GS Analyst
Daily Current Affairs

Asserting that France could help India to diversify its defence supplies amid a heavy dependence on Russia, the French Ambassador to New Delhi has clarified their intention to partner with India on critical projects including possible nuclear-powered submarines. 

• India began to import weapons from Russia in the
• The Ilyushin Il-14 cargo transport aircraft were the first ones to be inducted into the Indian inventory, followed by the MiG-21 fighter aircraft.
• From 1962 onwards, there has been a steady increase in India’s import dependence on Russia.
• The legacy still leaves India with a sizeable number of Soviet-built platforms and in the post-Cold War period, India has made several sizeable acquisitions.

About India’s defence equipment and scenario:

• India’s requirements on defence are catered largely by imports.
• The opening of the Defence sector for private sector participation will help foreign Original Equipment Manufacturers (OEMs) to enter into strategic partnerships with Indian companies.
• This will enable them to leverage the domestic markets as well as aim at global markets. Besides helping in building domestic capabilities, it will also bolster exports in the long term.
• Since 2014 the Ministry of Defence has signed more than 180 contracts with the Indian Industry, as of December 2019. These contracts were valued at over USD 25.8 Bn approximately.
• Favourable government policy which promotes self-reliance, indigenisation, and technology upgradation.
• The policies also aim at achieving economies of scale, including the development of capabilities, for exports in the defence sector.
• India’s extensive modernisation plans with an increased focus on homeland security and growing attractiveness as a defence sourcing hub.

Why has India remained dependent on Russia for so long?

• Russia is the second largest arms exporter in the world, following only the United States.
• In the five-year period between 2016 and 2020 America’s share in the global arms trade was 37 per cent, compared to 20 per cent of Russia’s, as per the Stockholm International Peace Research Institute (SIPRI), which tracks the global arms trade and military expenditure.
• For Russia, India is the largest importer, and for India, Russia is the largest exporter when it comes to arms transfer.
• Between 2000 and 2020, Russia accounted for 66.5 per cent of India’s arms imports. Of the $53.85 billion spent by India during the period on arms imports, $35.82 billion went to Russia.
• During the same period, imports from the US were worth $4.4 billion, and from Israel, it was worth US$ 4.1 billion.

Why India needs an alternate?

• Heavenly dependent on Russian Imports for defence equipment: According to a report, India’s 85% of defence equipment is brought from Russia.
• Russia’s expansionist policy: Russia’s war with Ukraine has shown many supply chain disruptions which led India to rethink its imports with Russia.
• Russia and China ties: Russia’s increasing closeness with China has led India to find a way to less depend on Russia.
• Expanding Indigenous defence manufacturing in India: India is on its way to developing its indigenous defence manufacturing. Recently, India commissioned its first indigenously made Submarine INS Vikrant for Indian Navy.

How France can become an alternative?

• India is looking to diversify its suppliers and obviously, France is a great option, as France has successfully delivered 36 Rafale fighter jets and other systems to India and wants to develop a national-level defence industrial base in India.
• France can also help India in developing nuclear-powered and nuclear attack submarines just like the Russians, he underlined that the country has a longstanding submarine cooperation with India. 

Recently the Ministry of Information and Broadcasting (MIB) directed YouTube and Twitter to take down links sharing the BBC documentary ‘India: The Modi Question’. 

About the directives of the Ministry:

• The Ministry of Information and Broadcasting (MIB) has directed the social media platforms for allegedly casting aspersions on the authority and credibility of the Supreme Court of India, sowing divisions among various communities, and making unsubstantiated allegations regarding actions of foreign governments in India.
• This was done in consideration of the order under the emergency provisions of the Information Technology Rules, 2021.

What does the emergency provision under IT rules say?

• Under the Information Technology Rules, 2021 (IT Rules, 2021), the MIB has the power to issue content takedown notices to social media intermediaries like YouTube, Twitter and Facebook in emergency situations for which no delay is acceptable.
• The Secretary of the Ministry of Information and Broadcasting may or can if he is satisfied that it is necessary or expedient and justifiable for blocking public access to any information or part thereof through any computer resource and as an interim measure issue such directions as he may consider necessary to such identified or identifiable persons, publishers or intermediary in control of such computer resource hosting such information or part thereof without giving him an opportunity of hearing.
• These emergency notices can be issued if the MIB believes that the content can impact the sovereignty, integrity, defence, or security of India, friendly relations with foreign states or public order, or to prevent incitement to any cognisable offence.

What can users whose content has been impacted do?

• If a platform has on its own taken down some content, the user can approach the grievance officer of the platform to raise a dispute, which they are to redress within 15 days.
• However, if a platform has taken down content on the basis of the emergency provisions in the Rules, the legislation does not offer any direct recourse. The only option users have in this case is to approach the courts.

