Why in news?

Nearly six years after the Arbitration and Conciliation Act, 1996 was amended in 2019, the Union government has still not constituted the Arbitration Council of India (ACI).

The ACI was envisaged as a central body to regulate, grade, and promote institutional arbitration in India, but its absence has delayed reforms aimed at strengthening India’s arbitration ecosystem.

What’s in Today’s Article?

• Mandate of the Arbitration Council of India
• Concerns Over Institutional Independence
• Draft Arbitration Law Reform: Key Proposals
• Recalibrating Courts’ Role in Arbitration
• The Way Forward for Institutional Arbitration in India

Mandate of the Arbitration Council of India

• The 2019 amendments to the Arbitration and Conciliation Act, 1996 proposed the creation of the Arbitration Council of India as a central body to promote, reform, and strengthen arbitration in India.
• The framework was based on recommendations of the High-Level Committee on Arbitration chaired by B.N. Srikrishna, which submitted its report in July 2017.
• The proposed ACI was entrusted with key functions such as grading arbitral institutions, recognising professional bodies that accredit arbitrators, and maintaining a repository of arbitral awards made in India.
• It was to be headed by a Chairperson appointed by the Union government in consultation with the Chief Justice of India, with eligibility extending to former Supreme Court judges, former High Court Chief Justices or judges, or eminent experts in arbitration.
• The Council was also envisaged to include ex officio members from the executive, giving it a broad institutional and regulatory role.

Concerns Over Institutional Independence

• A key criticism of the Arbitration Council of India is its perceived lack of independence.
• Since most members are appointed or nominated by the Union government—India’s largest litigant—experts fear undue executive influence over arbitration, undermining neutrality.
• Government Dominance and Conflict Risks
  • Critics argue that a government-heavy regulator empowered to grade arbitral institutions, accredit arbitrators, and advise on policy poses conflicts of interest.
  • Such a model has limited precedent in arbitration-friendly jurisdictions that prioritise institutional autonomy.
• Accreditation Model: Quality and Capacity Issues
  • While inspired by Singapore and Hong Kong, India’s approach differs significantly.
  • Those jurisdictions rely on a single, centralised arbitral institution, not a regulator overseeing many.
  • The 2019 amendments allow the ACI to accredit an unlimited number of institutions, risking diluted standards, heavy administrative burdens, and higher public costs.
• Impact on Global Attractiveness
  • Another concern is the exclusion of foreign legal professionals from the arbitrator pool.
  • This could reduce India’s appeal as an international arbitration seat, especially for foreign parties seeking globally familiar expertise.

Draft Arbitration Law Reform: Key Proposals

• In October 2024, the Union government released the draft Arbitration and Conciliation (Amendment) Bill, 2024, inviting public comments.
• The Bill aims to revitalise institutional arbitration through structural reforms.
• Redefining Arbitral Institutions
  • The draft Bill introduces a revised definition of an “arbitral institution” as any body or organisation that conducts arbitration under its own procedural rules or as agreed by parties.
  • This departs from the 2019 framework, which required formal designation by the Supreme Court or High Courts.
• Shifting Powers from Courts to Institutions
  • To reduce judicial intervention, the Bill proposes granting arbitral institutions powers currently exercised by courts.
  • These include extending timelines for awards, reducing arbitrators’ fees where delays are attributable to tribunals, and substituting arbitrators.
• Status of the Bill
  • Despite these proposals, the Bill remains under consideration.
  • In March 2025, Arjun Ram Meghwal informed Parliament that the draft had not yet been finalised or introduced.

Recalibrating Courts’ Role in Arbitration

• Under the Arbitration and Conciliation Act, 1996, courts currently have wide powers to grant interim measures before, during, and even after arbitral proceedings (until enforcement).
• The 2024 draft Bill seeks to narrow this role to reduce delays and judicial overreach.
• Limiting Interim Relief by Courts
  • The draft Bill proposes restricting courts’ power to grant interim measures to two stages only: before arbitration commences and after an arbitral award is rendered.
  • This change aims to minimise prolonged court involvement during ongoing arbitration.
• Tweaking the 90-Day Rule
  • A key amendment targets Section 9(2).
  • Presently, arbitration must commence within 90 days of a court granting pre-arbitral interim relief.
  • The draft Bill shifts this clock to start from the date the interim application is filed, discouraging parties from stalling arbitration through extended court proceedings.
• Introducing Emergency Arbitration
  • The Bill also proposes a new Section 9-A, allowing parties to seek interim relief from an emergency arbitrator once arbitration has begun but before the arbitral tribunal is constituted.
  • This move is designed to provide swift, arbitration-led remedies while keeping courts at arm’s length.
• Objective: Fewer Delays, Less Intervention
  • Collectively, these changes aim to curb pre-arbitral delays, strengthen institutional arbitration, and ensure courts play a supportive—not supervisory—role in the arbitral process.

