Daily Prelims Notes 15 February 2025

Daily Prelims Notes

15 February 2025

Table Of Contents

1. India-US 123 Agreement: Unlocking Full Potential Through Legislative Amendments
2. India-US TRUST Initiative: Strengthening Critical Minerals and Pharma Supply Chains
3. What Prime Minister Dhan-Dhaanya Krishi Yojana aims to achieve, how PMDKY will be implemented
4. Vice-President questions involvement of CJI in executive appointments
5. Reciprocal Tariffs by U.S. may not hurt India much, says GTRI

1. India-US 123 Agreement: Unlocking Full Potential Through Legislative Amendments

Sub : Sci

Sec: Nuclear sector

Why in News

• India has committed to legislative amendments and sought a crucial exemption from the United States, which could facilitate the deployment of US-designed nuclear reactors and Small Modular Reactors (SMRs) in India. This move aims to fully realize the India-US 123 Civil Nuclear Agreement signed in 2007.

India-US Civil Nuclear Cooperation:

• India and the US reaffirmed their commitment to deepening energy security cooperation, positioning Washington as a key supplier of oil and gas to India.
• The agreement is seen as a step towards bridging the trade deficit between the two nations.
• More importantly, both sides have pledged to fully implement the India-US 123 Civil Nuclear Agreement by fostering collaboration on nuclear reactor deployment in India.

Proposed Legislative Amendments in India:

• Atomic Energy Act, 1962:The proposed amendments aim to allow private sector participation in nuclear power plant operations.
  • Currently, only state-owned Nuclear Power Corporation of India Ltd (NPCIL) and its joint ventures with NTPC Ltd and NALCO are authorized to operate nuclear power plants.
  • The amendments would enable private firms to enter the SMR sector, enhancing domestic nuclear infrastructure.
• Civil Liability for Nuclear Damage Act, 2010 (CLNDA):Originally designed to compensate victims in case of a nuclear accident, CLNDA assigns liability to equipment suppliers, discouraging foreign investment.
  • Companies like GE-Hitachi, Westinghouse, and France’s Areva (now Framatome) have been reluctant to participate due to liability concerns.
  • Bilateral arrangements under CLNDA are being explored to address these concerns and facilitate US-India nuclear industry collaboration.
• Refer: India’s Nuclear Energy Mission

About India-US 123 Agreement:

• Indian Prime Minister Manmohan Singh and U.S. President George W. Bush announced plans for civil nuclear cooperation.
• India agreed to separate its civil and military nuclear facilities and place all civilian nuclear facilities under International Atomic Energy Agency (IAEA) safeguards.
• The United States aimed to adjust its domestic laws and work with international partners to facilitate full civil nuclear cooperation with India.
• The U.S. Congress amended the Atomic Energy Act of 1954, allowing nuclear cooperation with India despite its non-signatory status to the Nuclear Non-Proliferation Treaty (NPT).
• India negotiated an India-specific safeguards agreement with the IAEA, approved on August 1, 2008, and signed on February 2, 2009.
• On September 6, 2008, the NSG granted India a waiver, permitting it to engage in civilian nuclear trade globally.
• External Affairs Minister and U.S. Secretary of State signed the 123 Agreement in Washington, D.C., operationalizing the civil nuclear cooperation framework.
• Key Provisions:
  • The agreement encompasses nuclear reactors and aspects of the associated nuclear fuel cycle, including enrichment and reprocessing.
  • Provisions include developing a strategic reserve of nuclear fuel to ensure a reliable supply over the lifetime of India’s reactors.
  • India is granted prior consent to reprocess nuclear material, contingent upon establishing a dedicated national facility under IAEA safeguards.

The US ‘810’ Roadblock:

• The ‘810’ regulation under Part 810 of Title 10, US Code of Federal Regulations, restricts American nuclear firms from manufacturing nuclear equipment or conducting nuclear design work outside the US.
• While the 123 Agreement aimed to enable full nuclear cooperation, this restriction limits India’s ability to participate in nuclear technology manufacturing.
• Why India Seeks an Exemption?
  • India’s ambition to manufacture SMRs domestically is hindered by the ‘810’ restriction.
  • To develop and scale nuclear power generation, India requires an exception to allow domestic production of nuclear components.

Small Modular Reactors (SMRs):

• SMRs, with a capacity ranging from 30 MWe to 300 MWe per unit, are viewed as a viable option for clean energy transition.
• India aims to be a global leader in SMR technology.
• The Department of Atomic Energy (DAE) is in exploratory talks with Holtec International, a New Jersey-based company, for potential collaboration on SMR projects.

