India – Spain Bilateral Relations
Syllabus: GS2/IR
Context
- The Spanish Prime Minister paid a State Visit to India.
About
- PM Sanchez and Prime Minister Modi jointly inaugurated the Final Assembly Line Plant of C-295 aircraft co-produced by Airbus Spain and Tata Advanced Systems Ltd. at Vadodara.
- This plant will roll out the first ‘Made in India’ C295 aircraft in 2026, out of a total of 40 aircrafts to be manufactured in India.
- Airbus Spain is also delivering 16 aircrafts in ‘fly-away’ condition to India, out of which 6 have already been delivered to the Indian Air Force.
- India and Spain signed several memorandums of understanding (MOUs) during the bilateral meeting.
Overview of India-Spain Bilateral Relations
- Diplomatic relations between India and Spain were established in 1956.
- Since then, both countries have engaged in high-level visits and discussions to strengthen their political ties.
- Economic Relations: Spain is India’s 6th largest trade partner in Europe. Bilateral trade reached US$ 9.9 billion in 2023. India´s exports stood at US$ 7.17 billion while imports stood at US$ 2.74 billion during the same period.
- India-Spain Joint Commission on Economic Cooperation (JCEC) was set up under the 1972 Trade and Economic Cooperation Agreement and has since met twelve times.
- Investment: Spain ranks as the 16th largest foreign investor in India, with cumulative FDI totaling US$3.94 billion as of December 2023.
- Defence: Spain has emerged as a prominent member in Defence diversification and modernization for India.
- The procurement of 56 C295 aircraft from Airbus Spain represents the first Make in India project in the defence aircraft sector.
- Tourism in both directions is growing, with 250,000 Indian tourists travelling to Spain every year, and 40,000 Spanish tourists visiting India.
- The Spain-India Council Foundation (a private non-profit organization that functions in coordination with the Spanish Ministry of Foreign Affairs) organized the 3rd Spain-India Forum in 2023, in collaboration with Observer Research Foundation (ORF).
- This Forum serves as a crucial tool for promoting bilateral relations between Spain and India.
- Multilateral Cooperation: Both nations collaborate in international forums, including the United Nations, G20 and International Solar Alliance (ISA) addressing global challenges such as climate change, terrorism, and sustainable development.
- Diaspora: The Indian diaspora in Spain numbers around 75000, concentrated in Catalonia, Valencia, Madrid and Canary Islands.
Way Ahead
- India and Spain’s evolving economic and diplomatic relationship holds significant promise, with key areas of cooperation including trade, investment, renewable energy, infrastructure, and defense.
- Spanish expertise in renewable energy, infrastructure, and environmental technology complements India’s expanding market.
- Initiatives like “Make in India” and “Digital India” create favorable conditions for further collaboration, encouraging foreign direct investment.
- As both countries continue to leverage their mutual strengths, the future of India-Spain bilateral ties looks bright, with enhanced cooperation.
Brazil Decides Not to Join China’s Belt and Road Initiative
Syllabus: GS2/IR
Context
- Brazil recently decided against joining China’s multi-billion-dollar Belt and Road Initiative (BRI).
About
- This marks a major setback to China’s BRI after India’s refusal to endorse the mega project.
- Brazil has become the second country after India in the BRICS bloc to deny support.
- Brazil wants to take the relationship with China to a new level, without having to sign an accession contract.
- Joining BRI may fail to bring any tangible benefits for Brazil in the short term but could also make relations with the U.S.A more difficult.
| BRICS – BRICS is an acronym that refers to a group of five major emerging national economies: Brazil, Russia, India, China, and South Africa. 1. Later, Egypt, Ethiopia, Iran, and the United Arab Emirates were admitted as member states. – The term was originally coined by economist Jim O’Neill in 2001. – Summits: The governments of the BRICS states have met annually at formal summits since 2009. – BRICS countries come together to deliberate on important issues under the three pillars of: 1. political and security, 2. economic and financial and cultural and 3. people-to-people exchanges. – New Development Bank: Formerly referred to as the BRICS Development Bank, is a multilateral development bank established by the BRICS states. |
Belt and Road Initiative (BRI)
- China proposed the BRI in 2013 with the purpose of restoring the ancient Silk Route.
- The initiative aims to connect Asia with Europe and Africa, through a network of railways, highways, ports, airports, and other infrastructure projects with the intent to promote trade, investment, and economic growth in participating countries.
- China has presented the BRI as an open arrangement in which all countries are welcome to participate.
- So far, China has signed BRI cooperation agreements with more than 150 countries and 30 international organisations.
- The BRI comprises two main components: The Silk Road Economic Belt and the 21st century Maritime Silk Road.
