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Daily Current Affairs

3-May -2024- Top News of the Day

1. Removing exotic plants will ensure food for wild animals, finds study

(Source – The Hindu, Section – States, Page – 3)

Topic: GS3 – Environment – Environmental pollution and degradation

Context

● A recent study by the Kerala State Forest Protective Staff Organisation highlights the necessity of removing exotic plants such as Acacia mearnsii and eucalyptus from Chinnakkanal, Munnar, to ensure food for wild elephants.

● The region’s landscape is dominated by West Indian Lantana (kongini), hindering the growth of other species and limiting animal access.

● With 19 wild elephants, the area faces significant human-elephant conflict.

Analysis of the news:

A study by the Kerala State Forest Protective Staff Organisation (KSFPSO) suggests removing exotic plants like Acacia mearnsii and eucalyptus from forest areas to ensure food for wild elephants in Chinnakkanal, Munnar.

Exotic Plant Species

What Are Exotic Plant Species?

● Exotic Plant Species: Exotic plant species, also known as non-native or alien species, are plants that have been introduced to a region or ecosystem where they are not native, often due to human activities such as trade, agriculture, or landscaping.

● Invasive Plant Species in India: Some invasive plant species in India include Lantana camara, Prosopis juliflora, Parthenium hysterophorus, Eichhornia crassipes (water hyacinth), and Chromolaena odorata (commonly known as Siam weed).

A ground forest team, including deputy rangers and watchers, interacted with locals and panchayat officials to mitigate human-elephant conflict.
The state department emphasises the importance of converting areas with exotic trees to natural grasslands to provide food and water for wild elephants.
West Indian Lantana (kongini) is a major problem in the Chinnakkanal landscape, inhibiting the growth of other species and restricting animal access.
The region is home to 19 wild elephants, including two tuskers and various male and female elephants.
An expert panel appointed by the High Court recommends reopening the elephant corridor from Anayirankal to Old Devikulam in Munnar to facilitate elephant movement and address human-animal conflict.

Issues Over Exotic Plant Species

Issues Over Exotic Plant Species:

● Competition with Native Species: Exotic plant species often outcompete native flora for resources such as sunlight, water, and nutrients, leading to the decline or displacement of indigenous plants.

● Alteration of Ecosystem Dynamics: Invasion by exotic plants can alter ecosystem dynamics, disrupt food webs, and reduce habitat suitability for native fauna, affecting biodiversity and ecosystem functioning.

● Loss of Genetic Diversity: Exotic species introductions may lead to genetic homogenization and loss of unique genetic traits within native plant populations, reducing their resilience to environmental stressors.

● Increased Fire Risk: Some exotic plant species are highly flammable, increasing the risk and intensity of wildfires in affected areas, further threatening native vegetation and wildlife.

● Spread of Invasive Traits: Exotic plants with invasive traits can rapidly spread and colonise new habitats, forming monocultures and outcompeting diverse native ecosystems.

Way Forward:

● Preventative Measures: Implement strict regulations on the import and trade of exotic plant species to prevent their introduction and spread into new environments.

● Early Detection and Rapid Response: Establish monitoring programs for early detection of invasive species and implement rapid response measures to control their spread.

● Restoration and Rehabilitation: Prioritize restoration efforts in areas affected by exotic plant invasions to restore native habitats and promote biodiversity conservation.

● Public Awareness and Education: Raise public awareness about the ecological impacts of exotic plant species and encourage responsible landscaping practices to avoid their introduction and spread.

● Research and Monitoring: Invest in research to better understand the ecology and behaviour of exotic plant species and their interactions with native flora and fauna, informing management strategies and policy decisions.

PYQ: (UPSC civil services prelims 2015)

Q. With reference to the International Union for Conservation of Nature and Natural Resources (IUCN) and the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), which of the following statements is/are correct? (2015)

1. IUCN is an organ of the United Nations and CITES is an international agreement between governments.

2. IUCN runs thousands of field projects around the world to better manage natural environments.

3. CITES is legally binding on the States that have joined it, but this Convention does not take the place of national laws.

