Recently, a dialogue on systemic issues of poor electricity supply faced by the farmers in Rajasthan has recommended the establishment of a farmers’ cooperative-based distribution model with the regulatory viability under the Electricity Act 2003.

• The dialogue was organized by the Jaipur-based Centre for Energy, Environment and People (CEEP) as part of the ‘Vidyut Samvad’ series here earlier this week.

About Cooperative Society

• Definition: A cooperative society is a voluntary association of individuals with shared needs who come together to pursue common economic interests.
• Objective: The primary goal of any cooperative is to offer assistance to its members, particularly prioritizing the welfare of the underprivileged segments of society, through the principles of self-help and mutual aid.
• Operational Approach: By establishing cooperatives, individuals unite as a collective, combining their individual resources, optimizing their utilization, and deriving mutual benefits.
  • In a cooperative society, individuals can join voluntarily and are also at liberty to exit, although they are unable to transfer their shares.
• Types of Cooperatives in India: Consumer Cooperative Societies, Producer Cooperative Societies, Cooperative Credit Societies, Cooperative Farming Societies, Housing Cooperative Societies, and Marketing Cooperative Societies.
  • Among the 300 largest cooperative societies globally, India’s Amul, IFFCO, and KRIBHCO are featured.

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Steps taken to strengthen the cooperative movement in India

• Ministry of Cooperation: Established with a distinct administrative, legal, and policy structure aimed at enhancing the cooperative movement.
• The Banking Regulation (Amendment) Act, 2020: Empowers the RBI to replace the boards of Cooperative banks and permits Cooperative banks to raise capital through public issues or private placements of equity or preference shares.
• The National Agricultural Co-operative Marketing Federation (NAFED): Aids Marketing Cooperatives in the States to enhance their marketing operations and improve services to their members.
• The National Co-operative Development Corporation (NCDC): Established in 1963, it offers assistance in the form of loans and subsidies for marketing, processing, storage, and share capital practices in cooperative sugar, spinning, and weaving mills.
• Cancellation of the 97th Constitutional Amendment Act, 2011 by the Supreme Court: This amendment aimed to protect cooperatives by amending Article 19(1)(c) and inserting Article 43B and Part IXB. However, the Court ruled that Part IXB of the Constitution applies solely to Multi-State cooperative societies within states and Union Territories.
  • Part IXB of the Constitution outlined regulations for operating cooperative societies.

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According to LinkedIn’s Economic Graph data, women’s participation in the workforce and senior leadership positions has plateaued since 2022 and experienced a decline in 2024.

Trends in Women’s Workforce Representation

• Stagnation: Women’s workforce representation has seen growth over the years but stagnated since 2022 and experienced a decline in 2024. Similarly, advancements in elevating women to senior and leadership positions have also stagnated.
• Employment of Women across Industries: Women are predominantly represented in senior positions within healthcare, education, administrative, and support services. 
  • Conversely, their presence across all positions remains minimal in manufacturing, construction, oil, and gas industries.

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Women Workforce Representation Across Industries

• Slow Progression: The promotion of women to senior leadership roles has been gradual. From 2016 to 2019, the proportion of women in senior positions rose by one percentage point, followed by another increase from 2019 to 2022.
• Current Stagnation: If the decline observed in January 2024 continues, the already slow progress will halt.
• Slowdown in Hiring: The stagnation and decline in the proportion of women in senior roles are due to a slowdown in hiring women for leadership positions. The share rose from 18.8% in 2016 to 25.2% in 2021 but has declined since then.

Women Leadership Representation Across Industries

• Significant Challenges in Specific Sectors: Women encounter the greatest difficulties in entry and career progression within the oil, gas, and mining, construction, utilities, wholesale, manufacturing, transportation, and real estate sectors, where they hold only 11%-14% of leadership roles.

• Minimal Representation in Oil Industry: The oil sector has the lowest proportion of women in leadership, with only about 11% of top positions occupied by women.
• Accommodation and Food Services: In sectors like accommodation and food services, financial services, retail, technology, and media, women occupy 15% to 20% of senior roles.

• Sectoral Representation: The data indicates that women’s representation in senior positions differs significantly across various industries.
• Representation in Education and Healthcare: Women hold the highest share of senior positions in education (30%) and have significant representation in administrative and support services, healthcare and hospitals, consumer services, government administration, and education, with percentages ranging from 22% to 30%.

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A recent analysis by The Lancet Public Health reveals that globally, men face a greater disease burden and tend to die prematurely compared to women.

