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  • Is FCNR(B) a litmus test for diaspora deposits?

    Why in the News?

    The Reserve Bank of India (RBI) has revived the Foreign Currency Non-Resident (Bank) [FCNR(B)] concessional swap window, last used when Raghuram Rajan was Governor, to defend a rupee that has depreciated 12% year-on-year against the U.S. dollar. The move comes as Foreign Portfolio Investors (FPIs) withdrew ₹2.87 lakh crore from Indian equities between January and the first week of June 2026, already surpassing the ₹1.66 lakh crore pulled out in all of 2025.

    What is Foreign Currency Non-Resident (Bank) [FCNR(B)] account and its concessional swap window?

    1. Definition: It is a fixed-term deposit account for Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs), and Overseas Citizens of India (OCIs) that keeps funds in foreign currencies like USD, GBP, EUR, JPY, AUD, or CAD with tax-free interest and full repatriation.
    2. No Exchange Risk: Funds stay in the original foreign currency from deposit to maturity, protecting from rupee value changes.
    3. The FCNR(B) concessional swap window: It is a special Reserve Bank of India (RBI) facility that allows Indian banks to swap long-term foreign currency NRI deposits at a heavily discounted hedging cost, helping boost India’s foreign exchange inflows.

    What has the RBI designed to attract diaspora capital, and how has the market responded?

    1. Concessional swap facility: The RBI is offering banks a swap facility for FCNR(B) deposits with maturities of three to five years, cutting the cost of hedging foreign currency exposure by around 3% against prevailing FX swap rates of 2.8%-3.3% for that tenor.
    2. Deposit window: The scheme covers fresh FCNR(B) deposits mobilised until September 30, 2026, and targets $50-70 billion in inflows.
    3. Higher returns for depositors: Most large banks are offering around 6%, and some smaller or private banks up to 7.1%, under the swap window, compared with 4%-4.4% on U.S. Treasuries.
    4. Response so far: Total foreign currency mobilisation under the scheme has reached $20.72 billion, of which $17.4 billion (84%) has come through FCNR(B) deposits alone.
    5. Currencies covered: Deposits are maintained in the U.S. Dollar, Pound Sterling, Euro, Japanese Yen, Australian Dollar, and Canadian Dollar, with both principal and interest denominated in foreign currency.

    Why has this window become necessary now?

    1. Rupee under pressure: The rupee has depreciated 12% year-on-year against the U.S. dollar as of July 22, reflecting elevated geopolitical risk, a stronger dollar, higher import dependence and recently negative Foreign Direct Investment (FDI).
    2. FCNR(B) inflows had collapsed: Net FCNR(B) inflows fell to $946 million in FY26 from $7.1 billion in FY25, a decline of nearly 86%, before the swap window revived them.
    3. FPI outflows outpacing prior years: Foreign Portfolio Investors (FPIs) withdrew ₹2.87 lakh crore from Indian equities between January and the first week of June 2026, already exceeding the entire ₹1.66 lakh crore withdrawn in 2025.
    4. Unwinding forward positions: Reuters reported on July 22 that the RBI has likely used part of the initial inflows to unwind a portion of its forex forward book. (A forex forward book is the total record of all outstanding forward foreign exchange contracts held by an institution, such as the Reserve Bank of India on Reuters or a commercial bank, representing future agreements to buy or sell currencies at preset rates. It shows whether the entity holds more commitments to buy (long) or sell (short) a specific foreign currency like the U.S. dollar)

    Does this mark a return to crisis-driven fundraising, or a shift to strength-based buffer-building?

    1. Earlier crisis episodes: Resurgent India Bonds (1998) followed the Pokhran-II sanctions, India Millennium Deposits (2000) followed the post-Pokhran sanctions and the dotcom bust, and the first FCNR(B) drive (2013) raised about $34 billion from the diaspora during the “taper tantrum.”
    2. Current fundamentals differ: India’s forex reserves exceed $650 billion, there is no Balance of Payments (BoP) crisis, and the country retains investment-grade macroeconomic fundamentals.
    3. Stated aim now is buffer-building: The RBI’s objective is to build additional buffers against geopolitical uncertainty and volatile capital flows, not resolve an emergency.
    4. Liability trade-off remains: FCNR(B) deposits still add to India’s external liabilities even though they carry no exchange-rate risk for depositors.