The Way Forward for Institutional Arbitration in India

• The report of the B. N. Srikrishna–headed committee notes that ad hoc arbitration continues to dominate in India due to parties’ strong preference for procedural autonomy and lingering scepticism toward domestic arbitral institutions.
• Concerns about institutional independence and administrative competence have eroded confidence.
• Addressing this trust deficit—by strengthening autonomy, credibility, and governance of arbitral institutions—is essential if Indian centres are to compete with established global arbitration bodies.

Why in news?

Recently, Financial Intelligence Unit–India (FIU-I) updated its AML/CFT (Anti-Money Laundering/Countering the Financing of Terrorism) guidelines for entities providing services related to Virtual Digital Assets.

The revised norms apply to cryptocurrency exchanges and lay down stricter requirements for customer due diligence, mandating how platforms must vet users and monitor transactions to prevent money laundering and terror financing.

What’s in Today’s Article?

• Stricter KYC and Due Diligence Norms for Crypto Exchanges
• KYC Practices Across Cryptocurrency Exchanges
• How Indian Crypto Exchanges Vet Customers?
• Unclear Legal Status of Cryptocurrency in India

Stricter KYC and Due Diligence Norms for Crypto Exchanges

• Enhanced Customer Verification - Under the updated guidelines issued by FIU-I, cryptocurrency exchanges must conduct robust Know-Your-Customer (KYC) checks.
  • This includes collecting verified identity details, contact information, occupation, income range, and a selfie with liveness detection.
• Location and Bank Account Authentication - Exchanges are required to record the customer’s onboarding location using latitude–longitude data, along with date, timestamp, and IP address.
  • Bank accounts must be verified through the penny drop method, ensuring the account belongs to the customer and is operational.
    • Penny drop method is a bank account verification technique where a tiny amount of money (like ₹1) is sent to an account to confirm its validity and match the account holder's name against provided details.
• Risk-Based Monitoring - Platforms must identify high-risk clients and transactions and apply enhanced due diligence. High-risk customers must update KYC details every six months, while others must do so annually.
• Restrictions on ICOs and Registration Requirements - The guidelines strongly discourage Initial Coin Offering (ICO) and Initial Token Offering (ITO) activities. They also urge all virtual digital asset service providers to register with FIU-IND as reporting entities.
• Ban on Anonymity-Enhancing Tools - Exchanges are barred from facilitating transactions involving privacy-focused tokens and crypto mixers, which obscure transaction trails and hinder traceability, reinforcing India’s AML–CFT compliance framework.

KYC Practices Across Cryptocurrency Exchanges

• Centralised Exchanges and Compliance - Most centralised cryptocurrency exchanges already conduct KYC procedures to ensure lawful use, deter criminal activity, freeze offending accounts, and trace fraudulent transactions. These checks support AML–CFT compliance to prevent misuse of fiat-to-crypto conversions.
• Why Regulators Insist on KYC - Regulators fear cryptocurrencies could be used to evade reporting requirements or finance terrorism. AML laws and Countering the Financing of Terrorism (CFT) rules aim to curb such risks.
  • In 2023, Binance settled with U.S. regulators over failures to prevent and report suspicious transactions.
• Evidence of Illicit Use – It has been reported that groups such as Hezbollah, Hamas, and the Houthis have used crypto at unprecedented scales, reinforcing regulatory concerns.
• The Challenge of Decentralised Exchanges - Not all exchanges enforce stringent KYC. Decentralised exchanges (DEXs) allow anonymous, unregulated transactions with minimal controls.
  • While DEXs have legitimate uses—privacy, avoiding repression, and asset self-custody—they are also attractive to money launderers, scammers, hackers, and terror financiers.
• The Road Ahead for India - To effectively address these risks, Indian regulators will need to go beyond issuing guidelines—strengthening enforcement, oversight, and international cooperation to curb illicit crypto activity without stifling legitimate use.