Select the correct answer using the code given below:

(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

Ans: (b)

Practice Question: Assess the impact of exotic plants on biodiversity and wildlife, and propose management strategies. (150 Words /10 marks)

2. Why are Indian spices facing the heat?

(Source – The Hindu, Section – Text, Page – 10)

Topic: GS3 – Indian Economy – Effects of liberalisation on the economy

Context

● Several countries, including Singapore, Hong Kong, and the United States, are investigating potential contamination of spice mixes by Indian brands MDH and Everest, citing high levels of ethylene oxide.

● Concerns over health risks, previous recalls, and India’s response highlight the need for stringent safety measures to protect consumers and uphold the integrity of the spice trade.

Analysis of the news:

Investigation into Contamination of Indian Spice Mixes

Several countries, including Singapore, Hong Kong, and the United States, have initiated investigations into possible contamination of spice mixes sold by Indian brands MDH and Everest.
These investigations are in response to complaints regarding the presence of ethylene oxide (EtO) beyond permissible limits.

Countries Flagging Safety Concerns

On April 5, Hong Kong’s Centre for Food Safety suspended the sale of three MDH spice blends and one Everest spice mix due to high levels of ethylene oxide.
Singapore also ordered a recall of Everest spice mix, citing it as unfit for human consumption.
The U.S. Food and Drug Administration (FDA) is gathering additional information about the situation, while regulatory bodies in Maldives, New Zealand, Bangladesh, and Australia have announced similar plans.

Health Concerns Associated with Ethylene Oxide

Ethylene oxide, a prohibited pesticide, is used as a food stabiliser in spice mixes but can leave behind toxic residues.
Long-term exposure to ethylene oxide is associated with cancers like lymphoma and leukaemia.

More About Ethylene Oxide

● Ethylene oxide (EtO) is used as a sterilising agent and food stabiliser in various industries, including food processing.

● Health impacts include irritation of the eyes, skin, and respiratory system upon short-term exposure.

● Long-term exposure may lead to respiratory issues, neurological effects, and an increased risk of cancer, particularly leukaemia and lymphoma.

● EtO contamination in food can occur through fumigation or sterilisation processes.

● Commonly contaminated foods include spices, herbs, grains, nuts, and seeds.

● Regulatory bodies set permissible limits for EtO residues in food items to mitigate health risks.

● Chronic exposure to low levels of EtO in food has raised concerns about cumulative health effects.

● Proper handling, storage, and testing methods are essential to monitor EtO levels in food products.

● Consumers can reduce exposure by washing fruits and vegetables thoroughly and choosing certified organic or EtO-free products when possible.

History of Rejections in the U.S.

FDA’s import refusal report for 2023 shows instances of rejections due to salmonella contamination and misbranding.
MDH and Everest have had recalls in the past due to contamination issues.
India and Mexico were identified as the top sources of pathogen-based food import refusals by the U.S. Dept of Agriculture.

India’s Response and Corrective Measures

The Spices Board of India has initiated mandatory testing of consignments shipped to Singapore and Hong Kong.

The Spices Board of India

● Established in 1987 under the Spices Board Act.

● Headquartered in Kochi, Kerala, India.

● Functions under the Ministry of Commerce and Industry, Government of India.

● Responsible for the development and promotion of Indian spices globally.

● Regulates the export of spices from India.

● Provides certification, quality control, and research services.

● Offers technical assistance to spice growers and exporters.

● Facilitates market intelligence and trade data.

● Conducts training programs and workshops for stakeholders.

● Aims to enhance the competitiveness of Indian spices in the international market.

Guidelines have been issued for exporters to prevent EtO contamination, including testing at various stages and storage protocols.
The Food Safety and Standards Authority of India (FSSAI) has directed state regulators to collect samples of major spice brands for testing.

Challenges in Ensuring Food Safety in India

Operational challenges include India’s diverse food landscape and the lack of standardised record-keeping.
Logistic barriers include the insufficient number and uneven distribution of food testing labs across states.
Lack of transparency in FSSAI operations hinders efforts to meet safety standards and build trust.

Potential Impacts on India’s Spice Trade

The integrity and future of India’s spice trade are at stake, with potential losses to critical markets.
Farmers could be negatively impacted if companies reduce prices due to potential losses.
If regulators in China and the EU follow suit with regulatory actions, Indian spice exports could see a significant downturn, affecting a substantial portion of the country’s global spice exports.

Conclusion

The situation demands urgent attention to uphold the reputation of India’s spice trade and prevent potential losses to farmers and the entire ecosystem.
There is a need for stringent safety checks and regulatory measures to ensure the quality and safety of Indian spices in the global market.