Information Technology Rules, 2021:

• The Rules aim to empower ordinary users of social media and OTT platforms with a mechanism for redressal and timely resolution of their grievances with the help of a Grievance Redressal Officer (GRO) who should be a resident in India.
• Safety measures: Special emphasis has been given to the protection of women and children from sexual offences, fake news and another misuse of social media.
• Source identification: Identification of the “first originator of the information” would be required in case of an offence related to the sovereignty and integrity of India.  
• Appointment of Chief Compliance Officer: A Chief Compliance Officer, a resident of India, also needs to be appointed and that person shall be responsible for ensuring compliance with the Act and Rules.
• Complaint monitoring: A monthly compliance report mentioning the details of complaints received and action taken on the complaints would be necessary.
• Code of Ethics: The OTT platforms, online news and digital media entities, on the other hand, would need to follow a Code of Ethics.
• Self-classification: OTT platforms would be called as ‘publishers of online curated content’ under the new rules.
• They would have to self-classify the content into five categories based on age and use parental locks for ages above 13 or higher. They also need to include age verification mechanisms for content classified as ‘Adult’.
• Redressal mechanism: A three-level grievance redressal mechanism has been mandated. This includes the appointment of a GRO, self-regulatory bodies registered with the Ministry of Information & Broadcasting (MIB) to look after the Code of Ethics and a Charter for the self-regulating bodies formulated by MIB

According to Sebi data, the value of P-note investments in Indian markets—equity, debt, and hybrid securities—stood at Rs.96, 292 crores at December-end, as compared to Rs.99, 315 crores at the end of November.

What are Participatory Motes (P- Notes)?

P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be a part of the Indian stock market without registering themselves directly after going through a due diligence process.

Who issues P- Notes and what is the process?

• Participatory notes are issued by brokers and FIIs registered with SEBI. The investment is made on behalf of these foreign investors by the already registered brokers in India.
• For example, Indian-based brokerages buy India-based securities and then issue participatory notes to foreign investors. Any dividends or capital gains collected from the underlying securities go back to the investors.
• The brokers that issue these notes or trades in Indian securities have to mandatorily report their PN issuance status to SEBI for each quarter. These notes allow foreign high-net-worth individuals, hedge funds and other investors to put money in Indian markets without being registered with SEBI, thus making their participation easy and smooth.

Advantages of participatory notes:

• Anonymity: Any entity investing in participatory notes is not required to register with SEBI, whereas all FIIs have to compulsorily get registered. It enables large hedge funds to carry out their operations without disclosing their identity.
• Ease of trading: Trading through participatory notes is easy because they are like contract notes transferable by endorsement and delivery.
• Tax saving: Some of the entities route their investment through participatory notes to take advantage of the tax laws of certain preferred countries.
• P-Notes also aid in saving time and costs associated with direct registrations.

Disadvantages of P-notes:

• Because of the anonymous nature of the instrument, the investors could be beyond the reach of Indian regulators.
• P- Notes are being used in money laundering with wealthy Indians, like the promoters of companies, using it to bring back unaccounted funds and to manipulate their stock prices.

Why SEBI is not in favour to ban P-Notes?

• P- Notes are used globally in many markets.
• According to SEBI’s and the government’s views, P-Notes are legitimate instruments that are required for normal financial transactions and are prevalent in all the larger markets.
• In an attempt to ban, P-Notes in 2007 due to a surge in capital flows and excess liquidity, markets crashed immediately which recognised the importance of P-Notes in the Indian economy.

Capital market in India:

• The long-term financial market of an economy is known as the ‘capital market’. This market makes it possible to raise long-term money for a period of a minimum of 365 days and above.
• Across the world, banks emerged as the first and foremost segment of the capital market.
• In coming times many other segments got added to it, viz., the insurance industry, mutual funds, and finally the most attractive and vibrant, the security/stock market.
• Organised development of capital market together with putting in place the right regulatory framework for it, has always been a tough task for the economies.
• It is believed today that for strong growth prospects in an economy presence of a strong and vibrant capital market is essential.
• Over time, the Indian capital market started to have the following segments:
  • Financial Institutions
  • Investment Institutions
  • Banking Industry
  • Insurance sector
  • Security market

Amid the continued suspension of derivates trading in seven Agri commodities, the farmers has launched agitation outside the office of the Securities and Exchange Board of India (SEBI) in Mumbai.

