Editorials/Opinions Analysis For UPSC 20 July 2023

Editorials/Opinions Analysis For UPSC 20 July 2023

Contents

1. Genetically Modified Crops in India: Issues
2. India-UAE Trade Deal: Improving Trade and Remittance

Genetically Modified Crops in India: Issues

Context

• India has had a heated and continuous controversy around genetically modified (GM) crops for the past 20 years. Environmentalists, scientists, farmers, and members of the higher court have all expressed serious concerns regarding the necessity, safety, and efficacy of GM food.
• Notably, a group of activists has recently petitioned the Supreme Court with their grievances, pleading for a ban on the growth of genetically modified (GM) food crops, with a focus on the Dhara Mustard Hybrid-11 (DMH-11) type. They support the prohibition for a variety of reasons, including the safety, environmental impact, and socioeconomic repercussions of using GM crops.

Relevance

GS Paper 3 – Science and Technology – Bio-technology

Mains Question

Examine the importance of the debates around GM mustard, Bt cotton, and Bt brinjal in India. A discussion of the GEAC’s (Genetic Engineering Appraisal Committee) role in approving GM crops and the latest exception for genome-edited crops is required. Examine how this choice will affect biotechnology research. (250 Words)

GM Mayonnaise

• The DMH-11 variety of genetically modified mustard developed by the Delhi University Centre for Genetic Manipulation of Crop Plants has generated intense and ongoing discussion about GM crops in India over the past 20 years.
• Biotechnologists randomly introduce particular genes into plants’ DNA as part of the process of creating GM crops. This genetic engineering aims to improve particular traits or properties of the crop.
• The commercial cultivation of the genetically modified variety of DMH-11 mustard was authorised by the Genetic Engineering Appraisal Committee (GEAC), which assesses requests relating to the discharge of genetically engineered organisms and products into the environment.
• The Environment Protection Act has given the GEAC the authority to impose penalties for the release of GM organisms or goods.
• Notably, mustard is a crucial crop in India because it is used to produce the majority of the nation’s edible oil. In light of the potential effects of the introduction of GM mustard on agriculture, the environment, and the economy, this increases the relevance and implications of doing so.

What Problems Are There With GM Mustard?

• Because GM mustard is a herbicide-tolerant crop, farmers and activists are worried that using dangerous chemicals on the plant could have a severe influence on consumer health. There are concerns that such cultivation methods may not be environmentally sustainable and may not be suitable for India’s different agricultural conditions.
• Environmentalists, scientists, MPs, farmers, consumers, and members of the higher court are just a few of the groups that have questioned the need for genetically modified (GM) food as well as its efficacy and safety.
• Committees involved with GM mustard have called attention to fundamental flaws in the regulatory framework and emphasised the necessity of exercising utmost caution. Members of these committees have also called attention to problems with the evaluation of GM crops’ safety.
• The government has not made the entire biosafety document on GM mustard publicly available, which fuels criticism. Further aggravating the situation, the government has contested the designation of GM mustard as a herbicide-tolerant (HT) crop.

How do GM crops work?

Plants that have undergone genetic engineering to add specific alterations to their DNA are known as genetically modified crops, or GMOs.The goal of genetic modification is to give the plant new qualities that do not exist naturally in the species.By increasing the crop’s nutrient profile and resistance to particular pests, diseases, and environmental stresses, these improvements hope to raise the quality and output of food crops.

Indian GM Crops

• Bt Cotton: Bt cotton is a genetically modified plant that has two extra genes from the Bacillus thuringiensis (Bt) soil bacteria. These genes allow the plant to create a protein that is poisonous to the pink bollworm, a common insect problem. The only GM crop that is legal to grow in India is Bt cotton.
• Contrary to conventional Bt cotton, a variety of Bt cotton has been created by inserting a second gene from a different soil bacterium. The plant now has resistance to the common pesticide glyphosate thanks to this extra gene.
• Bt Brinjal: This genetically altered fruit and vegetable contains a gene that protects against fruit and shoot borer infestations. The plant can successfully defend itself because to this genetic modification.
• GM Mustard (DMH-11): Deepak Pental from the South Campus of the University of Delhi is one of the scientists that created the genetically altered mustard variety known as DMH-11. This GM mustard is designed to allow cross-pollination in the crop, as opposed to naturally occurring self-pollination.
• Global Variants: Genetically modified maize, canola, and soybean varieties are widely accessible and grown all over the world.

