 A very good evening aspirants. Welcome to the Hindu newspaper analysis brought to you by Shankar A.S. Academy. Today's date is 11th of July 2023. Displayed here are the list of news articles that we are going to discuss today. For the benefit of the viewers, we have taken articles from Sunday's newspaper as well. So without much delay, let us get into the first news article discussion. This FAQ article from Sunday's newspaper is about the recent export control measure placed by China on the export of gallium and germanium. See these metals are mainly used in the manufacture of semiconductor systems. So the article covers various aspects like the details of export control, what prompted China to impose the export control and what are the impacts. So in our news article discussion, we will see the important points mentioned in the news article. Before that the syllabus relevant to the news article is highlighted here for your reference. You can go through it. First let us see a little bit of background information about the ongoing issue. So the export control on gallium and germanium is the recent episode of the ongoing chip war between China and the West. It was the United States that started the chip war. To understand the context of the chip war, we have to go back to the 1950s. In the early 1950s, the transistor, which is a major component in all semiconductor devices, was invented in the United States. Then for the next two decades, the U.S. dominated the world in the area of semiconductor manufacturing. In the late 1980s, the U.S. started facing stiff competition from other countries like Japan, South Korea, Hong Kong and Singapore in the semiconductor business. These countries, though lacking the technical power of the U.S., had abundant cheap labor. So the U.S. could not match their prices. This prompted the U.S. to shift the majority of their production to Taiwan. This move of the U.S. resulted in the formation of the Taiwan Semiconductor Manufacturing Company Limited, TSMC in 1987. Initially, the deal was IC chip, that is the semiconductor chip. Designing would be done only in the U.S. and only production would happen in Taiwan. That is in TSMC. But later, TSMC started designing chips as well. And currently, TSMC, that is only one Taiwanese corporation, they alone have around 55% of the global market for chip manufacturing and produces around 90% of the most advanced processor chips that are used in smartphones and computers and advanced data centers. To understand the enormity of TSMC, you can compare it to the OPEC, that is organization of the petroleum exporting countries. The OPEC, which has 13 members and has control over only 40% of the global market. Just look at the range difference. The other important corporation that is involved in the semiconductor business is the ASML of the Netherlands, while TSMC of Taiwan is a world leader in semiconductor chip production. The ASML of the Netherlands main focus is on the machinery. To be very specific, advanced lithographic tools that help produce semiconductor chips. So currently, ASML and TSMC have a virtual monopoly on the semiconductor chip market. Now China wants to disrupt this status quo and have a domestic chip manufacturing industry of its own. China has two reasons to augment its chip manufacturing capacity. One is an economic reason and the other is geopolitical reason. First let us see the economic reason. We all know that most of the modern electronic devices like mobiles and laptops are manufactured in China, right? But China does not produce the advanced semiconductor chips used in electric devices locally. 90% of China's semiconductor needs are met through imports. So China spends more on importing each semiconductor chips than on importing oil. And the majority of the input happens from Taiwan. This makes Taiwan a critical supply source for China. As Taiwan is heavily influenced by the US, China to protect its electronic manufacturing industry is planning to develop its own semiconductor chip manufacturing capacity. This is the first reason. The second reason is geopolitical. See China aims to become a global superpower. For that, it needs a modern military. In that aspect, China aims to make the People's Liberation Army, PLA, a world-class military by 2049. As 2049 marks the century of the Chinese Communist Party's rule. To modernize its military, China plans on developing autonomous weaponry including hypersonic missiles and using artificial intelligence for applications that include electronic warfare. To achieve all these, China needs modern microchips. Once China modernize its military completely, the first thing that it would do is invade Taiwan and create a unified China. But Taiwan is the country that has to supply modern microchips to the Chinese military. If infusion of Taiwan is the ultimate aim of China, then how will Taiwan supply those advanced military microchips to China? So, China plans on creating its own domestic chip manufacturing industry. These two reasons prompted China to billions of dollars into building the technology to manufacture semiconductors. And China also had plans of importing advanced chip machinery from ASML Netherlands. This action by China worries the US. This is because not just China, even