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[DAILY CURRENT AFFAIRS, 28 MARCH 2023]

NATO EXPANSIONS AND RUSSIA

1. Background

After nearly three months of debate between the two countries, Finland and Sweden have formally applied for membership in the North Atlantic Treaty Organization (NATO), the US-led security alliance forged during the Cold War to defend its members from Soviet expansion.

2. Transforming Europe

  • The war in Ukraine has already changed the geopolitics of Europe and the World. The admission is Finland and Sweden to NATO would bring about a transformation in the continent's security map by giving NATO a contiguous long frontier in western Russia Finland and Russia share a 1. 300 km border and doubling it from the present 1, 200 km, parts of it in northern Norway, Latvia and Estonia and Poland and Lithuania.
  • In addition, Sweden's island of Gotland in the middle of the Baltic Sea would give NATO a strategic advantage.
  • Furthermore, when Sweden and Finland join NATO, the Baltic Sea Russia's gateway to the North Sea and the Atlantic Ocean would be ringed entirely by members of the western security alliance- Finland, Estonia, Latvia, Lithuania, Poland, Germany, Denmark and Sweden.

3. Neutrality history

  • In seeking NATO membership, Sweden and Finland have abandoned their long history of neutrality, when their foreign policy and security priority was to stay out of superpower rivalry during the Cold War and maintain cordial ties with both blocs.
  • Post-war Finland sought to carve out neutrality from a defence alliance with the Soviet Union called the Treaty of Friendship, Co-operation and Mutual Assistance which also gave the superpower a base on its territory.
  • Finland also stayed out of the Marshall Plan, the US aid programme for Europe's post-World War II recovery.
  • From the perspective of Finland whose capital Helsinki is situated just across the Gulf of Finland from St Petersburg (Leningrad)- the treaty protected it from being attacked or incorporated into the USSR like Baltic and eastern European states.
  • It allowed the country to pursue the path of democracy and capitalism while staying out of the conflict between the great powers.
After the end of the Cold War and the disintegration of the Soviet Union, Finnish neutrality was manifest in its decision to stay out of NATO, even as it entered the European Union in 1995.
In recent years, the Finland model or Finlandisation was advocated by some including former US Secretary of State Henry Kissinger as the way forward for Ukraine's relations with Russia.
 
  • Swedish neutrality traces back to the early 19th century and is largely held through WWII, though it has faced questions about its assistance to Hitler's Germany.
  • Sweden's neutrality is often described as the other side of its social welfare and as the two pillars of its national identity.
  • But the official policy of neutrality or non-alignment was not without contradictions.

4. Finland and Sweden's joining NATO

  • Swedish Prime Minister Olaf Palme's anti-Vietnam war stand had angered the US; at the same time, it was during his tenure that Sweden entered into a secret defence pact with the US.
  • Sweden's neutrality has helped it play the role of a pacifist country that preached disarmament, despite its flourishing armaments industry.
  • Sweden all but shed its neutrality in the 1990s as it became involved with NATO in its international missions in Bosnia, Afghanistan and Libya.
  • It joined the EU in 1995 at the same time as Finland and in 2010, became part of the European Common Security and Defence Policy.
  • Although the debate over joining NATO was ongoing in both countries for nearly three decades, Russia's annexation of Crimea pushed both towards NATO's "open door" policy.
  • Still, there was little political consensus in either country, especially in Sweden where the Social Democrats have been against the idea.
  • February 24 changed everything, former Swedish Prime Minister Carl Bildt said referring to the date on which Russia invaded Ukraine.
  • In Finland, the leadership was at one with the growing public clamour for admission to NATO, while in Sweden, where elections are due later this year, the ruling Social Democrats came under pressure from opinion polls that showed that a majority were in favour.
  • Some may see an expanding NATO and the growing role of the US in European security as winding the clock back to a time on the continent where war was an ever-present threat, a worse situation than even during the Cold War when the US and the Soviet Union met regularly to reduce the risk of war, especially nuclear.
  • However, Bildt dismissed the concerns that NATO's expansion would add to the tensions on the continent.
  • He said instead "strengthening NATO and EU" would act as a deterrent against Russia.
  • That is the key thing, because as long as Russian President Mr Valdimir Putin is in power.
 

