Current Affairs 15 January 2025

Content:

1. Qatar’s Final Draft of Gaza Truce Deal
2. U.S. Tightens Grip on AI Chip Flow to Maintain Global Dominance
3. Impact of Rajasthan’s River-Linking Project on Ranthambhore Tiger Reserve
4. IMD’s Evolving Challenges and Vision for Weather Resilience and Climate Change Adaptation
5. Urea Industry’s Success and Progress Towards Self-Reliance
6. Welfare Concerns Regarding the Use of Elephants in Ceremonies and the Kerala Government’s Inaction
7. Inflation Eases to 4-Month Low of 5.22%, but RBI Remains Cautious on Rate Cuts

Qatar’s Final Draft of Gaza Truce Deal

• Context : Qatar officials presented a final draft for a Gaza ceasefire and hostage release after intensive negotiations. The talks involved envoys from both the Biden and Trump administrations and key officials from Israel, Hamas, and Qatar.

Relevance : GS 2(International Relations)

• Participants:
  • Israeli Delegation: Included high-ranking officials from Israel’s Mossad and Shin Bet intelligence agencies.
  • Hamas: Represented by top leaders in the ongoing negotiations.
  • Qatar’s Role: Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani facilitated the talks in Doha, pushing both sides toward a resolution.
  • U.S. Involvement: The U.S. envoy in Doha, Steve Witkoff (expected to assume a formal role once Trump returns to power), played a key role in urging Israel’s participation. Outgoing envoy Brett McGurk was also part of the negotiations.

• Timeline:
  • The breakthrough in negotiations occurred around midnight, with continued talks into the early hours of Monday.
  • The next 24 hours are considered crucial for finalizing the deal.

• Content of the Deal:
  • Ceasefire: A ceasefire proposal is central to the draft, aimed at halting the ongoing conflict.
  • Hostage Release: A key component of the draft involves the release of hostages held by Hamas.

• Challenges:
  • Israeli Demands: Israel insists that the war will not end unless Hamas is dismantled, showing resistance to a permanent ceasefire without security assurances.
  • Hamas Demands: Hamas maintains that the agreement must lead to a permanent end to the conflict, including an Israeli withdrawal from Gaza.

• International Influence:
  • Egypt’s Role: Egypt’s intelligence chief, Hassan Mahmoud Rashad, also attended the discussions, signaling Cairo’s involvement in mediation efforts.

• Outlook:
  • Both sides report significant progress but with notable differences remaining.
  • A senior Israeli official mentioned that the deal could be finalized within days, depending on Hamas’s response to the proposal.
  • A Palestinian official called the progress “very promising,” suggesting narrowing gaps and a strong push toward an agreement.

U.S. Tightens Grip on AI Chip Flow to Maintain Global Dominance

• New Regulations:
  • AI Chip Export Restrictions: The U.S. government is set to further restrict the export of advanced AI chips and technology, with a focus on maintaining control over global AI capabilities.
  • Export Caps: New rules will cap the number of AI chips exported to most countries while ensuring that U.S. allies have unlimited access to these technologies.

Relevance : GS 2(International Relations ), GS 3(Technology )

• Geopolitical Focus:
  • Blocking China and Adversarial Nations: China, Russia, Iran, and North Korea will remain blocked from receiving U.S. AI technologies, reflecting ongoing tensions over technological competition and security concerns.
  • Targeting China’s Rise in AI: The move is part of a broader strategy to limit China’s access to advanced AI chips, which are vital for its technological growth.

• Dividing the World into Tiers:
  • Tier 1 – Close Allies: 18 countries, including Japan, Britain, and South Korea, will be largely exempt from these restrictions, allowing them unfettered access to advanced AI technologies.
  • Tier 2 – Restricted Access: 120 countries, including Singapore, Israel, Saudi Arabia, and the UAE, will face country-specific caps on the number of chips they can import.

• Industry Impact:
  • Graphics Processing Units (GPUs): The new rules place specific limits on GPUs, which are critical for running data centers used to train AI models.
  • Cloud Service Providers: Major U.S. cloud service providers will be allowed to build data centers in countries unable to import sufficient AI chips, bypassing export licensing restrictions.

• Regulation Timeline:
  • Implementation Period: The new rules will take effect 120 days after publication, giving the incoming administration time to evaluate and potentially adjust the measures.

• Broader Objective:
  • Global AI Dominance: The regulations reflect the U.S. government’s effort to solidify its position as the leader in artificial intelligence by controlling the flow of critical AI-related technologies globally.
  • Impact on Competitors: These moves are aimed at restricting adversarial nations’ technological advancements and preventing them from achieving parity with U.S. capabilities in AI and machine learning.

