhering to additional obligations for protecting kids’ privacy if they can process their data in a “verifiably safe” manner.
This marks a key departure from the previous data protection Bill that was floated in 2022 where the threshold of children’s age was hard-coded at 18 years.
The change, however, is in line with data protection regulations in the Western world, with regions like the European Union and the United States prescribing a lower age of consent.
Lowering the age of consent under the 2022 draft had been a key ask of the industry, especially social media companies, as a hard-coded age of consent would have meant business disruptions for them on account of setting up new systems for obtaining parental consent for users under 18 years of age — a key demographic for such services.
The final change in the Bill that is headed to Parliament marks a series of twists and turns as a number of stakeholders attempted to prescribe what the age of children should be in India’s data protection law.
The committee, which was set up by the Centre months before the Supreme Court’s landmark decision of upholding privacy as a fundamental right, submitted its report to the government in 2018.
More cash and less grain (Page no. 14)
(GS Paper 3, Economy)
Three years ago, neither the Centre nor the states had money to make large-scale cash transfers to poor and vulnerable households suffering job and income losses during the pandemic-enforced lockdowns.
But there was plenty of wheat and rice in the Food Corporation of India’s (FCI) warehouses: Some 813.5 million persons received 10 kg of grain per month practically free from April 2020 to December 2022.
Offtake of the two cereals totaled 92.9 million tonnes (mt) in 2020-21 (April-March), 105.6 mt in 2021-22 and 92.7 mt in 2022-23, as against an annual average of 62.5 mt during the first seven years post the National Food Security Act (NFSA) from 2013-14 and 48.4 mt in the seven years preceding the law.
It wasn’t just the public distribution system (PDS). The three years from 2020-21 also saw all-time-high grain exports from India (see table below).
Rice shipments alone aggregated 21.2 mt in 2021-22 (valued at $9.66 billion) and 22.3 million tonnes ($11.14 billion) in 2022-23, with these at 7.2 mt ($2.12 billion) and 4.7 mt ($1.52 billion) respectively for wheat. Thus, there was surplus grain not only to give out free, but even to export in record quantities.
The situation is almost the reverse today. Governments have money, due to the resumption of economic activity. Gross goods and services tax revenues grew 21.9% in 2022-23 and have risen 11.6% in April-June 2023 over April-June 2022. However, FCI godowns aren’t exactly bursting at the seams.
Economy
Credit card defaults surge sharply in FY22-23; up 30.5% YoY at 14,073 cr (Page no. 15)
(GS Paper 3, Economy)
Defaults in the credit card segment are rising. Gross non-performing assets (GNPA) in the credit card segment of banks rose by Rs 951 crore to Rs 4,073 crore in the fiscal ended March 2023 from Rs 3,122 crore in the year ended March 2022, according to the latest data obtained from the Reserve Bank of India (RBI) under the Right to Information (RTI) Act.
The total credit card outstanding at the end of March 2023 was Rs 1.94 lakh crore as against Rs 1.48 lakh crore at the end of March 2022, the RBI’s monthly sectoral bank credit data showed. Total number of credit cards increased to 8.53 crore in FY2023 from 7.52 crore in FY2022.
The recently released Financial Stability Report (FSR) of the RBI said that while there was an overall improvement in asset quality in respect of personal loans, impairments in the credit card receivables segment rose marginally in fiscal 2023.
During the previous fiscal, the banking system’s gross NPA ratio in credit card receivables stood at 2.02 per cent. The FSR report showed that public sector lenders’ gross NPA in the credit card segment was 18 per cent while private sector banks reported a GNPA of 1.9 per cent in FY2023.
Foreign banks’ credit card gross NPA ratio was 1.8 per cent during the previous fiscal. Bankers say stress in credit card loans is mainly seen in the low-ticket segment, that is, below Rs 50,000.
In credit card accounts, the amount spent is billed to the card users through a monthly statement with a definite due date for repayment.
Banks give an option to the card users to pay either the full amount or a fraction of it, i.e., the minimum amount due, on the due date and roll over the balance amount to the subsequent months’ billing cycle. In case of defaults, banks charge interest rates as high as 38 to 42 per cent on outstanding dues.