How Indian Crypto Exchanges Vet Customers?

• Leading Indian exchanges already follow global best practices and bank-level compliance, with the Financial Intelligence Unit–India rules largely formalising existing processes.
• Indian exchanges typically conduct core identity checks, selfie-based face match with liveness detection, and bank account verification under FIU/PMLA norms.
• Some of them also uses geo-tagging to match user location with ID details (with exceptions) and instant KYC via DigiLocker for Aadhaar and PAN.
• Overall, FIU-IND’s updated guidelines do not introduce drastic changes; they codify practices already in place across major Indian crypto exchanges, including DigiLocker-based KYC and periodic re-verification.

Unclear Legal Status of Cryptocurrency in India

• Cryptocurrency in India operates in a regulatory grey zone, with investors and industry leaders repeatedly seeking clearer rules.
• While debates continue, policy responses have largely focused on legality and security, lagging behind comprehensive crypto frameworks emerging in the US, Europe, and East Asia.
• Although virtual digital assets are taxed at 30% on capital gains with a 1% TDS, India offers little investor protection against scams, hacks, or unfair practices by private platforms.
• Many users choose Indian exchanges to comply with tax and legal norms, but face uncertainty and a discouraging regulatory environment due to the absence of a clear, investor-friendly legal framework.

Why in News?

• India’s renewable energy sector (private developers, Renewable Energy Implementing Agencies (REIAs), industry bodies) has raised strong objections to a proposed regulatory framework by the Central Electricity Regulatory Commission (CERC).
• The proposed framework could lead to the forfeiture of Inter-State Transmission System (ISTS) connectivity if developers fail to execute long-term Power Purchase Agreements (PPAs) within a stipulated time.
• The issue is significant in the context of India’s ambitious target of 500 GW of non-fossil fuel capacity by 2030 and ongoing challenges of grid congestion, transmission bottlenecks, and delays in project execution.

What’s in Today’s Article?

• Background
• Key Concerns Raised by the Renewable Energy Sector
• Sector-Specific Issues
• SECI’s (Solar Energy Corporation of India) Position
• Challenges and Way Ahead
• Conclusion

Background:

• Existing framework:
  • Under General Network Access (GNA) regulations, renewable projects can secure connectivity through Letters of Award (LoAs), signed PPAs, partial land acquisition, bank guarantees in lieu of land documents.
  • This flexibility aimed to facilitate early-stage project development.
• How the current model works:
  • REIAs like SECI, NTPC, NHPC, and SJVN act as intermediary procurers - buy power from developers via PPAs, sell to discoms through Power Sale Agreements (PSAs).
  • Typically, PPAs are signed only after PSAs, making early PPA linkage difficult.
• CERC’s proposal:
  • PPA-linked connectivity: Grant future transmission connectivity only against signed PPAs, not LoAs.
  • Auction-based allocation: Introduce auctions for allocating connectivity, along with firm commissioning timelines.
• Rationale behind these proposals:
  • Address underutilisation of transmission infrastructure.
  • Nearly 31.8 GW of renewable capacity already has connectivity but lacks PPAs.
  • Around 42 GW of RE capacity remains without PPAs, making PPA delays a systemic bottleneck (ICRA).

Key Concerns Raised by the Renewable Energy Sector:

• Penalising developers for factors beyond control:
  • Industry associations argue that PPA delays are largely due to procedural inefficiencies and slow tariff approvals by state-owned DISCOMs, not developer inaction.
  • Penalising developers undermines the principle of regulatory certainty.
• Impact on India’s clean energy targets:
  • The proposed measures could slow capacity addition, threatening the 2030 non-fossil energy target.
  • Despite rapid renewable growth, transmission infrastructure (495,000 circuit-km grid) has struggled to keep pace.
• Risk of higher tariffs and market concentration:
  • The National Solar Energy Federation of India (NSEFI) opposed auctioning grid connectivity at a premium, warning it would -
    • Increase renewable energy tariffs.
    • Favour large, cash-rich players, marginalising smaller developers.
  • Grid connectivity, they argued, should not become a tradable asset.

