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India’s diaspora diplomacy and the limits of cultural nationalism

Explained | Polity | Mains Paper 2: Indian Diaspora

Introduction

The Indian diaspora, among the world’s largest, has long been celebrated for fostering goodwill, investment, and soft power. Recently, however, incidents involving public religious celebrations such as Ganapati immersions and Deepavali fireworks in Western nations have drawn scrutiny. These events have ignited debate over “the limits of acceptable public behaviour” and whether expressions of cultural nationalism abroad risk alienating host nations or complicating India’s diplomacy.

Why in the News

A section of the Indian diaspora in developed countries, notably in Canada, the U.S., and Australia, has faced backlash after cultural events like Ganapati immersions in waterbodies and Diwali fireworks in public spaces. Following incidents such as houses catching fire during Deepavali celebrations in Edmonton, Canada, authorities issued advisories urging restraint. Anti-immigrant and nationalist groups in these countries are exploiting such events to fuel nativist campaigns against people of Indian origin. The issue is significant because it marks a new phase in diaspora visibility, from community pride to potential friction with local norms and foreign policy sensitivities.

India’s Diaspora Diplomacy: Changing Role

  1. Strategic Asset: The diaspora historically served as India’s cultural ambassador, strengthening trade, investment, and soft power links.
  2. Political Sensitivity: Earlier, India urged Persons of Indian Origin (PIOs) to remain apolitical in the domestic politics of their adopted countries, maintaining a careful balance.
  3. Policy Shift: With the rise of Hindutva-oriented nationalism since the 1990s, diaspora activism has gained a new ideological and political tone, extending beyond cultural identity into transnational nationalism.

Why has cultural assertion turned contentious?

  1. Rise of Hindutva Influence:
    • Ideological expansion: The ascent of Narendra Modi in 2014 intensified diaspora engagement rooted in nationalist pride.
    • Global networks: Indian-origin communities began hosting large-scale rallies reflecting Hindutva themes, echoing domestic politics abroad.
  2. Shift from cultural to political nationalism:
    • Earlier Indian nationalism emphasized universal human rights and secular inclusion.
    • Now, diaspora activism mirrors territorial or cultural nationalism, often perceived as exclusive.
  3. Public visibility: Increased religious processions and fireworks are seen as public displays of faith, once private, now overtly political in tone.

How are host nations responding to diaspora assertiveness?

  1. Heightened scrutiny: Countries like the U.S., Canada, and Australia view foreign-linked activism with caution, citing fear of interference in domestic politics.
  2. Parallel with other powers: While India avoids the level of hostility faced by Russia or China, New Delhi’s activities are increasingly monitored.
  3. Examples of scrutiny:
    • In the U.S., foreign influence laws allow diaspora political activity if registered transparently.
    • Far-right and left-leaning figures alike, from Bernie Sanders to Tucker Carlson, have begun debating diaspora-linked influence.

Dual Citizenship Debate and “Nationalist Hype”

  1. Legal context:
    • India does not allow dual citizenship, unlike the U.S.
    • However, the Citizenship (Amendment) Act, 2003 introduced Overseas Citizenship of India (OCI), a form of “dual citizenship in spirit, but not in law.”
  2. Rights and limitations:
    • OCI cardholders enjoy visa-free entry, property and education rights, but cannot vote or hold public office.
    • This arrangement symbolizes India’s partial accommodation of diaspora identity while maintaining constitutional sovereignty.
  3. Diplomatic sensitivity: The growing assertion of OCI holders in political protests abroad sometimes clashes with India’s principle of non-interference and host countries’ domestic politics.

Balancing Pride and Prudence: The Policy Challenge

  1. Tightrope diplomacy: India must encourage diaspora pride without allowing overzealous nationalism to harm bilateral ties.
  2. New geopolitical reality:
    • Rising global nationalism has made foreign societies less tolerant of visible ethnic politics.
    • India’s image as a pluralist democracy depends on diaspora restraint and inclusivity.
  3. Foreign policy implications: The diaspora’s actions now intersect with strategic diplomacy, compelling New Delhi to redefine its soft power outreach with greater nuance.

Conclusion

India’s diaspora diplomacy today walks a fine line between cultural pride and political overreach. While the diaspora remains a pillar of India’s global image, unchecked assertions of religious nationalism can blur boundaries between identity and interference. Sustaining goodwill requires promoting inclusive Indian values abroad, rather than exporting domestic ideological divisions. A balanced diaspora policy, grounded in soft power, pluralism, and mutual respect, will ensure that India’s global citizens remain its greatest strength, not a diplomatic liability.

Value Addition
Bhikhu Parekh on the Indian Diaspora and the Debate on Identity Politics

Bhikhu Parekh, a renowned political theorist and member of the British House of Lords, has been one of the most influential voices in the global debate on diaspora identity, multiculturalism, and nationalism abroad.

Parekh’s Core Ideas

  • Plural Identity: Parekh emphasized that members of the Indian diaspora hold multiple overlapping identities, as Indians, as citizens of their host countries, and as global citizens.
    • He argued that loyalty to India must not conflict with civic responsibility to the host nation.
    • True diaspora strength lies in cultural rootedness combined with civic integration.
  • Critique of Cultural Nationalism Abroad:
    • Parekh warned against transforming cultural pride into exclusive nationalism, stating that religious or ideological exportation risks alienating host societies and undermining India’s democratic image.
    • He urged India to promote a “cosmopolitan nationalism”, celebrating Indian values of pluralism and tolerance abroad rather than majoritarian politics.
  • Cultural Confidence, Not Cultural Aggression:
    • In his writings, particularly during debates on British multiculturalism, Parekh defended the right of immigrants to maintain traditions, but within a framework of mutual respect and civic harmony.
    • He believed that diaspora behaviour becomes diplomatic capital only when it fosters intercultural dialogue, not division.

Indian Diaspora Policy Evolution: From “Pravasi Bharatiya Divas” (2003) to Current Geopolitical Engagement

India’s diaspora policy has evolved from a symbolic celebration of overseas Indians to a strategic instrument of foreign policy.

  • Early 2000s: Institutional Recognition
    • Pravasi Bharatiya Divas (2003) was launched to commemorate Mahatma Gandhi’s return from South Africa, marking the first structured outreach to the diaspora.
    • The event institutionalised diaspora recognition and honoured contributions through the Pravasi Bharatiya Samman Awards.
  • Mid-2000s: Engagement and Identity Building
    • Establishment of the Ministry of Overseas Indian Affairs (MOIA) in 2004 signified a shift from symbolic to policy-based engagement.
    • Introduction of Overseas Citizenship of India (OCI) and Person of Indian Origin (PIO) cards facilitated cultural and economic linkages.
  • 2010s: Economic and Developmental Integration
    • The merger of MOIA with the Ministry of External Affairs (MEA) in 2016 streamlined diaspora diplomacy.
    • Focus shifted to remittances, investments, and knowledge exchange, positioning the diaspora as a development partner.
  • Post-2014 Era: Strategic and Ideological Turn
    • The diaspora became a pillar of India’s soft power and image-building strategy, particularly under Prime Minister Modi’s global outreach (e.g., massive diaspora events in the U.S., U.K., and Australia).
    • India’s foreign policy began viewing the diaspora as a geopolitical asset to influence public opinion and build partnerships in host countries.
  • Current Phase: Geopolitical and Security-Sensitive Diplomacy
    • Diaspora engagement now intersects with strategic diplomacy, requiring balancing national pride with respect for local sensitivities.
    • India emphasizes responsible diaspora conduct, ensuring cultural assertion aligns with mutual respect and diplomatic prudence.

PYQ Relevance

[UPSC 2023] Indian diaspora has scaled new heights in the West. Describe its economic and political benefits for India.

Linkage: The topic is important as it reflects India’s growing global influence through its diaspora-driven economic, cultural, and political networks. The question links to how diaspora activism enhances India’s soft power yet demands careful diplomacy to avoid friction with the host nations.

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Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

Big Tech’s contempt for Indian Public Health

Explained | Science Tech | Mains Paper 3: S&T - Applications In Everyday Life

Introduction

India’s Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 (DMRA) prohibits advertisements claiming to cure 54 specific medical conditions without proven efficacy. However, the advent of Big Tech advertising has bypassed this framework. Platforms such as Meta, Google, and others are now running sponsored ads for unapproved ayurvedic and homeopathic treatments, violating DMRA provisions. Despite clear illegality, these violations persist due to jurisdictional leniency, U.S.-based corporate protection, and absence of enforcement by Indian regulators.

Why in the News

Big Tech’s persistent advertising of unverified health products and ayurvedic “cures” on Indian social media platforms has triggered major concern. The issue marks a systemic regulatory failure, even after India’s decades-old legal framework (DMRA, PNDT Act) prohibits such practices, platforms continue to profit from misleading medical claims. The scale of harm, coupled with cross-border corporate impunity, has made this a critical governance challenge and a new frontier in public health ethics and digital accountability.

How Has Advertising in Public Health Evolved in the Digital Era?

  1. Shift from Traditional to Digital: Advertisement control has weakened as digital and social media replaced print and broadcast.
  2. Rise of Big Tech Platforms: Meta, Google, and others allow sponsored advertisements promoting “miracle cures,” violating the DMRA.
  3. Absence of Oversight: Digital platforms operate transnationally, making regulatory enforcement difficult.
  4. Public Health Implication: Continuous exposure to false medical claims undermines rational drug use and increases health risks.

Why Are Big Tech Platforms Violating Indian Law?

  1. Profit-Driven Algorithms: Platforms profit from “sponsored” or “boosted” posts, regardless of legality or health implications.
  2. Weak Accountability: Advertisers and intermediaries claim immunity as “third-party hosts,” avoiding liability under Indian law.
  3. Jurisdictional Escape: Since most Big Tech firms are headquartered in the U.S., Indian laws like DMRA lack cross-border enforcement power.
  4. Regulatory Vacuum: Absence of a unified digital advertising regulator allows platforms to function without deterrence.

What Legal Frameworks Are Being Ignored?

  1. Drugs and Magic. Remedies (Objectionable Advertisement) Act, 1954: Prohibits advertisements for 54 medical conditions; violation is a criminal offence.
  2. Pre-Conception and Pre-Natal Diagnostic Techniques (PNDT) (Prohibition of Sex Selection) Act, 1994: Bans sex-selection advertisements; Big Tech platforms earlier violated this as well.
  3. Drugs & Cosmetics Act, 1940: Requires all medicines to be clinically established before advertising.
  4. IT Act, 2000 (Section 79): Provides conditional immunity to intermediaries, which is being misused to escape responsibility.
  5. U.S. Corporate Protection: American law shields these corporations from Indian prosecution, leading to managerial impunity.

What Are the Broader Implications for Governance and Sovereignty?

  1. Erosion of Regulatory Authority: India’s ability to enforce its health and advertising laws is weakened.
  2. Public Interest vs. Corporate Freedom: Public health suffers as profit-driven digital advertising goes unchecked.
  3. Failure of Accountability Mechanisms: Courts and regulators have struggled to bring Big Tech executives under Indian jurisdiction.
  4. Threat to Rule of Law: Unequal treatment between Indian entities and global corporations undermines trust in domestic regulation.

What Policy Reforms Are Needed?

  1. Legal Recalibration: DMRA and PNDT Act need alignment with the Information Technology Act to hold intermediaries accountable.
  2. Managerial Responsibility: Indian courts should compel Big Tech executives to appear before regulators and face prosecution if violations persist.
  3. Strengthened Digital Health Advertising Rules: Mandate health ads to carry verification tags or disclaimers by government-authorized bodies.
  4. Bilateral Cooperation: India-U.S. digital diplomacy must address cross-border legal immunity for tech corporations.
  5. Institutional Oversight: Establish a Digital Health Advertising Authority (DHAA) under the Ministry of Health to oversee compliance.

Conclusion

Big Tech’s disregard for Indian health advertising laws symbolizes the intersection of technology, law, and public welfare. Without regulatory modernization and corporate accountability, digital platforms will continue to operate beyond the reach of Indian law. Ensuring managerial accountability, legal parity, and public health protection must now be central to India’s digital governance reform agenda.

PYQ Relevance

[UPSC 2023] Introduce the concept of Artificial Intelligence (AI). How does AI help clinical diagnosis? Do you perceive any threat to privacy of the individual in the use of AI in healthcare?”Introduce the concept of Artificial Intelligence (AI). How does AI help clinical diagnosis? Do you perceive any threat to privacy of the individual in the use of AI in healthcare?

Linkage: Health related topics are a recurring theme in both GS2 and GS3 papers. The growing use of AI by Big Tech in healthcare mirrors the same challenge of data misuse and weak accountability seen in misleading health advertisements. Both reflect how unchecked digital algorithms can exploit personal health data for profit, posing grave risks to privacy and public trust in India’s health governance system.