4. Russian Response

  • If Putin's invasion of Ukraine was meant to deter NATO's eastward expansion, the war has had the opposite effect.
  • If admitted, Sweden and Finland will become its 31st and 32nd members. The alliance had 12 founding members in 1929.
  • Back in March, the possibility of the two Nordic nations applying for NATO membership had evoked a threatening response from Russia, which said it would take retaliatory measures by stationing its nuclear and hypersonic weapons close to the Baltic Sea.
  • In his first remarks after Finland and Sweden officially announced their intention to join, Putin did not sound as threatening.
  • Russia has no problems with Finland and Sweden and NATO's expansion at the expense of these countries does not pose a direct threat to us.
  • But the expansion of military infrastructure into this territory will certainly provoke our response.
  • Sweden had already said it would not allow NATO bases or nuclear weapons on its territory.
  • Finland's Prime Minister Sanna Marin told that her country is opposed to NATO deploying nuclear weapons or setting up military bases on its territory if admitted to the alliance.

5. Membership Process

  • At the moment the main obstacle to their applications in Turkey, a member since 1952 and which has NATO's second-largest army after the US.
  • Turkey's president Recep Tayyip Erdogan has objected to their applications on the ground that the two countries had provided a haven to the leaders of the Kurdish group PKK, an armed movement fighting for a separate Kurdistan, comprising Kurdish areas in  Turkey, Iraq, Iran and Syria.
  • Neither of these countries has a clear, open attitude towards terrorist organisations and both Sweden and Finland joined an arms embargo against Turkey in 2019.
Membership in NATO is open to all European nations that fulfil certain criteria that include
  1. A functioning democratic political system based on a market economy
  2. Fair treatment of minority populations
  3. A commitment to resolve conflicts peacefully
  4. An ability and willingness to make a military contribution to NATO operations and
  5. A commitment to democratic civil-military relations and institutions.
  • New members are admitted with the unanimous consent of all members.
  • Erdogan has said he would not entertain delegates from either country who may hope to change his mind.
  • Provided this opposition can be overcome, the seven-step membership process could take from four months to a year, raising concerns in both countries of a potential Russian attack before they are covered by Article 5 of the North Atlantic Treaty, NATO's legal framework, which pledges collective defence for all members.
  • The UK, Denmark and Norway have promised to come to their aid if this happens.

For Prelims & Mains

For Prelims: NATO, Russia-Ukraine War, Finland, Sweden, Cold war, 
For Mains:
1. What are the reasons for Finland and Sweden's joining in North Atlantic Treaty Organisation? Discuss its impacts on the geopolitics around Russia. (250 Words)

Previous Year Questions

1. What does NATO stand for?  (West Bengal Police SI  2019) 
A. North American Treaty Organisation
B. New Atlantic Treaty Organisation
C.North Atlantic Treaty Organisation
D. New American Treaty Organisation
 
1. Answer: C
 
2. Which among the following countries is not a member of the North Atlantic Treaty Organization (NATO)? (UPSC CAPF  2022)
A. Hungary
B. Poland
C. Belarus
D. Turkey
 
2. Answer: C
 
Source: The Indian Express

CHINA TAIWAN TUSSLE

 

1. Context

Tensions between China and Taiwan have escalated since October 1, 2022, when China observes its National Day to mark the birth of the People’s Republic of China (PRC). Coinciding with the 72nd-anniversary celebrations, China flew over 100 fighter jets into Taiwan’s air defence identification zone, jangling nerves in Taiwan and setting off an alarm around the world that it was prepping to take over the island by force.