Key Highlights of the Lancet Study Reveals Gender Disparities in Health

• Gender Disparities in Disease Burden: In 2021, men bore the brunt of 13 out of the top 20 causes of disease burden compared to women, including COVID-19, road injuries, and various cardiovascular, respiratory, and liver diseases. 
  • These conditions disproportionately led to premature deaths among men. 
• Global Trends in Women’s Health: Conversely, globally, women predominantly encountered non-life-threatening conditions such as musculoskeletal issues, mental health disorders, and headache disorders.
• COVID-19 Impact: In 2021, COVID-19 emerged as the primary cause of health loss globally, with males experiencing a 45% higher health loss from the virus compared to females.
• Gender Disparity in Ischaemic Heart Disease: Ischaemic heart disease ranked second in terms of the absolute difference in health loss between males and females. 
  • Males suffered a 45% higher health loss from heart disease compared to females.
• Cause of Premature Male Death: The research links premature male deaths to cancer, heart disease, and road injuries. 
  • While common among men, lifestyle-related comorbidities remain significant contributors.
• Women’s Health Challenges: Women’s health issues primarily include low back pain, depression, headaches, anxiety disorders, musculoskeletal conditions, dementia, Alzheimer’s disease and HIV/AIDS.  These may not lead to premature death but keep them sick throughout their lifetime. 
  • Example: In 2021, females had over a third higher DALY rates than males (1,265 vs 787 DALYs per 100,000). In South Asia, this gap widened to over 50% (1,292 vs 598 DALYs per 100,000).
• Rise of Mental Health cases among Women: Women worldwide are disproportionately affected by mental health conditions. 
  • For instance, in 2021, the health loss attributed to depressive disorders was more than a third higher among females than males globally, with rates of 1,019 vs 671 DALYs per 100,000.

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Causes of Disease Differences

• Gender Differences in Adolescence: In adolescence, disparities between genders become apparent. This period not only marks the onset of biological distinctions but also sees the influence of gender norms shaping individuals’ lives.
• Bias in Health Care Systems: There is a bias in health care systems where they will more easily diagnose women with mental disorders.
  • At the same time, men are less likely to get help for mental health conditions due to perceptions of masculine norms that work against their seeking or getting help.
• Inadequate Treatment: Research indicates that women experiencing pain are frequently disregarded by healthcare providers and receive inadequate treatment when they seek assistance.
  • Additionally, a recent study revealed that healthcare professionals, regardless of gender, were less inclined to provide assistance for lower back pain when the patient was female.
• Triple Burden on Women: Women starting rehabilitation programs for lower back pain often begin in worse condition than men, possibly due to a triple burden of work, household maintenance, and caregiving duties, hindering access to appropriate services.
• Narrow Focus on Women’s Health: There has been a tendency within global health systems to focus on women’s reproductive capacity, equating women’s health solely with their uterus.

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SEBI released a consultation paper proposing a framework to facilitate investments by domestic mutual funds (MFs) in their overseas counterparts and unit trusts with exposure to  Indian securities.

Can domestic mutual funds invest in their overseas counterparts?

• Ambiguity: The existing framework does not explicitly permit domestic Mutual Funds to invest in overseas MF/UTs with exposure to Indian securities.
• Feeder Funds: Indian mutual funds diversify their portfolios by launching ‘feeder funds’ which invest in overseas instruments such as (units of) MF, UTs, ETFs and/or index funds.
• Purpose:  To diversify and ease the path to make global investments. 

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SEBI’s Proposal

• Upper limit: Overseas instruments being considered must not have an exposure of more than 20% of their net assets in Indian securities. 
  • To strike a balance between facilitating investments in overseas funds with exposure to India and preventing excessive exposure
• Breach of Cap: If the 20% cap is breached, the Indian mutual fund scheme which is investing in the overseas fund would slip into a 6-month observance period which will be utilized by the overseas fund to rebalance its portfolio.
  • The domestic mutual fund cannot undertake any fresh investment in the overseas MF/UT, during this period. Further investment in the overseas instrument would be allowed only when the exposure drops below the limit.  
• Investment Vehicle: SEBI’s proposal has sought that Indian mutual funds ensure contributions of all investors of the overseas MF/UT is pooled into a single investment vehicle and not a parallel instrument alongside the main instrument with varying exposure. 
• Indian mutual funds must also ensure that all investors of the overseas instrument are receiving gains proportionate to their contribution and in no order of preference.  
• Overseas Instrument Management: The overseas instrument needs to be managed by an “officially appointed, independent investment manager or fund manager” who is actively involved in making all investment decisions for the fund.
  • SEBI says that these investments should be made autonomously by the manager without any influence from the investors or undisclosed parties.  
• Transparency: SEBI seeks  public disclosures of the portfolios of such overseas MF/UTs periodically for the sake of transparency.
• SEBI has warned against the existence of any advisory agreement (business agreement) between the Indian mutual fund and the overseas MF/UT. 
  • This is to prevent conflict of interest and avoid any undue advantage.  
• Condition for Liquidation: The Indian mutual fund must liquidate its investment in the overseas instrument within 6 months, if the portfolio is not rebalanced within the observation period of 6 months.
  • It would be debarred  to accept any fresh subscriptions to the scheme, launch any new scheme or levy any exit load (the fee for redeeming the mutual fund before a specific date) on its investors exiting the scheme