the US is heavily dependent on TSMC for its semiconductor needs. See what the first thing China will do once it capture Taiwan is, it will restrict the export of semiconductor chips from Taiwan to the US. This will place US in the chokehold. The US realizing this has started taking some actions. Firstly, the US has stepped up its investments in semiconductor manufacturing facilities. In August 2022, it passed the landmark chips and science act providing 280 billion dollar in new funding for domestic research and manufacturing of semiconductors in the country. Secondly, the US started lobbying with its allies like Japan and the Netherlands to restrict the shipments of their most high tech machinery to China. And as expected, Japan and the Netherlands, especially ASML Corporation, agree to tighten the export of high tech machinery to China. Both the countries stated that they are doing so to protect their national security interest. Thirdly, the US has started taking steps to diversify its supply chain. As a part of this one lead during the recent US State visit by our Prime Minister, Micro Technology Inc., which is a US chip manufacturer, agreed to invest in a new chip assembly and testing facility in Kucharat. These three actions of the US angry China, particularly preventing ASML from the supply of advanced machinery to China, agreed it the most. So, as a retaliatory measure on July 3, the Chinese Ministry of Commerce announced that it would implement export controls on items related to gallium and germanium. It said that the control were being imposed in order to safeguard national security interest, which is the same reason as said by the US and its allies, a nice story, right? So, this is all about the chip war. So, these learnt points, now let us move on to the next news article discussion. Take a look at this news article. The article says that the leaders of Solomon Islands and China have signed agreements on Polish economic and technical cooperation. So, in this news article discussion, we will see some important points about Solomon Islands, its map location and the significance of the recent Bonomi between China and Solomon Islands. Now, look at this map. As you can see in the map, the Solomon Islands are part of Melanesia. It is located east of Papua New Gunia, west of Duvalu and Vanuatu, north of New Caledonia and south of the Marshall Island. This island is located in the Southern Hemisphere between the equator and the Tropic of Capricorn. The Solomon Islands is located 2000 kilometers northeast of Australia. The capital of Solomon Islands is Honiara and it is located on Guadalcanal Island. You can see that in the image given here. See, the country consists of six major islands and over 900 small islands. The Solomon Islands Archipelago mainly consists of volcanic islands and islanded at all. This area experiences volcanic activity because the Solomon Archipelago is located along the plate boundary between the Australian plate and the Pacific plate. This is about the location of the Solomon Islands. Now, let us quickly see about its geopolitical significance. See, the islands were initially controlled by the British Empire during the colonial era. Then, during the world wars, the control of the islands went into the hands of Germany and Japan. It then went back to the UK after the Americans took over the island from the Japanese during World War II. The islands became independent in 1978 to become a constitutional monarchy under the British Crown with a parliamentary system of government. Although it comes under the British Crown, it is Australia that has close security relations with the Solomon Islands due to its close proximity. Currently, China is trying to increase its influence in this area to be specific in the Pacific region. As a part of this, China signed the secretive security agreement with the Solomon Islands. This worried the western nations, particularly the US and Australia, as they thought through this agreement, China might create a military base in Solomon Islands and increase its military presence in the Pacific. Both the US and Australia worry that China is planning to establish military base in the Solomon Islands so that it can insert itself between America's military base in the Pacific Islands and Australia. But China is saying that it is engaging with Solomon Islands for purely economic reasons as the island nation is an important component of its Belt and Road Initiative BRI. Specifically, China sees the region as a critical air-fried hub in its so-called air-silk road, which connects Asia with Central and South America. Although the real intention of China is still unclear, one thing is sure, China is trying to increase its sphere of influence among the island nations of Oshania. That's all regarding this news article discussion. In this news article discussion, we saw about the location of Solomon Islands, then we saw about the agreement signed between China and Solomon Islands. With these learned points, now let us move on to the next news article discussion. Take a look at this news article. This article is about a court ruling in India. The court rejected PepsiCo's appeal to maintain a patent for a specific potato variety. This variety is used in their