Daily Mains Practice Questions 13-02-2023

Q. 1

KEY POINTS

·        France is the 11th largest foreign investor in India with a cumulative investment of $10.31 billion from April 2000 to June 2022, which represents 1.70% of the total foreign direct investment inflows into India.

·        France has emerged as a major strategic partner for India with crucial defence deals and increased military to military engagement.

·        A key example of this is the inducting of the French Scorpene conventional submarines, being built in India under technology transfer agreement of 2005.

·        As the complexities in the international geopolitical order have emerged, both countries have worked towards a deepening and broadening of their cooperation.

·        India and France are resident powers of the Indian Ocean and in the Indo-Pacific.

·        Maritime security has further gained momentum as both countries have articulated their common vision for a free, fair and open Indo-Pacific.

·        The two partners have formed a trilateral grouping with the United Arab Emirates to ensure maritime domain awareness and security from the east coast of Africa to the far Pacific.

·        India’s partnership with France is built on common values and goals. Both have underlined the ‘importance of maintaining strategic autonomy with a shared understanding of global risks in many domains.

KEY POINTS

·        One of the reasons for the modest export performance of India’s textiles sector is high import duties in developed countries.

·        For example, the duty in the EU and the UK on most garments imported from India is 12 per cent. The duty in the US may reach 32 per cent.

·        Indian firms also get a level playing field with firms from Vietnam and Bangladesh, whose products enter the EU and the US at zero duty.

·        India expected a jump in exports, but it did not happen. India’s apparel exports during 2007-09 and 2019-21 increased from $121 million to just $197 million.

·        While India’s textiles exports to Japan are small, they are sizeable with respect to the US, the EU and other developed country markets.

·        India has 1,200 compliant factories supplying cotton products to FFI and other large buyers.

·        In India, factories with more than 300 workers need government permission to fire workers or exit business. Allow units to hire and fire with suitable financial safeguards like the firms in the services sector.

·        This simple step will increase the share of workers in the organised sector from the current 8 per cent to a far higher level, benefiting both the employer and the workers and increasing output.

KEY POINTS

·        The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Wednesday raised interest rates further in an attempt to bring inflation back to the target level of 4%.

·        Monetary policy essentially deals with the supply and cost (interest rates) of money in an economy.

·        While changes to the repo rate affect the broader economy in terms of whether loans  for homes, cars, or factories  will be costlier or cheaper.

·        The policy stance opens a window into how members of the MPC see the inflation and economic growth situation.

·        The decision to increase the repo rate was made by a 4-2 majority in the six-member MPC; government-nominated members Ashima Goyal and Jayanth Varma voted against the hike.

·        RBI expects that India’s gross domestic product (GDP) will grow by 6.4% in FY24 — however, the growth rate will slow down in each quarter through the year.

·        At 6.4%, India’s growth rate would slow marginally from the 7% it is expected to achieve in the current financial year and the 8.7% that it achieved in the previous financial year.

·        But most economists who expected the RBI to pause interest rate hikes are of the view that GDP growth will barely cross 6%, if at all.

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