Advantages

• Diversification: Investments in international markets provide diversification opportunities to Indian investors, by providing investment opportunities in sectors or industries that may not be available in the Indian listed market space.
  • It will be an useful avenue for diversifying investor portfolios as well as generating significant risk adjusted returns
• It will enable investors to take desired exposure in overseas securities

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Recently, India concluded hosting of the 46th Antarctic Treaty Consultative Meeting (ATCM-46) and the 26th Committee on Environmental Protection (CEP-26) 2024 in Kochi, Kerala

About Antarctic Treaty Consultative Meeting (ATCM)

• Annual Meetings: These annual meetings provide a platform for Antarctic Treaty Consultative Parties and other stakeholders to discuss pressing environmental, scientific, and governance matters concerning Antarctica.
• Frequency of ATCM Meetings: Between 1961 and 1994, the ATCM typically convened once every two years, but since 1994, the meetings have taken place annually.

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Committee on Environmental Protection (CEP-26)

• Founding: The CEP was created under the Madrid Protocol, also known as the Protocol on Environmental Protection to the Antarctic Treaty, in 1991.
• Role of CEP: The CEP advises the ATCM on protecting and conserving Antarctica’s environment.

Antarctica Treaty

• Signing of the Treaty: The Antarctic Treaty was signed in Washington on December 1, 1959, by twelve countries whose scientists had been involved in Antarctica during the International Geophysical Year (IGY) of 1957-58.
  • The original 12 signatories included Argentina, Australia, Belgium, Chile, France, Japan, New Zealand, Norway, South Africa, the Soviet Union, the UK, and the US.
• Categories: There are two categories of parties to the Antarctic Treaty: Consultative, numbering 29, and non-Consultative, numbering 27.
  • Non-Consultative parties are invited to attend Consultative Meetings but do not partake in decision-making.
• Secretariat: The Antarctic Treaty Secretariat (ATS), founded in 2004, acts as the administrative centre for the Antarctic Treaty System.
  • It coordinates the ATCM and CEP gatherings and oversees compliance with treaty provisions and agreements. 
  • Additionally, it offers support and advice to Antarctic Treaty Parties on matters concerning treaty implementation and enforcement.

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India in Antarctica

• India’s Role in Antarctic Governance: India has held consultative party status to the Antarctic Treaty since 1983. Among the 56 nations under the treaty, 29 have consultative party status.
  • In this role, India actively participates in and votes on all major decision-making processes concerning Antarctica. India has been engaged in scientific research in Antarctica since 1981.
• Establishment of Indian Antarctic Research Stations: In 1983, India established its first Antarctic research station, Dakshin Gangotri
  • In 1989, India established its second Antarctica research station, Maitri  in the Schirmacher Oasis
  • In 2012, India unveiled Bharati, its third Antarctica research station, positioned east of Maitri, on the Prydz Bay coast.
• Antarctic Act: India demonstrated its commitment to the Antarctic Treaty by passing the Antarctic Act.
• Future Plans:India intends to establish a new station, Maitri II, just a few kilometres away from the ageing Maitri station. Operations are scheduled to commence by 2029.

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Recently,  a volcano in southwest Iceland erupted. 

Volcanic activity in Iceland

It led to evacuations of the small fishing town of Grindavik and the popular geothermal Blue Lagoon spa.

• Iceland volcano, Sundhnuksgigar, has erupted for the 5th time since December 2023.
  • This eruption follows another 8-week eruption nearby.
• Iceland’s volcanic activity has increased recently, with eruptions happening nearly every year since 2021. (Previously, eruptions occurred every 4-5 years).

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What are volcanoes?

• Volcanoes: They are openings or vents where materials like lava, small rocks (tephra), and steam burst out onto the Earth’s surface.
• Formation and Characteristics
  • Formation: It results from the eruption of material much hotter than the surrounding area onto the Earth’s surface.
  • Material Composition: It can include liquid rock (magma when underground, lava when on the surface), ash, and gases.
• Diversity in Location
  • Land and Ocean: Volcanoes can be found both on land and under the ocean, exhibiting their activity in diverse environments.

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Reasons for Iceland to be volcanically active

• Geological Location
  • Mid-Atlantic Ridge: Iceland is situated on the Mid-Atlantic Ridge, where the Eurasian and North American plates are moving apart gradually.
  • Effect: This movement creates volcanic rift zones, where the Earth’s crust fractures, allowing magma to rise and sometimes erupt as lava and ash.
• Hotspot Presence
  • Hot Zone: Iceland is also positioned over a hotspot, contributing to increased volcanic activity.
  • Effect: This hotspot leads to enhanced volcanic activity in the region, adding to the geological dynamics of the island.

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A plethora of new data has positioned the Carnian period of around, 237–228.45 million years ago as a period of significant climate and environmental change.