2. Brief History of Taiwan

  • Taiwan, earlier known as Formosa, a tiny island off the east coast of China, is where Chinese republicans of the Kuomintang government retreated after the 1949 victory of the communists.
  • It has since continued as the Republic of China (RoC).
  • Although largely unrecognized by other countries as such, self-ruled Taiwan sees itself as no less than an independent nation.
  • Its leaders, have vowed to defend its sovereignty against the Chinese goal of “reunification”.

3. China-Taiwan Tensions

  • In 1954-55, and 1958, the PRC bombed the Jinmen, Mazu, and Dachen islands under Taiwan's control, drawing in the US.
  • Congress passed the Formosa Resolution authorizing President Dwight D Eisenhower to defend Taiwanese (Republic of China- ROC) territory.
  • In 1955, Premier Zhou En-lai declared at the Bandung Conference that he wanted negotiations with the US. But as civil war broke out in Lebanon in 1958, China resumed the bombing, provoking the US to supply Taiwanese outposts on the islands.
  • The people's Republic of China (PRC) i.e. mainland China and ROC (Taiwan) then arrived at an arrangement to bomb each other's garrisons on alternate days-this continued until 1971.
  • Taiwan became the non-communist frontier against China during the Cold war. It was described as an "unsinkable aircraft carrier" underscoring its strategic significance.
  • It was only in 1971 that the US inaugurated ties with Mainland China through the secret diplomacy of Henry Kissinger, national security adviser to President Richard Nixon.
  • In 1975, Chiang Kai-shek died, martial law was lifted, and Taiwan got its first democratic reforms.
  • U.S. recognized the communist party that ruled People's Republic of China (PRC) as the legitimate government of China in 1979, ending its official relationship with Taiwan and abrogating its mutual defense treaty with the island.
  • The US has a policy of strategic ambiguity towards Taiwan. This means that it maintains ties with Taipei, and sells weapons to it, but officially subscribes to the PRC's "One China Policy" in which Taiwan does not exist as a separate entity.
  • Just 14 countries around the world recognize Taiwan. Most are very small, many are remote island nations. As the British prepared to exit Hong Kong in 1999, the "One China, Two Systems" solution was offered to Taiwan as well, but it was rejected by the Taiwanese.
 
Image Source: The Indian Express

4. The Current Tensions Between the Two Nations

  • Lasy year, amid worsening the US-China relations over Covid and trade, the State Department sent its highest-ranking delegation yet to Taipei.
  • During the visit, the Chinese conducted a military exercise in the Taiwan Strait, which separates Taiwan from mainland China.
  • In October 2020, President Xi Jinping asked the PLA to prepare for war, triggering an alarm in Taiwan, which read it as an open threat.
  • Early in the Biden Administration, which declared "rock solid" commitment to Taiwan, Taipei raised an alert about an incursion by Chinese Warplanes.
  • In April, Taiwan reported Chinese jets in its air defense Zone. In July, Xi warned that he would "smash" any Taiwanese move toward independence.
  • At the beginning of this month, as the Chinese jets came back, Taiwanese Defence Minister Chiu Kuo-Cheng told Parliament that China already has the capacity to invade Taiwan, and would be able to "bring the cost and attrition to its lowest" by 2025.

5. US Ties with China

  • Officially, the US has subscribed to PRC's "One China Policy" which means there is only one legitimate Chinese government.
  • The most serious encounter was in 1995-96 when China began testing missiles in the seas around Taiwan, triggering the biggest US mobilization in the region since the Vietnam war.
  • Now, the US backs Taiwan's independence, maintains ties with Taipei, and sells weapons to it.
  • Taiwan is entirely dependent on the US for its defense against possible Chinese aggression.
  • This is why every spike in military tensions between China and Taiwan injects more hostility into the already strained relationship between Washington and Beijing.