• Potential Effects:
  • Economic and Strategic Implications: These restrictions could strain relations between the U.S. and countries affected by the new caps, potentially leading to a reshaping of global AI alliances and supply chains.
  • Challenges for China: Limiting China’s access to advanced AI chips could hinder its technological ambitions, but it may also spur the country to develop its own alternative technologies.

Impact of Rajasthan’s River-Linking Project on Ranthambhore Tiger Reserve

Context:

• The Parbati-Kalisindh-Chambal-Eastern Rajasthan Canal Project (PKC-ERCP) is designed to link rivers in Rajasthan for better water distribution.
• It aims to supply water to 23 districts for irrigation, drinking, and industrial needs.
• A key component, the Doongri Dam, will be built on the Banas River, near Sawai Madhopur (30 km from Ranthambhore Tiger Reserve), which may have significant environmental consequences.

Relevance : GS 3(Environment)

Submergence and Impact on Ranthambhore:

• 37 sq km of land within Ranthambhore Tiger Reserve is expected to submerge due to the dam.
• Loss of habitat: Submergence may fragment the reserve, leading to a loss of biodiversity.
• Wildlife Connectivity: Disruption of the north-south dispersal routes essential for species, particularly tigers (current population: 57), risking genetic isolation.
• Long-term effects: Fragmentation could reduce the biological carrying capacity and hinder natural breeding patterns of tigers.

Ecological and Conservation Concerns:

• Habitat Destruction: Submergence will reduce the core area of the reserve, impacting prey species and flora.
• Human-Wildlife Conflict: Animals may move into human settlements, leading to poaching, encroachments, and increased conflicts.
• Water Availability: Though the reservoir could provide some water relief, improper management could harm the ecological integrity of the reserve.

Criticism of Project Design:

• Compensatory Land Issues: Conservationists argue that the compensatory land should match the ecological quality of the land lost, not just in quantity.
• Experts’ View: Dr. Rajesh Gopal, former Project Tiger chief, stresses the need for compensatory land to be strategically selected, avoiding high-value forest areas like Ranthambhore.
• Double/Triple Compensation: Some experts suggest allocating double or triple the forest area to mitigate the environmental damage.

Broader Environmental and Development Issues:

• Development vs. Conservation: The river-linking projects across India often clash with conservation goals. Similar projects (e.g., Ken-Betwa, North Koel) have already affected tiger habitats.
• International Best Practices: Globally, protected areas with flagship species should be no-go zones for large infrastructure projects, with a focus on environmentally-sustainable planning.
• Sustainability Debate: While proponents argue these projects address water scarcity and food security, environmentalists warn of the loss of irreplaceable ecosystems.

Government’s Position:

• Rajasthan Government: The Chief Wildlife Warden, Arijit Banerjee, stated that the final project details will be evaluated for ecological impacts, but critics caution this could delay critical action.
• Central Government: The Central Water Commission is assessing the Detailed Project Report (DPR) to ensure adherence to environmental standards.
• Compensatory Measures: The government has committed to legal procedures for environmental clearances and appropriate compensatory afforestation.

International and Expert Perspectives:

• Conservationists’ Critique: Experts, such as Dharmendra Khandal from TigerWatch, argue that compensatory afforestation often fails to replicate the ecological value of original habitats and advocates for prioritizing conservation.
• International Examples: Countries worldwide minimize ecological disruption through alternative measures, such as underground reservoirs or rerouting rivers to protect critical habitats.

Future of Ranthambhore Tiger Reserve:

• Legacy: Ranthambhore’s role as a vital tiger sanctuary since 1974 makes it a unique and irreplaceable habitat in India’s conservation efforts.
• Connectivity Restoration: If submergence is unavoidable, experts recommend establishing wildlife corridors and compensating with high-quality forest areas to maintain ecosystem health.

Conclusion:

• The Parbati-Kalisindh-Chambal Link Project balances development and conservation goals, but ecological costs to iconic reserves like Ranthambhore need careful consideration.
• Going forward, India must prioritize protected areas as no-go zones for large infrastructure projects and ensure that development happens in ways that minimize environmental damage.

