Content

1. India’s Energy Shift Through the Green Ammonia Route
2. Stick together

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India’s Energy Shift Through the Green Ammonia Route

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Source : The Hindu

A. Why in News?

• At India Energy Week 2026, PM highlighted $500 billion investment opportunity in energy transition, signalling shift from energy security to energy independence.
• SECI concluded landmark green ammonia auction under SIGHT (National Green Hydrogen Mission), institutionalising aggregated procurement.
• Discovered prices:₹49.75–64.74/kg ($572–744/tonne), nearly 40–50% lower than EU’s H2Global benchmarks.
• Contracts include 10-year fixed-price offtake agreements with fertiliser plants, ensuring long-term revenue certainty.

B. Relevance

GS II

• National Green Hydrogen Mission (2023) as strategic industrial policy.
• Climate commitments: Net-zero 2070, updated NDCs.
• Trade dimension: CBAM, hydrogen corridors, green certification regimes.

GS III

• Energy transition & renewable integration.
• Industrial decarbonisation (fertiliser, shipping, power).
• Green finance, PPP, blended finance.
• Technology-led competitiveness in green manufacturing.

C. Static Background

1. What is Green Ammonia?

• Produced by combining nitrogen (air separation) with green hydrogen via electrolysis powered by renewables.
• Unlike grey ammonia (natural gas-based), green ammonia is near-zero carbon, avoiding emissions from steam methane reforming.
• India is 2nd largest ammonia producer; nearly 80% consumption in fertiliser sector.
• Heavy dependence on LNG imports for grey ammonia exposes sector to global gas volatility.

2. Policy Framework

• National Green Hydrogen Mission (2023) targets 5 MTPA green hydrogen by 2030.
• SIGHT Programme provides production-linked incentives and aggregated demand aggregation via SECI.
• Strategic ambition: Position India as global hub for green hydrogen derivatives.
• Nodal agency: Solar Energy Corporation of India (SECI).

D. Economic Analysis

1. Price Discovery & Competitiveness

• Auction prices:₹49.75–64.74/kg ($572–744/tonne) versus grey ammonia at ~$515/tonne.
• Cost gap narrowed due to:
  • 10-year fixed contracts.
  • Production subsidies of ₹8.82/kg, ₹7.06/kg, ₹5.3/kg (tapering first three years).
• Price certainty shields producers from:
  • Gas market volatility.
  • Currency fluctuations.
  • Geopolitical supply disruptions.

2. Market Design Innovation

• Aggregated procurement: 724,000 tonnes/year across 13 fertiliser plants.
• Pre-identified coastal delivery points enable shipping-based logistics.
• Auction saw 15 bidders, 7 awardees, enhancing competition and transparency.
• Contracts substitute nearly 30% of ammonia imports, improving trade balance.
• Compared to EU H2Global and Korea’s CHPS, India achieved broader participation and lower discovered prices.

E. Strategic & Geopolitical Dimension

1. Energy Independence Shift

• India imports nearly 85% crude oil and relies on LNG for ammonia production.
• Green ammonia supports transition toward renewable-driven hydrogen economy and domestic industrial base.

2. Climate Diplomacy

• Contributes to Net-zero 2070 and 50% non-fossil capacity by 2030 targets.
• Export potential to:
  • EU (CBAM exposure).
  • Japan & South Korea (hydrogen import strategies).
• Enhances India’s credibility as clean energy supplier to Global South and OECD markets.

3. Maritime Fuel Future

• Green ammonia emerging as marine bunker fuel alternative.
• Aligns with IMO decarbonisation pathway for global shipping.
• Potential integration with port-led development under Sagarmala framework.

F. Environmental Dimension

Benefits

• Avoids CO₂ emissions from steam methane reforming.
• Decarbonises fertiliser supply chain, reducing embedded emissions.
• Enables movement toward circular nitrogen economy.

Risks

• Ammonia toxicity and storage hazards.
• High water demand for electrolysis.
• Renewable intermittency affecting hydrogen production stability.