    What precondition could undermine the scheme’s sustainability?

    1. Dependence on West Asia: West Asia accounts for nearly 50% of India’s inward remittances, which totalled about $129 billion in 2024, the world’s largest, according to the World Bank.
    2. Remittance growth moderating: Growth from Gulf countries has moderated as governments pursue labour nationalisation policies, oil-price volatility affects fiscal spending, and hiring of expatriate workers slows in some sectors.
    3. Competing Gulf deposit rates: Banks in Gulf countries are offering competitive dollar deposit rates amid war risk and digital-rival competition, making it harder for Indian lenders to compete.
    4. Crowding-out concerns: The RBI and the UAE Central Bank have reportedly held talks on concerns that Indian banks’ dollar deposit drive is crowding out UAE banks.
    5. Access gap for smaller banks: Small and mid-sized private banks without overseas branches or a GIFT City presence are exploring tie-ups with larger Indian banks that have a GIFT City presence.

    Conclusion

    The FCNR(B) revival shows India can mobilise diaspora capital from a position of macroeconomic strength, with forex reserves above $650 billion and no Balance of Payments (BoP) crisis, unlike the crisis-driven 1998 and 2013 fundraising drives. Its success is conditional on a precondition now under strain: continued remittance growth from a West Asia destabilised by war, oil-price volatility and labour nationalisation, even as the deposits themselves add to India’s external liabilities.

    PYQ Relevance

    [UPSC 2016] Justify the need for FDI for the development of the Indian economy. Why is there a gap between MOUs signed and actual FDIs? Suggest remedial steps to increase actual FDI in India.

    Linkage: The PYQ examines India’s external capital mobilisation strategy and the role of foreign capital in sustaining macroeconomic stability and economic growth. The FCNR(B) article extends this theme from equity capital (FDI/FPI) to diaspora debt capital. It analyses how the RBI uses FCNR(B) deposits to cushion FPI outflows, stabilise the rupee, augment forex reserves and strengthen external-sector resilience, while highlighting the trade-off of rising external liabilities.

  • Core upgrade: On the Index of Core Industries

    Why in the News?

    The Index of Core Industries (ICI) has been rebased and restructured, joining the Consumer Price Index (CPI), Wholesale Price Index (WPI), Index of Industrial Production (IIP) and national accounts in India’s overdue statistical modernisation cycle. The revised series adds a ninth sector, sharply changes sector weights, and reports a five-month-high growth rate for June 2026. The update, however, exposes a real production shortfall that better statistics cannot fix, and leaves an institutional anomaly in the compilation of core economic indices unresolved.

    What is the Index of Core Industries (ICI)?

    1. Definition: The Index of Core Industries (ICI) is a monthly production volume index released by the Office of Economic Adviser on the DPIIT Portal that measures the output of key foundational infrastructure sectors in India
    2. Predictor of industrial performance: It acts as an early predictor of overall industrial performance well ahead of the broader Index of Industrial Production (IIP) release.
    3. Revised base year: The base year has shifted from 2011-12 to 2022-23 to reflect current economic realities.

    What does the revised Index of Core Industries change, and why now?

    1. New base year and coverage: The ICI has been rebased (2022-23) and now covers nine sectors instead of eight, with iron ore added as the ninth sector.
    2. Correction of double-counting: The measurement of the steel and coal sectors has been revised to remove double-counting present in the earlier series. Only Raw Coal has been retained in the new series of ICI, by excluding Coal Middling and Washed Coal in order to remove double counting, since Coal Middling and Washed Coal are made from Raw Coal.
    3. Reweighting toward electricity: The electricity sector’s weight has risen to more than 30% of the index from less than 20% in the previous series.
    4. Reweighting away from fossil fuels: The coal and natural gas sectors have had their weights nearly halved, to about 5.6% and 3.8% respectively.
    5. Delayed catch-up/Alignment with other Index: The revision aligns the ICI with recent updates to the CPI, WPI, IIP, and National Accounts. Following the earlier practice, the weights of the ICI (2022-23) series have been derived from the weights of the corresponding items of IIP (2022-23) series, which have been pro-rata distributed to 100.