IMD’s Evolving Challenges and Vision for Weather Resilience and Climate Change Adaptation

Overview:

• The India Meteorological Department (IMD) is dealing with an increasing challenge of weather forecasting due to climatic changes and the rise of extreme weather events.
• The IMD Vision-2047 document highlights a focus on improving weather resilience and climate change adaptation.
• Events such as heatwaves, thunderstorms, and cold waves are expected to rise by about 80%-88% as per the forecasts.

Relevance : GS 3(Disaster Management )

Evolution of Meteorology in India:

• India’s meteorological history dates back to 1793, with the establishment of one of the world’s oldest observatories in Madras (now Chennai).
• Modernization efforts include the setting up of new meteorological centers in Leh, Shillong, Amravati, Port Blair, and Imphal (2023).
• Despite advancements, challenges in forecasting tropical weather persist due to the complex terrain and regional variations.

Climatic and Forecasting Challenges:

• Extreme Weather Events: Climate change has led to more frequent and unpredictable extreme weather events, including floods, heatwaves, and heavy rainfall.
• Localized and Short-Term Events: Extreme weather events often occur in short time spans or smaller localized areas, making accurate forecasting difficult.
• Regions with Limited Data: Areas such as the hills, remote locations, and regions with difficult terrain experience challenges in collecting weather data. For these, the IMD uses Automatic Weather Stations (AWS) and remotely sensed observations.
• Uncertainty in Forecasting: The rise of uncertainty in predicting such weather events poses significant challenges, with varying impacts in different regions.

IMD’s Efforts to Improve Forecasting:

• Increased Accuracy: The IMD has significantly improved forecasting accuracy over the years:
  • Compared to 2014, forecast accuracy for severe weather events has improved by 50%.
  • Forecasts now provide up to five days of lead time for weather events, compared to one day in 2017.
  • The IMD can predict cyclone development up to seven days in advance, compared to 1-3 days in 2014.

• Mission Mausam (150th Anniversary):
  • Launched as a part of the sesquicentennial celebration of the IMD, Mission Mausam aims to enhance weather observation and modeling.
  • Economic Outlay: The mission is planned with an investment of ₹22,000 crore till 2026, aiming to expand its observational network.
  • Panchayat Mausam Sewa and Mausamgram initiatives focus on impact-based forecasting services, providing hydrometeorological and socio-economic data.

Technological Advancements and Innovations:

• Radar Coverage and Crowdsourcing: The IMD is expanding its radar network for better monitoring and nowcasting of weather patterns.
• Weather Model Precision: Efforts are underway to improve the precision of weather models, allowing for better planning and disaster management.
• Crowdsourcing Feedback: Initiatives like crowdsourcing have been introduced to gather real-time feedback on weather events, helping refine forecasts.

Mission Mausam’s Key Objectives:

• Expansion of Observational Network: Under Mission Mausam, the IMD aims to expand its network of meteorological centers, providing comprehensive coverage across land, ocean, and poles.
• Indigenous Decision Support System: A key focus is the integration of hydrometeorological data with socio-economic data, offering better impact-based services for communities.
• Improved Forecasting for Resilience: The goal is to equip administrators and disaster managers with more accurate predictions for proactive response to extreme weather events.

Conclusion:

• The IMD’s Vision-2047 outlines a strategy to adapt to evolving climatic conditions and improve the accuracy and timeliness of weather forecasts.
• Through technological advancements and strategic initiatives like Mission Mausam, the IMD aims to enhance weather resilience, help communities better prepare for extreme weather, and combat the impacts of climate change.

Urea Industry’s Success and Progress Towards Self-Reliance

Context :

• India’s urea production has significantly grown, especially with the commissioning of new plants, aligning with the government’s Atma Nirbharta (self-reliance) goal.

Relevance : GS 2(Governance), GS 3(Agriculture)

• The expansion of urea production supports the New Green Revolution, particularly in the eastern states, aiming to boost agricultural productivity and reduce dependency on imports.
• The cost-effectiveness of “make” (domestic production) versus “buy” (import) urea is now central, influenced by factors like gas pricing, transportation logistics, and the overall impact of self-reliance initiatives.

Important Developments:

Expansion of Urea Production:

• India’s domestic urea production increased from 22 million tonnes (mt) in 2011-12 to 31.4 mt in 2023-24.
  • Imports of urea decreased from 7.8 mt to 7 mt, with a 31.7% drop in imports in the current fiscal year, potentially dropping below 5 mt — the lowest since 2006-07.

