Topic 1 : Blue water power
Introduction: Many strategic observers in the world were sceptical when the prime ministers of India and Mauritius, Narendra Modi and Pravind Jugnauth respectively, announced a Memorandum of Understanding (MoU) in 2015 to develop Agalega Atoll of Mauritius.
Location of Agalega Atoll
- Agalega is a tiny speck in the vast waters of the Western Indian Ocean.
- This atoll, comprising two islands, North and South Agalega, separated by a short channel not wider than 200 metres, is just 25 square kilometres in area.
- This atoll, located 684 miles (1,122 km) northeast of mainland Mauritius was once a slave plantation colony.
- The only town on the island is called Vingt-Cinq — meaning 25 in French — referring to the number of lashes the slaves would receive as punishment.
- The 12 km-long and 2 km-wide northern island has a small airstrip which used to be occasionally visited by Coast Guard planes and helicopters.
- From the air, it looks like an exclamation mark.
How much the atoll is developed?
- Although it existed on the radar of agencies like the CIA, which suspected, without any evidence, that the erstwhile USSR had plans to capture it and turn it into a naval base, not many bothered about this piece of land in a remote corner of the Indian Ocean.
- Even the Mauritius government, to which Agalega belonged, used to dispatch a shipload of essential commodities to its less than 300 inhabitants, almost all Creoles, only once in three months.
- M V Trochetia, the ship that brought these commodities to service the islanders, would anchor deep in the waters as no port facility existed on the island, while small vessels would make dozens of rounds to shift the cargo back and forth.
- No medical or educational facility existed for the people living there.
How the Agalega will be developed?
- While signing the MoU in 2015, the two prime ministers announced that the 800-metre long airstrip, capable of landing light aircraft, will be developed into a full-length airfield that can receive larger planes.
Speculations regarding India’s support
- Some critics in the strategic world were not convinced and insisted that the real objective of the Indian government was to build a military base.
- Dozens of articles and reports followed, with some even alleging that Agalega was “a secret base, and India’s claim to power”.
- Some politicians in Mauritius too saw an opportunity to corner the prime minister.
- However, Prime Minister Jugnauth stoutly defended his decision, insisting that the project was intended to enhance the capabilities of the government in managing far-flung islands.
- He also clarified that “India would be allowed to utilise the facilities in Agalega subject to prior notification from the competent authorities of Mauritius.”
- Eight years after the MoU, and amidst intense speculation, the two prime ministers met again, virtually, earlier this week and announced the opening of the upgraded 3-km-long airstrip that can handle bigger aircraft, and a harbour that can anchor big ships.
- Six civilian projects, including a medical facility and a school, were also inaugurated.
Strategic Significance of Agalega Atoll
- Agalega thus entered the list of ports in the Indian Ocean that provide strategic access to India — dubbed by some analysts as the “necklace of diamonds” — as against the “string of pearls” ports that provide access to the Chinese.
- India already has a naval air station in North Andaman called INS Kohassa, and another near Port Blair called INS Utkrosh, which provide enough depth for the country’s military to monitor the Eastern Indian Ocean thoroughly.
- With the maritime empowerment of Mauritius through the Agalega project, India can expect to get enough cooperation from that country, “a natural partner”, in monitoring important ocean lines in the Western Indian Ocean too, including the crucial Mozambique Channel.
The Indian Ocean and Geopolitical Contestation
- The Indian Ocean region has emerged as the axis of global power.
- The US and the UK, with the Diego Garcia base, and France, with Reunion Island, are already active in the region.
- China, too, joined them, investing heavily in spreading its tentacles.
- It built many assets in the Western Indian Ocean, such as the bases in Djibouti and Gwadar, and developed extensive influence over many leaders in Africa.
- For India, which depends on the Indian Ocean for almost 90 per cent of its imports and exports, growing Chinese activities in the region are a considerable challenge.
Conclusion: India wished to convey through the Agalega project that it too has arrived and is serious about its critical role as a net peace provider in the Indian Ocean region, and willing to brook no interference in managing it as a “zone of peace”.
Topic 2 : Betting big
Introduction: The government is moving on its ambitious semiconductor plans. On Thursday, the Union cabinet approved three chip projects worth Rs 1.26 lakh crore. These include India’s first semiconductor fabrication plant to be set up in Dholera, Gujarat, by the Tata Group.
More about projects
- The project, which has been set up in partnership with the Taiwan-based Powerchip Semiconductor Manufacturing Corporation (PSMC), is estimated to cost Rs 91,000 crore.
- Alongside, a separate Tata Group proposal for setting up an assembly plant in Assam at a cost of Rs 27,000 crore has also been cleared, along with another one by CG Power in Sanand Gujarat which involves an investment of Rs 7,600 crore.
- These projects follow the government’s approval in June last year of Micron Technology’s assembly and test facility in Gujarat.
India Semiconductor Market Insights Forecasts to 2032
- The India Semiconductor Market Size was valued at USD 26.3 Billion in 2022.
- The Market is Growing at a CAGR of 25.7% from 2022 to 2032
- The India Semiconductor Market Size is expected to reach USD 271.9 Billion by 2032.
The government’s effort to develop a semiconductor ecosystem in India
- In December 2021, looking to develop a semiconductor ecosystem in the country, the government had put in place a Rs 76,000 crore chip incentive scheme, announcing incentives for “every part of supply chain including electronic components, sub-assemblies, and finished goods.”
- Under this, the central government offers fiscal support and state governments can offer additional incentives to attract investments.
- For instance, as reported in this paper, in the case of Micron, of the project cost of Rs 2.75 billion, the company will contribute $825 million, with 50 per cent coming from the central government and 20 per cent from the Gujarat government.
- The Tata-PSMC plant is expected to serve industries such as high-performance computing, electric vehicles, defence and others.
- The chips will be primarily 28 nanometre, along with 50 nm and 55 nm.
Global competition in semiconductor manufacturing
- In recent times, competition in this arena has become fierce.
- Countries like the US have put in place attractive schemes to facilitate investments.
- In fact, government support is seen as critical.
- Currently, South Korea, Taiwan and China account for around 70 per cent of the global manufacturing capacity, with the balance in the US and Japan.
- India’s incentive schemes are focused on all three parts of the semiconductor ecosystem — packaging units (ATMP facilities), assembly and testing projects (OSAT plants), and full-scale foundries that can manufacture chips.
- In fact, the government is also setting up an R&D lab at the Semiconductor Laboratory, with the modernisation plan for the organisation involving an outlay of Rs 10,000 crore.
- The government is providing support at a fiscal and regulatory level. It must also ensure a stable policy environment.
Conclusion: A strong domestic ecosystem will help cater to the burgeoning demand in the country, assist in building of secure and resilient supply chains, while reducing reliance on some, the importance of which has become apparent during periods of geopolitical uncertainty.