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Terrorism and Challenges Related To It

The complicated history of U.S-Pakistan relations

Explained | International Relations | Mains Paper 2: Effect Of Policies & Politics Of World On India'S Interests

Introduction

The U.S.-Pakistan relationship has oscillated between strategic intimacy and mutual distrust. Built on Cold War exigencies, it evolved through shared military interests, geopolitical bargains, and recurring disappointments. As new global alignments emerge, Pakistan’s dual engagement with China and the U.S. once again tests the durability and intent of its foreign policy choices.

Evolution of the U.S.-Pakistan Strategic Partnership

  1. Cold War Origins: Pakistan aligned with the U.S. through SEATO (1954) and CENTO (1955), positioning itself as a frontline ally against communism.
  2. Military and Economic Aid: U.S. assistance included arms, technology, and infrastructure funding, strengthening Pakistan’s military elite.
  3. Transactional Nature: The partnership thrived on mutual utility rather than shared values; Pakistan sought defense support; the U.S. sought regional leverage.

Impact of Shifting U.S. Priorities during and after the Cold War

  1. Soviet Invasion of Afghanistan (1979): The U.S. re-engaged Pakistan as a base for arming Mujahideen fighters. Aid and weapon transfers surged.
  2. Post-Withdrawal Abandonment: After Soviet withdrawal, Washington invoked sanctions under the Pressler Amendment (1990) over Pakistan’s nuclear program, halting delivery of F-16 aircraft.
  3. Cycle of Engagement and Sanctions: Every phase of cooperation was followed by punitive measures, reflecting deep distrust.

9/11 and the Recasting of the U.S.-Pakistan Ties

  1. Post-9/11 Alignment: Pakistan became a major non-NATO ally in the U.S.-led “War on Terror,” receiving over $30 billion in aid.
  2. Military Dependence: U.S. logistics for operations in Afghanistan relied heavily on Pakistani routes and intelligence.
  3. Strategic Mistrust: U.S. accused Pakistan of harboring militants while receiving counter-terrorism aid, the Osama bin Laden incident (2011) deepened suspicion.

Trump’s Policy Reversal and Conditional Engagement

  1. Harsh Rhetoric: In 2018, Donald Trump accused Pakistan of “lies and deceit”, suspending over $300 million in military aid.
  2. Focus on “Double Game”: The U.S. alleged Islamabad’s duplicity, fighting terrorism publicly while sheltering terror networks privately.
  3. China Factor: Trump’s tilt towards India and containment of China indirectly alienated Pakistan, pushing it further into Beijing’s orbit.

The China Variable and Strategic Realignment

  1. Deepening Sino-Pak Ties: The China-Pakistan Economic Corridor (CPEC) and defense collaboration highlight Pakistan’s strategic drift eastward.
  2. U.S. Withdrawal from Afghanistan (2021): Reignited Pakistan’s regional leverage but also increased scrutiny of its Taliban links.
  3. Balancing Act: Pakistan now seeks to balance its Chinese dependence with limited U.S. engagement to avoid isolation.

Sanctions, Contradictions and Mutual Suspicion

  1. Sanctions Regime: U.S. invoked multiple sanctions, Symington (1977), Pressler (1990), and Brown (1995) Amendments targeting nuclear proliferation.
  2. Contradictory Approach: Despite sanctions, Washington relied on Pakistan’s logistics during Afghan conflicts, exposing policy inconsistency.
  3. Enduring Distrust: Mutual dependence persisted but never matured into stable diplomacy, defined by suspicion rather than trust.

India’s Dimension in the Context of U.S.-Pakistan Relations

Positive Implications for India

  1. Strategic Leverage: Weakening U.S.-Pakistan ties strengthened India’s position as a reliable democratic partner in South Asia.
  2. Defence Cooperation: India gained access to advanced U.S. defence technology, joint exercises (like Malabar), and strategic dialogues (2+2 format).
  3. Global Standing: Partnership in QUAD and Indo-Pacific frameworks enhanced India’s geopolitical influence.
  4. Counterterrorism Support: U.S. alignment with India’s stance against cross-border terrorism increased diplomatic pressure on Pakistan.

Negative Implications for India

  1. Regional Instability: Strained U.S.-Pakistan ties can destabilize Afghanistan, indirectly impacting India’s security interests.
  2. China-Pakistan Nexus: The gap left by U.S. withdrawal pushed Pakistan deeper into China’s orbit via CPEC and military cooperation.
  3. U.S. Policy Unpredictability: Frequent shifts in U.S. South Asia policy raises doubts about long-term reliability.
  4. Reduced Mediation Influence: India faces difficulty in balancing ties with both U.S. and Russia amid sanctions and defence dependencies.

Way Forward

  1. Strategic Autonomy: Maintain balanced ties with all major powers while safeguarding national interests.
  2. Regional Dialogue: Promote multilateral frameworks including Afghanistan and Central Asia to counter instability.
  3. Deepened Indo-U.S. Cooperation: Expand collaboration in critical tech, energy, and intelligence without compromising sovereignty.
  4. Focus on Neighbourhood: Strengthen regional engagement to offset Pakistan’s external alignments and ensure South Asian stability.

Conclusion

The U.S.-Pakistan relationship remains an exemplar of “strategic utility without strategic trust.” Despite recurring phases of cooperation, both nations continue to perceive each other through transactional lenses. As Pakistan deepens ties with China and the U.S. recalibrates Indo-Pacific priorities, their future engagement will depend on how Islamabad reconciles its global ambitions with domestic constraints and regional realities.

PYQ Relevance

[UPSC 2019] What introduces friction into the ties between India and the United States is that Washington is still unable to find for India a position in its global strategy, which would satisfy India’s national self-esteem and ambitions’. Explain with suitable examples.

Linkage: U.S.-Pakistan ties were transactional and interest-driven, creating India’s distrust of U.S. intentions. This history causes friction in U.S.-India ties, as India seeks equality while the U.S. retains a hierarchical outlook.

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Foreign Policy Watch: India-Nepal

Winding up the clock of India-Nepal Ties

Explained | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

Introduction

On October 1, 2025, RBI Governor Shaktikanta Das unveiled steps to deepen INR–NPR linkages. This move signals India’s intent to make the rupee a regional trade and investment currency. These include:

  1. Allowing Authorised Dealer (AD) banks to lend INR to non-residents from Nepal, Bhutan, and Sri Lanka.
  2. Permitting Special Rupee Vostro Accounts for foreign banks to hold Indian bonds and corporate papers.
  3. Establishing a transparent reference rate for major trading partner currencies to facilitate INR-based transactions.

This marks a strategic departure from decades of tightly controlled cross border monetary flows. It aligns with India’s ambition to make the rupee a “South Asian Settlement Currency” and deepen economic resilience across borders.

The Significance of RBI’s Move:

  1. Internationalisation of INR: Strengthens INR’s role as a regional settlement currency, reducing dependence on the dollar.
  2. Cross border integration: Enables Nepal, Bhutan, and Sri Lanka to engage in INR based transactions, supporting regional financial stability.
  3. Investor confidence: Allows Nepalese investors to diversify holdings in Indian bonds and securities.
  4. Trade facilitation: Establishes a transparent mechanism for pricing and settlement of bilateral trade.

The Hurdles in Nepal

  1. COVID-19 Economic Fallout: Nepal’s economy struggled with post-pandemic recovery as industrial performance remained weak.
  2. Credit Crunch: Low confidence among banks led to restricted lending, making it difficult for small businesses to sustain.
  3. Supply Chain Strain: Domestic credit shortages impacted internal supply chains and imports, amplifying inflationary pressures.
  4. Structural Weakness: Chronic trade deficit, narrow industrial base, and dependency on remittances limit growth resilience.
  5. Political Uncertainty: Frequent political instability has deepened investor hesitation.

How India’s Lending Outreach Could Change the Game

  1. Rupee Lending Window: RBI’s INR credit facility allows Nepalese firms to access Indian capital markets, easing liquidity pressure.
  2. Reduced Dollar Dependence: Using INR for trade and lending could insulate both economies from dollar exchange fluctuations.
  3. Enhanced Trust: Transparent reference rates can reduce cross border settlement disputes and improve institutional confidence.
  4. Joint Ventures: Encourages cross border investments and participation in sectors like hydropower, manufacturing, and tourism.

The Trade Equation Between India and Nepal

  1. High Interdependence: India remains Nepal’s largest trading partner, accounting for 65% of its total trade.
  2. FDI Flows: India is Nepal’s largest FDI source, contributing 33% of total foreign investment, worth nearly $670 million.
  3. Export–Import Composition: India imports billion dollar worth of goods from Nepal, including coffee, tea, and herbal products, while exporting essential commodities and petroleum.
  4. Monetary Peg: The INR–NPR peg (₹1 = NPR 1.6) has stabilised bilateral transactions for decades, but rising inflation and dollar volatility demand recalibration.

Challenges to Implementation

  1. Institutional Compliance: Nepal Rastra Bank (NRB) must reform regulatory processes to align with RBI’s updated norms.
  2. Risk of Overdependence: Over reliance on INR could expose Nepal’s economy to India’s monetary shocks.
  3. Operational Barriers: Currency convertibility limits and legal harmonisation may delay smooth execution.
  4. Political Sensitivity: Perception of “rupee dominance” may spark internal opposition in Nepal’s political circles.

Possible Multiplier Effects

  1. Stronger INR: If successfully implemented, the move can strengthen INR internationally while stabilising Nepal’s currency.
  2. Reduced Dollar Outflows: Bilateral INR use saves foreign exchange reserves, improving both nations’ current account positions.
  3. Boost to Trade Financing: Easier credit availability to Nepalese traders can expand import capacity for Indian goods.
  4. Regional Model: Success may inspire replication with Bhutan, Sri Lanka, and Bangladesh under the Neighbourhood First Policy.

Conclusion

The RBI’s initiative represents more than a banking reform, it is a strategic assertion of economic diplomacy in South Asia. By aligning monetary instruments with foreign policy, India aims to create a shared financial ecosystem that stabilises its neighbourhood while propelling the rupee towards international recognition. For Nepal, this marks a chance to integrate deeper into India’s growth story and move towards sustainable, confidence driven development.

PYQ Relevance

[UPSC 2018] How would the recent phenomena of protectionism and currency manipulations in world trade affect macroeconomic stability of India?

Linkage: This question relates to currency stability and external sector management. The RBI–Nepal rupee measures reflect India’s proactive approach to enhance rupee resilience and reduce dollar dependence, aligning with UPSC’s recurring focus on monetary stability and economic diplomacy.

Value Addition

Internationalisation of the Indian Rupee (INR)

  • Definition: Internationalisation of the rupee refers to the increasing use of INR in cross-border trade, investment, and financial transactions, reducing reliance on foreign currencies like the US dollar.
  • Objective: Strengthen India’s economic sovereignty, reduce exchange rate risk, and enhance global confidence in the rupee as a settlement currency.
  • Recent Policy Measures:
    • RBI’s 2022 Circular: Allowed INR invoicing and settlement of international trade.
    • Special Vostro Accounts: Enabled partner nations (e.g., Russia, UAE, Nepal) to hold rupee balances for bilateral trade.
    • RBI–Nepal Measures (2025): Permitted INR lending, rupee-based bonds, and reference rate mechanisms.
    • INR–Dirham Linkage: Facilitated oil payments in rupees via UAE, strengthening South–South trade.
  • Benefits:
    • Reduces Forex Outflows: Decreases demand for dollars in trade settlements.
    • Improves External Stability: Mitigates impact of global currency volatility.
    • Boosts Trade Competitiveness: Simplifies invoicing for neighbouring countries.
    • Supports Regional Integration: Promotes South Asian financial architecture anchored in INR.
    • Enhances India’s Soft Power: Projects rupee as a symbol of economic strength and trust.
  • Challenges:
    • Limited convertibility of INR in capital account.
    • Regulatory asymmetry among trading partners.
    • Need for deep rupee-denominated financial markets abroad.
    • Possible geopolitical resistance to India’s monetary expansion.
  • Global Examples:
    • China’s Yuan (CNY): Integrated into IMF’s SDR basket (2016).
    • Euro (EUR): Serves as a model for regional monetary integration.
  • Reports & Committees:
    • RBI Inter-Departmental Group (2023): Highlighted steps for gradual and phased INR internationalisation.
    • IMF Report (2023): Identified INR among potential emerging reserve currencies.

 

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Artificial Intelligence (AI) Breakthrough

Governance, cybersecurity move to centrestage in AI conversations

Explained | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

Introduction and Why in the News

Artificial Intelligence, once hailed purely as an efficiency enhancer, is now at the centre of ethical, cybersecurity, and accountability debates. The AI@Work roundtable in Mumbai, moderated by industry and data leaders, highlighted that as organisations adopt AI to accelerate operations, they are simultaneously confronting unprecedented risks. These risks arise from data breaches and AI unpredictability to physical and digital intrusions. Globally, the scale of the threat is stark: over 36,000 AI-driven cyber incidents have been detected recently, revealing vulnerabilities that demand robust governance mechanisms. The focus is shifting from innovation for profit to AI for responsible, transparent, and accountable governance.