Benefits of GM Crops

1. Enhanced Productivity and Higher Farmer Income: GM crops help enhance agricultural output, which raises farmers’ incomes.
2. Lessened Need for Chemical Pesticides and Insecticides: GM crops can reduce the need for chemical pesticides and insecticides by adding natural pest resistance traits, which is good for the environment and for people’s health.
3. Addressing Food Availability: Higher yields from GM crops help feed populations that are expanding quickly, resulting in better food availability.
4. Better Land Use: The improved productivity of GM crops allows for higher yields to be produced on smaller plots of land, resulting in more effective use of agricultural resources.

The downsides of GM crops

1. The genetic alterations in GM crops might cause the dominance of particular features, favouring some organisms and potentially upsetting ecosystems and biodiversity. This is one of the disadvantages of GM crops.
2. Increased Farming Costs and Marketization: The use of GM crops may increase farm costs and subject agriculture to forces of the market aimed at maximising profits, which may result in unethical behaviour.
3. Risks to Farmers, the Environment, and International Trade: The introduction of transgenic crops presents hazards to farmers, the environment, and the dynamics of international trade.
4. Safety Evaluation Limitations: Many of the unfavourable effects connected to GM crops are not sufficiently covered in the present safety analyses.
5. Insufficient Risk Assessment: The regulatory framework for GM crops in India has not undergone a thorough assessment of the potential dangers unique to Indian settings. This raises questions about how effective the current regulatory framework is.

Genetically modified crops’ legal status in India

• The highest authority in India for approving the commercial distribution of genetically modified (GM) crops is the Genetic Engineering Appraisal Committee (GEAC). The GEAC authorised the commercial production of Bt cotton in 2002.Under the Environmental Protection Act of 1989, using unapproved GM varieties is punishable by harsh fines and prison terms that might total five years.
• In a recent significant move, the Central government decided to exempt a few genome-edited crops from the strict laws that apply to genetically modified products. This exemption is anticipated to make it easier to conduct additional study and development in this field.
• The Food Safety and Standards Authority of India (FSSAI) issued an order on February 8, 2021, establishing an allowed limit of 1% for genetically modified organisms in such items, in response to GMO concerns over imported food crops.

Way Forward

When it comes to GM crops, governments should put an emphasis on safety testing, strong legislation, and transparent food labelling. Responsible biotechnology research must be supported by a clear industrial plan, and public involvement encourages enlightened debate. In order to solve issues with food security, GM crops will be deployed responsibly and sustainably by balancing innovation with risk mitigation.

India-UAE Trade Deal: Improving Trade and Remittance

Context

The Reserve Bank of India (RBI) and the Central Bank of the United Arab Emirates (UAE) recently signed two significant Memoranda of Understanding (MoUs) to strengthen economic connections between the two countries. This occurred during Prime Minister Narendra Modi’s visit to the UAE. These agreements have the potential to have a substantial impact on trade volume, remittance flows, and financial inclusion. They aim to boost cross-border trade in local currencies and improve the efficiency of payment systems.

Relevance: 

GS Paper 2: Bilateral relations

Mains Question

What advantages would the Local Currency Settlement System (LCSS) between India and the UAE provide to exporters and importers in both nations, and how will it advance bilateral commerce and investment?(150 words)