Geologists Uncover Global Evidence of Significant Climate Shifts During the Carnian Pluvial Episode

Geologists Schlager and Schollnberger investigated Austria’s Northern Limestone Alps and discovered a layer of dark grey siliciclastic rock, indicating very wet conditions within the era’s dry carbonate rock layer in the 1970s.

• The same layer was later uncovered by geologists in England, Israel, Italy and the U.S.A., solidifying the base for the occurrence of the Carnian Pluvial Episode.

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About Carnian Pluvial Episode

• The Carnian Period: The earth’s surface was still divided into the Pangea ( It was one massive supercontinent where, all the continents were joined together)  and the Panthalassa (one vast ocean)
  • The Pangea was surrounded by mountains and as a result, all its central area was under a long dry spell, and some rainfall was present only at its edges near the vast ocean.
• The Carnian Pluvial Episode: The middle Carnian (c. 232 Million years ago) experienced a brief interval of increased temperatures and multiple episodes of very heavy continuous rainfall, which is today called the Carnian Pluvial Episode.

Theory About the Causes

• Volcanic Eruptions: A series of very powerful volcanic eruptions took place in the Wrangellia Terrane, today’s Alaska and British Columbia, concentrating the atmosphere with massive amounts of carbon dioxide.
  • The massive amount of now released carbon dioxide in the atmosphere has contributed to the global warming phenomenon.
• Pressure gradient created: The emergence of a new mountain range, the Cimmerian orogen, created a strong pressure gradient between the ocean and the continent, creating a monsoon phenomenon deep within the Pangea.

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Effects of Carnian Pluvial Episode

• Raising Temperature: Due to the volcanic activity Earth’s temperature rose by 3-4 °C. The planet’s average temperature before CPE was already 10 °C higher than today 
• Ocean Acidification: A change in the ocean’s salinity might also have taken place with the rise of CO2 in the atmosphere.
• Increased Fluvial Input: The beginning of the CPE is marked by a switch from shallow marine carbonate and evaporates to siliciclastic and dark organic rich sediments, likely resulting from increased fluvial input.
• Fluvial systems expansion: The spatial distribution of fluvial systems expanded and semi-permanent lakes were formed on land.
• Mass extinction: The CPE episode lead to mass extinction of species with several ammonite and conodont groups becoming extinct. Suspension feeders living in shallow marine habitats (e.g., crinoids: sea lilies) were also severely impacted by the high siliciclastic input and marine eutrophication.
• Emergence of Dinosaurs: The CPE was followed by the first appearance of the dinosaurs, marking the beginning of the “age of the dinosaurs.” 
  • Furthermore, the origination of many modern animal groups e.g., turtles, crocodiles, lizards and mammals occurred during the Carnian.

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Recently, Indian Air Force (IAF) and Indian Navy are taking part in two mega multinational war games named Exercise Red Flag and RIMPAC (Rim of the Pacific).

Exercise Red Flag and RIMPAC (Rim of the Pacific)

• The Indian Air Force  has deployed Rafale fighter jets for the two-week multinational air exercise Red Flag which commenced in Alaska.
• The Indian Navy is deploying the indigenous stealth frigate INS Shivalik for Ex RIMPAC (Rim of the Pacific) .

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Exercise Red Flag 2024

• About: It is organized by the United States  Air Force, stands as one of the most prestigious and advanced multilateral air combat training exercises.
• Objective: The exercise includes participation from multiple nations to improve interoperability and combat readiness.
• History: The US has been conducting this exercise with its friendly countries  since 1975.
  • The Indian Air Force joined the exercise for the first time in 2008.
• Location and Management: Red Flag exercises are held at two distinct locations: Nellis Air Force Base in Nevada and Eielson Air Force Base in Alaska. 
  • The Nevada exercise is organized by the United States Air Force Warfare Center (USAFWC), while the Alaska exercise is overseen by the Pacific Air Forces (PACAF), the air component command of the United States’ Indo-Pacific Command (USINDOPACOM).

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Significance of Red Flag Exercise for India

• Strategic Significance: Participating in Red Flag enhances the IAF’s operational abilities and promotes international military cooperation.
• Training Advantages: It provides valuable experience in large-scale air warfare, leveraging a diverse and challenging environment for realistic training.

RIMPAC Exercise 2024

• About: Rim of the Pacific Exercise is one of the largest biennial multilateral naval exercises, led by the United States of America.
• Background: RIMPAC commenced in 1971 as an annual exercise involving the US, Australia, and Canada. 
  • However, starting in 1974, the maritime exercise transitioned to a biennial event.
• Aim: To improve the  interoperability and foster trust among the navies of friendly foreign nations.
• Theme:  “Partners: Integrated and Prepared.

• Participating Countries:  Australia, Belgium, Brazil, Brunei, Canada, Chile, Colombia, Denmark, Ecuador, France, Germany, India, Indonesia, Israel, Italy,Japan, Malaysia, Mexico, Netherlands, New Zealand, Peru, the Republic of Korea, the Republic of the Philippines, Singapore, Sri Lanka, Thailand, Tonga, the United Kingdom and the United States.

