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  • Ganga treaty not in Bihar’s interests, says JD(U) leader

    Why in the News

    The national working president of the Janata Dal (United), who was Bihar’s Minister for Water Resources between 2021 and 2024, has advocated against renewal of the 1996 India Bangladesh Ganga Water Treaty on the ground that renewal would hurt Bihar’s interests. The treaty expires on 31 December and the two sides are yet to hold the last round of talks on its renewal. A federal objection has therefore entered a bilateral negotiation that the Union alone has the power to conclude.

    What is the India Bangladesh Ganga Water Treaty, 1996?

    1. What it is: A bilateral treaty signed on 12 December 1996 for a term of 30 years, governing the sharing of Ganga waters between India and Bangladesh at the Farakka Barrage.
    2. What it covers: It applies only to the dry season, from 1 January to 31 May, when flow at Farakka is lowest and competition between the two uses is sharpest.
    3. How sharing is measured: Availability is measured in ten day periods at Farakka, and shares are calculated separately for each period rather than as an annual total.
    4. How disputes are handled: A Joint Committee observes and records flows at Farakka and at the Hardinge Bridge in Bangladesh, and the treaty provides for review of the arrangement at five yearly intervals or earlier by mutual agreement.

    What is a cusec?

    1. What it means: A cusec is one cubic foot of water flowing per second, the standard unit in which river discharge and canal capacity are stated in South Asia. All the sharing thresholds in the Ganga treaty are expressed in this unit.

    What does the sharing formula actually do at Farakka?

    1. When availability is 70,000 cusecs or less: The flow is divided equally, with India and Bangladesh receiving 50 percent each.
    2. When availability is between 70,000 and 75,000 cusecs: Bangladesh receives 35,000 cusecs and the balance of the flow goes to India.
    3. When availability is 75,000 cusecs or more: India receives 40,000 cusecs and the balance of the flow goes to Bangladesh.
    4. The guarantee clause: Between 1 March and 10 May, India and Bangladesh each receive a guaranteed 35,000 cusecs in alternate blocks of three ten day periods.
    5. The fallback provision: Where the two sides cannot agree at review, India is to release not less than 90 percent of Bangladesh’s share until an understanding is reached.

    Why does Bihar say the treaty has hurt its interests?

    1. The claim made: Thirty years of data under the treaty show that the interests of Bihar have been negatively impacted.
    2. The separation of interests asserted: Diplomatic issues between the two countries must be sorted out, but Bihar’s interests too must be kept in mind while doing so.
    3. The trade off named: The treaty may have checked a few boxes in terms of international messaging, but it has hurt the State’s interests.
    4. The physical mechanism behind the grievance: Maintaining pond level at Farakka raises the water surface upstream, which slows the river and deposits silt in the Ganga bed across Bihar, reducing channel capacity.
    5. The flood consequence: Reduced channel capacity aggravates flooding and drainage congestion in the Bihar districts along the Ganga, including Bhagalpur, Katihar and Munger.
    6. The State’s standing demand: Bihar has for years sought large scale desilting of the Ganga, a national silt management policy, and at one point the decommissioning of the Farakka Barrage.

    Why does the renewal decision sit with the Union alone?

    1. Treaty making power: Article 253 empowers Parliament to make any law for implementing an international treaty or agreement, and the executive power to conclude treaties rests with the Union.
    2. Water as a State subject: Water, including water supplies, irrigation and canals, drainage and embankments, is Entry 17 of the State List, which is why States claim a stake in any water sharing arrangement.
    3. The Union’s own entry: Entry 56 of the Union List gives Parliament power over the regulation and development of inter State rivers and river valleys where declared expedient in the public interest.
    4. Consultation is practice, not obligation: Riparian States are consulted as a matter of convention in transboundary water negotiations, but the Constitution does not require their concurrence.
    5. The precedent of exclusion: West Bengal objected in 2024 to being left out of the committee constituted for the Ganga treaty renewal and the Teesta discussions, which shows the grievance is not confined to Bihar.