Spices export from India

● India’s spice export is currently valued at $4 billion.

● The export value is projected to reach $10 billion by 2030.

● India is a leading player in the global spice industry.

● More than 75 spices are grown in India, contributing to its status as the “spice bowl of the world.”

● The World Spice Congress serves as a platform for stakeholders to discuss trade, sustainability, quality, and future prospects in the spice industry.

● The Spices Board of India plays a crucial role in the development and promotion of Indian spices worldwide.

(Source – PIB, September 15, 2023)

PYQ: With reference to the “Tea Board” in India, consider the following statements: (UPSC civil services prelims 2022)

1. The Tea Board is a statutory body.

2. It is a regulatory body attached to the Ministry of Agriculture and Farmers Welfare.

3. The Tea Board’s Head Office is situated in Bengaluru.

4. The Board has overseas offices at Dubai and Moscow.

Which of the statements given above are correct?

a) 1 and 3

b) 2 and 4

c) 3 and 4

d) 1 and 4

Answer: (d)

Practice Question: How can India address the recent concerns raised by international regulators regarding the contamination of spice mixes produced by Indian brands? Discuss the potential impacts on India’s spice trade and suggest measures to ensure food safety compliance and maintain market reputation. (250 Words /15 marks)

3. Steel exports to Europe increase 65% to touch 5-year high in FY24

(Source – The Hindu, Section – Business, Page – 13)

Topic: GS3 – Indian Economy – Effects of liberalisation on the economy

Context:

● In FY24, India’s steel exports to Europe surged to a five-year high, marking a significant 65% year-on-year increase and reaching 3.3 million tonnes, driven by increased shipments to the EU.

● However, exports to the UAE hit a five-year low, and South East Asian exports declined due to competition from Chinese exports.

Analysis of the news:

Indian steel exports to Europe reached a five-year high in FY24, totaling 3.3 million tonnes, marking a significant 65% year-on-year increase and nearly doubling over a five-year period from FY20.
However, exports to the UAE hit a five-year low, while shipments to South East Asia also declined, attributed to stiff competition from Chinese exports.
Overall, India’s steel exports rose by 11% year-on-year to 7.5 million tonnes, primarily driven by increased shipments to the EU.
Italy experienced a 112% rise in Indian steel exports over the five-year period, while exports to Belgium more than doubled, and Spain saw a surge of 133%.
Exports to the EU fluctuated in recent years, with 2 million tonnes in FY23, 3 million tonnes in FY22, 2 million tonnes in FY21 (during COVID restrictions lifting), and 1.5 million tonnes in FY20 (COVID year).
Indian steel mills withheld Hot Rolled Coil (HRC) export offers to Europe this week, with indicative prices ranging from $625 to $635 per tonne.
Domestic prices in the EU rose due to restocking and a weakened dollar, ending a downward price trend since January.
Buyers delayed overseas purchases due to long lead times and limited demand, contributing to the lack of import competition.
Consultancy firm BigMint anticipates mills to increase prices soon due to the prevailing market conditions in EU.

Steps taken by Indian government for promotion of Steel Exports

● Introduction of the Production-Linked Incentive (PLI) Scheme for Specialty Steel with a budget of ₹6,322 Crore aimed at boosting domestic manufacturing of specialty steel, reducing imports, and attracting capital investments.

● Implementation of the National Steel Policy in 2017, providing policy support and guidance to steel producers to enhance production and export competitiveness.

● Enactment of the Domestically Manufactured Iron & Steel Products (DMI&SP) Policy to encourage procurement of domestically made steel by government and public sector projects, promoting indigenous production.

● Establishment of the Steel Scrap Recycling Policy to increase the availability of domestically generated scrap, thereby supporting the circular economy and reducing dependence on imported raw materials.

● Collaborative efforts between the government and steel industry stakeholders to enhance infrastructure, streamline regulatory processes, and facilitate trade agreements to boost steel exports and strengthen India’s position in the global market.

