What’s in today’s article?

• Why in News?
• Size of Indian exports
• Recent incidents of contamination
• Impact of recall
• Steps taken by the India

Why in News?

Last month, Hong Kong and Singapore recalled certain spice mix products from MDH and Everest Group due to higher than prescribed levels of the sterilizing agent Ethylene Oxide (ETO).

In response, Indian authorities have initiated several measures to ensure that Indian spices comply with the food safety standards of importing countries.

Size of Indian exports

• About
  • A quick export estimate data available with the Spices Board India shows that India enjoys a significant share in the global market for spices and spice products. 
• Statistics
  • In 2023-2024, India exported spices worth $4.4 billion (nearly 14 lakh tonnes), which is 12.3% higher than the financial year 2022-2023. 
• Products exported
  • Chilli, spice oils and oleoresins, curry powder and paste, cumin, mint products, cardamom and pepper are some of the largest exported spices and spice products in the financial year 2022-2023.
  •  In terms of production, garlic, ginger and chilli were the top three spices produced in FY23.
• Major export destination
  • India exported spices and spice products to 180 destinations worldwide.
  • China, Bangladesh, west Asian countries and the U.S. are important markets for Indian spices.

Recent incidents of contamination

• About
  • In May 2024, some spice mixes from the Indian brands Everest and MDH were found to contain ethylene oxide, a cancer-causing chemical, and banned in Singapore and Hong Kong. 
  • The products were recalled and banned in these markets.
• Source of contamination
  • India does not use Ethylene Oxide (ETO) as a pesticide but as a sterilizing agent to reduce microbial load in finished spice products.
  • Spices and other agricultural products are often contaminated in mandies (auction yards) due to contact with humans, birds, reptiles, and insects. 
  • Large factories receiving materials from these mandies are left with high microbial levels, necessitating the use of ETO sterilization.
  • However, contamination can be reduced early through value addition processes. 
  • Consumers are encouraged to focus on the quality of products, not just their prices, to ensure safer and healthier food choices.

Impact of recall

• Recall, Not a Ban
  • An official from the Federation of Indian Spice Stakeholders clarified that Singapore and Hong Kong recalled, but did not ban, Indian spice products. 
  • Exports to these countries have resumed, so a significant impact is not expected in the coming months.
• India’s share in spice production
  • India contributes about 70% of global spice production.
  • Hence, such incidents of contamination will affect India’s image as a spice producer.
• Varied Standards
  • Countries have different standards for Ethylene Oxide (ETO) and maximum residue levels (MRL). 
    • While ETO is permitted by the U.S., the EU seeks steaming as the method for sterilisation. 
    • But while the cost of using ETO as a sterilising agent is % per kg, for steaming it is 720-225 a kg. 
  • The Indian spice industry is urging the government to negotiate with the EU to relax these stringent norms to enhance Indian spice exports to European markets.
  • Also, the Indian government should lay down achievable guidelines and tell the buying countries about it.

Steps taken by the India

• Issuance of Protocols
  • Following the recalls by Hong Kong and Singapore, the Spices Board of India issued a detailed protocol to all manufacturing exporters to prevent ETO contamination.
• Mandatory Testing
  • The Board initiated mandatory testing of spice consignments destined for Singapore and Hong Kong specifically for ETO levels.
• International Standards
  • The Spices Board has engaged with the international food standards body to address the need for uniform ETO usage limits, as these standards vary across different countries.
• Consumer Awareness
  • There is an ongoing effort to educate consumers about the importance of quality over price. 
  • By encouraging consumers to focus on the quality of products, there is a push towards higher standards in the spice industry.
• Industry-Government Collaboration
  • The spice industry and government are working together to ensure that Indian spices comply with the varying standards of different countries, addressing issues specific to each market to prevent future recalls.

Q.1. What is the role of Spice Board in India?

The primary function of the Board includes development of small and large cardamom, promotion, development, regulation of export of spices and control on quality of spices for export.

Q.2. Where is the role of Ethylene Oxide (ETO)?

It is used to make household cleaners and personal care items, create fabrics, and manufacture raw materials into more useful forms. Another important use of ethylene oxide is the sterilization of medical equipment, including personal protective equipment used by health care professionals and hospitals.

Source: What is the current status with respect to spice exports? | Explained | Spice Board

What’s in today’s article?

• Why in News?
• What is the Council of Europe (COE)?
• What is Framework convention?
• What is AI Convention of Europe?
• EU’s AI convention - Significance
• EU’s AI Convention – Impact

Why in News?

Recently, the Council of Europe (COE) adopted the Framework Convention on Artificial Intelligence and Human Rights, Democracy, and the Rule of Law, known as the 'AI convention,'.

What is the Council of Europe (COE)?