6. Challenges for the US

  • As tensions rise, the world is watching the US, whose status as the world's pre-eminent power has been dented by the messy exit from Afghanistan.
  • In East and Southeast Asia, several countries including Japan, South Korea, and the Philippines, which are sheltered under the protective umbrella of the US, are concerned about US security commitments in the Pacific region.
  • President Joe Biden has been seen as walking a thin line between pledging support for Taiwan and keeping the lid on tensions with Beijing.
  • After speaking with Xi in October 2021, Joe Biden said that they had agreed to abide by the "Taiwan Agreement", under which US support for the "One China Policy" is conditioned on China not invading Taiwan.
  • The AUKUS pact among the US, UK, and Australia, under which Australia will be supplied with nuclear submarines, imparted a new dimension to the security dynamics of the Indo-Pacific. Taiwan welcomed the pact, while China denounced it as seriously undermining regional peace.

7. What are the implications for India

  • With India facing its problems with China on the LAC, there have been suggestions that it should review its One China Policy- it has in any case long stopped reiterating this officially.
  • Also, it is suggested that India use not just the Tibet Card, but also develop more robust relations with Taiwan to send a message to Beijing.
  • India and Taiwan currently maintain "trade and cultural exchange" offices in each other's capitals.
  • In May 2020, the swearing-in of Tsai was attended virtually by BJP MPs Meenakshi Lekhi (now MoS External Affairs) and Rahul Kaswan. In 2016, New Delhi had dropped plans to send two representatives for Tsai's first inaugural at the last minute.
  • India has been reported to be in talks with Taipei to bring a $7.5 billion semiconductor chip manufacturing plant to India. Chips are used in a range of devices from computers to 5G smartphones, to electric cars and medical equipment. The deal was reported on the heels of last year's summit of the QUAD, which discussed the need to build a "safe supply chain for semiconductors".
  • India also follows asymmetric Federalism where many states enjoy greater autonomy in their functioning as compared to other states (Article 371, Schedule V & VI).
  • These special provisions are also intended to deal with issues to identity & Culture. India thus needs to handle these democratically to not see Taiwan/Hongkong types of protests happening in India.
  • India can always use the leverage of Taiwan and Hong Kong whenever China meddles in India's internal issues like Kashmir/Naga unrest.

For Prelims & Mains

For Prelims: People’s Republic of China (PRC), Republic of China (RoC), Henry Kissinger, East China Sea, Taiwan Strait, One China Policy, QUAD, and AUKUS.
For Mains: 1. Discuss the rise of tensions between China and Taiwan and what are the serious implications for India.
 Source: The Indian Express

Previous year Question

1. Which one of the following statements best reflects the issue with Senkaku Islands, sometimes mentioned in the news? (UPSC 2022)
A. It is generally believed that they are artificial islands made by a country around the South China Sea.
B. China and Japan engage in maritime disputes over these islands in the East China Sea.
C. A permanent American military base has been set up there to help Taiwan to increase its defense capabilities.
D. Though the International Court of Justice declared them as no man's land, some South-East Asian countries claim them.
Answer: B
Source: indianexpress

MISSISIPI TORNADO EMERGENCY

 
 
