Goaltide Daily Current Affairs 2022

Nov 23, 2022

Current Affair 1:
How India-Australia FTA is set to boost trade?


Ind-Aus ECTA which was signed on 2 April 2022, is now ready for ratification for its early implementation.

ECTA is the first trade agreement of India with a developed country after more than a decade. The Agreement encompasses cooperation across the entire gamut of bilateral economic and commercial relations between the two friendly countries. This will also connect with more than seven lakhs of Australia’s Indian diaspora, second highest taxpaying diaspora, which makes a significant contribution to Australia’s society and economy.

Australia is an important strategic partner of India and both the democracies are part of the four nation QUAD, Trilateral Supply Chain Initiative and the Indo-Pacific Economic Forum (IPEF). The trade relationship facilitated through ECTA will open a new chapter on India-Australia Comprehensive Economic Partnership between two vibrant economies.

Look at India- us trade which already at peak.

India’s trade with Australia in the first three quarters of 2022 has surpassed the $21.98 billion worth of trade done in the entire year 2021.

India’s merchandise trade with Australia is driven heavily by imports from the latter. Of the $22.49 billion of trade this year, imports accounted for more than $15.6 billion and exports only for $6.83 billion.

Australia is India’s single biggest source for coking coal. In 2022 (till September), it accounted for more than 57 per cent ($9.56 billion) of India’s coking coal needs ($16.48 billion).

Data also reveals that the pace of growth of India’s exports to Australia is much faster than that of the imports. In the first three quarters of 2017, India’s total Australian imports were worth about $14.35 billion, which rose to $15.56 billion in 2022 — or an average growth of 7.8 per cent per year.

Current Affair 2:
Why FPIs are fleeing Indian debt?


Sustained monetary policy tightening by the US Federal Reserve has led to narrowing of the yield differential between the Indian and the US bonds. As an outcome, overseas ownership of Indian government and sovereign bonds has fallen to record lows.

FPI ownership of bonds

Aggressive monetary policy tightening has led to surging yields in the US, UK and other advanced economies. While monetary policy has tightened domestically also, the pace of tightening in advanced economies has outpaced the tightening in India. This has led to narrowing of the yield spread (yield differential).

As an example, the difference between the 10-year Indian bond yield and the10-year US bond yield was 4.94 per cent in December 2021. This has narrowed to 3.47 per cent in October 2022. On 2 November, the US Fed announced the fourth consecutive 75 basis points rate hike and suggested that more rate hikes are in store. This will have a bearing on the yield differential in the coming months.

Reflecting the impact of narrowing yield differential, foreign portfolio investors’ (FPI) participation in Indian government and corporate bonds has slumped. Of the total limit available for investment in government bonds, FPIs have utilised less than 25 per cent in government bonds.

In case of corporate bonds, the limit utilised is even lesser at 17 per cent. Local currency depreciation has also triggered the exit of foreign investors from local debt securities. Emerging economies such as Brazil, whose currency has appreciated against the dollar, offer better returns on their bonds to foreign investors as compared to Indian bonds.

FPIs turned net sellers in debt as they sold debt worth USD 432 million in October. FPIs will likely turn to sustained buying only when there is some indication of slowing down of aggressive monetary policy tightening by the US Fed.



Current Affair 3:
Arunachal Frontier Highway, among India’s ‘toughest’ projects yet


After seven decades of dithering on establishing border connectivity in the Northeast, India has initiated a massive infrastructure building, the showpiece of which is the Arunachal Frontier Highway, one of the country’s biggest and toughest projects.

The project, which was objected to by China in the past, is a 2,000-km long road that follows the McMahon Line. The road will begin from Mago in Arunachal Pradesh, adjacent to Bhutan, and pass through Tawang, Upper Subansiri, Tuting, Mechuka, Upper Siang, Debang Valley, Desali, Chaglagam, Kibithu, Dong, before ending at Vijayanagar near the Myanmar border.

With this project, Arunachal Pradesh will get three national highways — the Frontier Highway, the Trans-Arunachal Highway and the East-West Industrial Corridor Highway.

Six vertical and diagonal inter highway corridors totalling 2,178 km will be built to provide missing inter-connectivity between the three highways as well as to provide faster access to border areas.

Arunachal Frontier Highway will be a huge capability jump for the military since it will allow seamless and faster movement of both men and equipment to the border as and when needed for induction and de-induction.



Current Affair 4:
Muscat Ministerial Manifesto



The conference agreed the Muscat Ministerial Manifesto, which sets out the three global targets:

  1. Reduce the total amount of antimicrobials used in agrifood systems by at least 30-50% by 2030, galvanizing national and global efforts; 
  2. Preserve critically important antimicrobials for human medicine, ending the use of medically important antimicrobials for growth promotion in animals; 
  3. Ensure ‘Access’ group antibiotics (a category of antibiotics that are affordable, safe and have a low AMR risk) represent at least 60% of overall antibiotic consumption in humans by 2030.

Globally agreed targets will be key to protecting the efficacy of antimicrobials and curbing the development of AMR worldwide, as well as reducing environmental pollution, in turn lowering the spread of AMR. 

The Food and Agriculture Organization of the United Nations (FAO), the UN Environment Programme (UNEP), the World Health Organization (WHO) and the World Organisation for Animal Health (WOAH, founded as OIE), known as the Quadripartite, welcome the outcomes of the Conference for accelerating action on AMR. 

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