    Why is the renewal a test of the wider India Bangladesh relationship?

    1. The deadline: The treaty expires on 31 December, which fixes the outer limit of the negotiation.
    2. The pending step: The two sides are yet to hold the last round of talks on renewal.
    3. The linked file: The Teesta water sharing arrangement has remained unconcluded since 2011, and the Ganga renewal is the only functioning template the two sides have.
    4. The upstream downstream asymmetry: India is the upper riparian on the Ganga, so the treaty is the principal instrument through which Bangladesh secures a predictable dry season flow.
    5. The domestic politics on both sides: A renewal that satisfies Dhaka must also survive objections from Bihar and West Bengal, which makes the negotiation a two level one.

    Challenges to the renewal of the Ganga Water Treaty

    1. No mechanism to compensate an affected upstream State: The treaty allocates water between countries and is silent on internal distribution of costs. Eg. Bihar’s siltation and flood costs from Farakka pondage have no route to redress inside the treaty text.
    2. Declining lean season flow: The volume the formula divides has itself been shrinking, which sharpens the distributional fight. Eg. The guaranteed 35,000 cusecs blocks between 1 March and 10 May become harder to honour when total availability falls below 70,000 cusecs.
    3. Absence of a State role in the negotiating machinery: Riparian States have no formal seat, which produces objection after the fact rather than input before it. Eg. West Bengal objected in 2024 to exclusion from the renewal committee.
    4. Silt management remains unfunded and unassigned: No agency has both the mandate and the budget for basin scale desilting. Eg. Bihar’s demand for a national silt management policy has been pending across successive Union budgets.
    5. Political transition in Dhaka: A renewal negotiated with one government may be reopened by its successor. Eg. Bangladesh has undergone a change of government since the fall of the Awami League administration in 2024, with the Bangladesh Nationalist Party returning to power in February 2026.
    6. Linkage risk with other rivers: Dhaka has consistently sought to tie the Ganga arrangement to progress on the Teesta. Eg. The Teesta sharing draft agreed in 2011 was not signed because of West Bengal’s objection, and remains unresolved.
    7. No basin wide framework with upper riparians: The Ganga basin extends beyond the two signatories, so a bilateral treaty cannot govern total flow. Eg. Nepal controls the headwaters of the Kosi, Gandak and Ghaghara, which contribute a large share of the Ganga’s dry season flow.

    Conclusion

    The India Bangladesh Ganga Water Treaty, 1996 expires on 31 December, the last round of renewal talks has not yet been held, and a party in Bihar’s ruling coalition has now publicly opposed renewal on the ground that thirty years of the arrangement have damaged the State’s interests. The dispute is not about the sharing ratio alone but about whether an upstream State’s siltation and flood costs can be recognised inside an instrument the Union alone concludes. The next milestone is the final round of renewal talks between the two sides before the treaty lapses.

  • Trump’s new forced labour tariffs face global pushback and legal questions

    Why in News?

    The United States’ new forced labour tariffs under Section 301, covering more than 60 countries, face legal pushback from Brazil and Australia over WTO compliance.

    Key Highlights

    • Tariffs are imposed under a Section 301 forced labour enforcement investigation, covering over 60 trading partners.
    • Brazil and Australia are contesting the tariffs’ compliance with WTO rules.
    • The dispute remains open, legally and diplomatically.

    Section 301 (U.S. Trade Act, 1974)

    • Empowers the Office of the United States Trade Representative (USTR) to investigate and respond to unfair foreign trade practices.
    • Authorises the U.S. to impose tariffs or other trade restrictions if another country’s actions are found to burden or restrict U.S. commerce.
    • Frequently used in disputes involving intellectual property, market access, subsidies, and labour practices.

    World Trade Organization (WTO)

    • Established in 1995, succeeding the General Agreement on Tariffs and Trade (GATT), 1947.
    • Headquarters: Geneva, Switzerland.
    • Objective: Ensure rules-based, predictable, and non-discriminatory international trade.
    • Functions include administering trade agreements, resolving disputes, monitoring trade policies, and providing technical assistance.