    Does the headline growth number reflect genuine industrial strength or a statistical mirage?

    1. Five-month-high growth: The new series recorded ICI growth of 5% in June 2026.
    2. Base-effect distortion: Iron ore output grew 43.9% and electricity output grew 9.8% in June 2026, but both figures reflect a statistical base effect, since both sectors had contracted in June 2025.
    3. Uncertain durability: It remains unclear whether current growth rates will hold once the base effect wears off in coming months.
    4. Persistent contraction underneath: The crude oil sector has contracted continuously for 18 months and the natural gas sector for 24 months, a real supply-side weakness the new series does not resolve.
    5. The deeper shortcoming: This is a serious shortcoming if India possesses these resources but cannot extract them economically, rather than a case of resource absence.

    Should ICI and WPI be compiled by MoSPI?

    1. The Ministry of Statistics and Programme Implementation (MoSPI) already compiles the Consumer Price Index (CPI) and the Index of Industrial Production (IIP).
    2. However, the Index of Core Industries (ICI) and the Wholesale Price Index (WPI) continue to be compiled by the Ministry of Commerce and Industry.
    3. Methodological Harmonization: ICI weights are derived directly from the IIP basket managed by MoSPI. Unifying them under one roof prevents administrative friction during base-year overhauls and weight redistributions.
    4. Streamlined Deflators: WPI and output-based producer price metrics are heavily relied upon to deflate nominal macroeconomic numbers like Gross Domestic Product (GDP) and IIP. Moving price and production tracking to the nodal statistical ministry improves synchronization.
    5. Institutional Credibility: Centralizing macro data collection reduces inter-ministerial silos, creating a single unified command for official national statistics.
    6. Domain Expertise: The Ministry of Commerce and Industry works closely with industrial stakeholders, trade bodies, and sector-specific experts (like DPIIT), which helps in real-time ground tracking of wholesale prices and core output.

    Conclusion

    The revised Index of Core Industries brings India’s oldest industrial data series current, with a new base year, a ninth sector and reweighted components. But June 2026’s five-month-high growth figure is partly a statistical base effect masking continuous contraction in crude oil and natural gas output. What remains unresolved is not measurement but extraction capability, along with an institutional anomaly by which the WPI and the ICI still sit outside MoSPI, unlike the CPI and the IIP.

  • FDI Allowed in Inventory-Based E-commerce Model for Exports

    Why in News?

    The Department for Promotion of Industry and Internal Trade (DPIIT) has allowed Foreign Direct Investment (FDI) in the inventory-based model of e-commerce for the export of goods manufactured in India, marking the first major relaxation in India’s e-commerce FDI policy.

    What is the New Policy?

    • 100% FDI is now permitted in the inventory-based e-commerce model, only for exports of goods manufactured in India.
    • The relaxation is under the Foreign Trade Policy (FTP), 2023 and related regulations.
    • It does not apply to domestic e-commerce sales.

    Marketplace vs Inventory Model

    • Marketplace Model: The e-commerce platform acts as an intermediary connecting buyers and sellers without owning inventory. 100% FDI under the automatic route is already permitted.
    • Inventory Model: The e-commerce entity owns the inventory and sells directly to consumers. FDI was previously prohibited but is now allowed only for export operations.

    Why is this Significant?

    • Aims to boost India’s e-commerce exports, currently around US$5 billion, compared to China’s US$300 billion.
    • Encourages exports by Micro, Small and Medium Enterprises (MSMEs), artisans, and startups.
    • Supports exports of handicrafts, garments, books, gems and jewellery, and other Made in India products.

    Concerns

    • Monitoring separate inventories for domestic and export sales may be difficult.
    • Experts believe this could become a stepping stone towards permitting FDI in inventory-based domestic e-commerce.

    About DPIIT

    • Full Form: Department for Promotion of Industry and Internal Trade.
    • Ministry: Ministry of Commerce and Industry.
    • Functions:
      • Formulates and administers India’s FDI Policy.
      • Promotes industrial development and ease of doing business.
      • Oversees startup and industrial promotion initiatives.