How is AI reshaping governance and business operations?

  1. AI as a catalyst: AI is transforming industries, automating functions, and unlocking efficiency, especially in large corporations like HPCL.
  2. Governance shift: The emphasis is moving from using AI for automation to using it for secure, ethical, and explainable decision-making.
  3. Corporate accountability: Company Boards are now integrating AI risk management as part of business strategy and compliance mechanisms.

What are the major cybersecurity challenges emerging from AI integration?

  1. Dual challenge: HPCL and similar enterprises face both digital intrusions and physical tampering, such as pipeline or fuel data manipulation.
  2. Data breaches and tampering: AI systems amplify vulnerabilities by collecting, analysing, and predicting based on sensitive data.
  3. AI unpredictability: As one executive noted, AI “can behave unpredictably”, even making errors like confusing CAPTCHA, reflecting how AI mimics but doesn’t fully understand human behaviour.
  4. Evolving threats: Traditional cybersecurity tools like SIEM systems are being replaced by AI-based predictive defence models.

How are organisations building responsible AI frameworks?

  1. Ethical design: Companies are embedding AI hygiene protocols involving legal, ethical, and operational reviews.
  2. Cross-functional training: AI safety and compliance are being promoted through employee retraining and AI literacy initiatives.
  3. Accountability culture: “Who builds, who manages, and who owns AI” is now being formalised as part of corporate accountability structures.
  4. AI governance frameworks: Emphasis on explainability, transparency, and traceability of AI decisions.

How is India’s corporate sector responding to data and cybersecurity concerns?

  1. AI-based monitoring: Firms like HPCL have set up ATOM – Autonomous Threat Operations Machines capable of detecting and neutralising threats within minutes.
  2. Prioritisation of data integrity: Secure perimeters, application firewalls, and endpoint safety are now standard.
  3. Rise of human-AI synergy: Human oversight remains essential even as AI automates responses.
  4. New compliance model: AI-driven auditing and data lineage tools enhance traceability and prevent tampering.

Why is accountability and explainability central to future AI governance?

  1. Ownership and transparency: AI accountability now spans design to deployment stages.
  2. Explainability: Organisations must show how AI works, not just that it works, to maintain compliance.
  3. Ethical responsibility: AI ethics involves documenting data sources, audit trails, and decisions for regulatory and consumer trust.
  4. Broader awareness: Employees and consumers alike are being educated about AI literacy and bias detection.

Conclusion

The shift of AI conversations towards governance and cybersecurity signifies India’s entry into a new phase of responsible innovation. As AI pervades every domain, from finance to fuel, the focus must remain on trust, transparency, and traceability. Building ethical AI ecosystems that value both progress and protection is now essential for sustainable digital governance.

PYQ Relevance

[UPSC 2023] Introduce the concept of Artificial Intelligence (AI). How does AI help clinical diagnosis? Do you perceive any threat to privacy of the individual in the use of AI in healthcare?

Linkage: Both the article and the question highlight how AI, while enhancing efficiency in fields like healthcare and governance, raises critical concerns over data privacy, transparency, and ethical accountability. 

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Minimum Support Prices for Agricultural Produce

Trouble in ‘Soy State’-The Brewing Crisis in Madhya Pradesh’s Soybean Sector

Explained | Agriculture | Mains Paper 3: Issues Related To Farm Subsidies & Msp

Introduction

Madhya Pradesh contributes nearly 60% of India’s soybean output, earning its title as the Soy State. However, falling yields, poor returns, and uncertain government support are driving young farmers away from cultivation. The state, which once symbolized India’s success in expanding oilseed production, from 300,000 hectares in the 1970s to over 12 million hectares today, is now facing a turning point. Issues surrounding MSP, seed quality, and potential soybean imports have triggered widespread concern among cultivators.

Declining Interest in Soybean Cultivation

  1. Generational shift: Young farmers are abandoning soybean farming despite their families’ legacy due to poor income and rising costs.
  2. Low profitability: Farmers report earnings of only ₹5,000–₹6,000 per quintal, while production costs remain high due to fertilizers, diesel, and seed expenses.
  3. Falling acreage: MP’s soybean acreage fell from 5.7 million hectares in 2023 to 5.1 million hectares in 2024, marking a 10% decline.
  4. Shift to alternatives: Many farmers are switching to urad, moong, maize, or cash crops that offer higher or more stable returns.

Why Are Farmers Losing Faith in MSP?

  1. Improper implementation: Though the Centre announced ₹4,600 per quintal as MSP, most farmers sell below it due to lack of procurement infrastructure.
  2. Ceiling price issue: The government fixed a “ceiling price” of ₹4,300 per quintal for private buyers, making market rates unprofitable for producers.
  3. Limited procurement centres: Farmers complain of delayed payments and unavailability of buyers at MSP, forcing distress sales.
  4. Mismatch with cost of cultivation: Even after MSP hikes, real income remains stagnant due to higher input costs.

The Threat of Soybean Imports

  1. Policy uncertainty: Reports of possible U.S. soybean imports have caused panic among domestic farmers.
  2. Price depression: Imported soybean meal could reduce domestic demand, pushing prices below MSP levels.
  3. Industry divide: Processors argue that imports are needed to stabilize edible oil prices, but cultivators fear it will cripple local production.
  4. Farm unions’ protest: The Soybean Processors Association of India (SOPA) and farmers’ groups have demanded a ban on import proposals, calling it a “death blow” to the domestic industry.

What Are the Structural Problems Behind the Soybean Crisis?

  1. Seed quality issues: Farmers allege substandard seeds, resulting in poor germination and low yields.
  2. Inadequate extension services: Absence of updated agronomic practices and low use of scientific techniques hinder productivity.
  3. High input costs: Fertilizers, pesticides, and labour costs have nearly doubled over the last five years.
  4. Climate vulnerability: Irregular rainfall and pest infestations (like girdle beetle and stem fly) have further reduced yields.
  5. Weak farmer organizations: Lack of effective cooperatives and marketing federations reduces farmers’ bargaining power.

How Has Soybean Production Shaped India’s Agricultural Growth?

  1. Historical expansion: From 300,000 ha in the 1970s to 12 million ha today, soybean has been India’s fastest growing crop.
  2. Export potential: Soymeal exports to East Asia once contributed significantly to India’s agri-trade surplus.
  3. Edible oil dependence: Soybean accounts for nearly 35% of India’s oilseed area and plays a key role in reducing import dependency.
  4. Policy linkage: The crop was promoted under Technology Mission on Oilseeds (1986), which revolutionized oilseed cultivation patterns.

Reviving Faith in Oilseed Farming

  1. Long term MSP assurance: A 3 year guaranteed MSP policy can restore confidence and reduce uncertainty.
  2. Seed innovation: Investment in high-yielding, pest-resistant seed varieties through ICAR and private collaboration.
  3. Market infrastructure: Expansion of procurement centres and digital payment systems to ensure fair realization.
  4. Diversification support: Incentivizing mixed cropping and integrated farming models to mitigate risk.
  5. Value chain strengthening: Promotion of domestic processing units and branding for soybean-based products.

Conclusion

The “Soy State” stands at a crossroads. The crisis in Madhya Pradesh reflects the larger policy dilemma of India’s agricultural system, balancing market liberalization with farmer protection. Unless structural issues like MSP implementation, seed quality, and import regulation are addressed, India risks losing self-reliance in a crop that transformed its rural economy. The need of the hour is a farmer-centric reform agenda that enhances profitability, productivity, and predictability in oilseed cultivation.

PYQ Relevance

[UPSC 2018] What are the major reasons for declining rice and wheat yield in the cropping system? How crop diversification is helpful to stabilise the yield of the crops in the system?

Linkage: UPSC’s recurring theme of agriculture and crop diversification finds direct relevance here. The soybean crisis in Madhya Pradesh mirrors the same structural issues of monocropping stress, declining productivity, and need for diversified cropping systems to ensure long-term yield stability and farmer resilience.

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Port Infrastructure and Shipping Industry – Sagarmala Project, SDC, CEZ, etc.

The mirage of port led development in Great Nicobar

Explained | Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.

Introduction

The proposal for a mega port at Galathea Bay in Great Nicobar is being presented as a milestone in India’s maritime rise, intended to transform the country into a regional logistics hub comparable to Colombo or Singapore. Yet, experts argue that this vision rests on flawed economic assumptions, geographical isolation, and logistical weaknesses. The project’s viability is in question, as it lacks the organic trade ecosystem necessary for sustainable growth.

Why in the News?

The Great Nicobar port project has been in focus due to its scale, ₹75,000 crore investment aimed at creating a massive transshipment hub with long-term geopolitical and economic significance. It’s projected as India’s entry into the global maritime league. However, this marks a sharp contrast with earlier models of port development that grew around organic trade clusters and industrial hinterlands, not in remote ecological zones. The controversy centers on economic overestimation and environmental underestimation, making it one of the most debated infrastructure projects in recent years.

Is the economic rationale of the port sound?

  1. Flawed Assumptions: The project assumes India can capture transshipment traffic from Colombo and Singapore, but transshipment thrives on connectivity, carrier loyalty, and trade density, none of which currently exist at Nicobar.
  2. Absence of Hinterland: Unlike Colombo, which is connected to industrial networks, Nicobar lacks any comparable economic base, making port sustenance difficult.
  3. Dependence on Subsidies: Without a strong domestic trade ecosystem, the port would require massive subsidies to remain operational, contradicting long-term economic logic.

Why geography makes the project inherently difficult?

  1. Remoteness: Great Nicobar is 1,200 km from mainland India, severely limiting cost-effective logistics.
  2. Lack of Connectivity: Poor access to support industries, dry ports, and container parks increases shipping costs and delays.
  3. Comparative Disadvantage: Other regional ports (Colombo, Singapore, Klang) already have integrated logistics and deep-water infrastructure, leaving Nicobar at a permanent disadvantage.

Does strategic utility justify economic risk?

  1. Strategic Overreach: Supporters link the project to India’s naval presence and eastern maritime security, yet this rationale is weak for a commercial port.
  2. No Clear Defence Objective: India’s navy already operates from INS Baaz, and duplicating facilities under civilian guise increases financial and administrative strain.
  3. Limited Security Value: The port adds little to India’s surveillance or deterrence posture compared to existing assets in the Andaman and Nicobar Command.

How logistics and trade realities contradict projections

  1. Trade Patterns: Global shipping lines are deeply entrenched in established networks like Colombo and Singapore, where carrier commitments drive decisions.
  2. Operational Constraints: Indian ports, even major ones, struggle with high port-calling and handling costs, illustrated by Krishnapatnam Port (Andhra Pradesh), which still depends on government facilitation.
  3. Organic Hubs vs. Engineered Hubs: Great Nicobar, unlike Vizhinjam (Kerala) or Vadhavan (Maharashtra), lacks a supportive industrial corridor to sustain container flow.

Is there a precedent for success or failure?

  1. Colombo’s Model: Success based on decades of carrier relationships, industrial integration, and trust-based trade routes.
  2. Indian Experience: Vizhinjam shows progress but is still dominated by a single operator (MSC), revealing dependency rather than competitiveness.
  3. Lesson Learned: Without reciprocal liner relationships or industrial hinterland, a port remains a mirage of connectivity.

Conclusion

The Great Nicobar port embodies ambition divorced from ground realities. With limited economic viability, high environmental cost, and questionable strategic logic, it represents a misplaced vision of growth. Port-led development must emerge from organic trade evolution, not state-engineered projects in ecologically fragile zones. The focus should shift toward strengthening existing ports, coastal shipping, and integrated logistics, ensuring India’s maritime rise is both sustainable and strategic.

PYQ Relevance

[UPSC 2021] Investment in infrastructure is essential for more rapid and inclusive economic growth. Discuss in the light of India’s experience.

Linkage: It directly aligns with The Mirage of Port-Led Development in Great Nicobar article. Both examine how infrastructure-led growth can be unsustainable without economic and logistical foundations. The Nicobar port exemplifies the limits of infrastructure expansion without inclusive or organic economic linkages.

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Climate Change Impact on India and World – International Reports, Key Observations, etc.

Should India take global leadership on climate change?

Explained | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia

Introduction

Global momentum on climate change is waning. The U.S. withdrawal from the Paris Agreement, the EU’s cautious stance, and Brazil’s focus on implementation have created a leadership vacuum. India, backed by consistent domestic policies and credible renewable achievements, is being viewed as a stabilising force in climate negotiations.

Current Global Context and India’s Position

  • Leadership Vacuum: Developed economies show declining enthusiasm for climate leadership due to economic pressures and energy insecurity.
  • India’s Steady Role: India maintains policy continuity and cross-party consensus on climate goals, avoiding divisive politics.
  • Emerging ‘Axis of Good’: Expanding partnerships with Europe, Brazil, and developing nations for climate technology and forest cooperation.
  • Implementation Emphasis: COP30 expected to focus on execution of existing commitments rather than new pledges.