    Value Addition

    • Most-Favoured-Nation (MFN) Principle (Article I, GATT): WTO members must treat all trading partners equally unless an exception applies.
    • Dispute Settlement Understanding (DSU): Discourages unilateral trade retaliation and requires members to resolve disputes through the WTO mechanism.
    • Relevance for India: Increasing use of unilateral tariffs by major economies can affect export competitiveness and test the credibility of the multilateral trading system.

    [2018, GS2, 15 marks] What are the key areas of reform if the WTO has to survive in the present context of ‘Trade War’, especially keeping in mind the interest of India?”

  • NSA hosts 7th meeting of Colombo Security Conclave in Delhi

    Why In The News?

    At the 7th NSA-level Colombo Security Conclave meeting, member states prioritised cooperation on five pillars: maritime security, counterterrorism and radicalisation, trafficking and transnational crime, cybersecurity and critical infrastructure protection, and humanitarian assistance and disaster relief, aiming to strengthen regional security coordination.

    About Colombo Security Conclave (CSC):

    • Regional Grouping: A security platform comprising India, Bangladesh, Sri Lanka, Maldives, and Mauritius; Seychelles is an observer.
    • Objective: To enhance regional security and address transnational threats of common concern.
    • Origin: Began in 2011 as the Trilateral Maritime Security Cooperation between India, Maldives, Sri Lanka.
    • Hiatus: Became inactive after 2014 due to India-Maldives tensions.
    • Revival: Rebranded as CSC in 2020; Mauritius and later Bangladesh joined.
    • Participation: Involves NSAs and Deputy NSAs of member states.
    • Key Areas of Cooperation:
      • Maritime safety and security
      • Counterterrorism and radicalisation
      • Combating trafficking and transnational organised crime
      • Cybersecurity and protection of critical infrastructure
      • Humanitarian assistance and disaster relief
    [UPSC 2017] Consider the following in respect of Indian Ocean Naval Symposium (IONS)

    1. Inaugural IONS was held in India in 2015 under the chairmanship of the Indian Navy.

    2. IONS is a voluntary initiative that seeks to increase maritime co-operation among navies of the littoral states of the Indian Ocean Region.

    Which of the above statements is/are correct ? (a) 1 only (b) 2 only* (c) Both 1 and 2 (d) Neither 1 nor 2

     

  • India recorded the highest GHGs emissions for 2024

    Why in the News?

    The United Nations Environment Programme’s (UNEP) 2024 Emission Gap Report (“Off Target”) released before COP30, says India saw the world’s largest rise in greenhouse gas emissions in 2024, adding 165 MtCO₂e.

    India recorded the highest GHGs emissions for 2024

    About the Emission Gap Report:

    • Overview: It is an annual flagship publication by UNEP that measures the gap between current national emission pledges (NDCs) and the cuts required to meet the Paris Agreement goals of limiting global warming to 1.5°C or 2°C.
    • Purpose: Evaluates global progress, national commitments, and policy effectiveness, recommending actions to close the “emissions gap.”
    • Scope: Assesses emissions from energy, land use, and industry, comparing policy trajectories with required emission reduction pathways.

    Key highlights of the 2024 Edition- “Off Target”:

    • Core Message: Warns that the world remains far off track to achieve the 1.5°C limit.
    • Global Emissions: Hit a record 57.7 gigatonnes CO equivalent (GtCOe) in 2024, a 2.3% rise from 2023.
    • Warming Projections:
      • Current policies → ~2.8°C by 2100.
      • Full NDC implementation → only 2.3–2.5°C limit.
    • G20 Role: Account for 77% of global emissions, led by China, USA, India, EU, Russia, and Indonesia.
    • NDC Submission: Only 64 countries (63% of global emissions) updated their NDCs by 2024; most G20 nations off-track for 2030–2035 goals.
    • Sectoral Breakdown:
      • Fossil fuels – 69% of total emissions.
      • Methane – 16%.
      • Land-use change – significant share of increase.
    • Temperature Outlook: Predicts a temporary overshoot of 1.5°C by the early 2030s without rapid global action.