India UAE Relationship

• The United Arab Emirates (UAE) opened an embassy in Delhi, and India responded by opening an embassy in Abu Dhabi the following year. India and the UAE first established diplomatic relations in 1972. The visit of Prime Minister Narendra Modi to the UAE in August 2015, which signalled the start of a new strategic alliance, significantly improved the two nations’ bilateral relations. During his visit to the UAE in August 2019, PM Modi received the Order of Zayed, the highest honour bestowed by the country in honour of the deepening ties.
• Economic and commercial ties have existed between India and the UAE for centuries. The dynamics of trade dramatically changed in 1962 after oil was discovered in the United Arab Emirates. Bilateral trade was further driven by the rise of Dubai as a major regional trading hub and India’s economic liberalisation effort in the early 1990s. Currently, commerce between the two countries is around US$ 72 billion, with the UAE ranking as India’s second-largest export market and third-largest trading partner. Over $12 billion has been invested by the UAE in India through Foreign Direct Investment (FDI), which has grown over time.
• Cultural Relations: India’s participation as the Guest of Honour Country at the Abu Dhabi International Book Fair in April 2019 is evidence that the UAE values Indian culture. There is a sizable audience for Indian films, television, and radio in the United Arab Emirates. A number of yoga and meditation centres are growing in the UAE, and the Emirati community enthusiastically participates in India’s annual International Day of Yoga celebrations.
• Technology Partnerships: India and the UAE have entered into numerous agreements relating to digital innovation and technology. Plans call for cooperation on missions like the Red Moon mission between the UAE Space Agency (UAESA) and the Indian Space Research Organisation (ISRO). Indian professionals have been drawn to the UAE by its “golden visa” residency permits for professionals in high-end technical fields; former ISRO chief K. Radhakrishnan has joined the UAE’s space agency.
• Defence and Security Cooperation: Under the comprehensive strategic partnership formed in 2017, defence cooperation between India and the UAE has been progressively expanding, with high-level exchanges, port visits by navy ships, and yearly defence talks. To improve bilateral defence cooperation, military commanders have visited both nations and both take part in military drills.
• The UAE has served as a mediator between India and Pakistan by arranging meetings for participants, such as NSA Doval and Pakistani military leaders.
• Indian Community: With 3.4 million members, the Indian expatriate population in the UAE is the largest ethnic group, making up roughly 35% of the total population.
• Relationship difficulties include the most recent turmoil brought on by Indian people’ divisive remarks against the Prophet Mohammed.
  • Maintaining a balance in geopolitics between UAE links with China and India’s ties to Iran.
  • Disagreements over energy pricing, with India calling for a price cap as a big oil consumer and the UAE taking a different position as an OPEC nation.
  • The requirement to revise the aviation services contract in order to take into account UAE’s demand for more flights to India.
  • The treatment of minorities in India and events like the CAA protests and the Hijab Ban have generated concerns in Gulf countries.
  • Indians are not granted citizenship in the UAE, and labour camp conditions have been a cause of worry.In the past, legal concerns have made it difficult for foreign investments to enter India, hence streamlined procedures and processes are required.
• The relationship between India and the UAE has developed into a strategic partnership with significant defence, commercial, and technological collaboration. Despite obstacles, both nations continue to seek to deepen their relationships and resolve shared issues. The sizeable Indian expatriate population in the UAE is crucial to developing intercultural exchanges and advancing the development of both countries.

Local Currency Settlement System (LCSS)

To facilitate exchanges between the Indian rupee (INR) and UAE dirham (AED), the first MoU focuses on developing a Local Currency Settlement System (LCSS). The system includes all allowed and current capital account transactions, giving exporters and importers a solid foundation on which to carry out business in their respective native currencies.

Benefits of LCSS Implementation:

• Reducing Exchange Rate Risks: By denominating export contracts and invoicing in local currencies, exporters are able to offer more competitive pricing since the exchange rate risks associated with utilising a third currency as a standard are reduced.Additionally, it might open up more opportunities for collaboration between the banking systems of the two nations, boosting commerce and economic activity in both. Mineral fuels, oils, and products, bituminous materials, and mineral waxes are the main exports from India to the UAE, with pearls, precious stones and metals, electrical gear and equipment coming in second and third, respectively. India imports a large amount of petroleum crude and goods related to that industry. Increasing to $85 billion in 2022, India-UAE trade. Additionally, in FY2022-23, the UAE was India’s second-largest export market and third-largest trading partner. The UAE’s second-largest trading partner was India, on the other hand.
• Stabilising the INR-AED Exchange Market: By increasing liquidity and enabling more seamless cross-border transactions, the promotion of local currencies contributes to the growth of the INR-AED foreign exchange market.
• Increasing Remittances and Investments: The LCSS is anticipated to encourage remittances and investment between India and the UAE. Due to the ability to transact in one’s own currency, it encourages more cross-border investment.
• Optimising Transaction Costs: With streamlined transaction costs and decreased settlement time, the LCSS will make cross-border transactions, including remittances, more efficient and cost-effective.