The Financing Challenge and Implementation Gap

  1. Adaptation Finance Deficit: Global climate finance needs estimated at $1.3 trillion annually by 2035, highlighting dependence on private and multilateral funding.
  2. Means of Implementation: Finance, technology transfer, and capacity building remain central to effective execution.
  3. Blended Finance Approach: Encourages combining public, private, and philanthropic resources for adaptation sectors like agriculture and water.
  4. Pipeline Creation: Necessitates project,ready mechanisms at the national and state levels to attract investments.

India’s Achievements and Strategic Leverage

  1. Emission Stabilisation: Power sector emissions plateaued as renewable integration expands.
  2. Renewable Leadership: Non,fossil fuel sources account for ~50% of installed power capacity.
  3. Decoupling Trend: Energy demand growth no longer proportional to emissions growth, indicating structural change.
  4. Green Industry Shift: Corporate groups (Adani, Reliance) invest heavily in green hydrogen, solar, and renewables driven by market value creation.

Adaptation,Driven Growth and Dual,Benefit Projects

  1. Integrated Projects: Initiatives like PM,KUSUM use solar energy in agriculture, reducing diesel dependence and improving income security.
  2. Co,benefit Design: Projects combining adaptation (resilience) and mitigation (emission reduction) yield long,term sustainability.
  3. Sectoral Innovation: Solar,powered cold,chain storage and electric buses illustrate scalable, cost,efficient climate solutions.
  4. Aggregation Advantage: National,scale schemes can reduce costs, increase service access, and enhance local resilience.

Nationally Determined Contributions (NDCs) and Adaptation Planning

  1. Current Commitment: 50% of power capacity from non,fossil sources by 2030; aligned with Paris Agreement goals.
  2. Green Hydrogen Linkage: Recognition of renewable energy’s role in hydrogen production can strengthen India’s NDC profile.
  3. Industrial Decarbonisation: Industry identified as a “hard,to,abate” sector; emphasis on electrification, alternative materials, and carbon markets.
  4. Adaptation Priority List: Proposal for a “wish list” of adaptation projects under carbon markets, adaptable by States.
  5. Carbon Market Strategy: Promotes participation in high value areas (solar + storage) rather than single,stream credits.

Should India Lead Globally?

  1. Moral Credibility: Low per capita emissions and proactive domestic policy lend legitimacy to India’s global stance.
  2. Strategic Interest: Leadership enhances India’s role in shaping financial flows and green technology frameworks.
  3. Implementation Expertise: India’s experience with renewable deployment and welfare,linked schemes adds operational credibility.
  4. Risk and Responsibility: Global leadership must balance ambition with developmental imperatives for energy access and equity.

Conclusion

India’s leadership on climate change is neither symbolic nor premature, it is pragmatic, equity,driven, and implementation oriented. With stable governance, scalable models, and growing private participation, India can anchor the next phase of global climate action by ensuring that commitments translate into outcomes.

PYQ Relevance

[UPSC 2021] Describe the major outcomes of the 26th session of the Conference of the Parses (COP) to the United Nations Framework Convention on Climate Change (UNFCCC)? What are the commitments made by India in this conference?

Linkage: This question assesses understanding of India’s climate diplomacy from COP26 to future summits under the UNFCCC framework. The article extends this trajectory by highlighting India’s shift from pledge to performance, emphasizing implementation, adaptation finance, and renewable energy leadership ahead of COP30.

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Monsoon Updates

How do monsoons affect Tamil Nadu?

Explained | Geography | Mains Paper 1: Geographical Features & Their Location

Introduction

Tamil Nadu’s northeast monsoon, traditionally spanning October to December, has arrived early for the second consecutive year, bringing intense and localized rainfall. While excess rainfall was once viewed as a boon for agriculture and water storage, climate change has made “excess” a liability, causing flash floods, crop destruction, and structural damage. The situation is compounded by simultaneous inflows from Kerala via the Mullaperiyar Dam, creating a dual-flood scenario that tests the resilience of Tamil Nadu’s urban systems, infrastructure, and disaster governance.

Urban Flooding: A Consequence of Unsustainable Development

  1. Impervious surfaces: Extensive concretization and asphalt paving prevent rainwater infiltration, resulting in rapid surface runoff that overwhelms drainage systems.
  2. Inadequate drainage networks: Poor maintenance and blockage of stormwater drains lead to flash floods and prolonged inundation in low-lying areas.
  3. Infrastructure shutdowns: Power authorities resort to preventive power cuts to avoid electrocution risks, compounding public inconvenience and economic losses.
  4. Sewage overflows: Heavy rainfall triggers untreated wastewater discharge into streets and waterbodies, leading to public health crises and water contamination.

Agricultural Distress and Soil Degradation

  1. Waterlogging and root suffocation: Excess moisture damages crop roots, washes away seeds, and erodes nutrient-rich topsoil, reducing long-term fertility.
  2. Fungal and pest proliferation: Moist environments facilitate fungal infections and pest outbreaks, lowering crop yields.
  3. Nutrient runoff: Heavy rain carries fertilizers and pesticides into reservoirs, degrading water quality and aquatic ecosystems.
  4. Economic losses: Repeated crop failure translates into financial vulnerability for farmers and food supply disruptions.

Health and Environmental Risks of Prolonged Rainfall

  1. Vector-borne diseases: Stagnant water acts as a breeding ground for mosquitoes, leading to malaria, dengue, and Japanese encephalitis outbreaks.
  2. Zoonotic transmission: Flooded environments increase exposure to leptospirosis and scrub typhus.
  3. Infrastructure corrosion: High humidity and seepage promote mold growth and building decay, undermining structural integrity.
  4. Water contamination: Overflowing sewage and agricultural runoff mix into drinking sources, causing gastrointestinal and waterborne diseases.

Rising Flood Risk: The Mullaperiyar–Vaigai Connection

  1. Dual monsoon exposure: Kerala receives rainfall from the southwest monsoon, while Tamil Nadu depends on the northeast monsoon. Overlapping patterns cause simultaneous water inflows.
  2. Mullaperiyar Dam’s critical role: Located in Kerala’s Idukki district but operated by Tamil Nadu, the dam diverts water to Tamil Nadu’s Vaigai basin.
  3. Catchment saturation: Heavy rains in Kerala rapidly fill the reservoir, forcing Tamil Nadu to open shutters to ensure dam safety.
  4. Two-directional flooding: Released water flows both toward Kerala’s Periyar basin and Tamil Nadu’s Vaigai, creating cross-border flood pressure.
  5. Ground situation: With all 13 shutters open, Theni district faces submergence even as local rains intensify, turning “shared water” into a shared crisis.

Infrastructure and Economic Impact

  1. Rising water tables: Continuous rainfall elevates the groundwater level, weakening building foundations and road structures.
  2. Loss of load-bearing capacity: Saturated soil causes foundation shifting, cracks, and collapses in the long term.
  3. Economic burden: Damage repair, relocation, and agricultural losses lead to high fiscal costs for the State exchequer.
  4. Social impact: Displacement, psychological distress, and livelihood loss add a human dimension to the flood crisis.

Reassessing the “Excess is Good” Paradigm

  1. Changing monsoon patterns: Climate change is causing shorter, more intense bursts rather than steady rainfall, overwhelming absorptive capacity.
  2. Policy recalibration: Tamil Nadu must prioritize water storage optimization, urban resilience, and inter-State coordination.
  3. Adaptive planning: Future strategies must integrate real time dam management, rainwater harvesting, and climate resilient agriculture.

Conclusion

Tamil Nadu’s monsoon experience underscores that climate resilience is not merely about rainfall volumes but about water management capacity. Balancing inter-State water sharing, strengthening urban drainage systems, and adopting adaptive agricultural practices are crucial. The Mullaperiyar conundrum reflects the urgent need for cooperative federalism in climate adaptation, a lesson not just for Tamil Nadu but for all monsoon-dependent states in India.

PYQ Relevance

[UPSC 2023] Why is the South-West Monsoon called ‘Purvaiya’ (easterly) in the Bhojpur region? How has this directional seasonal wind system influenced the cultural ethos of the region?

Linkage: The monsoon is a recurring UPSC theme. Tamil Nadu’s experience, where the northeast monsoon defines urban life, agriculture, and inter-State dynamics, parallels Bhojpur’s example. This shows how regional monsoon variations influence both ecological realities and local ethos across India.

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Oil and Gas Sector – HELP, Open Acreage Policy, etc.

The Tailwinds from Lower Global Oil Prices

Explained | Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.

Why in the News

Global oil prices have fallen by nearly 16% since the beginning of the year, with Brent crude now around $61 per barrel. This decline comes despite geopolitical disruptions such as Ukraine’s drone attacks on Russian energy assets and ongoing U.S.–China tariff frictions.
The fall signals a major shift in global oil dynamics, driven by technological advances, demand stagnation in OECD economies, and a surge in production from both OPEC+ and non-OPEC countries. For India, this could translate into substantial fiscal gains and macroeconomic stability, but the relief may be short-lived given the cyclical volatility of the oil market.

Introduction

Crude oil remains the world’s most traded and influential commodity, impacting not just transportation and industry but also fiscal and foreign policy. With over 100 million barrels produced daily, the oil market’s direction affects the global economy’s heartbeat.
In recent months, a fascinating shift has occurred — a supply-driven decline in prices, contradicting traditional geopolitical expectations. For India, this moment offers both an opportunity for economic strengthening and a reminder of the need for strategic resilience in energy planning.

Shifting Dynamics in the Global Oil Market

What is Driving the Decline in Global Oil Prices?

  1. Technological disruptions: Innovations like shale extraction, horizontal drilling, and deep-sea exploration have boosted supply, lowering dependency on traditional producers.
  2. Stagnant demand in OECD economies: Due to slow post-COVID recovery, climate action, and EV adoption, demand growth has flattened.
  3. Emerging market growth plateau: Even China’s demand is tapering, with electric vehicles forming 50% of all new car sales.
  4. Supply overhang — Global production rose by 5.6 mbpd, outpacing demand growth of 1.3 mbpd, creating a glut that pushed prices down.

How Have Global Producers and Consumers Reacted?

  1. OPEC+ internal friction: Saudi Arabia wants to restore full production to regain market share, while Russia seeks gradual output increases amid sanctions.
  2. Consumer advantage: Many countries have used this moment to replenish strategic petroleum reserves, stabilizing short-term demand.
  3. Floating stockpiles: Over 100 million barrels of unsold crude remain on tankers at sea, an indicator of market saturation.

What Are the Contradictory Forecasts from Key Agencies?

  1. OPEC’s projection: Expects a slight supply deficit by 2026 (~50,000 bpd short).
  2. IEA’s projection: Predicts an unprecedented oversupply of 4 mbpd, aligning with think-tank estimates of Brent falling to $50/barrel.
  3. Divergence significance: Reflects deep uncertainty and potential volatility, crucial for policy planners like India.

What Is the Broader Economic Context Influencing Oil Prices?

  1. IMF’s World Economic Outlook (2025): Describes global economy as “in flux, prospects remain dim.”
  2. Global growth slowdown: Projected at 3.2% in 2025 and 3.1% in 2026, with trade expansion slowing to 2.9%, down from 3.5% in 2024.
  3. Geopolitical wildcards: Any relaxation of sanctions on Russia, Iran, or Venezuela, or renewed West Asian tensions, could again disrupt supply-demand balance.

What Does It Mean for India’s Economy?

  1. Import advantage: India’s oil import bill was $137 billion in 2024-25; every $1 decline in prices improves the current account deficit by $1.6 billion.
  2. Fiscal gains: Lower prices reduce subsidies and inflation, improving fiscal space and boosting public capital expenditure.
  3. Diplomatic breathing room: Reduced reliance on discounted Russian crude may ease U.S. trade frictions.
  4. Risk of remittance slowdown: A weaker West Asian economy may hit Indian remittances, exports, and investments.
  5. Cyclical caution: The oil market’s volatility means current relief could be short-lived, underscoring the need for energy diversification.

Conclusion

The decline in global oil prices provides India a strategic tailwind: strengthening fiscal health, reducing inflation, and supporting growth. Yet, this momentary advantage must not breed complacency. The future demands long-term energy resilience, investment in renewables, and strategic petroleum reserves. In an interconnected world, India must use this window to transition towards sustainable and self-reliant energy security before the next price cycle strikes.

PYQ Relevance

[UPSC 2013] It is said the India has substantial reserves of shale oil and gas, which can feed the needs of country for quarter century. However, tapping of the resources doesn’t appear to be high on the agenda. Discuss critically the availability and issues involved.

Linkage: The 2013 question on India’s untapped shale reserves links to the article’s theme of global oversupply driven by the shale revolution; India’s limited shale development has kept it import-dependent, making lower global oil prices a temporary boon rather than true energy security.

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Solar Energy – JNNSM, Solar Cities, Solar Pumps, etc.