    India-Specific Findings:

    • Emission Growth: India saw the largest absolute rise in 2024, +165 MtCOe, the world’s highest single-country increase.
    • Growth Rate: 3.6%, second only to Indonesia (4.6%).
    • Per Capita Emissions: 3 tCO₂e, less than half the global average (6.4 tCO₂e).
    • Global Ranking: 3rd-largest emitter, after China and the USA.
    • NDC Commitments: Aims to reduce emission intensity by 45% (2005–2030) and achieve 50% non-fossil energy capacity by 2030.
    • Progress: Overachieved by 15% on emission intensity but has not submitted an updated 2025 NDC.
    • COP30 Outlook: India’s rapid emission rise and missed NDC update may invite scrutiny, though low per capita emissions and developmental equity support its climate position.
    [UPSC 2024] Consider the following statements:
    I. Carbon dioxide (CO₂) emissions in India are less than 0.5 t CO2/capita.
    II. In terms of CO2 emissions from fuel combustion, India ranks second in Asia-Pacific region.
    III. Electricity and heat producers are the largest sources of CO2 emissions in India.
    Which of the statements given above is/are correct?
    (a) I and III only (b) II only (c) II and III only * (d) I, II and III

     

  • Financial Sector Assessment (FSA) Report by World Bank

    Why in the News?

    The World Bank’s November 2025 Financial Sector Assessment (FSA) Report says India must deepen financial reforms and boost private capital to reach its $30 trillion economy goal by 2047.

    What is the Financial Sector Assessment (FSA) Report?

    • Overview: It is a joint evaluation by the IMF and World Bank under the Financial Sector Assessment Program (FSAP), launched in 1999 to review a country’s financial stability and institutional soundness.
    • Objective: Assesses the resilience, inclusiveness, and stability of the financial system, analysing how well it supports sustainable and equitable growth.
    • Scope: Covers banks, NBFCs, insurance, capital markets, and payment systems, along with regulation, supervision, and crisis management frameworks.
    • Methodology: Uses stress tests, policy diagnostics, and supervisory assessments to evaluate financial soundness and regulatory effectiveness.
    • Frequency: Conducted every 5–7 years, tracking policy reforms and emerging risks in both advanced and emerging economies.

    Key Highlights: India’s FSA Report 2025

    • Improved Stability: Found India’s financial system more diversified, inclusive, and resilient than in 2017, aided by regulatory reforms.
    • Reform Success: Credited India for recovering from the 2010s banking crisis and COVID-19 shocks through RBI’s tighter supervision of banks and NBFCs.
    • Regulatory Strengthening: Praised the extension of RBI’s authority over cooperative banks and scale-based regulation for NBFCs.
    • Digital Financial Inclusion: Highlighted India’s UPI, Aadhaar, and Jan Dhan ecosystem as global benchmarks for financial access and gender inclusion.
    • Capital Market Expansion: Reported capital markets’ size rising from 144% to 175% of GDP since 2017, driven by investor confidence and strong infrastructure.
    • Policy Recommendations: Advised improving credit-risk management, developing conduct-risk oversight for mutual funds, and empowering self-regulatory bodies.
    • Private Capital Mobilization: Urged creation of credit-enhancement and securitization platforms to attract global long-term investors.
    • Strategic Vision: Emphasized that continued reforms, deeper markets, and financial integration are essential to achieving India’s $30 trillion economy goal by 2047.
    [UPSC 2015] Which one of the following issues the ‘Global Economic Prospects’ report periodically?
    Options:
    (a) The Asian Development Bank
    (b) The European Bank for Reconstruction and Development
    (c) The US Federal Reserve Bank
    (d) The World Bank*

     

  • Comprehensive Nuclear-Test-Ban Treaty Organisation (CTBTO)

    Why in the News?

