1. India, France launch solar alliance, promise funds

Declaring that India wanted a solar revolution not just in the country but across the world and announcing the establishment of a “Solar Techn-ology Mission”, Prime Minister Narendra Modi on Sunday announced the allocation of $1.4 billion as part of India’s Line of Credit (LoC) for 27 solar projects in 15 developing countries.

  • Prime Minister Modi and French President Emmanuel Macron co-chaired the founding conference of the International Solar Alliance (ISA) in the Capital that is being attended by over 20 heads and deputy heads of government, a majority of them African.
  • 23 out of these 27 projects for which Mr Modi offered financial assistance are in African countries where observers point out that India has been trying its best to counter Chinese influence.
  • The remaining four projects are in India’s neighbourhood of which two each are in Bangladesh (worth a total of $180 million) and Sri Lanka ($100 million).
  • This is apart from 13 solar development projects — either completed or under implementation — under Indian LoC worth $143 million in African countries.

Some of the solar projects that will be undertaken by India in other countries include setting up of Mollahat 100 MW Solar PV power plant worth $150.26 million in Bangladesh, electrification by photovoltaic solar system of 550 social community infrastructures (health centres, high schools and hand-pumped boreholes) worth $ 21 million in rural areas of Benin (Africa), Solar powered water stations for semi-urban water supply worth US$ 36.50 million in Burkina Faso (Africa), solar PV Renewable Micro-Utility (REMU) in six political zones in Nigeria (Africa) worth $8.36 million and 50 MW solar power plant in Bauchi State, again in Nigeria, worth $ 66.60 million and three projects in Seychelles with whom  India had inked an agreement in January

2. What is International Solar Alliance?

The International Solar Alliance (ISA) was unveiled by Prime Minister Narendra Modi and then French President Francois Hollande at the U.N. Climate Change Conference in Paris on November 30, 2015. Towards this, the ISA has set a target of 1 TW of solar energy by 2030, which current French President Emmanuel Macron said would require $1 trillion to achieve.

  • The ISA is open to 121 prospective member countries, most of them located between the Tropics of Cancer and Capricorn as this is the region worldwide with a surplus of bright sunlight for most of the year.
  • So far, however, only 56 countries have signed the ISA Framework Agreement
  • Apart from being a founding-member, India plays a significant role in the alliance in terms of being a host as well as a major contributor to the achievement of the target. The ISA is the first international body that will have a secretariat in India. India, with a target to produce 100 GW of solar energy by 2022, would account for a tenth of ISA’s goal. 


3. Elon Musk Says Hyperloop Will Give Pedestrians Priority Over Cars

The ‘urban loop’ would involve thousands of small stations about the size of a parking space. The billionaire technology entrepreneur said his tunneling startup, Boring Co., will prioritize pedestrians and cyclists in its hyperloop plan. The system “will still transport cars but only after all personalized mass transit needs are met,” Musk wrote on Twitter. “It’s a matter of courtesy and fairness. If someone can’t afford a car, they should go first.”

Musk published a white paper in 2013 outlining a transportation system using sealed tubes allowing for airplane-like speeds. He had once said he didn’t want to get into the business himself but changed his mind last year. The Boring Co. has begun digging test sites in Hawthorne, California, where Musk’s Space Exploration Technologies Corp. is located. Musk has said he would like to build a tunnel along the west side of Los Angeles. The startup is seeking approval from local jurisdictions, including Culver City, where his proposed tunnel would run.

The Boring Co. has secured a permit for a few miles between Baltimore and Washington but hasn’t begun construction. The route could be part of a system that one day connects Washington to New York

4. Now an ‘action plan’ in place of policy for electric vehicles

A month after India dropped the idea of an electric vehicle policy, the government’s think-tank NITI Aayog has tasked at least seven ministries with framing guidelines to encourage the use of such vehicles.

  • Once framed, the NITI Aayog will put these guidelines together as an action plan for promoting the use of electric vehicles (EVs). The government had earlier made a surprising U-turn on an EV policy after some carmakers protested that they were unprepared for an abrupt shift and that government policy should encourage all clean-fuel technologies. The ministries that have been asked to formulate guidelines are those of heavy industries, power, new and renewable energy, road transport and shipping and highways, earth sciences, urban affairs and information technology.
  • While the road transport ministry has been asked to form guidelines on non-fiscal incentives, public transportation and last-mile connectivity in the context of EVs and sustainable mobility solutions, the power ministry has been tasked with framing rules for charging infrastructure.

The Indian government is not in favour of procuring lithium from other countries and companies will have to source lithium for battery packs by entering an arrangement with countries that have lithium and cobalt deposits. 