Tapping the Shine: India must step in as a supplier of solar power to sustain its industry

Explained | Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.

Why in the News

India’s solar energy sector has achieved a historic milestone — generating 1,08,494 GWh in 2024–25, overtaking Japan and becoming the third-largest producer globally. This achievement mirrors India’s rapid growth in renewable capacity — solar module manufacturing expanded from 2 GW in 2014 to a projected 100 GW in 2025. However, beneath this success lies a dilemma: despite its potential, Indian-made solar modules are 1.5–2 times costlier than Chinese ones, and without robust export markets, the new manufacturing capacity may struggle. Hence, India’s push to emerge as a solar supplier to Africa under the International Solar Alliance represents not just climate diplomacy but a crucial economic strategy.

Introduction

India’s solar revolution is a remarkable blend of climate responsibility, industrial policy, and global ambition. The cost of solar power fell below coal in 2017 — a landmark that catalyzed private and public investment alike. Yet, with China’s dominance in module exports and India’s limited domestic absorption, the future of India’s solar manufacturing depends on securing new markets and deepening its international role as a sustainable energy leader.

India’s Solar Power Success Story

  1. Massive Growth: India’s solar generation reached 1,08,494 GWh in 2024–25, overtaking Japan (96,459 GWh).
  2. Manufacturing Leap: Module manufacturing capacity expanded from 2 GW (2014) to 100 GW (2025 projection), a fiftyfold jump.
  3. Installed Capacity: India’s current installed solar capacity stands at 117 GW (as of September 2025).
  4. Comparative Rise: India now ranks 3rd globally, behind only China and the US, according to the International Renewable Energy Agency (IREA).

What are India’s Solar Targets for 2030?

  1. Climate Commitments: India aims to source 50% of its power from non-fossil fuel sources by 2030.
  2. Solar Share: Around 250–280 GW of this will come from solar energy.
  3. Annual Addition Needed: India must add 30 GW/year until 2030, but has managed 17–23 GW/year in recent years.
  4. Challenge: This gap reflects issues in scaling production, costs, and grid integration.

Why is Indian Solar Manufacturing Still Costlier?

  1. Higher Costs: Indian modules are 1.5–2x costlier than Chinese ones.
  2. Reasons:
    • China’s control over raw materials and solar supply chains.
    • Superior production lines and economies of scale.
    • India’s fragmented ecosystem and dependency on imported inputs.
  3. Export Comparison:
    • India exported 4 GW of modules to the US in 2024 (a temporary gain due to US restrictions on China).
    • China exported 236 GW the same year, a staggering 59x lead.

How Can India Sustain Its Solar Manufacturing Boom?

  1. Need for New Markets: Without external demand, India’s large new capacity may remain underutilized.
  2. Africa as Opportunity:
    • Africa uses only 4% of its arable land for irrigation due to lack of rural power.
    • India can leverage this gap with solar-powered pumpsets, modeled on its PM Kusum Scheme.
  3. Diplomatic Leverage: India can push its solar expertise through the International Solar Alliance (ISA), showcasing schemes like PM Surya Ghar (urban rooftop) and PM Kusum (rural solar).
  4. Strategic Goal: To become a credible second supplier after China in emerging markets like Africa.

Domestic Solar Initiatives as Models for Export

  1. PM Kusum Scheme: Promotes solar irrigation pumps for farmers, ideal for replication in Africa’s rural power-deficient regions.
  2. PM Surya Ghar Scheme: Encourages rooftop solar adoption in urban India, demonstrating scalable, decentralized power solutions.
  3. Outcome So Far: Adoption is moderate, but the models offer policy templates for developing nations.

Conclusion

India’s solar journey is a story of ambition and transition, from an energy importer to a renewable exporter. Yet, sustaining this momentum requires vision beyond borders. Becoming a solar supplier to Africa can ensure India’s manufacturing viability, strengthen climate diplomacy, and cement its place in the global green order. As the world tilts toward decarbonization, India’s light must not just illuminate its homes, but the developing world.

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Rural Distress, Farmer Suicides, Drought Measures

Can rural education stop youth migration?

Explained | Indian Society | Mains Paper 1: Social Empowerment

Why in the News

India stands at a demographic crossroads. According to the Periodic Labour Force Survey (PLFS) 2020–21, nearly 29% of India’s population are migrants, with 89% hailing from rural areas. Over half of these migrants are aged 15–25, indicating that the nation’s most productive youth are leaving villages in search of livelihood. This is a turning point in India’s development trajectory, education, once seen as a ladder out of poverty, has lost its power to insulate youth from migration pressures. The mismatch between education and employment, coupled with the pandemic-driven reverse migration, has sparked urgent questions: Can India reimagine rural education and economies to retain its young talent?

Introduction

Migration has long shaped India’s economic and social fabric. But what was once seen as a path to progress is now exposing deep cracks in India’s development model. The migration of rural youth to urban centres reflects unmet aspirations, inadequate rural opportunities, and disillusionment with the promise of education.

The Covid-19 pandemic acted as a brutal reminder, as nearly 40 million workers were forced to return home during the first lockdown. It exposed the vulnerability of India’s informal urban workforce and, simultaneously, revealed the untapped potential of rural revitalization.

Rethinking the Roots of Migration

  1. Structural Imbalance: Migration is not purely about aspiration; it arises from rural distress and uneven regional development.
  2. Labour Force Data: PLFS data shows rural India continues to be the main supplier of labour, not a site of dignified livelihood.
  3. Educational Mismatch: Graduates are increasingly unemployed, revealing a disconnect between degrees and employable skills.

Why is Education Failing to Prevent Migration?

  1. Broken Linkage: Education no longer guarantees employment. Youth with degrees often find no dignified jobs in their hometowns.
  2. Graduate Unemployment: India’s expansion of higher education hasn’t translated into job creation, instead, it has produced educated unemployment.
  3. Informal Urban Absorption: About 49% of youth migrants work as daily wage labourers and 39% as industrial workers, mostly on temporary contracts.
  4. Gender Disparity: While 86.8% of women migrate for marriage, most men migrate for work, reflecting limited female labour participation despite mobility.

Pandemic: A Mirror to Rural Vulnerabilities

  1. Mass Exodus: Nearly 40 million workers returned home in 2020 (RBI, 2020), exposing the fragility of India’s urban informal economy.
  2. Urban Fragility: Cities like Delhi, Mumbai, and Bengaluru struggle with slums, pollution, waste, and overcrowding.
  3. Gendered Impact: Young women were more likely to lose jobs and slower to regain them (ILO, 2021), deepening gender inequality.

Reverse Migration: Stories of Hope and Resilience

  1. Agricultural Revival: Agriculture showed unexpected resilience, with a 39% increase in sown area in 2020 as returning workers revived farmlands.
  2. Success Stories:
    • Balaram Mahadev Bandagale (Raigad, Maharashtra) diversified into mango orchards using irrigation schemes, now earning higher income.
    • Chandrakant Pawar, once a migrant worker, returned to dairy farming and became Sarpanch, a symbol of empowered reverse migration.
  3. These examples highlight the potential of self-reliant rural ecosystems driven by local enterprise and education.

How Can Rural India Retain Its Youth?

  1. Diversified Rural Employment: Beyond agriculture, India needs to expand into dairy, poultry, food processing, handicrafts, rural logistics, renewable energy, and tourism.
  2. Rural Entrepreneurship: Government schemes like Pradhan Mantri Mudra Yojana, Start-Up India, and FPO expansion can empower youth — but need integration and youth-focused redesign.
  3. Digital & Renewable Energy Jobs:
    • Solar panel maintenance, microgrid operations, and biofuel units can create decentralized jobs.
    • Digital infrastructure is essential to bridge divides and enable e-commerce, telemedicine, and remote work.
  4. Agri & Eco-Tourism: Leveraging local ecology and culture can create sustainable livelihoods rooted in community pride.

Changing the Narrative: Migration as a Choice, Not Compulsion

  1. Breaking Stigma: Returning to villages must not be equated with failure. Reverse migrants should be portrayed as innovators, not dropouts.
  2. Portable Social Protection: Schemes for health, education, and pensions should be location-independent, following the worker wherever they go.
  3. Balanced Urban–Rural Growth: Development must prioritize equitable access to education, digital infrastructure, and markets in rural India.

Conclusion

India’s youth migration crisis is not merely about movement, it’s about meaning. It questions what development truly offers and whether education still promises empowerment. The path forward lies in integrating rural education with employable skills, expanding decentralized job ecosystems, and redefining success beyond cities. If India invests in its rural potential, migration will no longer be a story of escape, it will become a story of choice, dignity, and empowerment.

PYQ Relevance

[UPSC 2024] Why do large cities tend to attract more migrants than smaller towns? Discuss in the light of conditions in developing countries.

Linkage: This PYQ directly links with the article’s theme by highlighting how rural distress, weak educational–employment linkages, and uneven regional development push youth towards cities. It reflects the same structural imbalance where urban centres appear as opportunity hubs while villages remain economically stagnant.

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Foreign Policy Watch: India-Afghanistan

Turning Tides: Pakistan-Afghanistan Tensions

Explained | International Relations | Mains Paper 2: India & Its Neighborhood - Relations

Introduction

When the Taliban recaptured Kabul in August 2021, Pakistan perceived it as a strategic victory after two decades of covert support to the insurgents. However, the celebration was short-lived. Four years later, Pakistan faces an unprecedented internal security crisis, with over 2,400 people killed in militancy-related violence in 2025 alone. The rise of the Tehrik-e-Taliban Pakistan (TTP) and recent Pakistani airstrikes on Kabul (October 2025) signal a dangerous escalation — and a stark reversal of the country’s long-standing policy of using non-state actors as strategic assets.

Why in the News?

For the first time, Pakistan bombed Kabul, directly targeting militants across the Afghan border. This marks a major policy shift, as Islamabad traditionally treated the Taliban as an ally and buffer against India. The strikes came while Afghan Foreign Minister Amir Khan Muttaqi was visiting India, adding a symbolic twist to regional alignments. The scale of violence, with over 2,414 deaths this year, underscores the depth of Pakistan’s internal crisis and its failure to control militancy in Khyber Pakhtunkhwa. This development has drawn comparisons to India’s own doctrine of cross-border strikes, raising questions about whether Pakistan is now borrowing from a playbook it once condemned.

The Illusion of Strategic Depth

  1. Taliban Patronage: Pakistan’s military establishment nurtured the Afghan Taliban for decades, offering refuge and logistical support during their insurgency against the U.S.-backed Afghan government.
  2. Strategic Depth Doctrine: Islamabad’s rationale was to create a friendly regime in Kabul that could serve as a buffer against India and offer “strategic depth” in case of war.
  3. Backfiring Reality: Instead, the Taliban’s rise empowered the TTP, an ideologically aligned but operationally separate entity, turning Pakistan’s proxy into its nemesis.

How the Taliban’s Return Changed the Equation

  1. End of Patron-Client Relationship: Once in power, the Taliban sought state-to-state relations, not subservience to Pakistan’s military agenda.
  2. Durand Line Dispute: Kabul never recognized the Durand Line, reigniting border tensions that colonial history had left unresolved.
  3. TTP Empowerment: Inspired by the Afghan Taliban’s triumph, the TTP now demands enforcement of strict Islamic law and reversal of the merger of tribal areas with Khyber Pakhtunkhwa.
  4. Refugee Crisis: Pakistan’s decision to deport thousands of Afghan refugees further worsened ties, adding a humanitarian dimension to political hostility.

Pakistan’s New Doctrine: Borrowing from India?

  1. Airstrikes as Deterrence: By bombing Kabul, Pakistan appears to be testing a new counter-terrorism strategy, directly holding Afghanistan responsible for cross-border militant attacks.
  2. India Parallel: The move is reminiscent of India’s 2016 and 2019 strikes on Pakistani territory after terror attacks in Uri and Pulwama.
  3. Diplomatic Irony: The timing, coinciding with the Afghan FM’s India visit, highlights shifting regional equations where India engages diplomatically, and Pakistan responds militarily.

The Security Crisis within Pakistan

  1. Rising Violence: The Khyber Pakhtunkhwa province has become the epicenter of TTP-led insurgency.
  2. Contradictory Policy: Pakistan’s dual policy of fighting terrorism while nurturing militants targeting its neighbors has eroded domestic stability.
  3. Blowback Effect: Militancy now threatens Pakistan’s political order, economic recovery, and regional credibility.
  4. Qatar-Brokered Ceasefire: A fragile truce mediated by Qatar hints at the international community’s anxiety over a new South Asian flashpoint.

Why Pakistan’s Strategy is Self-Defeating

  1. Cycle of Violence: Airstrikes may offer short-term political gains but deepen long-term instability.
  2. Internal vs External Conflict: Pakistan’s greatest threat now emanates from within its borders, not across them.
  3. Loss of Moral Credibility: Its past of backing non-state actors undercuts its legitimacy when accusing others of the same.
  4. Strategic Isolation: Continued conflict risks alienating even traditional allies like China and Gulf states, who seek regional stability.