PYQ:

Q.1 Account for the present location of iron and steel industries away from the source of raw material, by giving examples. (150 words/10m) (UPSC CSE (M) GS-1 2020)

Q.2 Account for the change in the spatial pattern of the Iron and Steel industry in the world. (150 words/10m) (UPSC CSE (M) GS-1 2014)

Practice Question: In light of India’s surge in steel exports to Europe and declining exports to the UAE and South East Asia, discuss the factors influencing these trends and their implications for India’s steel industry and international trade relations. (250 Words /15 marks)

4. New Phase of Monkeypox Outbreak Emerges in the Democratic Republic of Congo: Genetic Mutations Raise Concerns Amid Limited Vaccine Access

(Source: Indian Express; Section: Explained; Page: 13)

Topic: GS3 – Science & Technology

GS2– Social Justice – Health

Context:

The Democratic Republic of the Congo (DRC) is facing its largest outbreak of Monkeypox, with cases surging since January.
The outbreak, which has affected over 4,500 suspected cases and nearly 300 deaths, has been declared a health emergency by the country.
Notably, cases have also been reported in the neighboring Republic of Congo, indicating the potential for regional spread.

Analysis of the News:

About Monkeypox:

What it is?

It is a viral disease that primarily spread to the human population through zoonotic spillovers, with rodents and primates serving as potential reservoirs.

The first case in humans was reported in 1970 in the Democratic Republic of Congo.
Transmission: It can be transmitted between humans through close contact and exposure to infected bodily fluids or lesions.
Incubation period: The incubation period (the period between exposure to an infection and the appearance of the first symptoms) of monkeypox is usually from 6 to 13 days but can range from 5 to 21 days.
Symptoms: Common symptoms of mpox are a skin rash or mucosal lesions, Fever, rash and swollen lymph nodes which may lead to a range of medical complications.
There is no effective vaccine available for Monkeypox infection.

Genetic Mutations and Transmission Dynamics:

An analysis conducted in Kamituga, eastern Congo, suggests genetic mutations in Monkeypox, potentially facilitating its easier spread among humans.
These mutations are observed in patients with milder lesions, primarily on the genitals, contrasting with previous outbreaks where lesions were predominantly found on the chest, hands, and feet.
Furthermore, the disease appears to have a lower mortality rate in this new form.

Sexual Transmission and Testing Challenges:

Sexual transmission has emerged as a significant mode of Monkeypox spread, with about a third of cases linked to sex workers.
However, diagnosing the disease has become more challenging due to the atypical lesions and the need for a new testing strategy to detect mutations.
This poses a risk of silent transmission, where cases may go undetected unless patients come forward for testing.

Clades of Monkeypox and Vaccine Availability:

Monkeypox is classified into two clades, with Clade 1 being more severe and potentially fatal.
The current outbreak is attributed to Clade 2, which has a higher survival rate.
However, a new form of Clade 1 has been identified in Kamituga, raising concerns about its potential for widespread transmission.
Despite the outbreak, access to Monkeypox vaccines and treatments remains limited in Congo, highlighting the urgent need for international assistance and investment in public health infrastructure.

International Response and Donor Support:

Despite the escalating spread of Monkeypox, there has been a lack of financial support from donors.
Efforts to secure vaccines and treatments are underway, with Congo’s health ministry seeking assistance from donor countries like Japan.
However, the situation underscores the importance of global cooperation and investment in addressing emerging infectious diseases to prevent future outbreaks and mitigate their impact on public health.

Zoonotic Diseases and India

India is among the top geographical hotspots where zoonotics diseases are a major public health issue causing high burden of morbidity and mortality.
High priority zoonotic diseases like Brucellosis have emerged from Haryana to Goa, incidence and prevalence of occupational zoonotic disease like Anthrax have affected human health throughout.
Similarly, Bovine tuberculosis (bTB) is a chronic disease of cattle that impacts productivity and represents a major public health threat and is considered endemic in India.
Further, being among the highest bacterial disease burden in the world, antibiotics, therefore, have a critical role in limiting morbidity and morality and consequently Antimicrobial Resistance (AMR) has huge implications for India.
Major public health zoonotic diseases in India include Rabies, Brucellosis, Toxoplasmosis, Cysticercosis, Echinococcosis, Japanese Encephalitis (JE), Plague, Leptospirosis, Scrub typus, Nipah, Trypanosomiasis, Kyasanur forest disease (KFD) and Crimean-Congo haemorrhagic fever (CCHF).
According to the National Centre for Disease Control (NCDC), about 75% of emerging and re-emerging infections are zoonotic, and new pathogens (viruses) continue to emerge and spread across countries.