Global SMR Developments:

• Only two SMR projects have reached operational status globally:
  • Akademik Lomonosov (Russia) – Two modules of 35 MWe each, operational since May 2020.
  • HTR-PM (China) – Grid-connected in December 2021, commercially operational by December 2023.
• Western firms advancing SMR certification include:
  • Holtec International – SMR-300
  • Rolls-Royce – SMR
  • NuScale – VOYGR SMR
  • Westinghouse Electric – AP300 SMR
  • GE-Hitachi – BWRX-300

2. India-US TRUST Initiative: Strengthening Critical Minerals and Pharma Supply Chains

Sub :IR

Sec: India and world

Why in News

• The Transforming Relationship Utilizing Strategic Technology (TRUST) Initiative was announced during Prime Minister Narendra Modi’s visit to Washington.

About TRUST Initiative:

• The TRUST initiative will facilitate collaboration in the recovery and processing of critical minerals like lithium and rare earth elements (REEs).
• It aims to reduce barriers to technology transfer, address export controls, and enhance high-tech commerce.
• India and the US will work together to create a secure and resilient supply chain for critical minerals.
• TRUST will drive collaboration among governments, academia, and private sectors to foster innovation in:
  • Defence, Artificial Intelligence (AI), Semiconductors, Quantum Computing, Biotechnology and Energy and Space Technologies.

Impact on the Pharmaceutical Sector:

• India is the second-largest manufacturer of Active Pharmaceutical Ingredients (APIs) after China.
• Many APIs depend on critical minerals like lithium, magnesium, zinc, and selenium.
• In 2023, pharma products accounted for 21.9% of India’s $20 billion exports to the US.
• The TRUST initiative aims to secure the supply of essential raw materials for the pharmaceutical industry.

US Critical Minerals Strategy:

• US Energy Act (2020): Authorized $675 million for the Critical Minerals and Materials (CMM) program to diversify supply chains.
• Battery and Critical Mineral Recycling Program (2024): Provided $125 million in grants for battery reuse and recycling.
• India’s National Critical Minerals Mission: Launched in 2024 with a budget of ₹16,300 crore over seven years.
• ₹7,000 crore allocated for the exploration of critical minerals.
• ₹1,500 crore allocated for an incentive scheme to support recycling.
• India-US iCET Initiative (2022):Focused on semiconductors, wireless communication, and AI.
• TRUST has a broader focus, covering critical minerals and supply chain security.
• TRUST will enhance bilateral engagement beyond MSFN and MSP frameworks.
• It seeks to reduce technology transfer barriers and address export control challenges.
• While it does not provide Inflation Reduction Act (IRA) tax benefits to Indian companies like Japan, it opens new avenues for collaboration.

Importance of Critical Minerals in Strategic Sectors:

• Critical minerals and REEs are essential for industries like defence, semiconductors, AI, energy, and space.
• Key applications:
  • Neodymium, praseodymium, samarium – High-performance magnets for missiles, fighter jets, radars.
  • Lithium, cobalt, nickel – Batteries for electric vehicles and energy storage.
  • Gallium, indium – Essential for semiconductors and AI hardware.
  • Europium, terbium – Used in medical diagnostics and biotech imaging.
  • Rare earth magnets – Crucial for wind turbines and space technology.
• China controls ~70% of global REE production and dominates processing.
• India, despite having some reserves, remains dependent on imports, especially for heavy rare earths.
• The TRUST initiative aims to reduce dependence on China by securing alternative global partnerships.

3. What Prime Minister Dhan-Dhaanya Krishi Yojana aims to achieve, how PMDKY will be implemented

Sub: Schemes

Sec: Agri

Context:

• The Prime Minister Dhan-Dhaanya Krishi Yojana (PMDKY) was announced by Finance Minister Nirmala Sitharaman during the Union Budget
• The scheme is inspired by the success of the Aspirational Districts Programme (ADP) launched in 2018, and aims to enhance agricultural practices in 100 districts.

About PMDKY:

• The PMDKY is modelled on ADP’s structure but is focused specifically on agricultural districts.
• It will target 100 districts in India, selected based on three key parameters:
  • Low productivity in agriculture.
  • Moderate cropping intensity.
  • Below-average credit parameters for farmers.
• The Ministry of Agriculture and Farmers’ Welfare is collecting data on these parameters to identify the districts that will benefit from the scheme.
• Funding will be sourced from various existing schemes under the Ministry of Agriculture and Farmers’ Welfare and the Ministry of Fisheries, Animal Husbandry, and Dairying.