    China has rejected President Trump’s claim of secret nuclear tests, reaffirming its commitment to the CTBT amid renewed U.S. calls for nuclear testing and revived Cold War–style tensions.

    About Comprehensive Nuclear-Test-Ban Treaty Organization (CTBTO):

    • Establishment: Formed in 1996 under the Comprehensive Nuclear-Test-Ban Treaty (CTBT) to build and operate a verification regime ensuring compliance with the global ban on nuclear explosions.
    • Headquarters: Vienna, Austria.
    • Mandate: To monitor adherence to the CTBT through a global verification system capable of detecting any nuclear test anywhere in the world.
    • Verification System: Operates the International Monitoring System (IMS) with 337 facilities, including seismic, hydroacoustic, infrasound, and radionuclide stations to detect underground, underwater, or atmospheric nuclear tests.
    • Data Centre: The International Data Centre (IDC) analyses and distributes real-time data to member states, providing early warning of suspicious activities.
    • Preparatory Commission: Functions until the CTBT formally enters into force, maintaining operational readiness and supporting states’ verification capabilities.
    • Scientific Applications: The IMS also contributes to tsunami warning systems, atmospheric research, and disaster response, reinforcing the CTBTO’s global utility beyond disarmament.

    Back2Basics: How are CTBT and NPT related?

    • Comprehensive Nuclear-Test-Ban Treaty (CTBT) and the Nuclear Non-Proliferation Treaty (NPT) are closely linked pillars of the global nuclear arms control regime:
      1. Shared Goal: Both aim to prevent nuclear proliferation and promote disarmament.
      2. Scope Difference: The NPT focuses on stopping the spread of nuclear weapons and promoting peaceful nuclear use; the CTBT bans all nuclear explosions for any purpose.
      3. Chronological Link: The NPT (1970) came first, creating the legal framework for non-proliferation; the CTBT (1996) built on it by prohibiting testing, reinforcing the NPT’s disarmament pillar.
      4. Verification and Compliance: The CTBT adds technical verification through the International Monitoring System, complementing NPT’s safeguards under the IAEA.
      5. Disarmament Pathway: Ratification of the CTBT is often viewed as a key step toward fulfilling Article VI of the NPT, which obliges nuclear powers to pursue disarmament.

    Status of the Treaty and Ratification Gap:

    • Adoption: It was adopted by the UN General Assembly in 1996 and opened for signature on September 24, 1996.
    • Membership: As of 2025, 187 states have signed and 178 have ratified the treaty.
    • Enforcement: It will become legally binding only after 44 specific “Annex 2” states, those with nuclear technology at the time ratify it.
    • Pending Ratifications: Eight critical states have not ratified the treaty- China, Egypt, Iran, Israel, and the United States (signatories but unratified), and India, Pakistan, and North Korea (non-signatories).
    • Recent Setback: In 2023, Russia revoked its ratification, though it continues to observe a testing moratorium, weakening the treaty’s political momentum.
    • Global Compliance: Despite legal limbo, a de facto moratorium on nuclear testing has largely held since the 1990s; only North Korea has violated it with tests since 2006.
    • Significance: The CTBT remains a cornerstone of the global non-proliferation regime, its verification network providing both deterrence and transparency even without formal legal enforcement.
    [UPSC 2015] Consider the following countries:

    1.  China 2. France 3. India 4. Israel 5. Pakistan

    Which among the above are Nuclear Weapons States as recognized by the Treaty on the Non-Proliferation of Nuclear Weapons, commonly known as Nuclear Non-Proliferation Treaty (NPT)?

    (a) 1 and 2 only * (b) 1, 3, 4 and 5 only  (c) 2, 4 and 5 only  (d) 1, 2, 3, 4 and 5

     

  • State of Food and Agriculture Report, 2025

    Why in the News?

    The State of Food and Agriculture (SOFA) Report 2025, released by the Food and Agriculture Organization (FAO) on 3 November 2025, highlights the alarming global impact of human-induced land degradation.

