MAINS Current Affairs includes Persian Gulf and India’s Food Security & India’s BRICS Presidency: Priorities & Strategic Significance

Economy

1. Persian Gulf and India’s Food Security

Context: Rising geopolitical tensions (such as the US–Iran conflict) and possible disruptions in the Strait of Hormuz have raised concerns over fertiliser supply to India.

• India’s heavy reliance on Gulf-origin fertilisers makes it vulnerable to such external shocks. 

Indian Agriculture & Role of Fertilisers

• Agriculture remains a key sector in India, supporting nearly 45% of the workforce.
• Fertilisers were instrumental in boosting agricultural output during the Green Revolution, alongside irrigation and HYV seeds.
  • HYV seeds require substantial nutrient input; without fertilisers, productivity gains are limited.
• India transitioned from a food-deficit nation in the 1960s to a food-surplus economy due to these advancements.
• Even today, fertilisers remain central to sustaining productivity and ensuring food security.

India’s Dependence on Persian Gulf Fertilisers

• Extent of Dependence:
  • India is a major importer of urea and DAP.
  • Import dependence levels:
    • Urea ~18%
    • Phosphatic fertilisers ~50–60%
    • Potash: almost entirely imported
  • Dependence on Inputs:
    • Domestic production depends on imported raw materials such as natural gas, ammonia, phosphoric acid, and sulphur, making the sector import-intensive at multiple stages.
  • Key Suppliers:
    • Saudi Arabia, Oman, Qatar, and United Arab Emirates
    • These countries have abundant natural gas, enabling cost-effective fertiliser production and strong export capacity.
  • Global Role of the Gulf:
    • The region is a dominant exporter of nitrogen-based fertilisers.
    • Nearly half of global sulphur trade passes through the Strait of Hormuz.

Reasons for High Dependence

• Structural Constraints:
  • Limited domestic reserves of phosphate and potash
  • Inadequate availability of natural gas
  • Energy-intensive nature of fertiliser production
• Policy Factors:
  • Subsidy structure reduces incentives for efficiency
  • Limited investment in domestic fertiliser capacity
  • Around 90% dependence in phosphatic fertilisers due to raw material shortages

Implications of Dependency

• Strategic Risks:
  • Vulnerability to geopolitical instability in West Asia
  • Potential disruption of supplies through the Strait of Hormuz
• Economic Risks:
  • Rising import costs and higher subsidy burden
  • Pressure on fiscal deficit
• Agricultural Risks:
  • Input price volatility impacts farmers’ costs and crop output
• Environmental Concerns:
  • Overuse of chemical fertilisers degrades soil quality
  • Nitrogen fertilisers contribute to greenhouse gas emissions
  • Ammonia production is energy- and water-intensive

Economic Burden

• On Farmers:
  • Fertilisers account for ~16% of input costs (subsidised)
  • At market prices, costs may rise up to 50%
  • Estimated fertiliser cost:
    • Wheat: ₹4,500–₹6,500 per acre
    • Paddy: ₹4,500–₹7,000 per acre
  • On Government:
    • Subsidy burden increases with global price fluctuations
    • Urea price remains fixed since 2018 (₹242 per bag)
    • Leads to fiscal stress and foreign exchange pressure
    • Also implies indirect transfer of benefits to exporting countries

Reducing Dependence: Key Strategies

Agroecological Alternatives

• Zero Budget Natural Farming (ZBNF):
  • Adopted widely (e.g., Andhra Pradesh), reduces input costs by 20–50%
• Organic Farming (Sikkim Model):
  • Demonstrates sustainable yield improvements
• Integrated Nutrient Management:
  • Combines organic and chemical inputs, reducing fertiliser use significantly

Technological Solutions

• Green Ammonia:
  • Produced using renewable energy
  • Helps reduce dependence on fossil fuel-based imports
  • Links food security with climate goals

Lessons from Global Experience

• The example of Sri Lanka shows that abrupt bans on chemical fertilisers can cause sharp declines in output (up to 40%) and economic instability.
• Hence, transition must be gradual, evidence-based, and policy-supported.

Way Forward

• Policy measures include gradual fertiliser rationalisation, target rainfed areas for transition, promote biofertilisers and composting, invest in green ammonia and domestic capacity, and reform subsidy structure (shift to direct income support)
• Strategic measures include diversifying import sources, building strategic fertiliser reserves, and strengthening supply chain resilience.
• Environmental measures include encouraging sustainable farming practices, and align with climate commitments (NDCs).