Challenges to Controlling Zoonotic Diseases in India

Large human population and its frequent interactions with animals.
Poverty: Leads to increased dependence on animal rearing as a means of livelihood. The intimate human-animal contact puts them at risk for this category of diseases. Poverty-struck communities are primarily dependent on rearing animals as a means of livelihood and, therefore, the intimate human-animal contact puts them at risk for this category of diseases.
Unawareness: Large part of population remains unaware of the basic hygiene routine to be followed.
Lack of proper vaccination programmes, poor sero-surveillance and lack of diagnostic facilities make the preventive and precautionary approach more difficult.

Practice Question: What are the key challenges faced by the Democratic Republic of Congo in containing the recent Monkeypox outbreak? Discuss the implications of genetic mutations and limited vaccine access on public health measures and international response efforts. (250 words/15 m)

5. Constitutional Immunity Shields West Bengal Governor amid Sexual Harassment Allegations: Legal Framework Raises Questions on Prosecution

(Source: Indian Express; Section: Cover Page; Page: 1)

Topic: GS2 – Polity – Indian constitution – Significant provisions

Context:

The article discusses the legal implications of a sexual harassment complaint filed against the Governor of West Bengal, C.V. Ananda Bose, highlighting the constitutional immunity that protects Governors from prosecution during their term in office.

Analysis of the News:

How did the Post of Governor Come About?

Before Independence:

Since 1858, when India was administered by the British Crown. Provincial Governors were agents of the crown, functioning under the supervision of the Governor-General.
With the Government of India Act, 1935, the governor was now to act in accordance with the advice of Ministers of a province’s legislature, but retained special responsibilities and discretionary power.

Post-Independence:

The post of the governor was extensively debated in the Constituent Assembly, which decided to retain it while re-orienting its role from the British era.
Currently, under the parliamentary and cabinet systems of governance adopted by India, the Governor was envisaged to be the Constitutional Head of a state.

Constitutional Immunity for Governors:

Article 361 of the Indian Constitution provides immunity to the President and Governors of states from prosecution and criminal proceedings during their term in office.
This immunity extends to any acts performed in the exercise of their official duties.
The provision explicitly prohibits the initiation or continuation of criminal proceedings against them in any court while they hold office and prevents their arrest or imprisonment.

Legal Interpretation and Precedents:

Senior Advocates emphasized that the Constitution bars prosecuting the Governor, preventing them from being named as accused in any criminal case.
According to a landmark ruling in Rameshwar Prasad v Union of India (2006), the Supreme Court affirmed the Governor’s complete immunity, even in cases of alleged personal malfeasance.
However, this immunity applies to the exercise of discretionary constitutional powers, not to criminal complaints.

Challenges to Prosecution:

Despite the legal framework, there have been instances where criminal proceedings against Governors were halted until they completed their term in office.
For example, in the Babri Masjid demolition case, former UP Chief Minister Kalyan Singh, who was then the Governor of Rajasthan, was granted immunity under Article 361.
The court postponed his trial until he ceased to hold the governor position.

Resignations Amid Allegations:

In certain cases involving serious allegations, Governors have resigned from their positions.
In 2017, Meghalaya Governor V Shanmuganathan resigned following allegations of sexual harassment by Raj Bhavan staff, prompted by pressure from the Centre.
Similarly, in 2009, Andhra Pradesh Governor N D Tiwari resigned due to an alleged sex scandal in Raj Bhavan, citing health grounds.

Conclusion:

The constitutional immunity granted to Governors shields them from prosecution during their tenure, ensuring that they can perform their official duties without fear of legal repercussions.
While this immunity has been upheld by the judiciary, there have been instances where criminal proceedings were postponed until Governors vacated their office.
However, resignations in response to serious allegations underscore the complexities surrounding accountability and governance in such situations.

What are Constitutional Provisions Related to the Governor?