lace potato chips. The court upheld a decision by the Protection of Plant Varieties and Formless Rights PPVFR authority to revoke the patent. The court stated that Indian rules do not allow patent on seed varieties. This is about the news article given here. In this context, let us quickly learn about the Indian patent regime. See the Patent Act 1970 and the Patents Rules 1972 govern patents in India. It replaced the previous Indian Patents and Designs Act of 1911. However, this 1970 act was amended by the Patent Amendment Act 2005. Now let's talk about inventions. According to the Act, an invention is defined as a new product or process that involves an inventive step and is capable of being used in industry. The criteria for patentability include novelty, inventive step and industrial applicability. Now the Act also specifies what are all not considered as invention. We will see the important points one by one. Firstly, inventions that are considered frivolous or go against well established natural laws or not patentable. Then inventions whose use or commercial exploitation goes against public order, morality or causes serious harm to humans, animals, plants or the environment or not patentable. For example, growing recombinant plants that harm butterflies, they are not eligible for patents. Then mere discoveries of scientific principles or finding living or non-living substance occurring in nature or not patentable. Also using a known process, machine or apparatus without involving a new product or reactant is not patentable. Then methods of agriculture, horticulture and medical, surgical, curative, diagnostic or therapeutic treatments for humans, animals or plants that aim to render them disease free or increase their economic value or not patentable. Also inventions falling within the scope of traditional knowledge like the use of herbal medicines or not patentable. Now we shall talk about the term patent. See in India the term of every patent granted under the Patents Act is 20 years from the date of filing the patent application. This means that once the patent is granted, the inventor has exclusive rights to the invention for a period of 20 years. Also note that to maintain patent enforce, the patent holder is required to pay annual renewal fee also known as maintenance fees or annuity fees. Let's say an investor filed a patent application on January 1, 2020. If the patent is granted the inventor will have exclusive rights to the invention until January 1, 2040 that is 20 years from the filing date. Hope you can understand. Now suppose the inventor fails to pay the renewal fee from the second year onwards if the fees are not paid within the specified time then the patent will lapse and the inventor will lose the protection okay. But on the other hand if the inventor realizes the mistake within 18 months from the date of lapse then they can file a restoration application. All these just show how flexible the patent regime is in India to boost the invention in the country. Now we'll see about important provisions under the Act that is the compulsory licensing. See compulsory licensing is a provision in the patent Act. It allows a person to apply for a license to use someone else's patented invention without the patent owner's permission. This can happen under certain circumstances to ensure public access to essential products or it can happen even to address issues related to affordability availability and etc. If you don't understand let me explain. Let's say there is a patented medicine and this medicine treats a widespread disease but the patent owner is selling the medicine at an extremely higher price. This makes it unaffordable for many people who need it. In this case a person or a company can apply for a compulsory license under the Act. If the license is granted this person or company can produce and sell a generic version of the medicine. They can do this without the consent of the patent owner. This shows how fair the Act actually applies. Then another important provision is the Bolar provision. See the Bolar provision is given under section 107A clause A of the Patents Act. See this provision allows certain activities related to a patented invention without being considered an infringement. So basically the Bolar provision allows generic drug manufacturers to conduct certain activities related to the development and testing of generic drugs. They can do this even before the expiration of the original patent for a brand name drug. For those who don't understand let me explain. Imagine there is a popular brand drug called MediEx that helps to treat a specific medical condition. The company that created MediEx holds a patent and as we know they have exclusive right to produce and sell the drug for 20 years. Now let's say a generic drug manufacturer called Generic Pharma wants to create a more affordable version of MediEx once the patent expires. But Generic Pharma cannot start manufacturing the generic drug because the patent has not expired. See in order to manufacture the generic version itself there should be some trials research that has to happen and it takes time right. So now should they wait till the end of 20 years and after the expiration they can start the trial. What do you