    About the SOFA Report:

    • Goal: Aims to help governments design sustainable land management and food security policies.
    • Publication: Released annually by the Food and Agriculture Organization (FAO) of the United Nations as one of its flagship analytical reports.
    • Focus (2025 Edition): Examines human-induced land degradation and its effects on agricultural productivity, poverty, and ecosystem stability.
    • Analytical Scope: Integrates soil data, land use patterns, crop yields, and socioeconomic indicators to identify global vulnerability hotspots.

    Key Global Findings (2025):

    • Population Exposure: Around 1.7 billion people live in land-degraded regions with declining agricultural output.
    • Deforestation Drivers: Agricultural expansion remains the cause of nearly 90% of global forest loss.
    • Land Use Trends (2001–2023): Global agricultural land shrank by 78 mha (–2%); cropland increased by 78 mha, while pastures declined by 151 mha.
    • Land Abandonment: About 3.6 mha of cropland is abandoned annually due to soil degradation.
    • Restoration Potential: Reversing 10% of degraded cropland could feed 154 million people yearly; restoring abandoned land could feed 476 million.
    • Vulnerability Hotspots: Sub-Saharan Africa and South Asia face the highest overlap of degradation, poverty, and child malnutrition.
    • Farm Structure Inequality: Small farms (<2 ha) constitute 85% of all farms but hold only 9% of farmland; large farms (>1,000 ha) control nearly 50% of it.
    • Degradation Masking: Large farms offset degradation through high input use, while smallholders face disproportionate yield losses.

    India-specific Insights:

    • Overview: India among countries with highest yield losses due to human-driven land degradation.
    • Regional Impact: Eastern and southern India worst affected owing to dense population and intensive cropping.
    • Major Causes: Include soil erosion, nutrient depletion, deforestation, and over-irrigation.
    • FAO Recommendations:
      • Scale up sustainable land management, soil health, and watershed programs.
      • Promote precision farming, agroforestry, and organic inputs for soil restoration.
      • Strengthen smallholder resilience through credit, technology, and market access.
      • Integrate land restoration with national missions like PM-KUSUM and PMKSY for long-term sustainability.
    [UPSC 2024] Consider the following statements:

    1. India is a member of the International Grains Council.

    2. The country needs to be a member of the International Grains Council for exporting or importing rice and wheat.

    Which of the statements given above is/are correct?

    Options: (a) 1 only* (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2

     

  • BRICS Pay and the Push to De-dollarize Global Finance

    Why in the News?

    Since 2014, BRICS nations have worked to cut dependence on the U.S. dollar, launching the New Development Bank (NDB), Contingent Reserve Arrangement (CRA), and now BRICS Pay to promote local currency trade and rival the SWIFT system.

    BRICS Pay and the Push to De-dollarize Global Finance

    About BRICS Pay Initiative:

    • Overview: BRICS Pay is a proposed cross-border digital payment and settlement platform developed by the BRICS nations (Brazil, Russia, India, China, South Africa) to facilitate trade in local currencies and reduce reliance on the U.S. dollar and the SWIFT network.
    • Origins: The idea emerged after the 2014 Fortaleza Summit, where BRICS established its own financial architecture, the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA).
    • Purpose: To enable direct financial transactions among member nations using local currencies, minimizing the role of Western-controlled financial systems and avoiding U.S.-led sanctions.
    • Development Path:
      • 2017: BRICS agreed to enhance currency cooperation via swaps, local currency settlements, and direct investments.
      • Early 2020s: The BRICS Payments Task Force (BPTF) was created to design interoperable systems.
      • 2024 Kazan Summit: Leaders highlighted strengthening of correspondent banking networks and settlements in local currencies under the BRICS Cross-Border Payments Initiative.
    • Prototype: A demo of BRICS Pay was unveiled in Moscow (October 2024), marking a concrete step toward implementation.
    • Supporting National Systems:
      • India: Unified Payments Interface (UPI)
      • China: Cross-Border Interbank Payment System (CIPS)
      • Russia: System for Transfer of Financial Messages (SPFS)
      • Brazil: Pix instant payment system
    • Strategic Importance: The initiative seeks to establish a self-reliant financial network, bypass SWIFT, and enhance monetary sovereignty among emerging economies.