Conclusion

Pakistan’s experiment with militant patronage has collapsed under its own contradictions. The strategic depth doctrine that once defined its Afghan policy has morphed into a strategic liability. Peace in Pakistan cannot be achieved through bombs over Kabul, but through a coherent internal reform of its security, political, and ideological ecosystem. As the editorial aptly concludes, “Pakistan cannot ensure internal security by bombing Afghanistan.”

PYQ Relevance

[UPSC 2013] The proposed withdrawal of the International Security Assistance Force (ISAF) from Afghanistan in 2014 is fraught with major security implications for the countries of the region. Examine in light of the fact that India is faced with a plethora of challenges and needs to safeguard its own strategic interests.

Linkage: The 2013 PYQ and this 2025 editorial both explore the Afghan theatre as a pivot of regional security, then, in anticipation of instability; now, in its full manifestation. Both are invaluable for analysing India’s neighbourhood policy, counter-terror strategy, and regional diplomacy in the post-US Afghanistan order.

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Internal Security Architecture Shortcomings – Key Forces, NIA, IB, CCTNS, etc.

Gorkhaland statehood, Government names ex-DY NSA as interlocutor

Explained | Polity | Mains Paper 2: Indian Constitution - historical underpinnings, evolution, features, amendments, significant provisions and basic structure

Introduction

India’s federal architecture is unique: it allows the creation of new states to accommodate cultural, linguistic, administrative, or developmental aspirations under Article 3 of the Constitution. Yet, every statehood movement also reflects deeper struggles over identity, representation, and development.

The Gorkhaland issue, revived by the Centre’s recent move to appoint an interlocutor, is one of the oldest and most persistent among these. While it directly concerns the Darjeeling hills and adjoining areas of West Bengal, it mirrors similar aspirations voiced across India, from Vidarbha to Bodoland, Harit Pradesh, and Kukiland.

The Gorkhaland Appointment: Why is this news significant?

The Centre’s decision to name ex-Dy NSA Pankaj Kumar Singh as interlocutor for Gorkha talks is a politically charged step:

  1. First formal engagement in years: It revives official talks after a long hiatus, moving beyond ad hoc arrangements like the Gorkhaland Territorial Administration (GTA).
  2. High-level signalling: The appointment of a senior security expert signals that the government sees the issue as sensitive, with implications for internal security and electoral politics.
  3. Identity at stake: It concerns recognition of the Gorkha community’s distinct identity, and a permanent political solution to decades of protests and autonomy struggles.
  4. Pre-election dimension: With West Bengal Assembly elections approaching, the move is seen as an attempt to politically engage the hill electorate, which has historically swung between national and regional parties.
  5. Potential precedent: Success in structured dialogue may offer a model for addressing other regional aspirations through negotiation instead of agitation.

Understanding the Gorkhaland Issue

Historical Context

  1. Origins: The demand for Gorkhaland dates back to 1907, when the Hillmen’s Association first sought a separate administrative unit for the Nepali-speaking people of Darjeeling under British rule.
  2. Post-Independence Phase: With linguistic reorganisation (1950s), Nepali-speaking Gorkhas felt their identity was inadequately represented in Bengali-dominated West Bengal.
  3. 1980s Uprising: The movement, led by Subhash Ghising’s Gorkha National Liberation Front (GNLF), turned violent; it led to the creation of the Darjeeling Gorkha Hill Council (DGHC) in 1988 as a compromise.
  4. Second Wave: In 2007, Bimal Gurung formed the Gorkha Janmukti Morcha (GJM), renewing the demand; this led to the Gorkhaland Territorial Administration (GTA) in 2011, but unrest persisted.
  5. Present Phase: The latest talks under an interlocutor aim to find a “permanent political solution” and recognition of 11 sub-tribes as Scheduled Tribes.

Key Demands

  1. Separate Gorkhaland State: Carved out of Darjeeling and parts of Kalimpong, to ensure administrative autonomy and cultural recognition.
  2. Scheduled Tribe Status: For 11 Gorkha sub-tribes to ensure constitutional protections and socio-economic inclusion.
  3. Constitutional Recognition: Safeguards for the political identity and rights of the Gorkha people under the Indian Constitution.

Statehood Demands in India: The Bigger Picture

India has witnessed over 30 major statehood demands since Independence. While the Constitution empowers Parliament to reorganize states under Article 3, these movements have tested the balance between administrative efficiency, cultural autonomy, and political representation.

Why Do Statehood Demands Arise?

  • Cultural & Linguistic Identity:
      1. Key reason: Desire for recognition of unique language, ethnicity, or cultural practices.
      2. Examples: Gorkhaland (Nepali-speaking identity), Bodoland (Bodo tribes), Vidarbha (Marathi dialect and identity).
  • Developmental Disparities:
      1. Economic neglect and poor resource distribution often drive demands.
      2. Example: Telangana’s movement was anchored in perceived neglect by Andhra’s political elite.
  • Administrative Efficiency:
      1. Smaller states are believed to ensure better governance and resource management.
      2. Example: Creation of Chhattisgarh and Uttarakhand in 2000.
  • Political Representation & Power-sharing:
      1. Regional elites demand greater political space or autonomy to reflect local aspirations.
  • Ethnic Security and Integration:
    1. Fear of cultural assimilation or discrimination by dominant groups drives ethnic-based mobilisation (e.g., Bodoland, Kukiland, Karbi Anglong).
Year Movement Outcome
1953 Andhra State (Potti Sriramulu movement) First linguistic state formed
1960 Maharashtra & Gujarat Bombay Reorganisation Act
1972 Meghalaya, Manipur, Tripura New northeastern states created
1987 Mizoram & Arunachal Pradesh Granted full statehood
2000 Chhattisgarh, Jharkhand, Uttarakhand Created for administrative and developmental reasons
2014 Telangana Result of sustained agitation
Ongoing Gorkhaland, Bodoland, Vidarbha, Bundelkhand Unresolved, periodic agitations

Constitutional Mechanism for Creating New States

Article 3 empowers Parliament to form new states by altering the boundaries or names of existing ones.

Procedure:

  1. Process: Bill introduced in Parliament → Referred to State Legislature for views (not consent) Passed by simple majority.
  2. Centre’s Discretion: State opinion is advisory, not binding — ensuring national flexibility but sometimes triggering discontent.
  3. Examples:
    • Telangana was created despite Andhra Pradesh’s legislature opposing it.
    • Jharkhand was carved out of Bihar through a parliamentary process.

Challenges and Implications of Statehood Movements

  1. Political Fragmentation: Multiplying small states may weaken national coherence and increase Centre-State friction.
  2. Administrative Burden: Creating new bureaucratic structures increases fiscal costs.
  3. Resource Distribution Issues: Conflicts over rivers, minerals, and forest resources (e.g., Telangana-Andhra).
  4. Ethnic Competition: One community’s recognition can fuel new demands from others.
  5. Positive Outcomes: Improved local governance, targeted development, and better representation when well-implemented (e.g., Chhattisgarh’s success in rural health and PDS).

Lessons from Gorkhaland and Other Movements

  1. Need for Institutional Dialogue: Interlocutors and commissions reduce the risk of violent agitation by creating formal channels for negotiation.
  2. Multi-stakeholder Approach: Engagement should include Centre, State, local bodies, and civil society, not just political parties.
  3. Development-Based Solutions: Autonomy and identity must align with socio-economic development for long-term peace.
  4. Model for Others: If successful, the Gorkhaland dialogue could serve as a precedent for resolving other autonomy demands peacefully.

Conclusion

The Gorkhaland issue is not merely a regional agitation; it is part of India’s broader story of balancing unity with diversity, integration with autonomy, and identity with development. The Centre’s interlocutor initiative provides a constitutional, consultative path forward, one that aligns with India’s ethos of resolving internal aspirations democratically.

As India continues to evolve, the challenge will be to ensure that new demands for statehood or autonomy are addressed through dialogue, data, and development, not through division or delay.

PYQ Relevance

[UPSC 2013] Creation of a large number of smaller States would bring in effective governance at the State level. Discuss.

Linkage: This PYQ links directly with Gorkhaland and other statehood demands, testing ideas of better governance and federal balance. The article helps students with examples, chronology, and constitutional context to write precise GS II answers.

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Air Pollution

Rising carbon dioxide levels

Explained | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia

Introduction

The atmospheric concentration of carbon dioxide (CO₂), the most significant greenhouse gas responsible for climate change, has increased by a record amount between 2023 and 2024, according to the World Meteorological Organization (WMO). The global average CO₂ concentration reached 423.9 parts per million (ppm) in 2024, 3.5 ppm higher than in 2023, representing the steepest one-year increase since records began.

This unprecedented rise coincides with 2024 being the hottest year on record, with average global temperatures 1.55°C higher than pre-industrial levels, breaching the 1.5°C limit scientists consider critical to prevent irreversible impacts.

Why This Is a Big Deal

This spike is unprecedented in modern climate history. Never before have CO₂ levels risen so sharply in a single year. It not only breaks the trend of relative stability observed over the last decade but also exposes the collapse of the global climate response despite the Paris Agreement. The rate of increase (3.5 ppm) is more than four times the average annual increase recorded between 2011 and 2020.

What makes this even more concerning is that both human-induced emissions (from fossil fuels, deforestation, and industrial activity) and natural feedback loops (like reduced ocean absorption and forest diebacks) are now amplifying each other, creating a self-perpetuating climate crisis.

What Is Driving the Surge in CO₂ Concentrations?

  1. Record-breaking increase: Global average CO₂ near Earth’s surface reached 423.9 ppm in 2024, marking a 3.5 ppm rise, the largest annual jump ever.
  2. Failure of climate frameworks: Despite international efforts under the Paris Agreement, emissions continue to climb, reflecting inadequate implementation and weak compliance.
  3. Global warming feedback: Higher temperatures reduce oceans’ capacity to absorb CO₂ and increase droughts and wildfires, releasing more carbon into the atmosphere.
  4. Burning of fossil fuels: Continued dependence on coal, oil, and gas remains the primary driver, responsible for more than 90% of anthropogenic CO₂ emissions.

How Are Natural Sinks Losing Their Absorptive Power?

  1. Reduced ocean absorption: Warmer oceans have absorbed less CO₂ in 2024 due to decreased solubility of gases in higher temperatures.
  2. Forest fires and droughts: A spike in wildfires and prolonged dry spells reduced the CO₂-absorbing capacity of trees and grasslands.
  3. Feedback loops: The decline of natural sinks worsens CO₂ imbalance, which in turn leads to even greater heat trapping and further degradation of these ecosystems.

How Do Other Greenhouse Gases (GHGs) Compare?

  1. Methane (CH₄): Second-most potent GHG, rose by 8 parts per billion in 2024 to reach 1,924 ppb, slightly below last decade’s average but still historically high.
  2. Nitrous oxide (N₂O): Increased by 1 ppb to 338 ppb in 2024, contributing to long-term warming effects due to its 270-year lifespan.
  3. Relative potency: While CH₄ and N₂O are more heat-trapping per molecule, CO₂ dominates because of its sheer volume and persistence in the atmosphere for thousands of years.

Why Is This Rise Unprecedented?

  1. Historical contrast: From the 1960s to 2010, CO₂ levels rose by 0.8 ppm per year; between 2011–2020, it increased by 2.4 ppm annually, far below the 2023–24 jump of 3.5 ppm.
  2. Crossing planetary limits: This rise pushed Earth past the 1.5°C warming threshold, previously considered a safe boundary.
  3. Interlinked causes: WMO attributes this to a mix of human emissions and natural CO₂ variability, indicating global climate systems are destabilizing.

Challenges for Global Climate Action

  1. WMO warning: The new data underscores the difficulty in curbing GHG accumulation in the atmosphere.
  2. Failure of control mechanisms: Despite decades of negotiations, anthropogenic activities continue unchecked.
  3. Feedback intensification: Natural processes, once climate stabilizers, are now acting as amplifiers of warming.
  4. Paris Agreement setback: The emission reduction targets for 2030 are unlikely to be met, while global temperatures already breached the 1.5°C mark.

Conclusion

The record-breaking surge in CO₂ levels between 2023 and 2024 is not just a statistical anomaly, it’s a planetary red alert. The intertwining of human actions and natural feedback loops signifies that climate change has entered a runaway phase unless drastic global mitigation is undertaken. The failure to meet emission targets and the collapse of natural carbon sinks highlight that the climate crisis is no longer a distant threat, it’s a present emergency demanding immediate collective action.

PYQ Relevance

[UPSC 2022] Discuss global warming and mention its effects on the global climate. Explain the control measures to bring down the level of greenhouse gases which cause global warming, in the light of the Kyoto Protocol, 1997.

Linkage: The article is important as it highlights the sharpest-ever rise in global CO₂ levels, signalling a critical climate tipping point and the failure of existing global frameworks like the Kyoto and Paris Agreements to curb emissions. It links directly with the question by showing how unchecked greenhouse gases are intensifying global warming and threatening climate stability.