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NASA’s James Webb Space Telescope (JWST) has discovered the earliest-known galaxy which is unexpectedly bright and large for its age.

NASA’s James Webb Space Telescope (JWST) finds most distant known Galaxy JADES-GS-z14-0

They used JWST for observations as part of the JWST Advanced Deep Extragalactic Survey (JADES) program.

• JADES-GS-z14-0 was first seen using JWST’s NIRCam, a powerful camera that captures near-infrared light.
• NIRSpec: Confirmed extreme distance (high redshift).
• MIRI: Provided more details and confirmed vast distance.

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About Galaxy

It is a system of stars, stellar remnants, interstellar gas, dust, and dark matter bound by gravity.

Variety and Size

• Star Count: Average galaxy contains about 100 million stars.
• Size Range: From dwarf galaxies with less than a thousand stars to supergiant galaxies with up to one hundred trillion stars.
• Dark Matter: Most of a galaxy’s mass is dark matter; stars and nebulae make up only a small percentage.
• Central Features-  Supermassive Black Holes: Commonly found at the centers of galaxies.

Classification

Galaxies are categorized by shape:

• Elliptical
• Spiral (e.g., Milky Way)
• Irregular

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About  Galaxy JADES-GS-z14-0

• It is the most distant known galaxy from Earth.
• Formation: JADES-GS-z14-0 was formed approximately 290 million years after the Big Bang.
  • Previously, the earliest-known galaxy was dated to 320 million years post-Big Bang.

Characteristics of Galaxy JADES-GS-z14-0

• Unique Properties: The galaxy contains young stars and significant ionized gas emission.
• Size: Measures about 1,700 light-years across.
  • A light year is 9.5 trillion kilometers.
• Mass: Equivalent to 500 million stars the size of the Sun.

Findings of Galaxy JADES-GS-z14-0

• Strong ionized gas emissions: Researchers found evidence of strong ionized gas emissions (including hydrogen and oxygen) within the galaxy.
  • The presence of oxygen suggests that multiple generations of massive stars had already lived their lives before observing the galaxy.

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Significance of the discovery of Galaxy JADES-GS-z14-0

• Challenges previous Theories: This galaxy’s size and brightness don’t fit with existing ideas of how early galaxies formed. 
  • It suggests the process might be more surprising and complex.
• New Insights into Early Universe: Studying JADES-GS-z14-0 helps  understand the formation and evolution of galaxies in the early universe.
  • It provides insights into the conditions of the universe shortly after the Big Bang.
• Milestone in Cosmology: This discovery is a major breakthrough in our study of the universe’s early history.

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Recently, scientists at the Institute of Advanced Virology (IAV), Thonnakkal, Thiruvananthapuram, Kerala, have developed a novel way of generating non-infectious Nipah virus-like particles (VLPs) in the laboratory, which mimic the wild type Nipah virus (NiV).

Scientists Develop HiBiT-Tagged Non-Infectious Nipah Virus-Like Particles for Antiviral Screening and Vaccine Development

• In the current study, IAV scientists generated “HiBiT-tagged” Nipah virus-like particles (NiV-VLPs) using plasmid-based expression systems, encoding the NiV structural proteins glycoprotein (G), fusion protein (F), and matrix (M).
• The VLPs thus produced were morphologically and functionally identical to the native virus. The inclusion of a highly sensitive HiBiT tag on these VLPs accelerates their potential in antiviral drug screening and vaccine development.

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About Nipah Virus

• A Pathogenic Virus: The zoonotic virus Nipah is a highly pathogenic paramyxovirus, with a fatality rate of up to 80% in affected humans. 
  • It is one of the deadliest pathogens known to infect humans.
  • Zoonotic disease means it passes from animals to humans. 
    • Nipah virus can be spread to people from infected bats, infected pigs, or infected people. 
• Host: The natural hosts of the virus are fruit bats, also known as flying foxes. 
• Genome: The genome of the NiV encodes six major proteins: glycoprotein (G), fusion protein (F), matrix (M), nucleocapsid (N), long polymerase (L) and phosphoprotein (P).

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About Virus-like Particles (VLPs)