5. Reshaping Indo-Pacific

The expansive prospect for India’s strategic partnership with France unveiled in Delhi on Saturday by Prime Minister Narendra Modi and the visiting President, Emmanuel Macron, underlines the growing importance of middle power coalitions that transcend the traditional alliance frameworks and new geopolitical fault lines. Amidst America’s uncertain external orientation and China’s effort to reshape the global order, second-tier powers like India and France seek a greater say in world affairs through more intensive collaboration. In that process, they are breaking down the old stereotypes of East versus West and North versus South.

  • In taking the lead on mitigating climate change, through the International Solar Alliance, India and France are demonstrating their potential for shared global leadership. France, a long standing military ally of the United States, is also looking beyond NATO to forge security partnerships with Asian democracies like India. Delhi, in turn, appreciates that its quest for a larger role in the world can’t be founded in exclusive security partnerships with either Russia or America. 

The Indo-Pacific has emerged as the new arena for cooperation between Delhi and Paris. Although India’s strategic partnership with France is the oldest and dates back to the late 1990s, it lacked a regional anchor. The focus was mainly on expanding bilateral defence and high technological cooperation. With their long standing national advantages in the Indo-Pacific threatened by the global power shift, they have chosen to band together.

  • Beyond their effort to influence the high politics of the Indo-Pacific, Delhi and Paris have agreed to address a huge gap in the bilateral relationship — the limited contact among the peoples of the two countries. Macron has promised to make France a major destination for Indian students, engineers, scientists and artists. At a time when borders are closing elsewhere in the world, this is a huge opportunity for the new generation of globalising Indians. Macron’s unbridled enthusiasm for India connects with his effort to rejuvenate France and revitalise Europe. 

6. Macron in Delhi: Russia appears to be cooling towards India, can France replace it?

French President Emmanuel Macron’s India visit has helped highlight a bilateral relationship that is far too understated for its own good. It is worth remembering that France was the only western nation that unambiguously supported India after its Pokhran II nuclear tests, refusing to impose any bilateral sanctions on New Delhi. As of now, Macron has emerged as a key force behind the European Union and is looking to increase French heft in the international arena.

  • After the Logistic Exchange Memorandum of Agreement with the US, the pact with France will increase options for Indian maritime operations in the Indo-Pacific, countering the threat of a potential Chinese encirclement of India. Macron did sound a discordant note in hard selling Rafale fighter jets to India, of which India has already agreed to buy 36 despite doubts in the country about the expense of the deal. He is a man of ideas and one hopes he sees more in the relationship with India than a transactionalist view where India is merely a market for expensive fighter jets or nuclear power plants.

In that regard the memorandum of understanding on mutual recognition of academic qualifications with India is an encouraging step, as is Macron attending the founding conference of the International Solar Alliance in Delhi with Prime Minister Narendra Modi. One hopes this can lead to transfer of technology and joint production deals in renewable energy and other high tech fields, as well as in stepped up trade and investment ties

7. M&A rebound is a good sign for Indo-Japan ties

  • A resurgence of Japanese interest in India is worth meditating on. Nippon Steel is part of a bid for its bankrupt rival on the subcontinent, Essar Steel. That would mark a revival of high-profile dealmaking in India after several big flops. The two countries share a spiritual affinity through Buddhism; healthier financial relations will also help create the harmonious, democracy-led region that Tokyo and Washington both want.
  • India’s rapidly growing middle class represents a huge opportunity for Japan, a rich country with a shrinking population. 
  • The Indian embassy in Tokyo shows foreign direct investment peaked around 2008 and 2009, with mega-deals including NTT DoCoMo’s $2 billion purchase of a stake in Tata Teleservices and Daiichi’s Sankyo’s $3 billion-plus acquisition of drugmaker Ranbaxy Laboratories
  • Both deals were disasters. Tata Teleservices performed badly and then, to exacerbate the pain, the RBI tried to prevent DoCoMo from recouping half of its original investment as part of a pre-deal insurance policy agreed upon between the two companies. Meanwhile, Ranbaxy ran into big trouble with U.S. regulators. Daiichi Sankyo alleged that the previous Indian shareholders hid information; it eventually sold the company to a domestic rival. Both Japanese groups took their cases to international courts.

The two cases are not the best advertisement for big bets on the subcontinent. It is against this backdrop that Nippon has teamed up with Luxembourg-based ArcelorMittal to bid around $6 billion for Essar Steel. The Japanese probably hope that investing alongside the Mittal family, as a quasi-local partner, will help avoid nasty surprises. A deal would follow smaller investments by Japan’s SoftBank into tech start-ups and a 50-year loan from Tokyo to build a bullet train linking Mumbai with Ahmedabad.

  • More investment will also lend credibility to the idea of a “free and open Indo-Pacific”.

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