Article 153 says that there shall be a Governor for each state. One person can be appointed as Governor for two or more states.
The Governor is appointed by the President by warrant under his hand and seal and holds office under the pleasure of the President (Article 155 and 156).
Article 161 states that the governor has the power to grant pardons, reprieves, etc.
The Supreme Court stated that the sovereign power of a Governor to pardon a prisoner is actually exercised in consensus with the State government and not by the Governor on his own.
S/he is bound by the advice of the state government.
Article 163 states that there is a council of ministers headed by the Chief Minister to aid and advise the Governor in the exercise of his functions, except some conditions for discretion.
Discretionary powers include:
Appointment of a chief minister when no party has a clear majority in the state legislative assembly
In times of no-confidence motions
In case of failure of constitutional machinery in the State (Article 356)
The governor’s powers with respect to the passage of bills are defined by Article 200 and Article 201 of the Constitution. According to these articles, the governor has the following options when a bill is presented to him/her by the state legislature:
He/she may give assent to the bill, which means the bill becomes an act.
He/she may withhold assent to the bill, which means the bill is rejected.
He/she may return the bill (if it is not a money bill) to the state legislature with a message requesting reconsideration of the bill or some of its provisions.
If the bill is passed again by the state legislature with or without amendments, the governor cannot withhold assent to it.
He/she may reserve the bill for the consideration of the president, who may either assent to or withhold assent from the bill, or direct the governor to return the bill to the state legislature for reconsideration.
Article 361 states that the Governor of a State, shall not be answerable to any court for the exercise and performance of the powers and duties.

What are the Issues Related to the Post of Governor in India?

Affiliation Based Appointment: Politicians and former bureaucrats affiliated with the ruling party have been appointed in several instances as Governors.
This has led to questions about the post’s impartiality and non-partisanship. Also, the convention of consulting the Chief Minister before appointing the Governor is often ignored.
From Centre’s Representative to Centre’s Agent: Critics refer to governors as the ‘agents of the Centre’ today.
In 2001, the National Commission to Review the Working of the Constitution, held that the Governor owes his appointment and his continuation to the Union. Apprehensions exist that he will follow instructions given by the Union Council of Ministers.
This goes against the constitutionally mandated neutral seat and has resulted in bias.
Misuse of Discretionary Powers: The discretionary powers of governor have been misused in many instances.
For instance, it has been argued by critics that the Governor’s recommendation for President’s Rule in a state has not always been based on ‘objective material’, but on political whim or fancy.
Removal of Governors: Having no written grounds or procedures for removing governors, several times governors were removed arbitrarily.
No Clear Distinction Between Constitutional and Statutory Role: The constitutional mandate to act on advice of the council of ministers is not clearly distinguished from the statutory authority as chancellor, resulting in many conflicts between the governor and the state government.
For instance, there was a recent appointment of a Vice Chancellor in a university by the Kerala Governor, bypassing government nominations.
Constitutional Loopholes: In the Constitution, there are no guidelines for exercise of the governor’s powers in-case of appointment of Chief Minister or dissolving the Assembly.
Also, there is no limit set for how long a Governor can withhold assent to a Bill.
As a result, friction between the governor and concerned state governments is likely to arise.

PYQ: Which of the following are the discretionary powers given to the Governor of a State? (2014)

1) Sending a report to the President of India for imposing the President’s rule

2)Appointing the Ministers

3) Reserving certain bills passed by the State Legislature for consideration of the President of India

4) Making the rules to conduct the business of the State Government

Select the correct answer using the code given below:

(a) 1 and 2 only

(b) 1 and 3 only

(d) 1, 2, 3 and 4

Ans: (b)

Practice Question: What is the constitutional immunity provided to Governors in India? Discuss its significance and challenges in ensuring accountability, citing recent events involving allegations against the Governor of West Bengal. (250 words/15 m)

6. India's Russian Oil Imports Reach Nine-Month High Despite Sanctions and Geopolitical Tensions

Topic: GS2 – International Relations – Bilateral Relations

GS3 – Indian Economy

Context:

India’s Russian oil imports reached a nine-month high in April, defying expectations amidst sanctions and geopolitical tensions.
The surge in imports was attributed to factors such as impaired Russian refining capacity due to Ukrainian drone attacks and attractive discounts offered by Russian oil producers.

Analysis of the News:

What are sanctions?

Sanctions are penalties imposed by one country on another, to stop them acting aggressively or breaking international law.
They are among the toughest measures nations can take, short of going to war

Rise in Imports despite Sanctions:

Despite recent sanctions imposed by the US on Russia’s oil shipping syndicate, Indian imports of Russian crude surged.
Trade sources noted that while there was speculation about Indian refiners becoming cautious, the impact of sanctions was marginal and short-lived.