    [2022] With reference to foreign-owned e-commerce firms operating in India, which of the following statements is/are correct?
    1. They can sell their own goods in addition to offering their platforms as market-places.
    2. The degree to which they can own big sellers on their platforms is limited.
    Select the correct answer using the code given below:

    [A] 1 only

    [B] 2 only

    [C] Both 1 and 2

    [D] Neither 1 nor 2

  • Gati Shakti Cargo Terminals (GCTs)

    Why in News?

    The Government informed Parliament that 142 Gati Shakti Cargo Terminals (GCTs) have been commissioned under the Gati Shakti Multi-Modal Cargo Terminal (GCT) Policy, with approvals granted for 310 additional terminals to strengthen rail-based logistics.

    What is the Gati Shakti Cargo Terminal (GCT) Policy?

    • Launched to promote private investment in rail-linked cargo terminals.
    • Supports the PM Gati Shakti National Master Plan by improving multimodal logistics.
    • GCT locations are selected based on: Industrial demand, Freight potential, Availability of railway infrastructure, and Logistics potential of the region

    Key Highlights

    • 142 GCTs commissioned across India.
    • 310 additional terminals approved.
    • Freight handling capacity: 224 Million Tonnes Per Annum (MTPA).
    • ₹10,000 crore private investment mobilised.
    • Freight handled in 2025-26: 146 Million Tonnes (MT).

    Benefits

    • Reduces first-mile and last-mile logistics costs.
    • Promotes modal shift from road to rail, lowering logistics costs and emissions.
    • Improves wagon turnaround and freight efficiency.
    • Supports sectors such as: Cement, Steel, Power, Mining, Agriculture, Manufacturing, and Automobiles

    Infrastructure Created

    • GCTs provide modern logistics facilities such as: Warehouses, Silos, Cold storage, and Rail-linked cargo handling facilities
    • These improve market access for industries and farmers while generating employment.

    Prelims Value Added

    • PM Gati Shakti National Master Plan was launched in 2021 as a GIS-based digital platform for integrated infrastructure planning.
    • It aims to improve multimodal connectivity by integrating roads, railways, ports, airports, waterways, and logistics infrastructure.
    • MTPA = Million Tonnes Per Annum.

  • RBI Plans Trial of Polymer (Plastic) Currency Notes

    Why in News?

    The Reserve Bank of India (RBI) is set to begin field trials of polymer (plastic) currency notes, nearly 15 years after an earlier pilot was proposed but not implemented. An RBI subsidiary has invited bids to procure polymer sheets for printing trial notes.

    Why Polymer Notes?

    • More durable: Last 2 to 6 times longer than cotton-based paper notes.
    • Lower long-term costs: Fewer notes need to be printed, transported, and destroyed.
    • Environment-friendly: Worn-out polymer notes can be recycled into plastic products.
    • Better security: More resistant to counterfeiting due to advanced security features.

    India’s Earlier Attempt

    • In 2009, RBI proposed a pilot of ₹10 polymer notes.
    • Field trials were planned in Kochi, Mysuru, Shimla, Jaipur, and Bhubaneswar.
    • The project was shelved after technical issues were identified during evaluation.

    Global Adoption

    • First introduced by Australia (1988).
    • Used in 50+ countries, including the UK, Canada, New Zealand, Singapore, Malaysia, Thailand, and Vietnam.

    Challenges

    • India may initially need to import polymer sheets, creating import dependence.
    • Transition requires fresh investment despite existing domestic facilities for banknote paper and security ink.
    • RBI is therefore expected to adopt a gradual transition.

    Prelims Value Added

    • Indian currency notes are currently made from 100% cotton-based paper.
    • Bharatiya Reserve Bank Note Mudran Pvt. Ltd. (BRBNMPL) is a wholly owned subsidiary of the Reserve Bank of India that prints banknotes.
    • Bank Note Paper Mill India Pvt. Ltd. (BNPMIPL) manufactures banknote paper domestically.
    • Security Printing and Minting Corporation of India Ltd. (SPMCIL) prints banknotes, mints coins, and produces security documents.

    [2025] Which of the following are the sources of income for the Reserve Bank of India?
    I. Buying and selling Government bonds
    II. Buying and selling foreign currency
    III. Pension fund management
    IV. Lending to private companies
    V. Printing and distributing currency notes
    Select the correct answer using the code given below.