Mitigation

• Hybrid renewable systems with storage integration.
• Strengthened industrial safety codes.
• Harmonised green certification standards aligned with global norms.

G. Financial & Infrastructure Dimension

Bankability Drivers

• 10-year fixed-price contracts enhance revenue stability.
• Blended finance and risk-mitigation instruments improve project viability.
• Sovereign-backed payment structures increase lender confidence.

Infrastructure Requirements

• Dedicated renewable energy parks.
• Port storage terminals and ammonia handling facilities.
• Pipelines and cracking infrastructure.
• Robust monitoring and certification systems.

H. Governance & Regulatory Challenges

• Regulatory clarity on grid access and banking provisions.
• Harmonised green taxonomy and certification.
• Alignment with evolving EU and OECD standards.
• First-mover risks and financial closure constraints.

I. Critical Evaluation

Strengths

• Aggregated demand reduces fragmentation.
• Competitive pricing relative to global benchmarks.
• Long-tenor contracts improve investor confidence.
• India’s low renewable tariffs provide structural advantage.

Risks

• Fiscal sustainability of production subsidies.
• Land acquisition and grid integration constraints.
• Export market volatility.
• Technology obsolescence risk in rapidly evolving hydrogen economy.

Core Insight

• India’s competitive edge lies in cheap renewables + scale + institutional innovation, enabling early-mover advantage in green ammonia markets.

J. Way Forward

• Develop Green Ammonia Export Corridors (India–EU, India–Japan).
• Integrate green ammonia under PLI schemes for fertilisers.
• Establish nationally recognised green certification framework.
• Expand coastal storage and shipping infrastructure.
• Promote R&D in ammonia cracking technologies.
• Introduce Carbon Contracts for Difference (CCfD).
• Create dedicated green hydrogen trading exchange.
• Align with SDG 7, SDG 9, SDG 13 and Just Energy Transition principles.

K. Prelims Pointers

• Green ammonia = nitrogen + green hydrogen.
• SIGHT operates under National Green Hydrogen Mission.
• SECI aggregates demand and conducts auctions.
• Grey ammonia derived from natural gas (SMR process).
• Target: 5 MTPA green hydrogen by 2030.
• Ammonia can function as marine fuel and hydrogen carrier.

L. Practice Mains Question

• Discuss how green ammonia can bridge India’s transition from energy security to energy independence. (15M)

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Stick together

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Source : The Hindu

A. Why in News?

• State visit (2026) of Luiz Inácio Lula da Silva to India reaffirmed deepening India–Brazil strategic partnership amid global trade turbulence.
• Both nations agreed to double bilateral trade to $30 billion by 2030, signalling diversification beyond traditional commodity exchanges.
• MoUs signed on critical minerals, steel & mining, digital cooperation, aiming to reduce overdependence on China-centric supply chains.
• Visit occurred amid U.S.-imposed 50% tariffs on both countries and uncertainty after U.S. Supreme Court ruling on tariff authority.
• Leaders reaffirmed commitment to multilateral order, WTO centrality, and Global South solidarity.

B. Relevance

GS II

• India–Brazil bilateral relations and South–South cooperation.
• Reform of UNSC, WTO, Bretton Woods institutions.
• Multilateralism vs unilateral trade regimes.

GS III

• Trade wars, protectionism, tariff weaponisation.
• Critical minerals security and supply chain resilience.
• Biofuel cooperation and alternative energy diplomacy.

C. Static Background

1. Institutional Groupings

India and Brazil are members of:

• BRICS – emerging economy bloc promoting multipolarity.
• IBSA (India–Brazil–South Africa Dialogue Forum) – democratic South–South platform.
• G20 – global macroeconomic coordination forum.
• G-4 (India, Brazil, Germany, Japan) – UNSC reform coalition.
• Co-founders of Global Biofuels Alliance (2023).
• BRICS’ New Development Bank (NDB) headquartered in Shanghai.

Significance of Platforms

• Push for reform of Bretton Woods institutions.
• Greater voice for developing nations in global decision-making.
• Exploration of alternative financial mechanisms and local currency trade.