think? No right. So here's where the Bolar provision comes into play. It allows Generic Pharma to conduct certain activities related to the development of their generic version of MediEx before the patent expires. So when the patent expires they can immediately start selling the generic version of the drug without wasting time okay. These are some of the very important provisions of the patent act. Make note of them. These provisions actually encourage innovation in the country and it reinforces the fact that all innovation is for the humankind and it makes sure that every one of the humankind gets benefited okay. So with these learnt points now let us move on to the next news article discussion. Look at this news article. It is discussing the affidavit filed by the Indian government in the Supreme Court regarding the current situation in Jammu and Kashmir after the dilution of article 370 in 2019. We all know that article 370 was a provision in the Indian constitution that granted special autonomous status to Jammu and Kashmir right. See the affidavit claims that Jammu and Kashmir is now witnessing a period of peace progress and prosperity. It highlights the return to normalcy, decrease in street violence, reduction in terrorism, dismantling of the terror ecosystem and measures taken to integrate the region's youth. The affidavit also mentions the development initiatives and increased budget allocation for Jammu and Kashmir. The filing of this affidavit is done in response to a series of petition that challenged the dilution of article 370 in the Supreme Court. This is about the news article given here. In this context let us learn few facts about dilution of article 370. See before 2019 Jammu and Kashmir had a special status under article 370 of the Indian constitution. This article provided certain autonomous power to the state. It also restricted the legislative power of the Indian parliament over Jammu and Kashmir. It allowed the state to have its own constitution, a separate flag and more control over its law. However on August 5, 2019 the Indian government made significant changes by issuing an order that modified article 370. The order brought about several key alternatives to the special status of Jammu and Kashmir. Now what are these alternatives? We will see them one by one. One of the major changes was the division of the state. See the state was divided into two separate union territories, Jammu and Kashmir and Ladakh. Previously it was a single state with its own governance structure. With this modification the special status that Jammu and Kashmir held was removed. Its separate constitution and flag was also removed. It now follows the Indian constitution just like other states in the country. This means that the people of Jammu and Kashmir are now governed by the same laws and have the same fundamental rights as other Indian citizens. They have rights like freedom of speech, equality before the law and the right to education. Additionally the law passed by the Indian parliament are now applicable in Jammu and Kashmir. This includes important legislations like the right to information act and the Indian penal code. Another significant change was the removal of article 35a. See this provision originated from article 370. It gave special rights and privileges to the permanent residents of Jammu and Kashmir. It allowed the state legislature to define who qualified as permanent residents and it also conferred certain benefits and protections to them. But after the modifications, article 35a no longer holds any legal effect, meaning the special rights and privileges associated with it are no longer applicable. The changes made by the Indian government were aimed at integrating Jammu and Kashmir more closely with the rest of India. Now we will quickly see what the Afidevic mentions about the developments that happened after the dilution of article 370. See the Afidevic aims to highlight the positive developments in the region. According to the Afidevic schools, colleges and other public institutions in Jammu and Kashmir have been functioning smoothly without disturbances or strikes for the past three years. The Afidevic states that the previous practice of daily strike, stone pelting and shutdowns has almost stopped. The Afidevic further highlighted the efforts made by the government to strengthen democracy at the grassroots level. It mentions the establishment of an elected three-tier Panchayatri Raj system. Regarding the security situation, the Afidevic stated that law and order events reduced by 97.2% and instances of terrorist activities initiated by terrorist reduced by 45.2% between 2018 and 2022. The Afidevic also mentioned the improvement in tourism in the region. We know that the G20 tourism working group meeting was held in Srinagar in May. This indicates the growing tourism opportunities in Jammu and Kashmir. These are also some of the important takeaway points from this news article. Make note of all these points. These are data given by the government itself. So you can freely use it in your main sansa writing. So with these learned points, now let us move on to the next news article discussion. Take a look at this FAQ article from Sunday's newspaper. It talks about the ongoing