Quantitative Analysis:

In April, Indian refiners imported approximately 1.96 million barrels per day (bpd) of Russian crude oil, the highest since July of the previous year.
This constituted nearly 40.3% of India’s total crude oil imports, marking the first instance of Moscow’s share exceeding 40% in seven months.

Impact of Impaired Refining Capacity and Surplus Exports:

The impairment of Russian refining infrastructure due to Ukrainian drone strikes led to higher seaborne oil exports from Russia.
Unable to refine surplus oil domestically, Russian producers exported more, providing Indian buyers with increased purchasing opportunities.

Limited Impact of Sanctions:

Despite US sanctions targeting Russian vessels and fleet operators, Indian refiners continued to accept deliveries from Russian tankers.
While some initial caution was observed, clarity on the scope of sanctions eased concerns, enabling the resumption of oil imports from Russia.

Strategic Responses by Indian Refiners:

Indian refiners initially avoided tankers explicitly sanctioned by the US but did not impose a blanket ban on Sovcomflot tankers, which resumed oil discharges at Indian ports following clarity on sanctions.

Alignment of Maritime Regulations:

Recent approvals by India’s shipping regulator for Russian insurance firms signal alignment with Russian maritime regulatory services.
This development ensures that cargoes are not subject to the G7 price cap, facilitating uninterrupted oil trade.

What is the G7 Price Cap?

The price cap imposed by the G7 countries, the European Union and Australia bans the use of Western maritime services such as insurance, flagging and transportation when tankers carry Russian oil priced at or above $60 a barrel.
The West imposed the mechanism after Russia’s February 2022 invasion of Ukraine.

Preference for Russian Crude due to Discounts:

Indian refiners preferred Russian Urals crude, with imports reaching a record high in April, comprising nearly 79% of India’s Russian oil imports.
The significant price differential between Urals and competing grades from traditional West Asian suppliers favored Russian imports.

Impact on Traditional Suppliers:

Imports from traditional suppliers like Saudi Arabia and Iraq declined in April, indicating a shift in India’s oil procurement patterns.
The attractiveness of discounted Russian crude influenced Indian refiners’ decisions, impacting the market shares of other suppliers.

Conclusion:

India’s surge in Russian oil imports amidst geopolitical tensions and sanctions underscores the resilience and adaptability of its energy procurement strategies.
The preference for discounted Russian crude reflects the pragmatism of Indian refiners in navigating global oil markets while ensuring energy security and economic viability.

Who are the Top Crude-Oil Suppliers for India?

Status of Oil Imports:

India currently is the 3rd largest consumer of oil behind the US and China. It imports 85% of its oil needs and this dependence is likely to rise as domestic production falls.
India will overtake China as the biggest driver of global oil demand in 2027. Diesel will be the single largest source of demand growth, accounting for almost half of the rise in the nation’s demand (International Energy Agency).
Major Oil Suppliers:
Russia:
Russia is currently India’s largest supplier of oil. Russian oil imports to India surged to 1.96 million barrels per day (bpd) in April, 2024.
India capitalised on discounted Russian offers following Western sanctions on Russia (due to Russia-Ukraine Conflict), displacing traditional suppliers.
The Urals crude oil grade of Russia has become a cornerstone of India’s energy diversification efforts.

Iraq:

Iraq is the second-largest source of crude supplier to India, with imports reaching 1.19 million bpd in January 2024, the highest since April 2022.
India’s efforts to diversify oil procurement channels aim to mitigate geopolitical risks and ensure a stable energy supply.
Saudi Arabia:
Saudi Arabia is India’s third-largest oil supplier and exported approximately 690,172 bpd of crude oil to India in January, 2024 maintaining its position as a key player in India’s energy security landscape.
UAE:
Oil imports from the UAE surged by 81% in January, 2024 reaching around 326,500 bpd.
Abu Dhabi is India’s fourth-largest supplier of crude oil.

PYQ: The term ‘West Texas Intermediate’, sometimes found in news, refers to a grade of (2020)

(a) Crude oil

(b) Bullion

(d) Uranium

Ans: (a)

Practice Question: What were the factors contributing to the significant increase in India’s imports of Russian crude oil in April 2024 despite recent sanctions and geopolitical tensions? (150 words/10 m)

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