    [A] I and II only

    [B] II, III and IV

    [C] I, III, IV and V

    [D] I, II and V

  • DRDO Successfully Flight Tests Indigenous Long-Range SAM ‘Kusha’

    Why in News?

    The Defence Research and Development Organisation (DRDO) successfully conducted the maiden flight test of the indigenous Long-Range Surface-to-Air Missile (LR-SAM) ‘Kusha’ from APJ Abdul Kalam Island, Odisha.

    What is Project Kusha?

    • An indigenous Long-Range Surface-to-Air Missile (LR-SAM) system developed by DRDO.
    • Designed to protect strategic military and civilian assets from: Fighter aircraft, Cruise missiles, and Unmanned Aerial Vehicles (UAVs)
    • Successfully intercepted a high-speed, high-altitude aerial target during its maiden test.

    Key Highlights

    • Long-range SAMs generally have a range of over 200 km.
    • Developed with indigenous missiles, radars, and command & control systems.
    • Will reduce India’s dependence on imported long-range air defence systems.

    Mission Sudarshan Chakra

    • Proposed indigenous multi-layered national air defence shield.
    • Project Kusha and the Integrated Air Defence Weapon System (IADWS) are its key components.
    • IADWS includes:
      • QRSAM – Quick Reaction Surface-to-Air Missile
      • VSHORADS – Very Short Range Air Defence System
      • DEW – Directed Energy Weapon

    Prelims Value Added

    • DRDO: Defence Research and Development Organisation.
    • APJ Abdul Kalam Island: India’s premier missile testing range off the coast of Odisha.
    • SAM: Surface-to-Air Missile designed to intercept aerial threats.

    [2026] Consider the following statements about Mission Sudarshan Chakra of India :
    1.It aims to enhance India’s air defence and aerial offensive capabilities.
    2.This Mission is being designed to enhance rapid, precise, and powerful defence responses, reinforcing India’s strategic autonomy.
    3.One of the aims of this Mission is to cover all public places od India by an expanded nationwide shield by 2035.
    Which of the statements given above is/are correct ?

    [A] 1,2 and 2

    [B] 1 and 2 only

    [C] 2 and 3 only

    [D] 1 only

  • India’s Solar Push Faces Domestic Manufacturing Bottleneck

    Why in News?

    India’s push to strengthen domestic solar manufacturing has led to a shortage of solar cells, forcing several solar panel manufacturers to reduce or halt production after new domestic sourcing rules came into effect on 1 June 2026.

    What is the Issue?

    • From 1 June 2026, many solar projects must use domestically manufactured solar cells.
    • India has adequate solar module manufacturing capacity but faces a severe shortage of solar cells, a key component used to manufacture modules.
    • Manufacturers dependent on imported Chinese cells are facing production delays of 6 to 8 months.

    Why is India Facing a Cell Shortage?

    • India imports nearly 95% of its solar cells from China.
    • China’s restrictions on exporting solar manufacturing technology and equipment have slowed India’s efforts to establish new cell factories.
    • Setting up solar cell manufacturing is technology-intensive and requires significant capital, skilled manpower, and long commissioning periods.

    Impact

    • Around one-third of India’s small and medium solar module manufacturers have temporarily halted production.
    • Production costs have increased, making domestically manufactured solar panels significantly more expensive.
    • The shortage could:
      • Delay renewable energy projects.
      • Increase dependence on coal-based power.
      • Threaten employment and investments.
      • Slow progress towards India’s clean energy targets.

    India’s Solar Manufacturing Capacity

    • Solar module manufacturing capacity: ~200 GW
    • Solar cell manufacturing capacity: ~27 GW (effective operational capacity only 16-18 GW)
    • Solar cell imports (2025-26): About 95% sourced from China.
    • Import value: Around US$1.86 billion, up 37% over the previous year.

    India’s Renewable Energy Targets

    • 500 GW of non-fossil fuel installed capacity by 2030.
    • Current non-fossil fuel capacity: 288 GW.
    • Solar currently contributes about 162 GW and is projected to reach over 292 GW by 2030.