crisis in India-Russia trade payments. See India is currently importing a huge quantity of crude oil from Russia. For those imports, India has to pay huge money, right? But India is facing multiple challenges in paying money for crude oil imports from Russia. This is the crux of the news article given here. In this context, let us learn few important points mentioned in the news article. Before that, the syllabus relevant to the news article is highlighted here for your reference. You can go through it. First, we will understand about the India-Russia oil trade. See, until a year ago, India imported most of its crude oil from West Asia, that is the United States and West Africa. But today, a bulk of crude oil to India is coming from Russia. If we look at the data in February 2023, Russia became the second biggest exporter of crude oil to India in financial year 2023 by surpassing Saudi Arabia. Now, if you are asking why all of a sudden, India is importing more crude oil from Russia, see it is mainly because of the economic sanctions placed on Russia due to the ongoing Russia-Ukraine war. Due to the sanctions, Russia faced huge economic challenges and it was not able to sell its goods in the international market. So, Russia searched for alternative markets and later it found a ready market in India to sell its goods, especially crude oil. India, unlike the West, did not join the list of countries formally imposing sanctions on Russia. So, Russia has offered steep discounts in crude oil prices to India. This has benefited both the countries. On one side, India is getting crude oil at a lower price. On the other side, the huge crude oil imports to India are benefiting Russia economically. But here also lies a problem. As we are importing more crude oil from Russia, we have to pay them right. Now, which currency is being used for payments to Russia? See, traditionally and currently, the import bills are paid through US dollars. But since the West imposed sanctions on Russia, India would be able to use only limited USD to pay import bills to Russia. Apart from this, the Western countries have also decided to cap the price of the Russian crude oil to a maximum of $60 per barrel. This means that the countries could not buy crude oil above $60 per barrel from Russia. India has tactically agreed to maintain the price gap of $60 per barrel as much as possible. So, as a result of this, students only, India is now able to import crude oil from Russia, and it is paying the import bill through USD. Here, you might have a doubt, is there any alternative to these USD payments? See, in the past, India was in negotiations with Russia to reactivate the rupee ruble trade agreement. This was done mainly to arrive at an alternative payment mechanism to settle dues in rupees instead of dollars or euros. Note that the ruble is the currency of the Russian Federation. Despite negotiations, the rupee ruble payment mechanism could not take off. There are a couple of reasons for this failure. The main reason is that there is a problem with rupee ruble convertibility. See, the value of the ruble is determined by the Russian government and not determined by the market. But in India, the value of the rupee is determined mostly by the market forces. So, Russia has pointed out that the rupee is more volatile than ruble. Therefore, problem would arise in case of rupee ruble convertibility. Apart from this, India's trade deficit with Russia touched $43 billion in 2022-23. This has led to staggering amount of Indian rupee in Russian banks. The issue is, this excess Indian money cannot be used by Russia in its war efforts. So, because of these factors, the attempts to reactivate the rupee ruble trade agreement have failed. Here you might have another doubt, or that any attempts being taken to replace USD. See, as of now, the US dollar is largely considered to be the global reserve currency. But the problem here is that the US at times may impose sanctions which ultimately result in low USD available in the market. This in turn affects the economy of most of the countries. So, many countries view that the US sanctions are one of the ways to weaponize the US dollar. This situation has led the countries to look into de-dollarization efforts. This means that the countries are now looking for the replacement of the US dollar with other currencies as the global reserve currency. But there is a long way to go in such de-dollarization attempt. Now, coming to India. See, India has also recently released a roadmap for the internationalization of the Indian rupee. The value and acceptability of any currency mainly depends on its purchasing power. That is the number of goods and services that can be bought using the currency right now. If we take Indian rupee, currently the daily average share for the rupee in the global foreign exchange market is approximately 1.6 percentage, while India's share of global goods trade is approximately 2 percentage. So, India needs to take many steps in internationalization of the Indian rupee. So, to conclude, India oil imports from Russia are unavoidable. Therefore, to counter the trade deficit with Russia, India should negotiate with Russia to make investments in every projects in India or to invest in common