- The Silk Road Economic Belt focuses on improving connectivity and cooperation between China and countries in Central Asia, Europe, and West Asia, while the 21st century Maritime Silk Road focuses on strengthening maritime cooperation between China and countries in Southeast Asia, South Asia, and Africa.
- The main portion of the required infrastructure build is expected to continue until 2035.
How does India view the BRI?
- Sovereignty Issues: The China–Pakistan Economic Corridor (CPEC) passes through the Pakistan-occupied Kashmir (PoK).
- India views this as a violation of its territorial integrity.
- Chinese Presence in IOR: The importance of the Indian Ocean for China has increased significantly due to its expanding trade, energy transport and investments.
- It started expanding its footprints in India’s neighbourhood through investments in various ports in Bangladesh, Pakistan, Sri Lanka and Myanmar.
- As commercial ports could be easily converted into military use, these developments have troubled Indian policymakers.
- Strained India- China Relations: Many negative developments in broader India-China ties (trade deficit, border tensions, etc.) have also affected India’s perceptions of the BRI.
- Debt Diplomacy: The BRI structure smacks of Chinese neo-colonialism. The projects is pushing smaller countries on the road into a crushing debt cycle, destroy the ecology and disrupt local communities.
- The debt traps are undermining their sovereignty and creating dependency on China.
Conclusion
- India was the first country to voice reservations and stood steadfast in its opposition to BRI.
- India is also vocal about its criticism of BRI projects stating they should be based on universally recognised international norms, good governance, and the rule of law and follow principles of openness, transparency and financial sustainability.
- The BRI can also be seen as China using its infrastructural, intellectual and financial advantage to forge stronger political ties with certain capital-importing countries.
- India is aware of these realities and also keen to determine its geopolitical interests in the Indian Ocean region.
India Remains Highly Dependent on Imports of Critical Minerals
Syllabus: GS 3/Economy
In News
- India’s Hunt for Critical Minerals report recently published by the Institute for Energy Economics and Financial Analysis (IEEFA)
India’s landscape
- India, the world’s third-largest energy consumer, is transitioning to a greener energy landscape driven by global climate commitments, reduced reliance on fossil fuels, and enhanced energy security.
- This shift relies heavily on critical minerals essential for renewable technologies like solar panels, wind turbines, electric vehicles, energy storage systems and also for defense and electronics.
- Challenges : India faces challenges in securing these minerals, including supply disruptions and geopolitical factors.
- India’s reliance on imports, particularly from China, poses risks, as highlighted by U.S.-China trade tensions in 2019.
- Ethical concerns, such as child labor in cobalt mining and environmental impacts, further complicate the mining landscape. India must establish policy frameworks to address these issues.
- Government Initiatives: The Indian government is actively working to improve domestic production through mining block auctions and the Critical Minerals Mission, which can enhance refining and processing capabilities.
- India has initiated a multi-pronged strategy to acquire critical minerals through international partnerships and domestic exploration.
Key Findings of recent report
- Focus: The report focuses on five critical minerals—cobalt, copper, graphite, lithium, and nickel—analyzing import dependency, trade dynamics, domestic availability, and price fluctuations.
- Import Dependency: : India heavily relies on imports for critical minerals essential for its energy transition, particularly lithium, cobalt, and nickel, with 100% reliance on imports for these minerals.
- Demand for these minerals is expected to more than double by 2030, while domestic mining production will take over a decade to develop.
- Minerals at Risk: High import dependency exists for graphite (natural and synthetic), lithium oxide, nickel oxide, copper cathodes, nickel sulphate, cobalt oxide, and copper ores, some of which come from geo politically risky countries.
- Geopolitical Risks: Countries like Russia, Madagascar, Indonesia, Peru, and China pose high geopolitical risks for sourcing critical minerals.
- Imports of lithium oxide and nickel oxide are mainly from Russia and China, which poses trade risk
- India is particularly reliant on China for synthetic and natural graphite .
- For copper and nickel, India mainly imports from Japan and Belgium, and the report suggests diversifying suppliers by looking at the U.S., which is a significant copper producer.
Suggestions
- India aims for 500 GW of non-fossil fuel-based electricity capacity by 2030, with a current capacity of 201 GW.
- Achieving net-zero emissions by 2070 may require installing around 7,000 GW of renewable energy.
- Therefore ,Government support in technology development and funding is vital for promoting domestic production of critical minerals, essential for meeting renewable energy targets.
- The report emphasizes the need for India to develop a well-crafted import strategy to mitigate trade risks and strengthen international relationships for securing essential minerals.
- India can explore investment opportunities in resource-rich, friendly nations, such as Australia, Chile and some African countries like Ghana and South Africa.