• About
  • The Council of Europe (CoE) is an international political organization that was founded in 1949 to protect human rights, democracy, and the rule of law. 
  • It is the oldest intergovernmental organization in post-World War II Europe and has the most member states, which cooperate voluntarily.
• Headquarter
  • The CoE is based in Strasbourg, France and has close ties with the European Union.
• Member
  • It has 46 members including the Holy See, Japan, and the U.S., plus countries of the EU bloc and others.
• CoE's areas of concern
  • It addresses issues of common concern to its members, including human rights, crime prevention, drug abuse, environmental protection, bioethical issues, and migration.

What is Framework convention?

• About
  • A framework convention is a legally binding treaty that outlines broad commitments and objectives, establishing mechanisms to achieve them. 
  • Specific targets are left to be determined by subsequent agreements.
• Protocols
  • Agreements negotiated under a framework convention are called protocols. 
  • E.g., the Convention on Biological Diversity is a framework convention, while the Cartagena Protocol on Biosafety addresses living modified organisms under it. 
  • Similarly, a future 'Protocol on AI Risk' could be established under Europe's AI convention.
• Significance of the Framework Convention Approach
  • This approach provides flexibility while encoding core principles and processes to achieve objectives. 
  • Parties to the convention can decide how to meet these objectives based on their capacities and priorities.

What is AI Convention of Europe?

• About
  • This agreement is a comprehensive convention covering AI governance and links to human rights, democracy, and the responsible use of AI.
  • It will be opened for signature in Vilnius, in Lithuania, on September 5.
• Aims and Definition
  • The AI convention ensures that activities involving artificial intelligence systems comply with human rights, democracy, and the rule of law. 
  • It describes an AI system as a machine-based system that uses input to generate outputs like predictions, content, recommendations, or decisions that can influence both physical and virtual environments.
  • Hence, the definition of AI in the convention aligns with the EU AI Act and the OECD's definition.
• Scope of the AI Convention
  • Coverage
    • The convention applies to all activities within the lifecycle of AI systems that could impact human rights, democracy, and the rule of law.
  • Public and Private Sector Responsibilities
    • Public Authorities: The convention is applicable to AI activities conducted by public authorities or private entities acting on their behalf.
    • Private Actors: Risks and impacts from AI activities by private entities not covered by public authorities must be addressed in alignment with the convention's objectives and purpose.
  • Exemptions for National Interests
    • Articles 3.2, 3.3, and 3.4 of the convention provide broad exemptions for national security interests, research, development and testing, and national defense. 
    • Consequently, military applications of AI are excluded from the convention.
  • Inclusion of Private Sector
    • The inclusion of the private sector in the convention's scope was contentious, leading to a compromise. 
    • Article 3(b) provides flexibility for parties to address private sector activities without completely exempting them.
  • Protection of Core Values
    • Human Rights (Article 4): The convention mandates the protection of human rights.
    • Democratic Processes and Rule of Law (Article 5): It emphasizes maintaining the integrity of democratic processes and respect for the rule of law. 
      • Although disinformation and deep fakes are not specifically mentioned, parties are expected to take measures against them under Article 5.
  • Flexibility for Enhanced Commitments
    • Article 22 allows parties to exceed the commitments and obligations specified in the convention, encouraging further proactive measures.

EU’s AI convention - Significance

• No New AI-Specific Rights
  • The AI convention does not introduce new human rights specific to AI. 
  • Instead, it emphasizes that existing human and fundamental rights, protected by international and national laws, must remain safeguarded during the application of AI systems.
• Government Obligations
  • The convention primarily directs its obligations towards governments, which are expected to implement effective remedies (Article 14) and procedural safeguards (Article 15).
• Protection of Core Values
  • The convention adopts a comprehensive approach to mitigate risks from AI applications regarding human rights, democracy, and the rule of law. 
  • This approach recognizes the dynamic nature of AI technology and the challenges it presents.
• Balance Between Innovation and Risk
  • Despite potential challenges and debates, particularly around the European notion of the rule of law, the convention is considered timely. 
  • It strikes a crucial balance between fostering innovation in AI and addressing risks to human rights.
• Challenges
  • Implementing the convention poses challenges, especially as AI regulation frameworks are still evolving and technology advances rapidly, often outpacing existing laws and policies.

EU’s AI Convention – Impact

• Regional Influence
  • The AI convention could inspire similar conventions at the regional level in other parts of the world, promoting global standards in AI governance.
• Indirect Effect on the U.S.
  • As the U.S. is a member of the Council of Europe (COE), the AI convention might indirectly influence AI governance in the U.S., which is significant given its status as a hub for AI innovation.
• European Values and Norms
  • A potential downside is that the AI convention might be seen as heavily influenced by European values and norms in technology governance.
  • This could lead to perceptions of bias.

Q.1. What is Cartagena Protocol on Biosafety?

The Cartagena Protocol is an international agreement managing the movement of living modified organisms from one country to another. It aims to protect nature from the potential risks posed by such organisms by establishing procedures countries can use to make informed decisions on the import of such organisms. 