 
1. Context
The vicious tornadoes that struck Mississippi on Friday evening killed at least 25 people and left many more injured and without a home. Those who survived are attempting to try to regain a sense of normalcy despite demolished homes and businesses. 
2.What is a Tornado?
  • It is a small-diameter column of violently rotating air developed within a convective cloud and in contact with the ground
  • Tornadoes occur most often in association with thunderstorms during the spring and summer in the mid-latitudes of both the Northern and Southern Hemisphere
  • These whirling atmospheric vortices can generate the strongest winds known on Earth: wind speeds in the range of 500 km (300 miles) per hour have been measured in extreme events
  • Tornadoes have diameters on the scale of 100s of meters and are produced from a single convective storm (i.e. a thunderstorm or cumulonimbus). A tropical cyclone, however, has a diameter on the scale of 100s of *kilometres* and is comprised of several to dozens of convective storms
3. What is Typhoon, Cyclone, and Hurricane
  • Hurricanes, cyclones and typhoons are all types of tropical storms
  • They are all basically the same thing, but are given different names depending on where they appear
  • Hurricanes are tropical storms that form over the North Atlantic Ocean and Northeast Pacific
  • Cyclones are formed over the South Pacific and Indian Ocean
  • Typhoons are formed over the Northwest Pacific Ocean
  • Cyclone, Typhoon, and Hurricane are all the same weather phenomenon. They are named differently because of their locations.
    Tornado is a different kind of storm
  • Tornadoes and typhoons are both storms formed by rapidly rotating storm systems created by warm, humid air rising as it collides with cold air
  • Tornadoes occur in many parts of the world, including Australia, Europe, Africa, Asia, and South America. Even New Zealand reports about 20 tornadoes each year. Two of the highest concentrations of tornadoes outside the U.S. are Argentina and Bangladesh
4.Air Masses and Fronts
  • Fronts and air masses are two key concepts in understanding weather patterns
  • An air mass is a large body of air with similar temperature and moisture properties
  • Fronts are boundary zones between two different air masses
  • The type of front that forms depends on the difference in temperature between the two air masses
  • An air mass is a body of air with a relatively constant temperature and moisture content over a significant altitude
  • 6.Air masses typically cover hundreds, thousands, or millions of square kilometres
  • 7.A front is a boundary at which two air masses of different temperatures and moisture content meet
5. World Meteorological Organization (WMO)
  • The World Meteorological Organization (WMO) is an intergovernmental organization with a membership of 193 Member States and Territories
  • It originated from the International Meteorological Organization (IMO), the roots of which were planted at the 1873 Vienna International Meteorological Congress
  • Established by the ratification of the WMO Convention on 23 March 1950, WMO became the specialised agency of the United Nations for meteorology (weather and climate), operational hydrology and related geophysical sciences a year later
  •  The Secretariat, headquartered in Geneva, is headed by the Secretary-General. Its  supreme body is the World Meteorological Congress
5.1. Vision
  • WMO provides world leadership and expertise in international cooperation in the delivery and use of high-quality, authoritative weather, climate, hydrological and related environmental services by its Members, for the improvement of the well-being of societies of all nations
  • WMO works to facilitate worldwide cooperation in the design and delivery of meteorological services, foster the rapid exchange of meteorological information, advance the standardization of meteorological data, build cooperation between meteorological and hydrological services, encourage research and training in meteorology, and expand the use of meteorology to benefit other sectors such as aviation, shipping, agriculture and water management
  •  
 
 
For Prelims: World Meteorological Organisation (WMO), Tornado, Cyclone, Typhoon
For Mains:
1.Cyclone, Tornado, Hurricane and Typhoon-How they are different from each other? (250 Words)
 
 
Previous year Questions:
1. Consider the following statements (UPSC 2020)
1.Jet Streams Occur in Northern Hemisphere Only
2. Only Some Cyclones Develop an Eye
3. The temperature inside the eye of a cyclone is 10° lesser than that of the Surroundings
Select the Correct Code
A. 1 Only        B. 2 and 3 Only        C. 2 Only          D. 1 and 3 Only
 
Answer (C)
Jet Streams Occur in Both Hemispheres
The temperature inside the tree is warmer compared to the Surroundings
 
 
1.Tropical cyclones are largely confined to South China Sea, Bay of Bengal and Gulf of Mexico. Why? (GS-1, 2014)
2.The recent cyclone on the east coast of India was called “Phailin”. How are the tropical cyclones named across the world? (GS-1, 2013)
 
 
 
Source: WMO 

VIENNA CONVENTION

1. Context 

Hours after a group of people chanting pro-Khalistan slogans took down the Indian flag at the High Commission in London, the Indian government on Sunday summoned the "Senior-most" UK diplomat, Deputy High Commissioner Christina Scott and Lodged a strong protest.

2. Key Points

  • On March 22, 2023 cement blocks that acted as barricades in front of the British High Commission in Delhi and the British High Commissioner's residence were removed, in what was seen as retaliation for the lack of visible security at the Indian High Commission in London.
  • On the same day, a group of pro-Khalistan protesters attacked and damaged the Indian Consulate in San Francisco.
  • Raising pro-Khalistan slogans, the protesters broke open the makeshift security barriers raised by the city police and installed two Khalistani flags inside the Consulate premises. 
  • Two consulate personnel soon removed these flags.
  • On the London incident, a statement by the Ministry of External Affairs said, "The explanation demanded the complete absence of British security that allowed these elements to enter the High Commission premises. Dy High Commissioner Scott was reminded in this regard of the basic obligations of the UK Government under the Vienna Convention".

