1. China opposes India-Taiwan trade ties

The issue in news

China has asked India to approach ties with Taiwan prudently and properly.

Main points

China has asserted that it would firmly oppose any official exchanges between India and Taiwan.


India-Taiwan Relations:

  • India and Taiwan are considering going forward with talks on a trade deal.
  • India and Taiwan in 2018 already signed a bilateral investment agreement. Trade ties between the two nations have expanded since, and Taiwanese firms are prominent investors in India, although India and Taiwan do not maintain formal diplomatic relations.


One China Policy:

  • The One China policy recognizes the long-held position in Beijing that there is only one China, and that Taiwan is a part of that.
  • According to the One-China policy: Any country wishing to establish diplomatic relations with Beijing must acknowledge there is only “One China” and sever all formal ties with Taiwan.





  1. Inflow of FDI

The issue in news

The highest ever Foreign Direct Investment (FDI) inflow of USD 35.73 billion for the first 5 months of a financial year was received During April to August, 2020.  

Main points

  • Despite the contraction of Gross Domestic Product (GDP) growth by 23.9% in the first quarter (April-June 2020) FDI inflow has increased.

Recent Increase in FDI Inflows:

  • The FDI received is 13% higher as compared to the first five months of 2019-20. Total FDI inflow grew by 55% in 2014-20. According to the World Investment Report 2020 by the UNCTAD, India was the 9th largest recipient of FDI in 2019.


  • Measures taken by the Government on the fronts of FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country.


  • Schemes like production-linked incentive (PLI) scheme for electronics manufacturing, have attracted foreign


  • To permit 100% FDI under automatic route in coal mining activities in 2019, the Central Government amended FDI Policy 2017. The government also permitted 26% FDI in digital sectors.

Foreign Direct Investment

  • foreign direct investment(FDI) is an investment made by a firm or individual in one country into business interests located in another country. Generally,  FDI takes place when an investor establishes foreign business operations or acquires foreign business assets in a foreign
  • It is different from Foreign Portfolio Investment where the foreign entity merely buys stocks and bonds of a company. FPI does not provide the investor with control over the business.

FDI has three components, viz., equity capital, reinvested earnings and intracompany loans.

  • Equity capital is the foreign direct investor’s purchase of shares of an enterprise in a country other than its own.
  • Reinvested earnings comprise the direct investors’ share (in proportion to direct equity participation) of earnings not distributed as dividends by affiliates, or earnings not remitted to the direct investor. Such retained profits by affiliates are reinvested.
  • Intra-company loans or intra-company debt transactions refer to short- or long-term borrowing and lending of funds between direct investors (or enterprises) and affiliate enterprises.
  • FDI gets in India through Automatic Route and Government route/Approval route.


The automatic route

  • Under this route, investment into different sectors are less restricted. Foreign direct investment norms and regulations are more liberalized.
  • Here, the overseas investor or the Indian company does not require a prior approval from the Reserve Bank of India (RBI) or government of India for investment into the country.

Approval route

  • The approval route is a little restricted. The foreign investor or the Indian company has to take a prior approval from the Reserve Bank of India (RBI) or the government of India before making an investment.



  1. Punjab formally rejects farm laws

The issue in news

Punjab became the first State to formally reject the Centre’s three recent agriculture sector laws, with its Assembly unanimously passing three Bills to negate the Union legislation.

Main points

  • The Assembly passed a resolution rejecting the Central legislation and the proposed Electricity Amendment Bill and demanding their immediate annulment.
  • It also sought an ordinance to protect the minimum support price (MSP) regime and ensure the continuance of procurement by the Centre.
  • The three State Bills provide for imprisonment of not less than three years and fines for sale-purchase of wheat or paddy under a farming agreement below the MSP, besides prevention of hoarding and black-marketing of agricultural produce, among other things.
  • It also rejected the proposed Electricity Amendment Bill and demanded their immediate annulment.



  1. Kaleshwaram eco-clearance violates law: NGT

The issue in news

The National Green Tribunal (NGT) has held that environmental clearance (EC) to the Kaleshwaram Lift Irrigation Project (KLIP) was granted ex post facto, after completion of substantial work, by the Ministry of Environment, Forests and Climate Change (MoEF&CC).

Main points

  • It has held that the EC was granted in violation of the law.
  • It has also observed that accountability needs to be fixed and remedial measures taken.
  • For this, MoEF&CC has been directed to constitute a seven-member expert committee.
  • The NGT Principal Bench suggested that the expert committee could assess the extent of damage caused in going ahead with the project without EC — the period from 2008 to 2017 — and identify the necessary restoration measures.


Kaleshwaram Lift Irrigation Project.

  • Kaleshwaram Lift Irrigation Project is being constructed in Telangana. It is being built at the confluence of Pranhita and Godavari Rivers. Apart from the obvious benefits like irrigation, drinking water and transportation, it will also help in other aspects like
  1. This project will help the fishing industry
  2. Development of Water sports
  3. Improve the tourism industry
  • State Governments of Telangana and Maharashtra have signed water-sharing agreement from this project, thus putting an end to the decades-old disagreement between the 2 states. 
  • Number of Districts that will receive Water for Irrigation and Drinking purposes  20 Districts (Out of 31 Districts) in Telangana 
  • The volume of water produced: Total of 240 tmcft.
  1. 195 tmcft from Medigadda Barrage
  2. 20 tmcft from Sripada Yellampalli project
  3. 25 tmcft from groundwater.

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