• Non-infectious Particles: Virus-like particles (VLPs) are molecules that closely resemble viruses, but are non-infectious because they contain no viral genetic material.
• Particles’ Characteristics: VLPs carry most of the characteristics of the virus, except their ability to replicate (because it lacks the viral genome). 
• Structure Classification: Given the structural diversity of VLPs, they have been categorized into three main groups: enveloped, nonenveloped, and chimeric. 
  • Enveloped VLPs (eVLPs): These are complex structures that own a host–cell-derived membrane and one or more glycoproteins. 
    • As vaccines, eVLPs stimulate immune responses and are manipulated with chemical or genetic methods. 
  • Non-enveloped VLPs: Non-eVLPs are single or multiple capsid protein nanoconstructs that lack cell membranes. Members of this category are produced on eukaryotic or prokaryotic expression systems. 
    • The surfaces of non-eVLPs can also be manipulated with chemical and genetic approaches to display epitopes or peptides on their surfaces and, herein, elicit wider immunological responses.
  • Chimeric VLPs (cVLPs): These are nanoplatforms from structural components originating from at least two different viral serotypes. 
    • In these nanoplatforms, the VLP core can be modified with antigens that cannot self-assemble or present polyproteins from distinct viruses. 
    • In contrast with the other two categories of VLPs, cVLPs are useful to present foreign epitopes; entrap multiple therapeutic or diagnostic molecules; and target cells, tissues, or organs.
• Importance: VLPs have long been recognised as effective quantitative platforms for studying viral binding and entry kinetics of the virus. But the advent of NanoBiT technology and “HiBiT-tagged” VLP (HiBiT is an 11 amino acid peptide ) makes it far more sophisticated.

Significance of New Method to Generate Virus-Like Particles

• Safe & Effective Platform: This new method offers an alternate, safe and effective platform for developing neutralizing antibodies against NiV in a biosafety level-2 (BSL) laboratory. 
  • Biosafety Level-2 (BSL) Laboratory: This biosafety level covers laboratories that work with agents associated with human diseases (i.e. pathogenic or infectious organisms) that pose a moderate health hazard.
• Reduced Risks: The potential risks of using native viruses in virus-host interaction assays, immune response studies, immunoglobulin validations and other virus-based assays could be alleviated with the use of these HiBiT tagged VLPs.
• Enable Studies in Lower Biocontainment Levels: The concept of generating VLPs or tagged VLPs (eg: HiBiT) is applicable to several other virulent pathogens but it is particularly advantageous to apply this methodology to BSL-3/BSL-4 level viruses, to enable studies in lower bio-containment levels.

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Recently, the Reserve Bank of India (RBI) allowed the opening of rupee accounts outside India.

Crucial Insights on RBI’s Announcement

• Liberalization of the External Commercial Borrowing (ECB) Framework & Regulations: The RBI said, the Strategic Action Plan for 2024-25 has been finalized  which includes the liberalization of the external commercial borrowing (ECB) framework. 
  • The RBI plans to liberalize regulations related to Indian Rupee (INR) accounts for non-residents and allow them to open rupee accounts outside India.
• Rationalization of Guidelines & Regulations: In its Annual Report, the RBI said that rationalization of various guidelines will be a priority, with an emphasis on continuous synchronization of the Foreign Exchange Management Act (FEMA) operating framework with the evolving macroeconomic environment. 

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• • The RBI said rationalizing regulations to promote the internationalization of the Indian Rupee was undertaken to enable the settlement of bilateral trade in local currencies. 
• Internationalization of the Indian Rupee with Regulatory Changes: The RBI will permit persons resident outside India (PROIs) to open rupee accounts outside India as part of the 2024-25 agenda for internationalizing the domestic currency.
  • The RBI is intensifying efforts to internationalize the Indian Rupee (INR) by making regulatory changes for non-residents and enhancing the appeal of GIFT City as an international financial center. 

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About Internationalization of Indian Rupee

Internationalization of Indian Rupee is a process that involves increasing the use of the rupee in cross-border transactions. These are all transactions between residents in India and non-residents. 

• Key Process Involved: : It involves promoting the rupee for import and export trade and then other current account transactions, followed by its use in capital account transactions. 
• Significance and Requirement:
• • Need for Economic Progress: The Internationalisation of the rupee is essential for India’s economic growth.
  • Necessary Steps:
    • Requires opening up of the currency settlement 
    • A strong swap and forex market.
    • Require full convertibility of the currency on the capital account and
    • Cross-border transfer of funds without any restrictions.
• Historical Context:
  • 1950s: In 1959, the Centre allowed the RBI to issue special notes only for the Gulf region. 
    • The Indian rupee was the legal tender in the Gulf countries, including Kuwait, Bahrain, Qatar and UAE, till the early 1970s. The currency had the same value as the Indian rupee and was known as the Gulf rupee or external rupee.
    • Moreover, Indians could also take the Indian rupee notes when they went on the Haj pilgrimage and exchange them freely for Saudi riyals. 
      • Later, the Centre introduced special notes for the pilgrimage with the word “HAJ” inscribed on it. These were called “Haj notes”.
    • The Indian currency, however, was devalued in 1966. This led to several countries in the Gulf withdrawing the use of the Gulf rupee. Gradually, by the early 1970s, all the countries stopped using the Gulf rupee as their currency.
  • 1994: India accepted the Articles of Agreement of the IMF, making the Indian Rupee fully convertible on the current account. 
    • India also enabled external commercial borrowings in Rupees (like masala bonds, which are rupee-denominated bonds issued by Indian entities outside India). 