New Urea Plants and Greenfield Projects:

• Six new plants installed since 2019, with a seventh under construction, have significantly contributed to the increase in domestic urea production.
  • These plants include those by Hindustan Urvarak & Rasayan Ltd (HURL), Chambal Fertilisers & Chemicals, Matix Fertilisers & Chemicals, and Ramagundam Fertilisers & Chemicals Ltd (RFCL).
  • These plants produced 7.55 mt of urea in 2023-24, with some plants exceeding their rated capacities.

Strategic Location of New Plants:

• New plants are located in states driving the New Green Revolution, such as Uttar Pradesh, West Bengal, Bihar, Jharkhand, and Telangana.
  • Matix Fertilisers holds a 20% market share in Eastern India and is the sole urea producer in West Bengal.
  • The Panagarh plant is India’s largest and most energy-efficient single-unit urea producer.

The Talcher Project:

• The Talcher plant in Odisha, under construction at a cost of ₹17,080.69 crore, will use coal gasificationtechnology — the first of its kind in India.
  • The plant will use coal from the Talcher mines, blended with petroleum coke for efficiency.

Technology and Cost Efficiency:

• The cost of feedstock for new plants is $318 per tonne, based on natural gas priced at $15.9/mmBtu.
  • New plants are energy-efficient, using 5 Gcal/tonne of energy for urea production and 0.25 Gcal/mmBtu of gas.

Make vs. Buy Decision:

Domestic Urea Production Costs:

• At a gas price of $15.9/mmBtu, domestic urea production costs approximately $493 per tonne.
  • With customs duties and taxes excluded, the feedstock cost drops to $252 per tonne, lowering the total production cost to $427 per tonne.

Imported Urea Costs:

• Imported urea faces additional handling costs, such as stevedoring, bagging, transport, and interest expenses, adding $30-$35 per tonne for movement to northern and eastern India.
  • This reduces the cost gap between domestic production and imports, making domestic production more competitive in certain regions.

Proximity to LNG Terminals:

• Seven LNG terminals across India facilitate the import of gas for urea production, especially in Western and Southern India.
  • Western and Southern India find it more viable to import urea, while Northern and Eastern India benefit from domestic production due to the availability of natural gas infrastructure and new plants.

Economic and Employment Benefits:

• The Make-in-India strategy promotes domestic production for job creation and economic growth in rural and industrial areas, which would not be as significant with imports.
  • By investing in domestic production, India creates a sustainable solution for its agricultural needs while fostering economic activity.

Shifting Focus and Future Strategy:

Hybrid Strategy:

• A balanced approach, with domestic manufacturing in Northern and Eastern India and greater importation for the Peninsular region, could optimize the urea supply.
  • This could also involve shutting down inefficient plants and reducing urea consumption to streamline costs.

Pricing and Consumption Trends:

• Urea consumption in India grew from 29.6 mt in 2011-12 to 35.8 mt in 2023-24, driven by the frozen subsidized farmgate price of ₹5,360 per tonne since 2012.
  • A rational pricing system could promote judicious fertilizer use by farmers, reducing overall demand and ensuring sustainability.

Conclusion:

• The Make vs. Buy debate in India’s urea industry highlights the evolving landscape of fertilizer production, shaped by advancements in LNG infrastructure and a focus on self-reliance.

Welfare Concerns Regarding the Use of Elephants in Ceremonies and the Kerala Government’s Inaction

Context : Animal Welfare and Public Safety

• The use of elephants in religious ceremonies, particularly in Kerala, raises concerns about animal welfare and public safety.
  • A male elephant ran amok during an annual feast in Malappuram, injuring 24 people. This follows the death of 24 elephants in Kerala in 2024, highlighting ongoing issues related to captive elephant care.

Relevance : GS 2(Governance), GS 3(Environment)

• Captive elephants often suffer extreme stress, which can manifest in erratic behavior, and there are growing concerns about their mistreatment during traditional events like temple festivals.

Legal and Regulatory Context:

• Kerala’s High Court previously imposed restrictions on the use of elephants in festivals, deeming it as “commercial exploitation.” The Supreme Court temporarily stayed these restrictions in January 2025, allowing the use of elephants in festivals like the Thrissur Pooram.
  • Despite these court orders, violations of the 2012 Kerala Captive Elephants (Management and Maintenance) Rules continue, with captive elephants subjected to extreme conditions and stress.

Conditions Leading to Stress:

• Captive elephants are often chained, subjected to longhoursofstanding, and forced to participate in demanding ceremonies, all of which contribute to high stress levels.
  • A study on the physiological effects of captivity found that stress hormones were more concentrated in elephants that were heavily restricted in movement or worked longer hours, further supporting the argument for improved welfare standards.