    Back2Basics: Society for Worldwide Interbank Financial Telecommunication (SWIFT) System

    • Establishment: Founded in 1973 by 239 banks from 15 countries to standardize and secure cross-border financial communications.
    • Headquarters: La Hulpe, Belgium.
    • Nature: A messaging network, not a bank, it does not hold or transfer funds but enables secure interbank communication for financial transactions.
    • Coverage: Connects over 11,000 financial institutions across 200+ countries, making it the largest international payment messaging system.
    • Operation:
      • Assigns each member a Bank Identifier Code (BIC) of 8–11 characters.
      • Standardizes message formats to ensure seamless global financial communication.
      • Facilitates fund transfer instructions, trade settlements, and foreign exchange operations.
    • Governance:
      • Supervised by G10 central banks, the European Central Bank (ECB), and the National Bank of Belgium.
      • Managed by a 25-member board of directors, representing about 3,500 member institutions.
    • Strategic Role:
      • Forms the backbone of global finance, allowing efficient movement of capital.
      • Exclusion from SWIFT acts as a powerful economic sanction tool, isolating nations (e.g., Russia and Iran) from the international financial system.
    • Significance: SWIFT’s dominance reflects Western control over global finance, making it a central target for alternative networks like BRICS Pay, China’s CIPS, and Russia’s SPFS that seek a multipolar monetary order.

     

    [UPSC 2023] With reference to the Central Bank digital currencies, consider the following statements:

    1. It is possible to make payments in a digital currency without using US dollar or SWIFT system.

    2. A digital currency can be distributed with a condition programmed into it such as time-frame for spending it.

    Which of the statements given above is/are correct?

    Options: (a) 1 only (b) 2 only (c) Both 1 and 2* (d) Neither 1 nor 2

     

  • Asia-Pacific Economic Cooperation (APEC)

    Why in the News?

    The 32nd APEC Economic Leaders’ Summit (2025) is being held in Gyeongju City, South Korea

    About Asia-Pacific Economic Cooperation (APEC):

    • Establishment: Created in 1989 as a regional economic forum to enhance the growing interdependence of the Asia-Pacific region.
    • Objective: Promote balanced, inclusive, sustainable, innovative, and secure growth, and accelerate regional economic integration.
    • Membership: Comprises 21 member economies– Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand, the United States, and Vietnam.
    • Secretariat: Headquartered in Singapore, coordinating policy dialogues, working groups, and capacity-building across member economies.
    • Decision-Making Principle: Functions on voluntary, non-binding, and consensus-based commitments rather than treaty obligations.
    • Economic Scale: Represents 2.9 billion people, accounting for ~60% of global GDP and ~48% of global trade.
    • Terminology: Refers to its members as “economies” (not countries) to accommodate non-sovereign entities like Hong Kong and Taiwan.
    • Major Frameworks:
      • Bogor Goals (1994) – Free and open trade and investment in the Asia-Pacific.
      • APEC Putrajaya Vision 2040 – Envisions an open, dynamic, resilient, and peaceful Asia-Pacific community by 2040.
    • Focus Areas: Trade liberalisation, digital economy, supply chain resilience, sustainable energy, and inclusive growth.