Advantages of Internationalization of the Indian Rupee

• Mitigates Currency Risk: The use of the rupee in cross-border transactions mitigates currency risk for Indian businesses. 
  • Protection from currency volatility not only reduces the cost of doing business, it also enables better growth of business, improving the chances for Indian businesses to grow globally.
• Reduce dependency on Foreign Currency: Internationalization of the rupee reduces the need for holding foreign exchange reserves. Reducing dependence on foreign currency will make India less vulnerable to external shocks.
  • As per RBI data, presently, India’s foreign exchange reserves are at a record high of $642.63 billion.
• Enhancement of India’s Global Stature: As the use of the rupee becomes significant, the bargaining power of Indian businesses would improve, adding weight to the Indian economy and enhancing India’s global stature and respect.
• Enhanced Competitiveness: It can enhance India’s competitiveness in global markets by allowing the Rupee to reflect India’s economic fundamentals and reducing the need for the RBI to intervene in currency markets.
• Diversification of Reserves: Internationalization of the rupee can diversify India’s foreign exchange reserves away from a concentration in US dollars, reducing the risks associated with holding a single currency.

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Challenges of Internationalization of Indian Rupee

• Trade Deficit: To internationalize any currency as a safe asset, the size of the economy is of primary importance. Whilst the Indian economy fulfills this criteria, India’s imports are larger than its exports and suffers from the disadvantage of a trade deficit. 
  • China’s efforts to make its currency, Renminbi internationally acceptable, has met with only limited success though, post the Ukraine war, as some settlements with Russia in Renminbi are taking place.
• Impact on Import Costs: If the internationalization of the Rupee leads to increased demand for the currency in global markets, it might strengthen the Rupee against other currencies. 
  • A stronger Rupee could potentially reduce the cost of imports from countries like China and Russia, potentially impacting trade balances.
• Tight Control by the Central Government: The RBI exercises a very tight control over India’s Capital account. To internationalize the rupee, the free flow of capital is desired. 
  • Even though the value of the Rupee is determined in the open market, RBI’s open market operations help maintain its stability. 
• Convertibility Concern: Although Rupee-based trade is being encouraged by the government and the RBI, there is no move to permit full convertibility as it may lead to the flight of capital with attendant exchange risks. 
  • Full capital Account Convertibility is not permitted in India. It is driven by past fears of capital flight (outflow of capital from India due to monetary policies/lack of growth) and exchange rate volatility, given significant current and capital account deficits.
    • The rupee is fully convertible in the current account, but partially in the capital account.
• Triffin Dilemma or Monetary Policy Dilemma: It is a conflict that arises when a country needs to supply enough of its currency to meet global demand while also maintaining its domestic monetary policies.
  • Balancing these conflicting objectives can be challenging in the process of internationalizing the Rupee because actions taken to meet global demand may have unintended consequences for India’s economy such as inflation or unstable financial conditions.
• Exchange Rate Volatility: Internationalization of the Rupee can create risks for businesses and investors that operate in multiple currencies, leading to uncertainty and higher transaction costs, especially in the initial stages. 
• • Fluctuations can impact trade and investments, affecting economic stability.
• Lack of International Demand: The daily average share for the rupee in the global foreign exchange market is about 1.6%, while India’s share of global goods trade is about 2%.
  • As per Parliamentary Standing Committee, there were few takers for the Indian Rupee.
  • During FY 2022-23, no crude oil imports by oil Public Sector Undertakings (PSUs) were settled in Indian Rupee. 
  • While efforts have been made to trade with around 18 countries in Rupees, transactions have remained limited.
• Impact of Demonetization: The demonetization of 2016, along with the withdrawal of the Rupees 2,000 note has affected confidence in the rupee, particularly in neighboring countries like Bhutan and Nepal.

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India’s Initiatives Towards Internationalization of Indian Rupee

• Special Rupee Vostro Accounts (SRVAs): With the objective of promoting bilateral trade in local currencies, the RBI in July 2022, had permitted banks to open and maintain Special Rupee Vostro Accounts (SRVAs) for partner banks from other countries.