Integration of UPI and IPP for Efficient Fund Transfers:

 Linking Payment SystemsThe second MoU focuses on connecting the UAE’s Instant Payment Platform (IPP) and India’s Unified Payments Interface (UPI). Additionally, in order to promote smooth communication and transactions between various payment service providers, the agreement calls for the interlinking of two card switches, RuPay switch and UAESWITCH.

Benefits of Card Switch Linkage with UPI-IPP:

• Quick, Easy, and safe Cross-Border Fund Transfers: Users in India and the UAE may make quick, easy, and safe cross-border fund transfers thanks to the combination of UPI and IPP. The ease of conducting business between the two countries will increase thanks to this feature, which will promote economic cooperation.
• Increased Remittance Flows Remittances are frequently burdened by high transaction fees and exchange rate margins, especially for low-wage workers. These issues are resolved by the UPI-IPP linkage, which improves the effectiveness and affordability of remittance flows for migrant workers.
• Increasing Payment Options and Cooperation: By encouraging cooperation between India’s and the UAE’s banking systems, the interlinking of payment systems strengthens economic relations and promotes growth in trade and economic activity.
• Financial Inclusivity for Non-Resident Indians (NRIs): The UPI ecosystem is made more inclusive by incorporating non-resident accounts with international numbers. NRIs can actively participate in India’s digital payment system, including those who live in the UAE, which improves cross-border financial integration.

Other current projects and remittance trends include:

• Partnership with PayNow in Singapore: To enable cross-border real-time money transactions, the National Payments Corporation of India (NPCI) partnered with PayNow in Singapore in March. Remittances were intended to become more effective and efficient through this strategic cooperation. According to representatives of the Monetary Authority of Singapore (MAS), this partnership would result in remittances becoming 10% less expensive, which would help both Indian migrants in Singapore and their relatives back home.
• Onboarding of Non-Resident Accounts into the UPI Ecosystem: In January, the NPCI approved the onboarding of non-resident accounts with international numbers from ten nations, including Singapore, Australia, Canada, Oman, Qatar, the United States, Saudi Arabia, the United Arab Emirates, the United Kingdom, and Hong Kong. By enabling non-resident Indians to actively engage in India’s digital payment system, this action increased financial inclusion.

Remittance Trends and the World Bank’s Observation:

• The World Bank’s 2023 Migration and Development Brief outlined important developments in India’s remittance inflows. Remittances to India increased significantly in 2022, rising by a whopping 24.4% to a total of $111 billion. This shows that the Indian diaspora’s financial support for their families back home in India has not decreased. The fact that this sum accounted for 3.3% of India’s GDP highlights the importance of remittances to the nation’s economy.
• A rise in remittance inflows from Gulf Cooperation Council (GCC) nations, which account for about 28% of all remittances to India, was also mentioned in the report. High energy prices, which favoured the employment and salaries of less-skilled Indian migrants in GCC countries, were among the factors cited as contributing to this development. Additionally, the GCC governments’ unique initiatives to reduce the inflation of food prices aided migrants’ ability to send money, which increased the flow of remittances to India.
• According to the research, high-skilled and primarily high-tech Indian migrants in nations like the United States, the United Kingdom, and Singapore are responsible for around 36% of all remittances. This shows how significantly qualified Indian professionals who work abroad contribute to India’s remittance inflows.

Conclusion

The RBI and the Central Bank of the UAE signed two key MoUs to assist the India-UAE trade deal, which has the potential to significantly deepen economic connections and advance financial inclusion. By encouraging the use of local currencies in cross-border transactions, the LCSS will reduce exchange rate risks and increase investments and remittances. In addition, the linkage of payment systems will facilitate fund transfers between India and the UAE and improve remittance flows, which will be advantageous for the economies of both countries. These strategic agreements represent an important step in promoting prosperity, cooperation, and economic progress between India and the UAE.