3. About Vienna Convention

  • The term "Vienna Convention" can refer to any of several treaties signed in Vienna, most of which are related to the harmonisation or formalisation of the procedures of international diplomacy.
The treaty being referred to by the MEA in this instance is the Vienna Convention on Diplomatic Relations (1961), which "provides a complete framework for the establishment, maintenance and termination of diplomatic relations on a basis of consent between independent sovereign states", as per an introductory note on the treaty in UN's Audiovisual Library of International Law.
  • The Convention codifies the longstanding custom of diplomatic immunity in which diplomatic missions are granted privileges that enable diplomats to perform their functions without fear of coercion or harassment by the host country.
  • It affirms the concept of "inviolability of a diplomatic mission, which has been one of the enduring cornerstones of international diplomacy.
  • The Vienna Convention on Diplomatic Relations entered into force on April 24, 1964, and is nearly universally ratified, with Palau and South Sudan being the exceptions.
4. Various Vienna Conventions
  1. Vienna Convention on Diplomatic Relations (1961)
  2. Vienna Convention on Civil Liability for Nuclear Damage (1963)
  3. Vienna Convention on Consular Relations (1963)
  4. Vienna Convention on Road Traffic (1968)
  5. Vienna Convention on the Law of Treaties (1969)
  6. Vienna Convention for the Protection of the Ozone Layer (1985)
  7. Vienna Convention on the Law of Treaties between States and International Organizations or between International Organizations (1986)
  8. United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988)

5. Obligations of a receiving state

  • As per the Vienna Convention, a "receiving State" refers to the host nation where a diplomatic mission is located.
  • In this case, the host nation is the UK and as per the Vienna Convention has some basic obligation towards the diplomatic missions it hosts on its sovereign territory.
  • Article 22 of the Convention deals with obligations about the premises of the Mission.
  • Part 2 of this article states that "The receiving State is under a special duty to take all appropriate steps to protect the premises of the mission against any intrusion or damage and prevent any disturbance of the peace of the mission or impairment of its dignity".
  • The security of any High Commission or Embassy is the responsibility of the host nation. 
  • While diplomatic missions can also employ their security, ultimately, the host nation is accountable for security.

6. UK did not fulfil its obligations

  • The fact that protestors were able to climb the walls of the High Commission premises indicates a breach.
  • India finds unacceptable the indifference of the UK Government to the security of Indian Diplomatic premises and personnel in the UK.
  • It is expected that the UK Government would take immediate steps to identify, arrest and prosecute each one of those involved in today's incident and put in place stringent measures to prevent the recurrence of such incidents.

7. UK response

  • The UK too has reacted strongly, condemning the event. The British High Commissioner to India Alex Ellis said that the disgraceful acts today against the people and premises of the High Commission in London are unacceptable.
  • The UK Foreign Office Minister Tariq Ahmad said that the UK government will "always" take the security of the Indian High Commission in London "Seriously".

For Prelims & Mains

For Prelims: UK, India, Vienna Convention, 
For Mains:
1. Discuss the Strategic importance of the Vienna Convention in the Contemporary world. (250 Words)

Previous Year Questions

1. Which one of the following is the main objective of Vienna Convention and Montreal Protocol?  (UPSC CAPF  2019) 
A. Combat desertification
B. Formulate sustainable developmental goals
C. Protection of ozone layer
D. Combat climate change
 
1. Answer: C

2. The formation of ozone holes in the Antarctic region has been a cause of concern. What could be the reason for the formation of this hole? (UPSC 2016)

(a) Presence of prominent tropospheric turbulence; and inflow of chlorofluorocarbons.