Impact of Atma Nirbhar Bharat Initiative on India’s Defence Sector
Syllabus: GS3/ Defence
Context
- The Atma Nirbhar Bharat initiative has transformed India’s defense sector, with a surge in domestic defense production and exports.
Defense sector of India
- According to the Defence Ministry, the value of defense production in India has gone up to ₹1,26,887 crore in FY 2023-24, reflecting a growth of 16.7% over the defense production of FY 2022-23.
- Of the total value of production in 2023-24, about 79.2% has been contributed by the Public Sector and 20.8% by the private sector.
- India’s defense budget of US$ 74.7 billion ranked fourth highest globally in 2024.
- Defense exports was ₹21,083 crore in FY 2023-24, reflecting a growth of 32.5% over the last fiscal when the figure was ₹15,920 crore.
- India has set a target of US$ 6.02 billion worth of annual defense exports by 2028-29.
- India has developed major defense platforms such as the Dhanush Artillery Gun System, Advanced Towed Artillery Gun System (ATAGS), Main Battle Tank Arjun, Light Combat Aircraft Tejas, and submarines etc.
Advantages of growth in defense production
- Self-defense: The presence of hostile neighbors like China and Pakistan makes it necessary for India to boost its self-defense and preparedness.
- Strategic advantage: Self-reliance will make India’s geopolitical stance strategically stronger as a net security provider.
- Technological advancement: Advancement in the defense technology sector will automatically boost other industries hence catapulting the economy further ahead.
- Economic drain: India spends around 3% of GDP on defense and 60% of that is spent on imports. This leads to an immense economic drain.
- Employment: Defence manufacturing will need the support of numerous other industries which generate employment opportunities.
Concerns
- Narrow Private Participation: Private sector participation in the defense sector is constrained by the lack of a conducive financial framework, that means our defense production is unable to benefit from modern design, innovation, and product development.
- Lack of Critical Technology: Lack of design capability, inadequate R&D investment, inability to manufacture major subsystems and components hamper indigenous manufacturing.
- Lack of Coordination Between Stakeholders: India’s defense manufacturing capability is hindered by overlapping jurisdictions between the Ministry of Defence and the Ministry of Industrial Promotion.
Government initiatives to Increase Defence EXport
- IDR Act: Defence Products list requiring Industrial License has been rationalized and manufacture of most of parts or components does not require Industrial License.
- The initial validity of the Industrial Licence granted has been increased from 03 years to 15 years with a provision to further extend it by 03 years on a case-to-case basis
- Government schemes such as iDEX (Innovations for Defence Excellence) and DTIS (Defence Testing Infrastructure Scheme) to enable innovation within the Defence & Aerospace ecosystem.
- FDI in the Defence Sector has been enhanced up to 74% through the Automatic Route and 100% by Government Route, to promote export and liberalize foreign investments.
- The government has established 2 dedicated Defence Industrial Corridors in the States of Tamil Nadu and Uttar Pradesh to act as clusters of defense manufacturing that leverage existing infrastructure, and human capital.
- Defence Production and Export Promotion Policy 2020 (DPEPP): The Ministry of Defence (MoD) has formulated a draft DPEPP 2020 as a guiding document of MoD to provide a focused, structured, and significant thrust to defense production capabilities of the country for self-reliance and exports.
- In 2021, Defence Acquisition Council (DAC) boosted the ‘Make in India’ initiative by Acceptance of Necessity (AoN) — to capital acquisition proposals worth US$ 1.07 billion (Rs. 7,965 crore) — for modernisation and operational needs of armed forces.
Way Ahead
- Green Channel Status Policy (GCS) has been introduced to promote and encourage private sector investments in defense production to promote the role of private sector in defense production.
- India has around 194 defense tech startups building innovative tech solutions to empower and support the country’s defense efforts.
- With the government’s emphasis on easing restrictions on foreign investment in order to achieve India’s goal of an Atmanirbhar Bharat, the growth trajectory of the Indian defense sector remains strong.
Cyber Fraud in Banking Transactions
Syllabus: GS3/Cyber Security
Context
- According to a projection made by the Indian Cyber Crime Coordination Centre (I4C), Indians are likely to lose over ₹1.2 lakh crore (nearly 0.7% of the country’s GDP) over the next year due to cyber frauds.
Surges of Cyber Fraud in Banking Transactions
- In the fiscal year 2024, India witnessed a dramatic surge in cyber fraud related to banking transactions, with incidents tripling compared to the previous year.
- According to the Reserve Bank of India’s (RBI) annual report, the number of frauds in the card and internet category skyrocketed to 29,082, accounting for 80% of all banking frauds.