Sector-Specific Issues:

• Solar energy sector: Emphasised that delays stem from state-level regulatory and approval bottlenecks. Warned against market distortion through premium-based auctions.
• Wind energy sector:
  • Wind associations termed proposed timelines unrealistic, citing long manufacturing cycles, import dependence for turbines and key components.
  • Opposed the 18-month project completion deadline, seeking a 24–30 month timeframe.

SECI’s (Solar Energy Corporation of India) Position:

• Warned that auctioning connectivity would push up future tariffs.
• Recommended reallocation based on project readiness, such as land acquisition, financial closure, and equipment procurement.
• This approach prioritises execution capability over bidding power.

Challenges and Way Ahead:

• Transmission bottlenecks and idle capacity: Accelerated transmission infrastructure development - Proactive expansion of ISTS to match renewable ambitions.
• Delayed PPAs: Due to DISCOM inefficiencies. Reform DISCOM processes - Time-bound tariff approvals and PPA execution, strengthening financial health of DISCOMs.
• Mismatch between generation growth and grid expansion: Flexible, technology-specific timelines - Differentiated norms for solar, wind, and hybrid projects.
• Risk of policy uncertainty and investor confidence erosion: Integrated policy coordination - Closer coordination between CERC, Ministry of Power, and MNRE, align transmission planning with renewable capacity addition.
• Potential monopolisation of grid access: Non-market-based allocation of connectivity - Prioritise project readiness and execution milestones, avoid auctioning connectivity as a revenue-maximising tool.

Conclusion:

• The controversy over ISTS connectivity rules highlights the broader tension between grid efficiency and renewable energy expansion.
• While addressing idle transmission capacity is necessary, punitive measures risk undermining investor confidence and slowing India’s clean energy transition.
• A coordinated, flexible, and developer-sensitive regulatory approach, focused on structural reforms rather than penalties, is essential to achieve India’s renewable energy and climate commitments.

Why in the News?

• Technology firms and space agencies are exploring space-based datacentres to address the rapidly rising energy demand of artificial intelligence workloads.

What’s in Today’s Article?

• Space-Based Datacentres (Background, Concept, Architecture & Design Principles, Challenges, Economic Aspect, India’s Interest)

Rising Energy Demand from Artificial Intelligence

• Datacentres are becoming one of the fastest-growing consumers of electricity worldwide, and artificial intelligence is significantly accelerating this trend.
• Modern AI systems rely on large clusters of graphics processing units (GPUs) and specialised accelerators to train and deploy machine learning models.
• These systems require continuous, high-density computing, leading to enormous power consumption.
• Unlike traditional datacentres that primarily support content delivery and cloud services, AI datacentres consume large amounts of energy internally.
• High-speed data exchange between servers within the same facility or across nearby facilities is essential for training large language models.
• As the adoption of generative AI expands across sectors, concerns over sustainability, carbon emissions, and grid stress are becoming increasingly prominent.

Concept of Space-Based Datacentres

• To address these challenges, researchers are exploring the idea of placing datacentres in low-Earth orbit.
• The central idea is to power datacentres entirely using solar energy available in space, where sunlight is uninterrupted and more intense than on Earth.
• This approach aims to bypass terrestrial constraints such as land availability, cooling limitations, and dependence on fossil fuel-based electricity grids.
• Google Research’s Project Suncatcher proposes deploying clusters of satellites equipped with computing hardware that can process AI workloads in space.
• These satellites would operate in carefully choreographed orbits that maintain constant exposure to sunlight, ensuring an uninterrupted power supply through solar panels.

Technical Architecture and Design Principles

• A key feature of orbital datacentres is their reliance on dense inter-satellite communication rather than high-speed connections with Earth.
• AI workloads require extremely high internal bandwidth to allow different processors to work in parallel.
• In space-based systems, this would be achieved through closely spaced satellites communicating with one another using advanced multiplexing and high-frequency links.
• Since most data movement occurs within the system itself, the bandwidth required to communicate with ground stations is relatively modest.
• This mirrors terrestrial AI systems, where user queries require limited bandwidth compared to internal data transfers during model training.