Objectives of PMDKY:

• Enhancing agricultural productivity.
• Adopting crop diversification and promoting sustainable agricultural practices.
• Augmenting post-harvest storage facilities at the panchayat and block levels.
• Improving irrigation facilities for more efficient water usage.
• Facilitating the availability of both long-term and short-term credit to farmers.

Cropping Intensity:

• Definition: Cropping intensity refers to the efficiency of land use and is expressed as the percentage of the gross cropped area relative to the net area sown.
• It reflects the number of crops grown on a piece of land in one agricultural year.
• The all-India cropping intensity for 2021-22 was 155%, showing a significant improvement from 111% in 1950-51.

Aspirational Districts Programme (ADP):

• Launched in January 2018 by Prime Minister Narendra Modi.
• The goal was to fast-track the development of 112 of India’s most under-developed districts, based on 3Cs:
  • Convergence of Central and State schemes.
  • Collaboration of government officers at the Central, State, and district levels.
  • Competition among districts based on their progress in monthly rankings.
• The ranking is based on the incremental progress made across 49 Key Performance Indicators under 5 broad socio-economic themes: Health & Nutrition, Education, Agriculture & Water Resources, Financial Inclusion & Skill Development and infrastructure.

4. Vice-President questions involvement of CJI in executive appointments

Sub: Polity

Sec: Judiciary

Context:

• Vice-President Jagdeep Dhankhar raised significant concerns about the involvement of the Chief Justice of India (CJI) in the selection of executive appointments, specifically the CBI director.
• Dhankhar questioned the legal rationale for this practice and emphasized the importance of maintaining the separation of powers in India’s democratic framework.

Separation of powers:

• The concept of separation of powers is a fundamental principle of governance that divides the functions and powers of the government into three distinct branches: the Executive, the Legislature, and the Judiciary.
• This ensures a system of checks and balances, where no branch becomes too powerful or infringes on the roles of the others.
• The Indian Constitution embodies this principle to maintain democratic governance and uphold the rule of law.

Separation of Powers in Practice:

• The separation of powers in India is not absolute but is designed to ensure cooperation and coordination between the branches of government. The Constitution allows for a degree of overlap, particularly in areas like:
• Judicial appointments: The Collegium system allows for judicial appointments to be made by the Executive, in consultation with the judiciary.
• Legislative-executive overlap: The President’s powers, such as issuing ordinances, can sometimes give the Executive significant influence in lawmaking.

Challenges to the Separation of Powers:

• Judicial activism: The judiciary sometimes intervenes in areas traditionally considered to be the domain of the Executive or Legislature. For instance, judicial decisions on executive policies, such as environmental issues or governance-related matters, may raise concerns over the judiciary’s overreach.
• Executive influence on the judiciary: There are instances where the Executive may try to influence judicial appointments or the functioning of judicial bodies, as seen in debates over the Collegium system.

Constitutional Provisions:

• Article 50directs the State to take steps to separate the judiciary from the executive.
• Articles 74 and 163 restrict the courts from inquiring into the advice tendered by the Council of Ministers to the President and the Governor.
• Articles 122 and 212 restrict the courts from questioning the validity of proceedings in the Parliament and the Legislatures.
• Articles 121 and 211restrict the Parliament and the State Legislature from discussing the Judicial conduct of a judge of the Supreme Court and the High Courts unless the resolution of removal of the judge is under consideration.
• Article 361 provides immunity to the President or the Governor from being answerable to any court for the exercise and performance of the powers and duties of his office.

Committee to appoint CBI director:

• In 2014, the Lokpal Act provided a committee for appointment of CBI Director:
• The committee is headed by the Prime Minister.
• Members: Leader of Opposition or Leader of the single largest opposition party, Chief Justice of India or a Supreme Court judge nominated by the Chief Justice.

5. Reciprocal Tariffs by U.S. may not hurt India much, says GTRI

Sub :Eco

Sec: External sector

 Why in News?

• The US has introduced “reciprocal tariffs” to match or offset tariffs imposed by its trading partners, signalling a shift from WTO trade norms. This move aims to address trade imbalances and protect US domestic industries.
• India’s exports may not be significantly affected due to differences in export profiles between the two countries, as per GTRI.

Key Insights

How reciprocal tariffs has minimal impact on India

• As per Global Trade Research Initiative (GTRI) – U.S. tariffs will have limited impact on India, since India’s export composition is different from the U.S. imports. Example – Pistachios Case – If the U.S. imposes a 50% reciprocal tariff on Indian pistachios, India remains unaffected as it does not export pistachios to the U.S.
• For 75% of U.S. exports to India, the average tariff is less than 5% (India levies low duties on several U.S. imports.)
• Indian textiles and footwear already face 15%–35% tariffs in the U.S., impacting labor-intensive industries.