What’s in today’s article?

• Why in the News?
• What is FDI?
• How does FDI Enter in India?
• Sectors in which FDI is Prohibited
• News Summary
• 100% FDI for Manufacturing, Operation of Satellites

Why in the News?

• The Ministry of Finance has changed rules under the Foreign Exchange Management Act to allow up to 100 per cent foreign direct investment (FDI) for the space sector through three categories of liberalised entry routes.

What is FDI?

• Foreign direct investment (FDI) is an investment from a party in one country into a business or corporation in another country with the intention of establishing a lasting interest.
• With FDI, foreign companies are directly involved with day-to-day operations in the other country.

How does FDI Enter in India?

• Foreign Investment in India is governed by the FDI policy announced by the Government of India and the provisions of the Foreign Exchange Management Act (FEMA), 1999.
• FDI enters in India through either of the two routes:
  • Automatic route
  • Government-approval route
• Automatic route:
  • The non-resident or Indian company does not require prior nod of the RBI or government of India for FDI.
• Government route:
  • The government's approval is mandatory.
  • The company will have to file an application through Foreign Investment Facilitation Portal, which facilitates single-window clearance.
  • The application is then forwarded to the respective ministry, which will approve/reject the application in consultation with the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce.
  • DPIIT will issue the Standard Operating Procedure (SOP) for processing of applications under the existing FDI policy.

Sectors in which FDI is Prohibited

• There are a few industries where FDI is strictly prohibited under any route. These industries are:
  • Atomic Energy Generation
  • Any Gambling or Betting businesses
  • Lotteries (online, private, government, etc.)
  • Investment in Chit Funds
  • Nidhi Company
  • Agricultural or Plantation Activities (although there are many exceptions like horticulture, fisheries, tea plantations, Pisciculture, animal husbandry, etc.)
  • Housing and Real Estate (except townships, commercial projects, etc.)
  • Trading in TDR's
  • Cigars, Cigarettes, or any related tobacco industry

News Summary

• The Finance Ministry has notified amended rules under the Foreign Exchange Management Act to operationalise its earlier decision to allow up to 100 per cent foreign direct investment (FDI) for the space sector through three categories of liberalised entry routes.
• The notification comes ahead of Tesla chief Elon Musk’s visit to India early next week where he is expected to meet space startups, make a push for his space venture Starlink’s plans and announce his electric vehicle (EV) investment plans.
• Earlier in February, the Union Cabinet had approved the amendment to the FDI policy for the space sector, allowing up to 100 per cent investment in certain categories.

100% FDI for Manufacturing, Operation of Satellites

• As per the latest Finance Ministry notification, 100 per cent FDI has been allowed for the space sector category of manufacturing and operation of satellites, satellite data products, and ground segment and user segment.

Out of this, up to 74 per cent would be through the automatic route and government nod would be required for investment beyond 74 per cent. 

Under the earlier policy, any foreign investment in manufacturing and operating satellites is allowed only with government approval.

• Automatic FDI has also been permitted up to 49 per cent for launch vehicles and associated systems or subsystems, and creation of spaceports for launching and receiving spacecraft. Government approval would be required for investments beyond 49 per cent.

Manufacturing of components and systems or sub-systems for satellites, ground segment and user segment will be fully under the 100 per cent automatic route.

Q1. What's the Difference Between FPI vs FDI?

Foreign Direct Investment (FDI) involves foreign investors directly investing in another nation's productive assets. Conversely, Foreign Portfolio Investment (FPI) entails investing in financial assets, like stocks and bonds, of entities situated in a different country.

Q2. What is the International Astronomical Union?

The International Astronomical Union is a non-governmental organisation with the objective of advancing astronomy in all aspects, including promoting astronomical research, outreach, education, and development through global cooperation. It was founded in 1919 and is based in Paris, France.

Source: https://indianexpress.com/article/india/musk-india-visit-rules-fdi-space-sector-9276071/ 

What’s in today’s article?

• Why in News?
• What is National Green Tribunal (NGT)?
• Structure & Members of NGT
• What are Powers of NGT?
• what are Glacial Lake Outburst Floods (GLOFs)?
• How did South Lhonak Lake Become Susceptible to GLOF?
• What is North East Space Application Centre (NESAC)?

Why in News?

The Sikkim government has informed the National Green Tribunal (NGT) that more than usual heavy rainfall — possibly a cloudburst — had preceded the glacial lake outburst flood (GLOF) event in the South Lhonak lake.

The state government has based its conclusion on a report by the North East Space Application Centre (NESAC). 

At least 40 people were killed 76 went missing in Sikkim in October 2023 after the South Lhonak Lake - a glacial lake situated in the state’s northwest at 17,000 ft - burst due to incessant rains.