Engineering Challenges in Space Deployment

• Despite the conceptual promise, several technical challenges remain. One major concern is exposure to solar and cosmic radiation.
• Long-term radiation can degrade semiconductor components, affecting performance and reliability.
• Initial tests conducted by Google indicate that some specialised AI chips can tolerate higher radiation levels than expected, but long-duration missions still pose risks.
• Thermal management presents another major challenge. On Earth, datacentres rely on air or liquid cooling systems.
• In space, where there is no atmosphere, dissipating heat becomes significantly more complex.
• Datacentres in orbit would continuously absorb solar radiation while lacking conventional cooling mechanisms, requiring advanced heat dissipation technologies.
• Maintenance is also a critical issue. Unlike terrestrial facilities, repairing or replacing faulty hardware in space is expensive and logistically difficult.
• This raises concerns about system resilience and long-term operational reliability.

Economic Viability and Cost Considerations

• The economic feasibility of space-based datacentres depends heavily on launch costs and hardware durability.
• Currently, launching equipment into orbit is expensive, but projections suggest that satellite launch costs may decline substantially in the coming decades.
• Google estimates that costs could fall to around $200 per kilogram by the mid-2030s, potentially improving the commercial viability of orbital datacentres.
• However, space-based solutions must remain competitive with rapidly advancing ground-based technologies.
• Improvements in renewable energy integration, cooling efficiency, and energy storage on Earth could reduce the relative advantage of orbital systems.
• Past experiments, such as underwater datacentres, demonstrated technical promise but were eventually discontinued due to economic constraints.

India’s Interest in Space-Based Datacentres

• India is also showing interest in this emerging domain.
• The Indian Space Research Organisation (ISRO) is reportedly studying space-based data centre technologies as part of broader efforts to explore commercial and strategic uses of space infrastructure.
• Given India’s growing AI ecosystem and renewable energy ambitions, space-based computing could become a long-term area of research and collaboration.
• This aligns with India’s broader push towards leveraging space technology for civilian, scientific, and commercial applications, while also addressing sustainability challenges associated with digital expansion.

About Chatham Islands:

• It is an island group in the South Pacific Ocean.
• These islands are New Zealand's most easterly territory.
• Composed of 10 islands, they are primarily of volcanic formation, but areas of limestone indicate that they may once have been part of New Zealand.
• Only the two main islands are inhabited: Chatham Island and Pitt Island.
  • Chatham Island, the largest of the islands, has a high southern tableland flanked by towering cliffs and a gentle northern portion encompassing extensive waterways, low peatlands and long sandy beaches.
• The Chatham Islands is the first inhabited place in the world to see the rising sun each day.
• The islands were first inhabited by Moriori, who named the islands 'Rekohu' – translated as 'misty skies' or 'misty sun'.
• European sealers and whalers were next to arrive, followed by Māori from New Zealand, who named the islands 'Wharekauri'.
• Descendants of Moriori still reside on the Chatham Islands today.
• The main settlement is Waitangi. Other settlements are Te One, Port Hutt, Kāingaroa, and Ōwenga.
• The economy of the Chatham Islands is heavily dependent on fishing, farming, and tourism.

About Vitamin A:

• It is a fat-soluble vitamin primarily stored in the liver.
• There are two types of vitamin A that are found in the diet.
  • Preformed vitamin A is found in animal products such as meat, fish, poultry, and dairy foods.
  • Precursors to vitamin A, also known as provitamin A, are found in plant-based foods such as fruits and vegetables.
    • These compounds are converted to the active form in your body.
    • The most common type of provitamin A is beta-carotene.
  • Foods with the highest levels of vitamin A include:
    • Beef liver and other organ meats
    • Some types of fish such as herring and salmon and cod fish oil
    • Eggs
    • Dairy products such as cheese and fortified milk
    • Fortified breakfast cereals
    • Orange and yellow vegetables and fruits, such as carrots, sweet potatoes, mangos, and cantaloupe
    • Broccoli, spinach, and most dark green, leafy vegetables
• Function:
  • Vitamin A helps form and maintain healthy teeth, skeletal and soft tissue, mucus membranes, and skin.
  • It is also known as retinol because it produces the pigments in the retina of the eye.
  • Vitamin A promotes good eyesight, especially in low light.
  • It also has a role in healthy pregnancy and breastfeeding.
• If you do not get enough vitamin A, you have more risk of eye problems such as:
  • Reversible night blindness
  • Non-reversible corneal damage known as xerophthalmia
  • It can also lead to hyperkeratosis or dry, scaly skin.
• Vitamin A deficiency can be treated with vitamin A supplements.