Conclusion

• India’s reliance on Gulf fertilisers exposes it to strategic and economic vulnerabilities.
• A balanced approach involving diversification, domestic capacity expansion, and sustainable farming practices is essential for long-term food security.

International Relations

2. India’s BRICS Presidency: Priorities & Strategic Significance

Context: India’s presidency of BRICS comes at a time of increasing global uncertainty marked by geopolitical tensions, economic fragmentation, and rapid technological change.

• The aim is to harness the collective strength of BRICS nations to promote global stability and development.

About BRICS

• Initially conceptualised as BRIC (2001) by economist Jim O’Neill, the grouping became BRICS in 2010 with the inclusion of South Africa.
• Members: Brazil, Russia, India, China, South Africa, along with new entrants such as Egypt, Ethiopia, Iran, Saudi Arabia, UAE, and Indonesia.

Core Objectives:

• Promote a multipolar global order
• Reform global institutions like IMF, World Bank, and UNSC
• Strengthen South-South cooperation
• Support sustainable and inclusive development

Significance of BRICS

• Combined nominal GDP exceeds $32 trillion (2026), contributing around 28–30% of global GDP.
• In PPP terms, BRICS accounts for over 40% of global GDP, surpassing the G7’s share.

Institutional Mechanisms

• New Development Bank (NDB) (2014):
  • Headquarters: Shanghai
  • Focus: Infrastructure and sustainable development financing
  • Seen as an alternative to Western-dominated institutions
• Contingent Reserve Arrangement (CRA):
  • Provides liquidity support during financial stress
  • Reduces reliance on traditional global financial systems

BRICS Presidency

• The presidency rotates annually among members in alphabetical order.
• The chair country hosts meetings and sets the agenda for cooperation.

India’s BRICS Presidency (2026)

• India assumed the presidency on 1 January 2026, marking its fourth term since 2009.
• Theme: “Building for Resilience, Innovation, Cooperation and Sustainability”
• Reflects a people-centric and development-oriented approach.

Key Priorities Under India’s Presidency

• Institutional Strengthening:
  • Transition BRICS from a discussion platform to a more action-oriented grouping
  • Push for reforms in global institutions (UNSC, IMF, World Bank, WTO)
• Economic & Financial Cooperation:
  • Promote financial innovation, including linkage of central bank digital currencies
  • Encourage trade in local currencies and sustainable finance
  • Support reform without destabilising the global financial system
• Supply Chain Resilience:
  • Focus on critical sectors such as semiconductors, minerals, and pharmaceuticals
  • Address risks from export controls and supply disruptions
• Climate Action & Sustainable Development:
  • Advance commitments related to climate change, disaster resilience, and SDGs
  • Align with global climate frameworks and future COP processes
• Digital Public Infrastructure (DPI):
  • Showcase India’s models like Aadhaar, UPI, and CoWIN
  • Promote digital cooperation and governance among BRICS nations

Challenges India Needs To Navigate

• Managing Internal Contradictions:  BRICS’s rapid expansion has increased its weight along with its heterogeneity.
  • Fissures in the Transatlantic Partnership between Europe and the US, as well as within NATO, have significantly enhanced uncertainty in global affairs, making BRICS consensus-building harder.
• Divergent Interests Among Members: India’s interests and priorities within BRICS differ significantly from those of China and Russia.
  • China favours rapid expansion to shape a new world order.
  • Russia supports expansion primarily to counter the West.
  • India favours a more cautious approach to prevent losing influence or diluting its leadership.
• Preventing Geopolitical Drift: India intends to prevent BRICS from turning into an ideological bloc against the West, preserving strategic autonomy and allowing partnerships outside BRICS.

India as the Voice of the Global South

• India’s presidency reflects its broader foreign policy of strategic autonomy and active multilateralism.
• Positions itself as a bridge between developed and developing nations.
• Emphasises:
  • Global governance reforms
  • Development financing
  • Climate action
  • Poverty reduction

Conclusion

• India’s 2026 BRICS presidency comes at a critical juncture of global uncertainty and weakening multilateralism.
• With its balanced and consensus-driven approach, India is well-placed to enhance cooperation within BRICS and strengthen its role in shaping a more inclusive global order.

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