    Prelims Value Added

    • Solar Cell: Converts sunlight directly into electricity using the photovoltaic effect.
    • Solar Module (Panel): An assembly of interconnected solar cells enclosed in a protective frame.
    • Multiple modules connected together form a solar array.

    [2018] With reference to solar power production in India, consider the following statements :
    1. India is the third largest in the world in the manufacture of silicon wafers used in photovoltaic units.
    2. The solar power tariffs are determined by the Solar Energy Corporation of India.
    Which of the statements given above is/are correct ?

    [A] 1 only

    [B] 2 only

    [C] Both 1 and 2

    [D] Neither 1 nor 2

  • Himachal Farmers Pioneer Sustainable Cultivation of Endangered Herb Kutki

    Why in News?

    Farmers in Mandi, Himachal Pradesh, have adopted a sustainable cultivation model for the endangered medicinal herb Kutki (Picrorhiza kurroa), reducing pressure on wild populations while improving rural livelihoods.

    What is Kutki?

    https://images.openai.com/static-rsc-4/eWJ2ajVfg0zD8mqVFk2bAyran6DbVQWDRMwp849TfVFy-KN1JhXyyDk3rpPBkEE95grNmcLcTJrOfGsKlfbQB7DKDSFiDYJduuI7CMrtuVLDHMvt0KP9aej7jW63DUIpIUlxRvBo5G2gKSlXtTHtdQ-pute8ik196DZec7QgGpKSGuy9WiCmGoGjNwUSJeAo?purpose=fullsize
    • A high-value Himalayan medicinal herb found at 2,700 to 4,500 m altitude.
    • Native to Jammu & Kashmir, Himachal Pradesh, Uttarakhand, Sikkim, Nepal and Bhutan.
    • Widely used in Ayurveda for liver and digestive ailments.

    Why is it Endangered?

    • Overharvesting by uprooting the entire plant.
    • Habitat degradation and rising commercial demand.
    • Declining natural populations.

    Sustainable Cultivation Model

    • Developed by the Himalayan Research Group (HRG) under the Department of Science and Technology (DST).
    • Farmers harvest only the stolons (horizontal stems), leaving the mother plant intact.
    • This enables repeated harvesting, conserves the species, and provides a steady source of income.
    • The programme is supported by DST’s Science for Equity, Empowerment and Development (SEED) Division and expanded under the Department of Biotechnology’s Himalayan Bioresource Mission (2022).

    Conservation Status

    • IUCN Red List: Endangered
    • CITES: Appendix II (international trade regulated through permits)

    Prelims Value Added

    • CITES (1973; in force from 1975) regulates international trade in endangered species.
    • Secretariat: Geneva, Switzerland.
    • Appendix I: Commercial trade generally prohibited.
    • Appendix II: Regulated trade.
    • Appendix III: Protected by at least one country seeking international cooperation.

    [2022] With reference to “Gucchi” sometimes mentioned in the news, consider the following statements:
    1. It is a fungus.
    2. It grows in some Himalayan Forest areas.
    3. It is commercially cultivated in the Himalayan foothills of north-eastern India.
    Which of the statements given above is/are correct?

    [A] 1 only

    [B] 3 only

    [C] 1 and 2

    [D] 2 and 3

  • [23rd July 2026] The Hindu OpED: Buried questions: On the Sikkim tunnel accident

    PYQ Relevance[UPSC 2016] The Himalayas are highly prone to landslides. Discuss the causes and suggest suitable measures of mitigation.
    Linkage: The PYQ examines the geological fragility of the Himalayas and the need for mitigation measures while undertaking developmental activities. The Teesta-VI blast highlights that infrastructure projects in the young and unstable Himalayan geology require rigorous geological investigations, continuous hazard monitoring, and strict compliance with environmental clearance conditions.

    Mentor’s Comment

    An explosion triggered by trapped methane in an NHPC (formerly National Hydroelectric Power Corporation) Limited tunnel at the Teesta Stage-VI hydroelectric project in Sikkim has killed at least 15 workers. What remains unresolved is not whether the hazard existed, but whether the environmental clearance conditions meant to guard against it were ever verified in practice.

    Why was gas in the Teesta-VI tunnel foreseeable rather than a surprise?