- It represents a staggering 334% increase from the 6,699 incidents reported in fiscal year 2023.
| Types of Cyber Fraud – Phishing Attacks: Fraudsters use deceptive emails and websites to steal sensitive information such as passwords and credit card details. – Identity Theft: Criminals obtain personal information to impersonate individuals, leading to financial and reputational damage. – Online Scams: These include lottery scams, job frauds, and fake online shopping websites that trick victims into parting with their money. |
Key Factors Behind the Surge
- Increased Digitisation: The rapid adoption of digital payment methods, including credit cards and online banking, has created more opportunities for cybercriminals.
- As more people rely on these digital channels, the vulnerabilities within these systems have become more apparent.
- Sophisticated Cyber Attacks: Cybercriminals have become more adept at exploiting weaknesses in digital payment systems.
- Techniques such as phishing, identity theft, and the use of malicious software have become more prevalent, allowing fraudsters to gain access to sensitive personal information.
- Behavioural Vulnerabilities: Many frauds occur due to human error, such as sharing passwords or falling for phishing scams.
- Senior citizens, in particular, are often targeted due to their lack of familiarity with digital security practices.
Financial Impact
- The financial impact of these frauds has been significant. In fiscal year 2024, the total value of card and internet frauds reached ₹1,457 crore, the highest amount recorded in the past six years.
- It highlights the need for enhanced security measures and greater awareness among consumers.
Regulating Cyber Fraud in India
- With the rapid digitisation of services and the increasing reliance on the internet, cyber fraud has emerged as a significant threat in India.
- It involves a comprehensive legal framework designed to prevent, detect, and penalise cybercrimes.
Key Legislative Measures
- Information Technology Act, 2000 (IT Act): It provides legal recognition for electronic transactions and aims to facilitate e-commerce and addresses various cybercrimes, including hacking, identity theft, and cyber terrorism. Key sections relevant to cyber fraud include:
- Section 66C: Punishment for identity theft.
- Section 66D: Punishment for cheating by personation using computer resources.
- Section 43: Penalty for damage to computer systems.
- Indian Penal Code (IPC), 1860: It includes provisions that address cyber fraud like:
- Section 420: Cheating and dishonestly inducing delivery of property.
- Section 468: Forgery for the purpose of cheating.
- Section 471: Using as genuine a forged document.
- Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021: These rules mandate intermediaries, such as social media platforms, to exercise due diligence and ensure the safety and security of users.
- They require intermediaries to report cyber incidents to the Indian Computer Emergency Response Team (CERT-In).
Regulatory Bodies and Initiatives
- Indian Cyber Crime Coordination Centre (I4C): Established under the Ministry of Home Affairs, I4C aims to combat cybercrime in a coordinated manner.
- It provides a platform for law enforcement agencies to collaborate and share information on cybercrime.
- Cyber Swachhta Kendra: This initiative by CERT-In focuses on creating awareness about cybersecurity and providing tools to detect and remove malicious software from devices.
- National Cyber Security Policy, 2013: It outlines strategies to protect the public and private infrastructure from cyber threats. It emphasises the need for a secure and resilient cyberspace.
- National Cyber Crime Reporting Portal: It allows citizens to report various types of cybercrimes, including financial fraud and crimes against women and children.
Challenges in Combating Cyber Fraud in India
- Rapid Technological Advancements: The fast pace of technological change makes it difficult for laws to keep up with new types of cybercrimes.
- Resource Constraints: Many organisations, especially small and medium-sized enterprises (SMEs), lack the resources to implement robust cybersecurity measures. It makes them easy targets for cyber criminals.
- Coordination Among Agencies: Effective cybersecurity requires coordination among various government agencies and departments, private sector entities, and international partners. However, it is often lacking, leading to fragmented efforts and inefficiencies.
- Jurisdictional Issues: Cybercrimes often transcend national borders, complicating the enforcement of laws.
- Lack of Awareness: Many individuals and businesses are unaware of the risks associated with cyber fraud and the measures to prevent it.
Measures to Combat Cyber Fraud
- Enhanced Security Protocols: Banks and financial institutions need to implement stronger security protocols to protect against cyber attacks.
- It includes multi-factor authentication and advanced encryption techniques.
- Regulatory Oversight: The RBI and other regulatory bodies must continue to monitor and enforce compliance with cybersecurity standards.
- Regular audits and assessments can help identify and mitigate potential risks.
- Consumer Education: Educating consumers about the risks of cyber fraud and how to protect themselves is crucial.
- Awareness campaigns can help individuals recognize and avoid common scams.
Conclusion
- The surge in cyber fraud in fiscal year 2024 underscores the urgent need for robust cybersecurity measures in the banking sector.
- As digital transactions continue to grow, both financial institutions and consumers must remain vigilant to protect against these evolving threats.