D. Economic & Trade Dimension

1. Bilateral Trade

• Current trade stands near $15 billion; target of $30 billion by 2030.
• Key sectors:
  • Agriculture (soy, sugar, meat).
  • Pharmaceuticals.
  • Engineering goods.
  • Energy and biofuels.

2. Trade Diversification Strategy

• Reduce reliance on China-dominated supply chains.
• Cooperation in lithium, rare earths, steel, mining.
• Strengthen industrial resilience through diversified sourcing.

3. U.S. Tariff Shock

• Both nations faced 50% tariffs under U.S. reciprocal measures.
• Additional scrutiny linked to:
  • BRICS alignment.
  • Russian oil imports.
  • Iran trade.
• Reflects weaponisation of trade policy and erosion of WTO norms.

E. Geopolitical & Strategic Analysis

1. Global South Assertion

• Lula’s “unionise” metaphor emphasises collective bargaining power.
• Advocates coordinated approach instead of fragmented bilateral concessions.
• Reaffirms commitment to WTO-centred multilateralism and sovereign equality.

2. BRICS in Transition

• Expanded BRICS membership enhances representational legitimacy.
• Push for local currency settlements and alternative financial rails.
• Faces Western scepticism and possible sanctions pressures.

3. UNSC Reform Push

• India and Brazil seek permanent membership through G-4 coalition.
• Reform stalled due to P5 resistance and geopolitical rivalries.
• Convergence strengthens moral claim for equitable representation.

F. Energy & Climate Cooperation

• Collaboration in bioethanol and renewable technologies.
• Coordinated stance on climate equity and just energy transition.
• Brazil: Global leader in bioethanol exports.
• India: 20% ethanol blending target achieved ahead of schedule trajectory.
• Supports green growth and South–South energy cooperation.

G. Strategic Autonomy Dimension

• India balances Quad engagement with BRICS participation, avoiding bloc politics.
• Brazil pursues independent foreign policy rooted in strategic autonomy.
• Shared preference for multipolarity over bipolar confrontation.
• Emphasis on diversified partnerships amid global volatility.

H. Risks & Constraints

1. Internal Constraints

• Brazil’s election cycle may disrupt diplomatic continuity.
• India–U.S. trade negotiations require calibrated diplomacy.

2. Structural Limits

• BRICS lacks enforcement or dispute resolution mechanisms.
• IBSA has limited operational momentum.
• WTO dispute settlement system remains weakened.

3. Divergences

• Different engagement patterns with China.
• Varied regional security priorities.
• Geographic distance increases logistics costs.

I. Critical Evaluation

Strengths

• High institutional density: BRICS + IBSA + G20 + G-4.
• Complementary economic structures.
• Shared Global South narrative in governance reform.

Limitations

• Bilateral trade modest compared to China–Brazil trade.
• Limited private sector integration.
• Symbolic rhetoric often exceeds economic depth.

Core Insight

• Strategic convergence must move beyond symbolism toward institutionalised economic integration and supply chain interdependence.

J. Way Forward

• Fast-track feasibility of Preferential Trade Agreement.
• Operationalise local currency trade settlements.
• Establish India–Brazil Critical Minerals Corridor.
• Revitalise IBSA as democratic Global South forum.
• Submit coordinated proposals for WTO and UNSC reform.
• Develop BRICS-based supply chain resilience framework.
• Expand membership of Global Biofuels Alliance.
• Align cooperation with SDG 17 (Global Partnerships) and reform-based multilateralism.

K. Prelims Pointers

• IBSA comprises India, Brazil, South Africa; separate from BRICS.
• G-4 includes India, Brazil, Germany, Japan.
• BRICS’ New Development Bank headquartered in Shanghai.
• Global Biofuels Alliance launched at G20 Delhi Summit 2023.
• Brazil is world’s largest exporter of ethanol.

L. Practice Mains Question

• India–Brazil relations reflect the resurgence of Global South diplomacy. Discuss. (15M)