Q.2. What is Holy See?

The Holy See is the central government of the Roman Catholic Church and is often referred to as "the Vatican". It is a sovereign juridical entity under international law, and is headed by the Pope, who is also the ruler of Vatican City State.

Source: How Europe’s AI convention balances innovation and human rights | Explained | Council of Europe | Britannica

What’s in today’s article?

• Why in News?
• India’s Foreign Trade
• Latest Trends of India’s Foreign Trade
• India’s Trade Deficit with its Major Trading Partners

Why in News?

• According to the latest data of the Ministry of Commerce & India, India has recorded a trade deficit (difference between imports and exports) with 9 of its top 10 trading partners in fiscal year (FY) 2023-24.

India’s Foreign Trade:

• Overview:
  • Foreign trade in India includes all (merchandise + services) imports and exports to and from India and it accounted for 48.8% of India's GDP in 2018.
  • At the level of the Central Government, trade is administered by the Ministry of Commerce and Industry.
  • In 2022, India was the number 15 in total exports, the number 8 in total imports.
  • According to the Commerce Ministry data, China was India's top trading partner from 2013-14 till 2017-18 and also in 2020-21.
  • Before China, the UAE was the country's largest trading partner. The US was the largest partner in 2021-22 and 2022-23.
• Exports (merchandise):
  • The top exports of India are Refined Petroleum ($86.2B), Diamonds ($25.9B), Packaged Medicaments ($19.5B), Jewellery ($12.6B), and Rice ($11.1B).
  • It exports mostly to the United States ($82.9B), United Arab Emirates ($31.6B), Netherlands ($17.6B), China ($15.3B), and Bangladesh ($13.8B).
  • In 2022, India was the world's biggest exporter of Diamonds ($25.9B), Rice ($11.1B), etc.
• Imports (merchandise):
  • The top imports of India are Crude Petroleum ($170B), Coal Briquettes ($58.7B), Gold ($35.8B), Petroleum Gas ($32B), and Diamonds ($26.1B).
  • It imports mostly from China ($110B), UAE ($51B) and the US ($48.5B), Saudi Arabia ($46.2B), and Russia ($40.4B).
  • In 2022, India was the world's biggest importer of Coal Briquettes ($58.7B), Diamonds ($26.1B), Palm Oil ($11.1B), Mixed Mineral or Chemical Fertilizers ($7.88B), and Nitrogenous Fertilizers ($7.37B).

Latest Trends of India’s Foreign Trade:

• As per the data from the economic think tank GTRI, China has overtaken the US as India's largest trading partner, with a total two-way commerce of $118.4 billion, in the FY 2023-24.
  • India's exports to China rose by 8.7% to $16.67 billion, while imports increased by 3.24% to $101.7 billion.
• On the other hand, exports to the US dipped slightly to $77.5 billion, and imports decreased by about 20% to $40.8 billion (the two-way commerce stood at $118.3 billion).
• The UAE with USD 83.6 billion, was the third largest trading partner of India. It was followed by Russia ($65.7 billion), Saudi Arabia ($43.4 billion), and Singapore ($35.6 billion).

India’s Trade Deficit with its Major Trading Partners:

• Latest trends:
  • India’s trade deficit with China rose to $85 billion, Russia to $57.2 billion, Korea to $14.71 billion and Hong Kong to $12.2 billion in 2023-24 against $83.2 billion, $43 billion, $14.57 billion and $8.38 billion in 2022-23.
  • India has a trade surplus of $36.74 billion with the U.S. in 2023-24 and America is one of the few countries with which India has a trade surplus along with the U.K., Belgium, Italy, France and Bangladesh.
  • India's total trade deficit in the last fiscal narrowed to $238.3 billion as against $264.9 billion in the previous fiscal.
• What can be drawn from these latest trends?
  • Imports are not always bad if a country is importing raw materials or intermediary products to boost manufacturing and exports.
  • However, it can cause the country's currency to depreciate because more foreign currency is needed for imports.
  • This depreciation makes imports more expensive, worsening the deficit and increasing external debt.
  • This can deplete foreign exchange reserves and signal economic instability to investors, leading to reduced foreign investment.

What needs to be done to cut the trade deficit? Boosting exports, reducing unnecessary imports, developing domestic industries, and managing currency and debt levels effectively.

Q.1. What is the share of services in India's total foreign trade?

With 4.6% of all services traded globally, India ranks seventh in the world as a commercial service exporter as of 2023.

Q.2. What is India's foreign trade policy (FTP) 2023?

The FTP 2023 aims at process re-engineering and automation to facilitate ease of doing business for exporters. It also focuses on emerging areas like dual use high end technology items, facilitating e-commerce export, collaborating with States and Districts for export promotion.

Source: India in trade deficit with nine of top 10 trading partners in 2023-24 | ET