• • The RBI has taken steps to make the rupee more acceptable in global trade by allowing 20 banks, operating in India, to open 92 SRVAs with partner banks from 22 countries to promote bilateral trade in a local currency.
• Recommendations of the Inter-Departmental Group (IDG): The efforts to internationalize rupee have gained momentum after an RBI-appointed working group, in July 2023, recommended various measures to accelerate the pace of internationalization of local currency. 
  • The inter-departmental group (IDG) said that non-residents should be allowed to open rupee accounts as the ability to open accounts outside the country of the currency is a foundational element of the internationalization of a currency.
• Agreements on Unified Payments Interface (UPI): The government has also signed agreements with seven countries to make UPI, allowing Indian citizens to transact in local currency.
• • Following its launch in Sri Lanka and Mauritius, UPI payments are accepted in France, UAE, Singapore, Bhutan, and Nepal.
  • RBI in collaboration with the Government of India and National Payments Corporation of India (NPCI) is reaching out to jurisdictions to increase the global outreach of the UPI system to facilitate cross-border transactions, including remittances. 
• Developments in the GIFT City: Gujarat International Finance Tec-City (GIFT City), Gandhinagar was set up as India’s first International Financial Service Centre (IFSC) with a vision to bring to the Indian shores, those financial services/markets and transactions, relating to India, that are currently done outside India. 
  • GIFT IFSC has the potential to develop as a competitor to international financial centers for Rupee products and also provides an opportunity for Indian entities to raise foreign capital through masala bonds and list the same on the exchanges in the IFSC.
• Asian Clearing Union (ACU): It is a regional payment arrangement that facilitates the settlement of trade transactions among its member countries on a multilateral basis. 
  • It was established in 1974 by 10 central banks of Asia. The ACU currently has 13 member countries, including India.
  • In March 2023, the RBI put in place the mechanism for rupee trade settlement with as many as 18 countries.
  • Banks from these countries have been allowed to open SVRAs for settling payments in the Rupees.
• Promotion of Rupee-denominated Bonds: The government has allowed Indian companies to issue rupee-denominated bonds in international markets that helped to increase the demand for the rupee.
• RBI enabled external commercial borrowings in Rupees (especially Masala Bonds).
• Currency Swap Agreements: The RBI has signed currency swap agreements with several countries, which allow for the exchange of rupee and foreign currency between the central banks of the two countries.
  • The RBI launched the South Asian Association for Regional Cooperation (SAARC) Swap Framework to strengthen regional financial and economic cooperation and to provide to SAARC countries a backstop line of funding to meet any balance of payments and liquidity crises.
    • The swap drawals can be made in US dollar, euro or Indian rupee. The framework provides certain concessions for swap drawals in Indian rupee.
  • India currently has a Bilateral Swap Agreement with Japan for an amount up to USD 75 billion.
• Bilateral Trade Agreements: The Indian government has signed several bilateral trade agreements with other countries to facilitate greater cross-border trade and investment and increased the use of the rupee in international transactions.
  • Recently India made its first-ever payment, in rupees, to the UAE to buy crude oil. This was seen as a significant boost for India, which has had to rely on buying 80% of its crude oil imports internationally in dollars. 
  • Under the Indo-Iran Agreement, the Indian Rupee vostro accounts of Iranian banks are credited 100% in Rupees by Indian importers
  • In 2022, Sri Lanka also made Rupee a designated foreign currency.

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Way Forward

• Adopt a Collaborative Approach: There is a need for careful planning and coordination between policymakers, market participants and regulators to ensure a smooth and successful transition towards the internationalization of the Rupee.
• More Freely Convertible Rupees: With a goal of full convertibility by 2060, there is a need for more financial investments that move freely between India and abroad.
  • It would allow foreign investors to easily buy and sell the rupee, enhancing its liquidity and making it more attractive.
  • While the acceptance of the Rupee as a global currency is gaining, its internationalization will still require cautious steps.
• Work upon Recommendations of Tarapore Committee: Recommendations of Tarapore Committee should be followed to achieve the aim of Internationalisation of the Indian Rupee.
• More Currency Swap Agreements: Currency Swaps and Local Currency Settlement provides currency diversification that stabilizes the local currency and provides a natural hedge for the business community to protect against currency risk exposure. 
  • A natural hedge is the reduction in risk that can arise from an institution’s normal operating procedures.
• Ensure Currency Management Stability: It is required to avoid sudden or drastic changes such as devaluation or demonetisation that can impact investors’ confidence.
• Easing Regulatory Hurdles: There is a need to ease the Foreign Exchange Management Act, 1999; revisiting regulatory guidelines to remove hurdles in the current Financial Action Task Force (FATF) and Prevention of Money Laundering Act (PMLA) provisions. 
  • Also, procedural and documentation roadblocks faced by foreign portfolio investors need to be reviewed. These roadblocks not only add to transaction and compliance costs but also affect the overall ease of doing business in India.

• Continuous Linked Settlement (CLS): Considering the growth in the Indian economy and the increase in trade, it is desirable and required to include Rupees as a direct settlement currency in CLS.
  • CLS is a global system for the settlement of foreign currency transactions.
• Cross-border Payment Infrastructure: To achieve the objective of internationalization of Rupee, there is a need for a robust Rupee-denominated payment mechanism for cross-border transactions and providing timely inter-bank transfers and settlement. 
  • This ensures a seamless flow of cross-border transactions in local currencies and may also reduce dependence on international payment systems based on the SWIFT messaging system.
• Creation of an Indian Clearing System: An Indian Clearing System will bring greater efficiency in the settlement in domestic currencies.
• Part of Special Drawing Rights (SDR) Basket: Inclusion of Rupee in the International Monetary Fund’s (IMF) SDR basket will help in attaining the objective of internationalization of Rupees.

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