• On December 20, 2021 the capital markets regulator suspended futures trading in seven commodities, wheat, paddy (non-basmati), moong, chana, soybean and its derivatives, mustard seed and its derivatives, and palm oil and its derivatives on the exchanges.
• The SEBI order allowed the squaring of contracts but said no new contract would be allowed in these commodities.
• Of the seven commodities, chana and mustard seed were already banned at the time.
• The trading was initially suspended for a year, but in December 2022, the ban was extended for another year., until December 20, 2023.
• The ban on the launch of futures contracts was intended to stop speculative trade in these commodities.

How does the derivative trade in commodities work?

• Agricultural commodities like cotton, paddy, soya bean, soya oil, mustard seed, etc., are traded on the National Commodities and Derivatives Exchange (NCDEX) and the Multi Commodity Exchange (MCX).

• Profits are made in the derivatives trade by predicting the price movements of the asset that underlies the contract. The derivatives trade can be in futures and options.
• In a futures contract, a supplier pledges to sell a certain quantity at a fixed price at a future date.
• Also, farmers can put fixed amounts of their products, which fit the quality standards of the exchange, to be sold at a fixed price, almost like price insurance.
• Both contracts can be excited by either the producer or the trader by paying a margin price to the exchange.

Why are farmers protesting against the ban?

• The future trends provided by the exchange are an important indicator for farmers.
• Physical markets or mand often follow the trend, and farmers base their offloading plans on it.
• More than individual farmers, the Farmer's Producer Companies (FPCs) trade on the exchanges.

The National Commodities and Derivatives Exchange (NCDEX):                                                                      

• The National Commodity and Derivatives Exchange (NCDEX) is a commodities exchange dealing primarily in agricultural commodities in India.
• The NCDEX is located in Mumbai but has offices across the country to facilitate trade.
• Exchanges like the NCDEX have also played a key role in improving Indian agricultural practices.
• Barley, wheat, and soybeans are some of the leading agricultural commodities traded on the NCDEX.

The Multi Commodity Exchange (MCX):

• The Multi-Commodity Exchange of India was established under the Forward Markets Commission (FMC) in 2003.
• It is an online platform that enables online trading, settlement and clearing of commodity futures transactions.
• It acts as a platform for providing risk management (hedging).

Recently, the district administration of Ladakh designated six hamlets within the Changthang Wildlife Sanctuary as a ‘dark-sky reserve’.

About the Dark-sky reserve:

• A dark-sky Reserve (DSR) is an area, usually surrounding a park or observatory that restricts artificial light pollution.
• The International Dark-Sky Association (IDA) is associated with the International Dark Sky Reserve (IDSR) and International Dark Sky Park (IDSP).
• An International Dark-Sky Association (IDA) was founded in 1988 to reserve public or private land for an exquisite outlook of nocturnal territories and starry night skies.
• In 1993, Michigan became the first state in the United States to designate a tract of land as a "Dark Sky Reserve" at the Lake Hudson State Recreation Area.
• It is generally understood that a dark-sky reserve, should be sufficiently dark to promote astronomy.
• However, this is not always the case. The lighting protocol for a dark-sky reserve is based on the sensitivity of wildlife to artificial light at night

Sky glow and causes:

• Sky glow would be familiar to most people as that light dome that appears over populated areas that become visible, especially when you go outside of that populated area and look back towards it.
• That dome that you see is an amalgamation of all the light sources that have been exposed to the exterior environment.
• Causes:
  • Skyglow, also known as light pollution, is the brightening of the night sky as the result of excessive and inappropriate artificial lighting.
  • Light pollution is an increasing problem threatening astronomical facilities, ecologically sensitive habitats, wildlife, and energy use.

What is the objective of these reserves?

• The purpose of the dark-sky movement is generally to promote astronomy.
• However, astronomy is certainly not the only objective of conserving a dark sky.
• A dark night sky is associated with so many facets of history, philosophy, religion, societal development, poetry, song, mathematics, and science.
• The preservation of a DSR is necessary to understand our environmental history.

Significance:

• The designation meant that the reserve had a responsibility to keep the skies dark, particularly for the astronomical observatories located in the area.
• While authorities safeguard telescopes’ access to dark skies by actively lowering light pollution around their sites, the night is actually becoming brighter in almost the rest of the world.

Environmental Consequences of light pollution:

• According to a 2003 report, light overnight on beaches deters sea turtles from coming ashore to nest.
• A 2006 review found that skyglow keeps trees from sensing seasonal variations.
• A 2017 study found that young burrow-nesting seabirds don’t take flight unless the nesting site becomes dark.
• A 2019 study reported that clownfish eggs don’t hatch when exposed to artificial light at night, killing the offspring.
• A 2020 study noted that skyglow interferes with multiple aspects of insect life and allows insect predators to hunt for longer.