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Finance Commission – Issues related to devolution of resources

Restoring fiscal space for the states

Explained | Polity | Mains Paper 2: Federalism

Introduction

India’s fiscal federalism has long been guided by the principle of cooperative balance, where both the Centre and States share resources, responsibilities, and accountability. However, the post-GST era has altered this equilibrium. The recent merger of the GST compensation cess with regular tax marks a watershed moment, ending an era of fiscal cushioning for States and raising pressing questions about States’ financial independence.

With rising public aspirations, widening service delivery gaps, and increased welfare commitments, States are grappling with constrained fiscal space. The centralisation of taxation powers, growing dependence on Central transfers, and the limited flexibility to raise revenue are redefining India’s fiscal federalism.

Why in the News?

The abolition of the GST compensation cess, after five years of implementation, marks a turning point in India’s fiscal framework. For the first time since GST’s rollout in 2017, the compensation mechanism, which assured States 14% annual revenue growth, has ended.

This is significant because:

  • The cess previously cushioned States from revenue shortfalls during GST transition.
  • Its removal exposes the true fiscal capacity of States, revealing wide disparities in revenue generation.
  • The Centre’s growing use of cesses and surcharges, which are not shareable with States, has further squeezed State finances.
  • The resulting imbalance has rekindled the debate on “fiscal autonomy versus fiscal efficiency.”

Evolving Fiscal Architecture

How has GST altered India’s tax landscape?

  1. Shift from origin-based to destination-based taxation: GST replaced multiple State taxes with a unified structure, eroding the States’ control over indirect taxes.
  2. Shared tax base: Both Centre and States levy GST, but decision-making lies with the GST Council, where the Centre has a dominant role.
  3. Erosion of fiscal autonomy: States lost independent authority to adjust tax rates or design fiscal responses tailored to their economies.
  4. Cess and surcharge dominance: These have become a parallel fiscal instrument for the Centre, bypassing the divisible tax pool.

Changing Centre–State Financial Relations

How have constitutional mechanisms evolved over time?

  1. Articles 268–293 define the fiscal relationship between Centre and States.
  2. The Finance Commission (Article 280) determines devolution, but several States allege that the criteria penalise progressive, industrial States.
  3. With the abolition of the Planning Commission in 2014, only two main transfer channels remain, Finance Commission grants and Centrally Sponsored Schemes (CSS).
  4. Article 282 allows discretionary Central grants, often perceived as politically influenced, affecting opposition-ruled States disproportionately.

Declining Devolution and Fiscal Dependence

How serious is the resource imbalance between Centre and States?

  1. Despite recommendations of 42% devolution (14th Finance Commission), actual transfers as a share of gross tax revenue have declined.
  2. Cesses and surcharges, which are non-shareable, reached ₹3.86 lakh crore (RE 2024–25) and are projected at ₹4.23 lakh crore (BE 2025–26).
  3. Central transfers still account for 44% of States’ revenue receipts, ranging from 72% for Bihar to 20% for Haryana, highlighting the uneven dependency landscape.
  4. The Centre collects 67% of total tax revenue, while States handle over 52% of total expenditure, particularly in health, education, and agriculture.
  5. This structural mismatch constrains States’ fiscal flexibility and deepens intergovernmental friction.

Emerging Demands for Fiscal Reforms

What are States and experts proposing for fiscal autonomy?

  1. Restructuring tax-sharing principles: Revisiting Finance Commission formulas to reflect true expenditure needs and reward performance equitably.
  2. Personal Income Tax sharing: Proposal to share or allow States to “top up” the personal income tax base to reduce fiscal dependence.
  3. Learning from Canada: Canadian provinces collect 54% of taxes and spend 60%, offering a model of greater subnational flexibility.
  4. Transparent devolution: Merging cesses and surcharges into the divisible pool could enhance transparency and equity.
  5. Independent fiscal oversight: Establishing a permanent intergovernmental fiscal council for mediation and coordination.

The Way Forward: Towards Cooperative Fiscal Federalism

How can fiscal space be restored to States?

  1. Revisit GST architecture: Grant States limited powers to vary tax rates within a band for specific commodities or services.
  2. Rationalise CSS schemes: Allow greater flexibility for States to design locally suited welfare interventions.
  3. Enhance fiscal responsibility: Encourage States to improve tax compliance, widen base, and adopt technology-driven revenue administration.
  4. Periodic fiscal reviews: Institutionalise data-based monitoring to balance efficiency with equity.
  5. Political cooperation: Encourage a non-partisan GST Council model where fiscal debates remain guided by economic logic, not politics.

Conclusion

India’s growth story is fundamentally federal. The vitality of its States determines the resilience of its economy. As the GST compensation era ends and States’ expenditure responsibilities rise, restoring their fiscal autonomy is essential for sustainable growth. True cooperative federalism demands not just consultation but real power-sharing in fiscal decision-making. Empowering States fiscally is not a concession — it is a constitutional necessity for a balanced and vibrant India.

PYQ Relevance

[UPSC 2024] What changes has the Union Government recently introduced in the domain of Centre-State relations? Suggest measures to be adopted to build the trust between the Centre and the States and for strengthening federalism.

Linkage: The phasing out of the GST compensation cess and rising use of non-shareable cesses and surcharges reflect the Centre’s growing fiscal dominance, compelling States to seek reforms in tax devolution to rebuild trust and uphold true cooperative federalism.

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Empower ASI to do its job

Explained | Governance | Mains Paper 2: Governance, Transparency & Accountability, Citizens Charters

Introduction 

The government’s move to allow private oversight of protected monuments is a watershed moment. For decades, ASI has been the statutory guardian of India’s tangible past, born in the colonial era and burdened by bureaucracy, underfunding and a shrinking sense of mission. Simultaneously, private actors and civic organisations have shown how resources, managerial skill and community energy can revive museums and sites. The question is not whether to choose one side; it is how to combine ASI’s technical authority with the creativity, funds and operational capability that partnerships bring, without commodifying culture.

The Human Cost of Institutional Drift

The shrinking imagination of public stewardship

  1. Institutional fatigue: ASI carries a legacy of scholarship but suffers from low morale and an inward-looking culture that treats conservation as paperwork rather than cultural care.
  2. Loss of interpretive vision: When custodians stop telling stories, monuments become inert props rather than living places of memory and identity.
  3. Urban neglect: Historic neighbourhoods, bazaars and ritual spaces around monuments decay when site management ignores everyday people.

The emotional stakes for communities

  1. Cultural dislocation: For villagers, priests and artisans, monuments are part of life, losing access or ritual meaning severs social ties.
  2. Livelihoods at risk: When heritage is mismanaged, local guides, craftspeople and small vendors lose incomes tied to respectful tourism.

The Promise of Partnerships and PPPs

Partnerships as custodianship boosters

  1. Financial rescue: PPPs can create endowments and recurring funding streams for long-term maintenance, freeing conservation from short political cycles.
  2. Example: Museum restorations in Mumbai combined corporate funding, municipal support and conservation expertise to revive institutions.
  3. Operational professionalism: Private sector expertise in project management, visitor services and marketing improves site upkeep and interpretive programming.
  4. New experiences, same respect: Thoughtful PPPs design museum displays, lighting, interpretation centres and guided routes that invite learning, not spectacle.

PPPs and local empowerment

  1. Livelihood integration: PPP projects that hire local artisans and vendors create shared incentives for conservation.
  2. Example: Community-run craft stalls and guided-walk programs increase earnings and local ownership.
  3. Skill-building: Partnerships can fund training for conservators, guides, and site managers, expanding the conservation workforce.

When PPPs get it right: conditions of success

  1. ASI oversight: Technical conservation plans must be approved and monitored by ASI or accredited conservation experts.
  2. Community clauses: Contracts should guarantee access, rituals and a share of revenue for local stakeholders.
  3. Transparent accountability: Public dashboards, audited accounts and sunset clauses prevent permanent privatization.

The Risks of Commercialisation and How to Guard Against Them

Commodification and loss of sacredness

  1. Over-entertainment danger: Turning a temple or tomb into a stage for events can strip its sanctity and alienate devotees.
  2. Tourist-first trap: If revenue becomes the sole metric, conservation values degrade.
  3. Equity and access concerns
  4. Paywall problem: Higher fees and exclusive events can exclude local communities; safeguards must keep access affordable and meaningful.

Technical and ethical lapses

  1. Skill imbalance: Corporates without heritage expertise may favour cosmetic changes over reversible, scientifically sound conservation.
  2. Short-termism: Event-driven models can fund repairs but not create long-term technical capacity for conservation.

A Practical, Human-Centred Roadmap

Reinventing ASI as knowledge steward and regulator

  1. Autonomy with accountability: Grant ASI managerial freedom and stable budgets while insisting on transparency and citizen oversight.
  2. Specialist cadres: Create conservation architect and urban heritage cadres, fellowships and cross-disciplinary teams (historians, anthropologists, conservators).

Designing PPPs for people and preservation

  1. Model MoU essentials: ASI-approved conservation plan, community benefit clause, revenue-sharing mechanism, independent monitoring, exit/sunset clause.
  2. Performance metrics: Conservation integrity, community welfare indicators, visitor-impact thresholds, financial sustainability.
  3. Phased pilots: Start with clearly defined pilot projects (museums, small sites) before scaling to larger or sacred monuments.

Community as co-custodians

  1. Local governance: Empower panchayats, municipal trusts and temple committees in day-to-day stewardship with technical backup from ASI.
  2. Benefit linking: Ensure training, employment and revenue-sharing for local craftspeople and service providers.

Modern tools for timeless care

  1. Digital records: 3D scans, GIS mapping and condition-monitoring dashboards to track deterioration and plan interventions.
  2. Public access to data: Open reports and accessible interpretive material strengthen democratic stewardship.

Conclusion — A human promise, not a transaction

Heritage is ethical work: it asks us to keep memory alive while serving the living. The ASI must be renewed into a vibrant, expert body that sets standards and guarantees access. PPPs — when framed by clear agreements, community rights and technical oversight — can supply funds, skills and fresh ideas. The aim is not to monetise memory but to steward it: to ensure that stones continue to tell stories, and that those stories remain deeply, unmistakably, Indian.

PYQ Relevance

[UPSC 2024] Public charitable trusts have the potential to make India’s development more inclusive as they relate to certain vital public issues. Comment.

Linkage: This PYQ highlights how non-state actors and philanthropic trusts can complement government efforts in addressing public issues. It is linked to the article as PPPs and heritage trusts similarly expand conservation beyond ASI’s limited capacity, ensuring inclusive and sustainable preservation of cultural assets.

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The Crisis In The Middle East

The future of the IMEC

Explained | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

Introduction

In an era where connectivity defines power, the India–Middle East–Europe Economic Corridor (IMEC) emerged as a visionary project connecting India’s western ports with Europe via the Arabian Peninsula. Envisaged as a multi-modal corridor encompassing maritime, rail, energy, and digital infrastructure, IMEC sought to integrate economies across continents while promoting peace and prosperity in a historically volatile region.

However, the optimism that surrounded IMEC’s launch quickly met the harsh reality of geopolitics. The October 7 Hamas attacks and subsequent Israel–Gaza war exposed the fragility of West Asian stability, placing IMEC’s implementation in question. Yet, beyond the uncertainty lies an opportunity for India to reshape its connectivity vision, adapting routes and partnerships to new global dynamics.

Why in the News

The IMEC has resurfaced in policy discussions as its viability faces uncertainty amid the deteriorating West Asian security environment. The October 7 Hamas–Israel conflict disrupted regional optimism nurtured by the Abraham Accords and slowed progress on IMEC’s proposed transnational links. At the same time, climate-driven Arctic trade routes and Red Sea disruptions by the Houthis are redrawing global shipping patterns, forcing India and its partners to reconsider IMEC’s configuration. The issue is critical as the corridor represents both an economic and strategic counterweight to China’s Belt and Road Initiative (BRI).

The Strategic Vision Behind IMEC:

  1. Comprehensive Connectivity: IMEC aims to upgrade maritime routes between India and the Arabian Peninsula and establish high-speed rail links from UAE ports to Haifa, Israel, via Saudi Arabia and Jordan.
  2. Integration with Europe: From Haifa, goods would be shipped to Europe’s Mediterranean ports, ensuring faster, secure, and sustainable trade connectivity.
  3. Beyond Transport: The corridor also includes plans for a clean hydrogen pipeline, electricity cable, and high-speed undersea digital cable, linking energy and digital ecosystems across three continents.
  4. Strategic Objective: IMEC provides a non-Chinese, rules-based alternative to the Belt and Road Initiative (BRI), enhancing India’s strategic outreach and economic influence.