(b) Presence of prominent polar front and stratospheric clouds; and inflow of chlorofluorocarbons.

(c) Absence of polar front and stratospheric clouds; and inflow of methane and chlorofluorocarbons.

(d) Increased temperature at polar regions due to global warming.

2. Answer: (b) 

3. Consider the following statements: Chlorofluorocarbons, known as ozone-depleting substances, are used (UPSC 2012)

  1. in the production of plastic foams
  2. in the production of tubeless tyres
  3. in cleaning certain electronic components
  4. as pressurizing agents in aerosol cans

Which of the statements given above is/are correct?

(a) 1, 2 and 3 only      (b) 4 only       (c) 1, 3 and 4 only        (d) 1, 2, 3 and 4

3. Answer: (d)

Source: The Indian Express

HUNDI SYSTEM

 
 
1.Context
With its registration under the FCRA (Foreign Contribution Regulation Act) under “suspension” for the past three years, the country’s richest religious Trust, the Tirumala Tirupati Devasthanams (TTD), faces an unprecedented situation: a mounting stockpile of foreign currency in cash anonymously dropped as “hundi” collections which cannot be deposited in its designated bank account.
 
2. About Hundi
Hundis refer to financial instruments evolved on the Indian sub-continent used in trade and credit transactions.
They were used as the following:
  • as remittance instruments (to transfer funds from one place to another),
  • as credit instruments (to borrow money [IOUs]),
  • for trade transactions (as bills of exchange).
Technically, a Hundi is an unconditional order in writing made by a person directing another to pay a certain sum of money to a person named in the order. Hundis, being a part of the informal system have no legal status and are not covered under the Negotiable Instruments Act, 1881
 Though normally regarded as bills of exchange, they were more often used as equivalents of cheques issued by indigenous bankers
Hundis have no legal status and are not covered by the Negotiable Instruments Act of 1881 because they are part of the informal system
 
3. Difference between 'Hundi and 'Hawala'
  • Hundi is an alternative remittance system that operates outside formal banking channels
  • The word Hawala has its origin in the Arabic language which means transform or change
  •  It is defined as a bill of exchange or a promissory note or a travelers check
  • Hundis have been in usage in India from ancient times but usages are not uniform and they are different at different places.
  • Being a part of the informal system, Hundi is not covered under the Negotiable instrument Acts 1881. Therefore Hundi as a financial instrument is not treated as a negotiable instrument.
  • The Hawala or Hewala (meaning transfer or trust in Arabic) word prevalent in the Middle East and North African countries is equivalent to the word Hundi in India. Hawala is used as an informal money transfer system by money brokers in those countries
4. Is Hundi Illegal?
According to an age-old tradition of business transactions in India, Hundi is a negotiable instrument which is available in various vernacular languages in the country
Immigrants mostly use hundi to send their earned money to their country
For the past few centuries, due to less complexity, the hundi business has been quite popular worldwide despite being illegal
Section 2(1)(h) of FCRA, 2010, "foreign. contribution" means the donation, delivery or transfer made by any. foreign source
 
 
For Prelims: FCRA, Hawala, Hundi System, Black Money
For Mains: 
1.Whether foreign remittances received from a relative are to be treated as foreign contribution as per FCRA, 2010?
 
 
Previous Year Questions:
1.Which of the following phrases defines the nature of the ‘Hundi’ generally referred to in the sources of the post-Harsha period?
A. An advisory issued by the king to his subordinates
B. A diary to be maintained for daily accounts
C. A bill of exchange
D. An order from the feudal lord to his subordinates
 
Answer (C)
Hundis refer to financial instruments evolved on the Indian sub-continent used in trade and credit transactions
 
 
 
 
Source: rbi

ISRO's LVM 3

 

1. Context

On March 26, 2023, the second commercial launch of the Indian Space Research Organisation’s LVM-3 saw 36 OneWeb satellites placed in orbit. This was also the second launch that ISRO performed for OneWeb, a UK-based company supported by the UK government and India’s Bharti Enterprises. 

2. About LVM 3


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