bonds. On other hand, this would help to address the trade deficit. Russia will also get returns while investing in India. That's all regarding this news article discussion. In this news article discussion, we saw about the difficulties in trans-border and trans-currency payments. With these learned points, let us move on to the next news article discussion. Take a look at this news article. It says that the GSD council meeting is scheduled to happen today. During that meeting, the GSD council is expected to consider the constitution of the GSD Appellate Tribunal to resolve the disputes surrounding the indirect tax. See, the GSD regime is now 6 years old, but still the taxpayers need to approach courts to resolve disputes. So, various industries are urging the centre to set up the GSD Appellate Tribunal as soon as possible. This is about the news article given here. So, in this news article discussion, let us understand about GSD Appellate Tribunal. See, the GSD Appellate Tribunal is a specialized Appellate authority that has to be constituted to resolve disputes under the GSD laws. It will hear the appeals against the orders passed by the first Appellate authorities. Note carefully, the GSD Appellate Tribunal is not constituted yet. It is just a proposed body. Now, what is the need to create such Appellate Tribunal? See, in case of disputes in the order of the GSD authorities, as of now, an aggravated taxpayer has to approach the High Court for relief. But the High Court are already burdened with the huge pendency of cases. So, the hearings may get delayed and it may take long years to obtain justice. As a result, many stakeholders have been demanding the central government to constitute a GSD Appellate Tribunal. So, to address this, the central government set up a six-member committee to look into the constitution of the GSD Appellate Tribunal. The committee made some suggestions and it also proposed a structure for the GSD Appellate Tribunal. Now, we will see the structure of the GSD Appellate Tribunal. See, the GSD Appellate Tribunal benches would be constituted at multiple levels like national level, regional level, state level and finally, area level. Particularly, talking about national bench, the national bench shall be headed by a judge of the Supreme Court or a Chief Justice of the High Court. Apart from this, the national bench shall also consist of one technical member from center and one technical member from the state. Note that the national or the principal bench shall be set up in New Delhi. See, the composition of all other benches shall be decided based on the GSD Act and the recommendations of the GSD Council. Now, talking about the powers and functions, see, while trying a case, the Appellate Tribunal shall have the same power as a court under the Code of Civil Procedure. So, the GSD Appellate Tribunal will be a deemed civil court. Apart from this, the Appellate Tribunal has been granted the power to pass orders and directions for the recovery of due amounts, enforcement of its orders and rectification of mistakes. The Tribunal also has the power to impose penalties, revoke or cancel registrations and take such measures as may be necessary to ensure compliance with the GSD laws. As of now, this is the only valid information available from the government sources. The GSD Appellate Tribunal is just a proposed body. Once it gets constituted, we'll get a clear picture about the functioning and all. So, we have to wait for the good news. So, in this news article discussion, we saw about GSD Appellate Tribunal, their functions and jurisdictions. So, with these learnt points, now let us move on to the next part of the news article discussion, which is the preliminary practice question discussion. Take a look at this first question. The question asks us to arrange the islands in Oceania from north to south. Four islands are given. First is Hawaii, Marshall Island, Fiji, Solomon Islands. See, the correct answer for the question is option C, 1, 2, 4 and 3. Look at this map. Here you can see that Hawaii is the first, then comes Marshall Islands, thirdly comes the Solomon Islands and fourth comes the Fiji. So, the correct answer for this question is option C, 1, 2, 4 and 3. Now, moving on, look at this question about Bolar provision. Four statements are given and you have to choose which one best explains the term Bolar provision. See, actually Bolar provision means generic drug development before patent expiration. We saw that in the discussion, right? So, the correct answer here is option C, generic drug development before patent expiration. Now, look at this third question regarding GSD. You have to find which goods or items are exempted from the goods and services tax. See, the correct answer here is option D, all the five, all are exempted from the GSD Regime. Moving on, the questions displayed here are the main practice questions for you today. Just go through the question, try to answer it in the comment section. We will review your answers and your peers also will review your answer. So, with this, we came to the end of the news article discussion. If you like the video, hit like, do comment and don't forget to subscribe to Shankar IAS Academy YouTube channel. Now, thank you for listening.