What is National Green Tribunal (NGT)?

• The National Green Tribunal has been established in October 2010 under the National Green Tribunal Act 2010.
• It was established for effective and expeditious disposal of cases relating to environmental protection and conservation of forests and other natural resources.
• It is a specialized body equipped with the necessary expertise to handle environmental disputes involving multi-disciplinary issues.
  • India became the third country in the world to set up a specialised environmental tribunal, only after Australia and New Zealand.

Structure & Members of NGT

• The Principal Bench of the NGT has been established in the National Capital – New Delhi, with regional benches in 
  • Pune (Western Zone Bench); Bhopal (Central Zone Bench); Chennai (Southern Bench) and Kolkata (Eastern Bench).
• The Chairperson of the NGT is a retired Judge of the Supreme Court, Head Quartered in Delhi. 
  • Other Judicial members are retired Judges of High Courts. Each bench of the NGT will comprise of at least one Judicial Member and one Expert Member. 
  • Expert members should have a professional qualification and a minimum of 15 years’ experience in the field of environment/forest conservation and related subjects.

What are Powers of NGT?

• The Tribunal is not bounded by the procedure laid down under the Code of Civil Procedure, 1908. It is guided by principles of natural justice.
• The Tribunal is mandated to make and endeavour for disposal of applications or appeals finally within 6 months of filing of the same.
• NGT has the power to hear all civil cases relating to environmental issues and questions that are linked to the implementation of laws listed in Schedule I of the NGT Act.
  • It should be noted that the NGT has not been vested with powers to hear any matter relating to 
    • the Wildlife (Protection) Act, 1972, 
    • the Indian Forest Act, 1927 and 
    • various laws enacted by States relating to forests, tree preservation etc.

What are Glacial Lake Outburst Floods (GLOFs)?

• Glacial lakes
  • Glacial lakes are large bodies of water that sit in front of, on top of, or beneath a melting glacier.
  • As a glacier withdraws, it leaves behind a depression that gets filled with meltwater, thereby forming a lake.
  • Glacial lakes are formed when a glacier erodes the land and then melts, filling the depression created by the glacier. 
    • They are typically found in high-altitude or polar regions where glaciers exist.
    • The more the glacier recedes, the bigger and more dangerous the lake becomes.
  • Glacial lakes are generally divided into two main groups:
    • Ice-contact lakes: These lakes have glacier ice that terminates in the lake water.
    • Distal lakes: These lakes are distant from glaciers or ice sheets, but are still influenced by their presence. 
• About GLOFs
  • Glacial lakes are mostly dammed by unstable ice or sediment composed of loose rock and debris. 
  • In case the boundary around them breaks, huge amounts of water rush down the side of the mountains, which could cause flooding in the downstream areas — this is referred to as a GLOF event.
  • Hence, GLOFs are disaster events caused by the abrupt discharge of water from glacial lakes.
• Factors triggering GLOFs
  • GLOFs can be triggered by various reasons, including glacial calving, where sizable ice chunks detach from the glacier into the lake, inducing sudden water displacement. 
  • Incidents such as avalanches or landslides can also impact the stability of the boundary around a glacial lake, leading to its failure, and the rapid discharge of water.

How did South Lhonak Lake Become Susceptible to GLOF?

• With the rising global temperatures, glaciers in Sikkim Himalayan have been melting rapidly, giving rise to many glacier lakes and expanding the already existing ones in the region.
• According to the Sikkim State Disaster Management Authority (SDMA), there are currently more than 300 glacial lakes in Sikkim Himalayan, and 10 (including South Lhonak Lake) have been identified as vulnerable to outburst floods.
• An earthquake of magnitude 4.9 in 1991 near the parent glacier feeding the South Lhonak Lake and the recent earthquake (6.9) in 2011 may have weakened the boundaries of the lake.
  • The recentincessant rains caused the lake to burst.

What is North East Space Application Centre (NESAC)?

• NESAC is a regional space center in Umiam, Meghalaya that was established in 2000.
• It is a joint initiative between the Department of Space (DOS) and the North Eastern Council (NEC).
• It provides developmental support to the North Eastern Region (NER) using space science and technology.

Q.1. What is Glacial calving?

Glacial calving, also known as ice calving, is the process of large chunks of ice breaking off from the edge of a glacier, ice shelf, ice front, crevasse, or iceberg.

Q.2. What are the principles of natural justice?

Principles of natural justice are those rules which have been laid down by the Courts as being the minimum protection of the rights of the individual against the arbitrary procedure that may be adopted by a judicial, quasi-judicial and administrative authority while making an order affecting those rights.