Challenges in Breeding and Sourcing Elephants:

• Elephants in captivity are often sourced from the wild, with males in musth (heat) turning aggressive and requiring isolation, while captive females in estrus are used in attempts to breed them.
  • There are challenges in sourcing elephants from the wild, and breeding them in captivity is not straightforward. As a result, the demand for elephants in temples continues to feed the cycle of sourcing elephants from wild populations.

Current Government Response:

• The Indian government has expressed concern over the misuse of microchips for identifying domestic elephants, leading to a decision that DNA testing should be the primary method for identifying captive elephants’ origins.
  • A project mapping the genotypes of all captive elephants in India has begun, with 270 animals profiled in the first six months, aiming to identify and regulate captive elephant populations more effectively.

Cultural and Legal Tensions:

• There is a persistent tension between preserving cultural practices involving elephants and ensuring the welfare and safety of the animals.
  • Some argue that the capture and use of elephants for religious ceremonies are deeply ingrained in tradition, while animal rights activists stress the need for a more humane approach.

Future Considerations:

• The Kerala government and the Supreme Court are being called to take stronger actions to balance religious traditions with animal welfare and safety.
  • There is a need for stricter enforcement of existing laws and regulations to protect elephants, along with a reevaluation of the role of elephants in traditional ceremonies.

Inflation Eases to 4-Month Low of 5.22%, but RBI Remains Cautious on Rate Cuts

Context : Inflation Trends

• Retail Inflation: India’s retail inflation moderated to 5.22% in December 2024, a four-month low, down from 5.48% in November.
  • Food Inflation: The food inflation rate decreased to 8.39% in December from 9.04% in November, driven by a reduction in prices of pulses and vegetables.
  • Core Inflation: Core inflation (non-food, non-fuel) inched lower to 3.6%, indicating subdued demand conditions in the economy.

Relevance : GS 3(Economy )

Sector-Specific Inflation:

• Food & Beverages: The food and beverages segment, accounting for 45.86% of the total Consumer Price Index (CPI) weight, saw a reduction in inflation from 8.20% in November to 7.69% in December.
  • Vegetables: Inflation for perishables like vegetables decreased significantly from 29.33% in November to 26.56% in December.
  • Cereals and Pulses: The inflation rate for cereals fell to 6.51% from 6.88% in November, while pulses saw a decline to 3.83% from 5.41%.
  • Milk & Dairy: Inflation for milk and dairy products slightly moderated to 2.80% from 2.85%.
  • Fuel and Oils: Inflation for oils and fats rose to 14.6%, the highest in three months, signaling potential concerns over fuel-related price pressures.

RBI’s Response and Outlook:

• Monetary Policy Caution: Experts suggest the RBI will likely pause on interest rate cuts in its February 2025 policy meeting, despite inflation showing signs of moderation. The RBI is expected to wait for clearer signs of long-term inflation control before initiating rate cuts.
  • Rate Cut Timing: There is speculation that the RBI may begin the rate cut cycle in April 2025, contingent on ongoing global economic conditions and domestic inflation trends.
  • Global Pressures: The U.S. Federal Reserve’s policy decisions and depreciation pressures on the Indian rupee may influence the RBI’s actions, with global uncertainties weighing on any preemptive rate cut decisions.

Factors Influencing Inflation:

• Rabi Sowing: Strong rabi sowing prospects are expected to help in further cooling off food inflation in the coming months, as agricultural output improves.
  • Food Inflation: Despite easing in December, food inflation remains a significant concern, averaging 8.4% for the current fiscal year, higher than the 7.5% target for fiscal 2024. Elevated food inflation continues to be a key challenge for the economy.

Future Outlook:

• Subdued Demand: The RBI and experts emphasize the importance of managing demand and inflation expectations. While inflation is expected to ease, the persistence of elevated food prices and the ongoing global economic uncertainty will likely keep inflation above the RBI’s target range for some time.
  • Cautious Approach: Analysts predict the RBI will take a cautious approach to rate cuts, balancing inflation control with broader economic stability, especially with expectations of a slower global economic recovery.

Expert Opinions:

• Ind-Ra and HDFC Bank: Economists from India Ratings & Research and HDFC Bank argue that while current inflation trends are promising, the RBI will wait for further clarity before adjusting rates, particularly given the pressure on food prices and global economic conditions.
  • Crisil’s Perspective: Crisil’s senior economist highlighted that while the inflation trend is positive for monetary policy, elevated food inflation remains a critical concern for the RBI in maintaining price stability.