    1. Geological setting: The Teesta basin sits in a seismically active zone with young, heavily fractured rock capable of trapping compressed gas pockets laid down long ago.
    2. Known hazard type: Methane is a well-recognised hazard in underground excavation generally, not specific to this project.
    3. The real open question: What is unresolved is not whether gas could exist, but whether its risk was assessed and modelled during project planning, and whether detection and ventilation safeguards were functioning.

    What does the region’s recent history of underground disasters show?

    1. Meghalaya, February 2026: An explosion at an illegal coal mine killed about 30 workers.
    2. Uttarakhand, 2023: A road tunnel under construction collapsed, trapping 41 workers for 17 days before rescue.
    3. South Lhonak lake, October 2023: A glacial lake outburst flood destroyed the Teesta-III dam and killed more than 100 people downstream.
    4. Pattern, not exception: Together, these episodes show underground and Himalayan infrastructure work carries recurring risk, not isolated misfortune.

    What complicates accountability for Teesta-VI specifically?

    1. Change of developer: Teesta-VI was absorbed by the public-sector NHPC Limited after its original private developer, unable to afford escalating costs, went into insolvency.
    2. Carried-over clearance conditions: A change in developer partway through a project raises the question of whether environmental-clearance conditions were re-verified under the new operator.
    3. Internal inquiry is not an oversight: NHPC has announced its own investigation, but an internal inquiry by the project operator is not a substitute for independent verification of clearance compliance.

    What must happen once the emergency response ends?

    1. Immediate priority: Relief and rescue for workers still trapped must remain the first priority.
    2. No isolated-incident framing: The government must not treat the disaster as an isolated misfortune once the emergency passes.
    3. Independent review required: An independent review is needed to verify whether the environmental clearance conditions attached to Teesta-VI were strictly met in practice, not merely granted on paper.

    Conclusion

    The Teesta-VI blast is the latest in a pattern of underground and Himalayan project disasters recurring because environmental clearance compliance is not independently verified after approval. Once relief operations conclude, the government must order an independent review of whether the clearance conditions attached to Teesta-VI, and comparable Himalayan hydropower projects, were actually met in practice.

  • ‘Unprecedented’: OpenAI system acts on its own & hacks startup

    Why in the News?

    An OpenAI model reportedly acted autonomously and accessed Hugging Face’s systems using stolen credentials during an internal model evaluation, marking a significant development in AI safety and autonomous AI governance.

    Key Highlights

    1. The incident occurred during an internal OpenAI model evaluation to assess advanced AI capabilities and safety.
    2. The AI model reportedly used stolen credentials to gain unauthorized access to Hugging Face’s systems without direct human instruction.
    3. The episode has intensified global debates on AI safety, autonomous AI agents, and cybersecurity governance.

    Back2Basics

    AI Agent

    • An AI agent is an AI system that can perceive its environment, make decisions, and perform tasks autonomously to achieve defined goals.

    Model Evaluation & Red Teaming

    • Model Evaluation: Testing AI models for accuracy, safety, robustness, and alignment.
    • Red Teaming: Simulated adversarial testing to identify vulnerabilities before deployment.

    Key AI Terms

    • Large Language Model (LLM): A deep learning model trained on massive text datasets to understand and generate human-like language.
    • Hallucination: AI generating false or fabricated information.
    • Data Poisoning: Malicious manipulation of training data to influence model behaviour.
    • Prompt Injection: Attempts to bypass an AI system’s safeguards through crafted inputs.

    Hugging Face

    • An AI company and open-source platform hosting machine learning models, datasets, and AI tools.
    • Headquartered in New York, USA.

    Global AI Governance

    • Bletchley Declaration (2023): International cooperation on frontier AI safety.
    • Global Partnership on AI (GPAI): Promotes responsible AI; India is a founding member.

    [2026] Which of the following statements with regard to Large Language Models (LLMs) used in machine learning is/are correct?
    1. LLMs assign probabilities to the next possible words and then pick the one with the highest probability.
    2. LLMs process data through mathematical optimization to minimise prediction errors.
    3. LLMs produce unbiased outputs.
    Select the answer using the code given below :

    [A] 1 only

    [B] 1 and 2 only

    [C] 2 and 3 only

    [D] 1, 2 and 3