The Geopolitical Context of 2023:

  1. Favourable Climate: The Abraham Accords (2020) created optimism for regional peace, bringing Israel and several Arab states closer. This atmosphere facilitated multilateral cooperation frameworks such as I2U2 (India, Israel, UAE, U.S.), paving the way for IMEC.
  2. India’s Upward Trajectory: India’s improving ties with Saudi Arabia and the UAE, coupled with strong U.S. relations, allowed it to play a central role in IMEC’s conception.
  3. Global Endorsement: The corridor was launched at the G-20 Summit in Delhi, with support from the EU, France, Germany, Italy, and Saudi Arabia, underscoring India’s emergence as a trusted global partner.

The Security Setback and Regional Volatility

  1. Conflict Shock: Within weeks of IMEC’s announcement, the Hamas–Israel conflict erupted, reversing the post-Abraham optimism.
  2. Regional Fallout: Israel’s military operations strained ties with Arab countries, undermining cross-border infrastructure cooperation.
  3. Red Sea Disruptions: The Houthi attacks on cargo ships forced rerouting via the Cape of Good Hope, increasing transit time and cost.
  4. Lesson: The events underscore that geopolitical stability remains the cornerstone of connectivity, and corridors like IMEC must remain adaptable to shifting realities.

Europe’s Changing Maritime Interests

  1. Arctic Openings: Climate change has opened new northern sea routes, shortening Asia–Europe shipping times. Beneficiaries include Russia, the U.S., China, and northern European nations.
  2. Mediterranean Anxiety: Countries like Italy, dependent solely on the Mediterranean, fear economic marginalisation if Arctic routes dominate trade.
  3. Strategic Importance of IMEC: Hence, Mediterranean states see IMEC as a means to sustain their maritime relevance and diversify trade partnerships.
  4. India’s Role: For India, the Mediterranean remains vital, as Arctic routes offer no immediate logistical advantage.

Why IMEC Still Matters for India

  1. Economic Scale: With $136 billion in annual trade, the EU remains India’s largest trading partner, highlighting the need for resilient connectivity.
  2. Supply Chain Resilience: IMEC offers a secure, shorter route connecting India to Europe while reducing dependence on the Red Sea–Suez chokepoint.
  3. Strategic Leverage: Enhanced engagement with Arab economies can dilute Pakistan’s influence and integrate India deeper into West Asia’s economic architecture.
  4. Innovation Space: As a multi-member initiative, IMEC allows India to propose new routes via Saudi Arabia and Egypt, adapting to political flux.

Challenges and the Way Forward

  1. Security Dependencies: Ongoing instability in Gaza and Israel poses a persistent threat.
  2. Financial and Political Coordination: Multi-country infrastructure projects face coordination delays, regulatory inconsistencies, and funding constraints.
  3. Need for Parallel Efforts: India must also upgrade domestic ports and logistics infrastructure, including Sagarmala and Dedicated Freight Corridors, to complement IMEC.
  4. Diplomatic Continuity: Sustaining dialogue through I2U2 and G-20 cooperation can help preserve IMEC’s spirit even if its routes evolve.

Conclusion

The IMEC’s future will depend not merely on the pacification of West Asia but on the political agility and diplomatic imagination of its members. While the corridor’s physical routes may shift, its strategic essence remains intact, to build resilient, diversified, and sustainable connectivity between India and Europe. For India, IMEC is more than an infrastructure project; it is a statement of intent, to be at the centre of global supply chains and a stabilising power in a fractured world.

PYQ Relevance

[UPSC 2018] The China-Pakistan Economic Corridor (CPEC) is viewed as a cardinal subset of China’s larger ‘One Belt One Road’ initiative. Give a brief description of CPEC and enumerate the reasons why India has distanced itself from the same.

Linkage: While China’s CPEC runs through disputed territory, making India wary, the IMEC shows how India is building its own clean, safe, and cooperative route to connect with Europe. It’s India’s way of staying in the global connectivity game—on its own terms.

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Renewable Energy – Wind, Tidal, Geothermal, etc.

The critical factor in India’s clean energy ambition

Explained | Economics | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.

Introduction

India’s ambition to achieve 500 GW of renewable energy by 2030 and net zero emissions by 2070 depends not just on sunlight and wind but on minerals buried beneath the earth’s surface. Lithium, cobalt, and REEs form the backbone of technologies driving the clean energy revolution. However, India imports almost all of these minerals, exposing its renewable future to external shocks. The article explores how India is gearing up to build a resilient supply chain, promote domestic mining, and move toward a circular economy, turning its green dreams into a self-reliant reality.

India’s Clean Energy Journey and the Mineral Imperative

  1. Critical minerals as enablers: They power EV batteries, solar panels, and wind turbines, the pillars of the green transition.
  2. Explosive market growth: India’s EV market is projected to grow at a 49% CAGR from 2023 to 2030, driven by the Electric Mobility Promotion Scheme (EMPS) 2024.
  3. Battery boom: The battery storage market, valued at $2.8 billion in 2023, is set to surge with renewable energy integration.
  4. Import dependency: India currently imports nearly 100% of lithium, cobalt, and nickel, and over 90% of REEs, creating severe strategic vulnerabilities.

Why Dependence is Dangerous: Global Supply Chain Vulnerabilities

  1. China’s dominance: Controls 60% of global REE production and 85% of processing capacity, giving it massive leverage.
  2. Geopolitical risks: Trade restrictions, conflicts, and supply disruptions can derail India’s energy transition plans.
  3. National security angle: Critical minerals are not just about clean energy,  they are strategic assets influencing defence, technology, and economic sovereignty.

India’s Domestic Potential: A Hidden Treasure Beneath the Soil

  1. New discoveries: The Geological Survey of India (GSI) identified 5.9 million tonnes of inferred lithium in Jammu & Kashmir in 2023, a major breakthrough.
  2. Policy push: The National Mineral Exploration Policy (NMEP), 2016, and amendments to the Mines and Minerals (Development and Regulation) Act, 2021, opened up exploration to private players.
  3. Auctions driving interest: In 2023 alone, 20 critical mineral blocks (lithium, graphite, REEs) were auctioned, attracting domestic and multinational bidders.
  4. Potential-rich states: Jammu & Kashmir, Rajasthan (lithium), Odisha, and Andhra Pradesh (REEs) have emerged as mineral hotspots.

From Discovery to Refinement: The Missing Link

  1. Production bottleneck: India contributes less than 1% of global REE production due to weak refining and processing infrastructure.
  2. Need for partnerships: Public-private collaborations can bring in advanced processing technologies and recycling systems.
  3. Government incentives: Subsidies, tax breaks, and R&D grants are critical to scale domestic lithium and cobalt pilot projects.

Investment and Policy Momentum: Building the Foundation

  1. Regulatory reforms: The Mines and Minerals (Amendment) Act, 2023 allows private exploration but the sector faces high costs and environmental concerns.
  2. Economic potential: Mining contributes only 2.5% to India’s GDP, compared to 13.6% in Australia — signalling untapped opportunity.
  3. National Critical Mineral Mission (NCMM): With an outlay of ₹34,300 crore, it aims to strengthen the value chain — from exploration to recycling.

Institutional efforts:

  1. NMDC diversifying through its Australian arm.
  2. IREL (India) Ltd. extracting REEs like neodymium, praseodymium, and dysprosium.
  3. KABIL (Khanij Bidesh India Ltd.), formed in 2019, tasked with overseas acquisitions of mineral assets.

Moving Towards a Circular Economy

  1. E-waste as opportunity: India produces 4 million metric tonnes of e-waste annually, yet only 10% is formally recycled.
  2. Recycling policies: The Battery Waste Management Rules (2022) and E-Waste Management Rules (2022) aim to improve recovery of critical minerals.
  3. Challenges: Weak enforcement, poor infrastructure, and lack of awareness hinder progress.
  4. Way forward: Public-private recycling hubs can boost technology access, cut costs, and reduce environmental footprint, paving the way for a circular economy.

Conclusion

Critical minerals are the backbone of India’s clean energy transformation. Securing them is not just about green growth, but about economic independence and strategic security. India’s policy thrust through the National Critical Mineral Mission, domestic auctions, and recycling reforms signal intent, but execution remains key. A coherent strategy involving private investment, state backing, and global partnerships can ensure India does not just consume green technology, it creates it. The success of this mission will determine whether India emerges as a leader in the global clean energy race or remains dependent on others for its green dreams.

PYQ Relevance

[UPSC 2022] Do you think India will meet 50 percent of its energy needs from renewable energy by 2030? Justify your answer. How will the shift of subsidies from fossil fuels to renewables help achieve the above objective?

Linkage: India’s ability to meet 50% of its energy needs from renewables by 2030 hinges on securing critical minerals like lithium and REEs that power solar, wind, and EV technologies. A shift of subsidies from fossil fuels to renewables will accelerate domestic mining, recycling, and innovation—building the self-reliant green infrastructure essential for achieving this target.

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Nobel and other Prizes

How innovation drives economic growth

Explained | Economics | Mains Paper 3: Issues relating growth and development, employment

Introduction

The 2025 Sveriges Riksbank Prize in Economic Sciences was awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt for “explaining innovation-driven economic growth.” Their research collectively answers one of the most fundamental economic puzzles — how nations sustain growth over centuries, not decades.

Why in the News

The Nobel Committee’s decision is significant because it celebrates innovation as the engine of sustained prosperity at a time when economies face stagnation despite technological abundance. It also marks a historical synthesis, combining Mokyr’s economic history with Aghion and Howitt’s modern growth models, to offer a unified vision of why the last two centuries broke free from millennia of stagnation. This award underscores that knowledge creation and openness to change are as critical to a nation’s future as natural resources or fiscal policy.

Understanding the Foundations of Innovation-Driven Growth

What did Joel Mokyr’s research reveal about sustained growth?

  1. Useful Knowledge: Mokyr argued that long-term growth depends on a constant flow of useful knowledge, divided into propositional (theoretical understanding) and prescriptive (practical implementation) forms.
  2. Before Industrial Revolution: Innovators understood why things worked (propositional) but lacked the technical ability to make them work (prescriptive).
  3. Scientific Revolution Impact: The 16th–17th centuries brought controlled experiments and reproducibility — transforming knowledge from abstract to applicable.
  4. Policy Implication: Nations must ensure technical education and skill development, as ideas alone cannot yield growth without implementation.

How did Mokyr link innovation to social openness?

  1. Openness to Change: Innovation often disrupts existing systems and creates losers; societies resistant to change stifle progress.
  2. Historical Example: Britain’s sustained growth stemmed from skilled artisans and engineers who translated scientific ideas into industrial applications.
  3. Policy Lesson: Governments must create inclusive ecosystems that accept change, retrain workers, and redistribute gains from innovation.

What is the Theory of Creative Destruction?

  1. Conceptual Core: Originally introduced by Schumpeter, “creative destruction” describes how innovation replaces older technologies and firms, creating both winners and losers.
  2. Aghion & Howitt’s Contribution: They formalized this process mathematically, showing how technological progress leads to sustained long-term growth.
  3. Dynamic Equilibrium: Innovation raises productivity but simultaneously displaces outdated industries — a perpetual cycle that fuels development.

How much should a country invest in Research and Development (R&D)?

  1. Balancing Act: Aghion and Howitt’s model shows two opposing trends:
    1. Trend 1 — Underinvestment: Since society benefits from outdated technologies even after firms lose profits, R&D should be subsidized to ensure social spillovers.
    2. Trend 2 — Overinvestment: When incremental innovations capture disproportionate profits, R&D may be excessive and distort competition.
  2. Optimal Level: There is no universal ideal investment, but the model provides tools to identify an economy-specific optimum that maximizes welfare without creating monopolistic inefficiencies.

Why does this Nobel matter for developing economies like India?

  1. Knowledge Ecosystem: The laureates’ findings emphasise that growth requires not just innovation, but translation — turning ideas into scalable realities through skills, entrepreneurship, and openness.
  2. India’s Imperative: Investments in R&D (currently ~0.7% of GDP), vocational skilling, and ease of doing business are crucial to realize the demographic dividend.
  3. Policy Relevance: The Economic Survey and NITI Aayog’s “Innovation Index” already underline similar principles — this Nobel reinforces India’s need to build a “knowledge economy.”

Conclusion

The 2025 Nobel Prize in Economic Sciences reaffirms that innovation, knowledge, and societal openness are the real engines of prosperity. Economic success is no longer a product of mere capital or labor, but of the synergy between imagination and execution. For India and other developing nations, the message is clear: sustained growth depends on nurturing human capital, research ecosystems, and tolerance for disruption. As Mokyr’s and Aghion–Howitt’s work shows, societies that embrace change, skill their people, and invest in ideas will lead the next chapter of human progress.

PYQ Relevance

[UPSC 2015] What are the areas of prohibitive labour that can be sustainably managed by robots? Discuss the initiatives that can propel the research in premier research institutes for substantive and gainful innovation.

Linkage: This PYQ aligns with the 2025 Nobel Prize in Economic Sciences as both emphasize how technological innovation transforms labour structures—echoing Aghion and Howitt’s theory of creative destruction, where automation replaces old forms of work while driving new productivity.

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