    India and APEC:

    • Membership: India is NOT a member but has shown consistent interest since the early 1990s, aligning with its Look East / Act East Policy.
    • Geographical Criterion: APEC’s membership is limited to Asia-Pacific economies, while India is categorised under South Asia, restricting eligibility.
    • Economic Context: India’s gradual liberalisation in the 1990s contrasted with APEC’s open market orientation, reducing its early appeal to members.
    • Political Resistance: China has reportedly opposed India’s entry to maintain regional influence and prevent rival power balancing.
    • Moratorium: A 1997 freeze on new memberships continues to block India’s formal inclusion.
    • Current Engagement: Participates in Track-II dialogues, observer consultations, and partner discussions with APEC economies.
    • Strategic Significance:
      • APEC economies drive 60% of world GDP and 48% of global trade.
      • Membership would improve market access, FDI inflows, and digital integration.
      • Enhances India’s engagement with U.S., Japan, China, and ASEAN through multilateral diplomacy.
    • Alternative Platforms: India engages APEC members via BRICS, QUAD, IPEF, and RCEP-linked forums, expanding Indo-Pacific economic influence.
    • Future Outlook: Once the moratorium is lifted, India’s robust economic scale, digital economy, and supply chain capacity make it a strong candidate for future APEC membership.

     

    [UPSC 2017] With reference to `Asia Pacific’ Ministerial Conference on Housing and Urban Development (APMCHUD)’, consider the following statements:

    1. The first APMCHUD was held in India in 2006 on the theme `Emerging Urban Forms – Policy Responses and Governance Structure’.

    2. India hosts all the Annual Ministerial Conferences in partnership with ADB, APEC and ASEAN.

    Which of the statements given above is/are correct?

    Options: (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2*

     

  • International Convention for the Suppression of the Financing of Terrorism (CFT)

    Why in the News?

    Iran has officially ratified the UN International Convention for the Suppression of the Financing of Terrorism (CFT), signalling a major policy shift toward international financial reintegration.

    Why such move by Iran?

    • Economic Isolation: Iran’s blacklisting by FATF in 2020 and U.S.-led sanctions have severely restricted its banking access, trade, and foreign investment.
    • Reformist Agenda: President Pezeshkian’s government seeks economic stabilization through engagement, not confrontation, with Western institutions.
    • Trade Barriers: Even traditional allies like Russia and China face difficulty trading with Iran due to its non-compliance with FATF norms.
    • Diplomatic Leverage: CFT accession signals willingness to reform and could help Tehran negotiate sanction relief or trade facilitation.
    • Political Balance: The government faces domestic opposition from hardliners who fear the law will expose Iran’s support for groups like Hezbollah and Hamas, but reformists view it as essential for economic recovery.

    About the International Convention for the Suppression of the Financing of Terrorism (CFT):

    • Adopted: 1999 by the UN General Assembly; entered into force in 2002.
    • Parties: Ratified by 188 countries including India, making it one of the most widely accepted anti-terror treaties.
    • Objective: To criminalize, prevent, and punish the financing of terrorism and enhance international cooperation against terror-linked financial networks.
    • Definition: Financing terrorism includes collecting or providing funds—directly or indirectly—with intent or knowledge that they will be used for terrorist acts causing death or injury to civilians or non-combatants.
    • Key Provisions:
      • States must criminalize terror financing in domestic law.
      • Freeze, seize, and confiscate assets linked to terrorism.
      • Ban misuse of banking secrecy to block investigations.
      • Facilitate extradition, legal cooperation, and mutual assistance.
      • Ensure political or ideological motives cannot justify terrorist financing.
    • Legal Mechanism: Creates obligations for states to report suspicious transactions and cooperate across jurisdictions for enforcement.

    FATF and CFT: Complementary Global Frameworks

    • CFT (1999): Provides the legal foundation, obligating states to define and criminalize terror financing under international law.
    • FATF (1989): Provides the operational and policy framework, setting 40 detailed recommendations for implementation, monitoring, and compliance.
    • Interaction:
      • FATF requires its members to implement CFT obligations in national systems.
      • CFT establishes criminalization and cooperation, while FATF ensures compliance, enforcement, and evaluation.
    • Iran’s Case:
      • FATF blacklisted Iran for failure to adopt CFT and AML standards.
      • Ratification of CFT is Iran’s first step toward FATF re-evaluation and possible removal from the blacklist.
      • Compliance would enable Iranian banks to restore correspondent relations and resume limited international transactions.